Governor DeLisle Worrell Warns Foreign Reserves Continue to Fall

3rd-quarter-foreign-reserves
The Barbados private sector agency has raised the alarm that their members have had to wait for foreign exchange to be released from commercial banks to honour purchase requests. This is not good news for Barbadians who have had to tighten their belts for eight long years. Have we not been boasting of record arrivals for the last two years? What is happening!

The Governor of the Central Bank warned Barbadians in a document posted to the Central Bank website last week that the country has failed to manage the balance in foreign exchange inflows and outflows since 2013. Based on the Governor’s concern it is safe to assume that our international reserves have fallen from 900.3 million or 14 weeks of imports at the end of the 3rd quarter -to what?

With tourism booming by all account YET foreign reserves falling the solution is to increase tourist arrivals, foreign direct investment AND decrease demand for imports. If the reserves continue to fall we will not be able to defend our peg to the US dollar. The price of oil which has started to increase will not help our cause. Wait a minute -why do we pontificate about tourist arrivals? Should we not heed the advice of the official from Singapore who indicated at a conference in Barbados a couple years ago we must measure the success of tourism by revenue receipts and NOT number of tourists.

With sinking foreign reserves so too will investor confidence on the local and international markets. Several huge investment projects like Sam Lord’s Hotel, Hyatt Hotel, Beaches Hotel, Four Seasons, Marina and others have not started as promised by the government. Whether we agree if the projects should be implemented or not, the inability of the government to mobilize them has affected the plan to inject activity in the economy.

The obvious question is -what next? With a year to go before the next general election one thing we know for sure -the Democratic Labour Party will not have a strong economy to support a campaign message to win votes. BU’s prediction is that this will be one of the ‘nastiness’ general elections since Independence.

96 comments

  • No Jeff Cumberatch column today.

    Like

  • “With a year to go before the next general election one thing we know for sure -the Democratic Labour Party will not have a strong economy to support a campaign message to win votes.”

    They do not need such a message having won with the idiotic slogan that the Country is not only an economy but a society”

    Like

  • Violet C Beckles

    It not good to see our words come true, who would love for us to be more wrong?The facts are the facts and not the long talk,
    All things grow from the land even the people plants houses all things.
    Issues Issues Issues people want to focus on the coverup of the facts of all matters,
    No one will deal with the truth and the corrections of what is wrong, If all of those were doctors all who came to you for help would be dead and no payments could ever be made,
    Land fraud in your faces and yet you turn your back for the knife,
    Lawyers, Ministers, Bankers, lack of freedom of information while slavery alive and strong in Barbados, More Pain to come,
    https://www.facebook.com/alexmitchell.el/

    Like

  • Ac suspect it would be a campgain that dictates all that is necessary within the political landscape to be forthright in executing plans which would be progressive and beneficial to the country’s best interest.
    So far the oppositions has said nothing to indicate or even persuade such plans are in order
    The days and years of volatile crictisms although necessary would not be sufficient to sway those sitting on the fence awaiting meaningful and progressive change

    Like

  • In his budget speech last June, Minister of Finance Chris Sinckler said the long-talked-about sale of the Barbados National Terminal Co. Ltd. (BNTCL), which is a wholly-owned subsidiary of the Government-owned Barbados National Oil Co. Ltd, would soon take place. But he did not say to whom.

    However, the deal had not yet closed by April of this year, as the Central Bank of Barbados reported in its economic press release for the first three months of 2016 that “A special dividend related to the sale of BNTCL was included in the Government’s projected Estimates figures; however this sale is yet to be completed and the dividends declared.”

    The difference between the Estimates and the actual out-turn was $85.1 million, suggesting this was the amount which the Government expected from the sale of BNCTL.

    Read more: http://www.caribbean360.com/business/rubis-pull-one-main-caribbean-markets#ixzz4VAGI2Z7u

    Like

  • A lot of this issues presented here on BU involves the political affairs, but to gain a better equilibrium of societal ills, a focused effort has to be made to address the issues of criminality amongst the youth, the lack of the female contribution here on BU, especially those that are younger, the sexual, physical, emotional and financial abused of women in Barbados, perpetrated by the Barbadian male, the impertinence of the young people towards the elders and its etiologies, the lack of inclusiveness of the elders towards the young people, the financial, physical, and psychological abuse of the elderly, as well as neglect etc.

    Like

  • Read also Steve Stoute’s comment in today’s Sun that a proposed tax on the lottery was not implemented and for that the Barbados Olympic Association is grateful. There is not clarity of purpose to borrow Arthur’s term.

    Like

  • This guy from Republic Bank is also recanting and not wanting to make predictions about the economy.

    https://www.barbadostoday.bb/2017/01/07/de-souza-managed-enthusiasm-for-2017/

    Like

  • @ David
    Is it not obvious that, in a situation where FOREIGNERS control all of our engines of business, when these foreigners have a glut in their economies they will channel resources to their Barbados businesses (to hide from taxes as well as to enjoy enhanced profits not possible in their own jurisdiction)….?

    Is it not equally obvious that when things get rough in their home countries, that they will make withdrawals from they overseas ATM? Bushie refuses to believe that our so-called leaders are too dumb to have recognised this… when they were selling off the family silver.

    If you were a Trina banker, and your kith and kin back home were having difficulties with FOREX …. and you controlled an offshore ATM with good tourist receipts…. cud shiite man David …. What would YOU do?
    …and who would even know…? the FSC? …those jokers probably don’t even have their own accounts up-to-date.
    The Central Bank is a colossal joke, …still looking for $300M missing two years ago…
    The MoF is still working on understanding decimals and the PM is in a pothole of his own making.

    We are just lucky that, so far, our foreign owners – having extracted all they can from their ATM, have not closed the account and walked off leaving us broke and homeless….

    But as the old folks used to say….”Whuh ain’t ketch yuh, ain’t pass yuh”

    Like

  • Bush Tea

    $300M was never missing, that was just the DLP making up an excuse for singing a different tune after winning an election and having said something different on the stump. PACK OF LIARS.

    Like

  • Today’s Nation editorial and BU on the same page albeit 300 words extra.

    EDITORIAL: Failed to achieve balance

    BARBADOS NATION,

    Added 08 January 2017

    editorialcolor

       

    AS THE YEAR opened, the state of the economy has regained its topicality after celebrations of Independence and Christmas.

    The debate has been reignited with the publication of the January 2016 economic letter of Governor of the Central Bank Dr DeLisle Worrell which contained, among other disclosures, that since 2013 Barbados was not able to bring in enough foreign exchange to achieve “a balance between foreign exchange inflows and outflows.”

    While this paraphrase cuts to the core of the issue the language used by the governor presents a sharper and starker picture, given the concerted effort over the past seven years  to reduce the deficit and to get the economy on a sustained  growth path.

    The governor’s words are: “The foundation for growth is a stable economy, and in Barbados that means a balance between foreign exchange inflows and outflows. We know when we have achieved that balance because in that case we do not have to dip into the Central Bank reserves of foreign currency to make up the difference. The country has failed to achieve that balance since 2013, and there remains the need to dampen spending further in order to protect the country’s reserves of foreign exchange. The reserves are what protects us from devaluation. The Central Bank remains in a position to provide US dollars at the 2:1 exchange rate  to meet all legitimate needs if no other source is sufficient.”

    Given the recent economic measures, these are not the words that Barbadians wish to hear at this time, but Central Bank governors are not employed to “flavour the pot” Their task is to give us the facts however inconvenient. The statement shows that the greater outflow of foreign exchange since 2013 has not allowed for a sufficiently stable economy to fuel growth, or at any rate, the rate of growth that we need. The statement implies that the foreign reserves may have taken a hit which in turn drives the “need to dampen spending further in order to protect the country’s reserves of foreign exchange.” This raises the spectre of belt-tightening.

    While the country will be grateful for this reality check, we are reminded by a former governor that a central bank governor is a creature of the Minister of Finance and, therefore, this matter becomes one of politics and policy; for it now seems beyond argument that something has gone drastically wrong with the much touted policy of the homegrown fiscal consolidation policies or that those policies have failed.

    It is so unsatisfactory a situation in which we find ourselves that the President of the Barbados Chamber of Commerce and Industry Eddy Abed can tell us that business executives were not surprised by the statement since some of them were told as long ago as September that they would have to wait in a queue and would be allocated foreign  exchange when it became available.

    We are only too well aware that the policy of the Ministry is set by the Minister and his Cabinet colleagues, and that the opinions and advice of any governor does not constitute policy.

    In the face of the governor’s letter, the Government has a compelling duty to address the country on how it now proposes to tackle the issues which he says face the economy.

    – See more at: http://www.nationnews.com/nationnews/news/92238/editorial-failed-achieve-balance#sthash.8fJZPMcF.dpuf

    Like

  • “Bush Tea

    Did you see the article (was it Hoyos) commenting on Barbados pulling Massy out of a hole before of the poorly performing Trini market?

    Like

  • Worrell is to my mind a joker. He cannot be taken seriously.

    Like

  • Trinidad is having the same problem. The government there is having to places businesses and people when it come to getting foreign currency because of falling reserves and shortages. What is going on?

    Like

  • What we need is a proper national debate about the role of foreign reserves. What we are getting is the same argument going round and round without any new intellectual ideas.
    The reason for this is that we have the same old professors who have been teaching from their old 1960s/70s notes, supervising PhDs and giving them distinctions if they repeat the same mantras, a media which do not understand economics, lawyer/politicians who do not understand economics, but pretend that they do. Nothing has changed about these redundant ideas since the 1980s, and certainly not since 2008.
    It is a bit strange taking part in debates in London with people at the cutting edge of economic ideas then listening to the intellectual dinosaurs in Barbados talking about pegging the Bajan to the Greenback, foreign reserves, a resistance to devaluation and other non-economic nonsense.
    The only reason I take these discussions seriously is because as a Barbadian I will like to see we get it right.
    But Bajans, true to form, do not even want to hear new ideas, farless debate them.

    Like

  • I concluded like Bushie that both the Trinidadian ‘power houses’ in our midst would dip into their US dollar holdings by paying from the Barbados privy purse for consolidated corporate purchases especially those for TnT which is having a bigger problem than we do.Here is a nod to the GoCB and to he MoF.Get off your rear ends and make it worthwhile to have more spend by the thousands of cruise ship passengers who stay on board in port.Create the shows,the entertainment,the unique bajan cultural activities th

    Like

  • ……activities that would encourage them to want to disembark.

    Like

  • Well Well & Consequences

    http://www.nationnews.com/nationnews/news/92242/pothole-stops-donville

    Karma is a swift and beautiful woman..,, hahaha lol

    When ministers don’t do their jobs, karma intervenes…big time, Inniss drives a huge vehicle, an SUV, just imagine what the roads are doing to the smaller sedans….while retarded Fruendel the Fiend talks shit.

    “Pothole stops Donville
    ROY R. MORRIS, roymorris@nationnews.com
    Added 07 January 2017

    donville-inniss
    Minister of Industry Donville Inniss. (File

    BARBADOS’ POTHOLE EPIDEMIC, described just days ago by Prime Minister Freundel Stuart as a “transitory inconvenience”, has left one member of his Cabinet digging into his pocket and upset.
    Related articles
    Bajans not seeking pothole compensation…
    No politicians in new party

    A SUNDAY SUN team happened upon Minister of Industry Donville Inniss in the wee hours of yesterday after his car dropped into a pothole on the ABC Highway less than 100 metres from the Hinds Hill, St Michael junction, bursting a tyre.

    Inniss, who limped home on the slowly deflating tyre, confirmed to the SUNDAY SUN that it was the “second time in about four months I have been the victim of a pothole”, revealing that the first episode cost him almost $3 000 and damage to two wheels.

    The St James South Member of Parliament, who was visibly upset at the scene, complained that once again he would have to pay to replace a tyre and have the wheel examined for damage. (RRM)

    See more at: http://www.nationnews.com/nationnews/news/92242/pothole-stops-donville#sthash.tEkZOCLd.dpuf

    Like

  • Gabriel

    What has given confidence in the last 9 years to think they can achieve anything? They are hopeless, the know it but are fighting hard to make sure that little secret does not get out.

    Like

  • @ ac January 8, 2017 at 6:24 AM #

    Unfortunately, this INEPT DLP administration, with an INCOMPETENT Minister of Finance, Central Governor and Council of Economic Advisors, has been UNABLE “to be forthright in executing plans which would be PROGRESSIVE and BENEFICIAL to the country’s BEST INTEREST.”

    “So far, (the DLP has NOT DONE ANYTHING) to INDICATE or even PERSUADE such PLANS are in order,” and this is EVIDENCED by the fact that, despite their much touted “Medium Term Fiscal” and “Medium Term Development” Strategies 2010-2014, (which Sinckler said had been successful and Central Bank Governor Dr. Worrell subsequently admitting their FAILURE to ACHIEVE the DESIRED OBJECTIVES), and the IMF initiated “home grown economic policies,” Barbados REMAINS the only island in the Caribbean to have SUFFERED nine (9) CONSECUTIVE credit rating downgrades.

    Additionally, while other Caribbean economies have begun to show signs of positive economic growth, contrary to predictions by Sinckler and Dr. Worrell, Barbados’ economy is yet to experience growth.

    This inept DLP administration has been implementing SIMILAR FAILED ECONOMIC POLICIES EXPECTING DIFFERENT RESULTS. The DEMS’ usual response to critics or those who make opposing assessments of Barbados’ economy is “bring solutions.” However, not only do they REJECT alternative economic solutions suggested by local and foreign economists, special interest groups, business community and concerned Barbadians, they CUSS and INSULT them as well…….. labeling them as “BLP operatives” and “preachers of doom and gloom.”

    Marla Dukharan is a Group Economist for Royal Bank of Canada (RBC) Caribbean and “is regarded as one of the top thought leaders in the Caribbean on key economic topics and policies.” Dukharan made an assessment of the Barbados economy, which did not find favour with Sinckler, and using the immunity afforded to him by parliament, he launched his usual bombastic “anti-woman” attack on the lady. On Tuesday, March 15, 2016 during the Appropriations Bill 2016 debate, Sinckler said of Dukharan: “Every year we have this economist from Royal Bank…giving her outlook…(saying) Barbados is going to default in the next twelve months…and that Barbados should restructure its debt to achieve some particular results.” “Do not come around here every year talking that rubbish.”

    If we look “closer to home,” in 2014 DLP Minister of Agriculture Dr. David Estwick said his government was using the “wrong medicine” to deal with the economic problems facing the island and engaged in public disagreements over the government’s current fiscal and economic policies. Estwick begged for an audience with his cabinet colleagues to discuss his alternative presentation of fiscal/economic policies.
    Interestingly, Estwick was GIVEN the OPPORTUNITY to make his presentation at the cabinet meeting of Thursday, February 13, 2014……….AFTER the BUDGET for the financial year was APPROVED. As at January 8, 2017, none of Estwick’s alternative solutions have been accepted or implemented.

    Also, against the background of mounting criticisms from labour unions and Estwick, of government’s economic policies, while addressing a constituency branch meeting held on Sunday, February 9, 2014, PM Stuart was reported as having “likened the PLANS to RESTRUCTURE the economy to that of building a house, saying it would be FOOLISH to TAKE on every bit of ADVICE about the structure.

    Taking these facts into consideration, after this DLP administration’s VERBAL ABUSE of critics and REJECTION of alternative economic policies from concerned groups, and ESPECIALLY from their own Estwick in particular, no wonder people are NOT lining up “to bring solutions.”

    Like

  • Well Well & Consequences

    http://www.nationnews.com/nationnews/news/92245/politicians-party

    No politicians in a new political party, that’s one way of getting rid of all the well known garbage.

    However, how will this dude get rid of the minorities, their schemes, scams and crimes against the majority and the island….if he cannot now name his own candidates….due to fear of retaliation from the losers in the 2 present political parties, with just one year to go, this is fodder for the blogs, haha.

    Like

  • Artax

    Ask yourself this, if they are not smart enough or compentent to recognise a problem how are they going to recognise a solution?

    It is too simple an explanation to say the reason PM Stuart has not move Sinckler is because he is incapable of making a decision or he does not have the political room. These two have made a deal with the Devil and have common objectives. Neither will work after politics.

    Like

  • Well Well & Consequences

    Put in a Group/Party of local businessmen financed by shrouded private interest and see what happens to Barbados. The fox will steal not only the hens but the hen house and the estate as well.

    Like

  • Well Well & Consequences

    Snusmas…a real life criminal is funding this particular political party, all these “business people” in the new party would have at one time or another worked for or interacted with both CGI Insurance or CLICO….read Leroy Parris….starting with this same Grenville Phillips.

    Like

  • Well Well

    The investigative American TV special 60 Minutes just did a piece on the lack of sustainable transparency throughout the region the Caribbean, and to my surprised Barbados was not featured. The focused of the peice was centered around the islands of St. Lucia, Dominica, Antigua and St. Vincent, and how these islands were selling citizenship to foreigners as far away as Dubai etc.

    Like

  • Well Well & Consequences

    Dompey…that should tell ya that many people are benefitting from the lack of transparency in Barbados, have no good plans for Barbados and dont want it highlighted or known to the majority people in Barbados.

    Like

  • After viewing the video we have to reconcile what Estwick told his constituency in Feb 2010.

     

    Barbados minister proposes wage freeze, sale of state assets.

    Date Published:

    Monday, February 1, 2010

    BRIDGETOWN, BARBADOS, CMC – ECONOMIC Affairs Minister Dr David Estwick says the economic situation in Barbados is so bad that there is need for a wage freeze and the sale of state assets to help the government ride out the situation.

    Dr Estwick told a constituency meeting of the ruling Democratic Labour Party on Sunday that it was a matter he would raise with Prime Minister David Thompson, who is also the Finance Minister.

    http://www.davidestwick.com/news/2012/barbados-minister-proposes-wage-freeze-sale-state-assets.html

    Like

  • Artax,

    I have been saying since before 2008 that Barbados has been economically underperforming the region and the globe since the end of the Second World War.
    Others say otherwise, but they do not produce any evidence. Owen Arthur’s supporters claim that he presided over the most prosperous years in our history. It is a lie. He presided over the biggest per capita debt – both private and public – in our history.
    This is what Thompson inherited, but is no excuse for the DLP’s subsequent incompetence.

    Like

  • D|avid,
    Can someone plse explain to me the economics of foreign reserves?

    Like

  • @Hal

    Let is start at the beginning. What is required to defend the peg? We have to generate a net positive -inflows and outflows.

    Correct?

    Like

  • Round and round the mulberry/sage bush we go……

    We are spending more than we are earning.

    Tourism numbers in this day and age when monies are paid outside of Bim does not translate to higher local spend.

    Govt has been aware as to what has to be done for years…..they have refused…….brace yourself for impact…..nothing can be done.

    Like

  • MR EDITOR,
    CAN YOU PLEASE SEND THIS OVER TO BUSH TEA;
    As you take your sip of tea
    Whether it be Liptons or Tetley
    Have you ever wonder
    The origin of its flavor
    You may not be so alarme’
    ‘cause it came from Assam
    Or shocked at this shameful horrible story
    Of the Teas of P G Tips, Twinings or Tetley
    Grown chiefly near the banks of the Brahmaputra
    It’s the largest tea producing plantations of India
    In an ideal of 96.8 º (F) temperature
    Giving it its malty taste and bright colour

    Often sold as sometimes Irish Breakfast Tea
    Or Black, or White or Green tea variety
    These teas, as shocking as was Slavery
    Has oodles of baggages of chicanery

    Your tea time may be your bliss
    And you may reject tea after this
    From whence it came
    They showed no shame
    If its from India behold
    Its a horrible story untold
    If its from the Assam estates of Assam
    Where the living condition is a sham
    The Giant Assam supply tea to the company
    Of PG Tips, Liptons, Twinings and Tetley
    The manager described conditions as a No No
    And so did Lady Sarah Roberts the big CEO

    She said workers conditions as not acceptable
    But did nothing which is damn deplorable
    What they meant was that the estate
    Of 740 homes couldn’t accommodate
    Workers to relieve themselves in 464 toilets
    After filling millions of back breaking baskets
    Many families when they get the rushes
    Just defecate amongst the tea bushes

    Sanitation amidst toilets blocked and broken
    With over flowing cesspits more than a token

    And on some estates even child labour are used.
    For managements’ behaviour left workers obtused
    So next time when its tea time around four pm
    Remember the pickers and the plight of them
    Think of where and why it tastes so refreshing
    Write to those who are doing your legislating
    It isn’t from the fresh air of Assam of the greedy plantation owners
    But maybe its from the excreta from the abused wretched workers.

    Like

  • As you take your sip of tea
    Whether it be Liptons or Tetley
    Have you ever wonder
    The origin of its flavor
    You may not be so alarme’
    ‘cause it came from Assam
    Or shocked at this shameful horrible story
    Of the Teas of P G Tips, Twinings or Tetley
    Grown chiefly near the banks of the Brahmaputra
    It’s the largest tea producing plantations of India
    In an ideal of 96.8 º (F) temperature
    Giving it its malty taste and bright colour

    Often sold as sometimes Irish Breakfast Tea
    Or Black, or White or Green tea variety
    These teas, as shocking as was Slavery
    Has oodles of baggages of chicanery

    Your tea time may be your bliss
    And you may reject tea after this
    From whence it came
    They showed no shame
    If its from India behold
    Its a horrible story untold
    If its from the Assam estates of Assam
    Where the living condition is a sham
    The Giant Assam supply tea to the company
    Of PG Tips, Liptons, Twinings and Tetley
    The manager described conditions as a No No
    And so did Lady Sarah Roberts the big CEO

    She said workers conditions as not acceptable
    But did nothing which is damn deplorable
    What they meant was that the estate
    Of 740 homes couldn’t accommodate
    Workers to relieve themselves in 464 toilets
    After filling millions of back breaking baskets
    Many families when they get the rushes
    Just defecate amongst the tea bushes

    Sanitation amidst toilets blocked and broken
    With over flowing cesspits more than a token

    And on some estates even child labour are used.
    For managements’ behaviour left workers obtused
    So next time when its tea time around four pm
    Remember the pickers and the plight of them
    Think of where and why it tastes so refreshing
    Write to those who are doing your legislating
    It isn’t from the fresh air of Assam of the greedy plantation owners
    But maybe its from the excreta from the abused wretched workers.

    THANKS DAVID
    NORMAN

    Like

  • Declining reserves and rising tourism. When a vacation is booked and paid for on the internet for Barbados Sandals or other resorts available on line, where does the payment get transmitted to? Likely not all to Barbados. On the other hand, things imported and consumed for those vacations are paid for in US$ from the internal reserves. Under this model all inclusive vacations are destined to eventually drain the country of all foreign reserves. Just a matter of time.

    Like

  • When Adrian Loveridge questioned Butch Stewart at a BCCI luncheon he was laughed at by our finest.

    Like

  • Hal Austin January 8, 2017 at 11:46 AM #

    “I have been saying since before 2008 that Barbados has been economically underperforming the region and the globe since the end of the Second World War. Others say otherwise, but they do not produce any evidence. Owen Arthur’s supporters claim that he presided over the most prosperous years in our history. It is a lie. He presided over the biggest per capita debt – both private and public – in our history.”

    @ Hal Austin

    There is some truth to your comments, as it relates to the debt situation.

    According to economic information I read during my thesis research, between 2002 and 2008/2009 (i.e. before the global economic crisis), Barbados’ debt increased at an average rate of 9% per annum. After 2009 the average increase in debt was about 5% per annum. This clearly indicates the island was accumulating debt at a faster rate prior the financial crisis than it has been after the crisis.

    However, we must first ascertain the purposes for which the debt was incurred, (e.g. to stimulate the economy and finance the provision of social services)? As it relates to social services, between 2004 and 2006, for example, the former BLP administration bought 94 Mercedes Benz buses for the Transport Board.

    Like

  • Recent Central Bank statistics indicate that Barbados’ foreign reserves has consistently decreased at an average of 7% per annum. As at June 2016, reserves were REPORTED to be US$450M or, as DETERMINED by the Central Bank, to satisfy 13 WEEKS (3.1 months) of imports.

    The decline in reserves has been associated with insufficient tourism revenue inflows (even though we boast of record long stay arrivals); lower foreign direct investment (FDI), perhaps mainly due to a lack of investor confidence; an increased in costs to service debt (one reason is probably as a result of the consecutive credit rating downgrades).

    However, while CBB’s calculation of reserves were US$450M at the end of June 2016 or approximately 3.1 months of imports, the IMF reported that: “Net inflows in the capital and financial account fell, driven by large official amortization payments and lower FDI. As a result, net international reserves dropped to US$469 million at end-April 2016 (2.8 months of imports).” [Source: IMF 2016 Article IV Consultation, August 22, 2016]

    It is interesting to note 2.8 months of imports is below the internationally accepted 3 month precautionary benchmark.

    Here is where the “economic anomalies” arise. Using Barbados’ economic data, the IMF concluded that, at the end of April 2016 the reserves were US$469M (2.8 months of imports).

    Contrary to this fact, during the budget speech, Sinckler said at the end of June 2016 the reserves were US$19M less or US$450M = 3.1 months of imports

    Like

  • Artax,
    What are the foreign reserves for?

    Like

  • David,
    Nothing is required to defend the peg. In fact, the peg is a barrier to progress. It was introduced in the mid-1970s, economically another world. We must drop the paradigm of the peg and a mountain of foreign reserves.

    Like

  • Harold Codrington🇧🇧
    ✅Hal Austin wants an explanation of the function of foreign reserves in the Bdos economy.He sees no need for it and posits that in so far as economists in his midst are concerned Barbados is holding on to a concept as outdated as the “outhouse”.
    ✅While we have your attention what are your thoughts on Barbados adopting the US dollar as the currency of the realm.

    Like

  • @Hal

    For the ignorant in these matters please feel free to detail/submit the advantages if Barbados were to unhitch from the peg given our weak economic predicaments and fundamentals underpinning the economy.

    Like

  • I am saddened today after reading this post…………to think that all of this pending heartache could have been avided if only we had leaders and not thin skinned little people pretending to be leaders.

    They did not know and would not listen………Brian Francis commented on a budget one year and he was cursed by Donville Inniss.

    Marla Dukharan voiced her concerns, she was belittled on the floor of the House.

    David, Artax, Miller, Bush Tea and yours truly have offered our opinions on BU….the ac’s cursed us.

    Clyde Mascoll and Owen Arthur have been offering advice continually………they were told there is no magic bullet and ignored.

    Where do we go from here if as reported the IMF told the government three years ago that they had to put the currency peg on the table……..three years later with an economy in a worsened state, can we ever imagine what is the inevitable?

    I am really scared now!

    Like

  • You debate CB FIGURES AND REPORTS, Are they accurate or true? If you are an investor with multiple investments worldwide, what are you in business for? …..PROFIT! yes profit, so who gets the “profits” of the central banks that are “privately owned”? …

    Here is an interesting disclosure, it may be more to it than what is declared and debated.

    Is the CBB, a Bajan asset?.. It must be renamed.

    http://www.anonews.co/rothschild-owned-bank/

    Like

  • @ Seth January 8, 2017 at 1:13 PM #

    Declining reserves and rising tourism. When a vacation is booked and paid for on the internet for Barbados Sandals or other resorts available on line, where does the payment get transmitted to? Likely not all to Barbados. On the other hand, things imported and consumed for those vacations are paid for in US$ from the internal reserves. Under this model all inclusive vacations are destined to eventually drain the country of all foreign reserves. Just a matter of time.
    …………………………………………………………………………

    I have been thinking the same for a while after reading a post last year from Adrian Loveridge.

    Since all of the bookings are done online…………..how much of this money comes here?

    The monies that are collected locally………….at the end of the financial year how much of this is remitted after salaries etc are taken out……..cause we know they are not paying a dime in taxes, they operate free of taxes…………….

    Wish we peasants could say the same!

    Like

  • Here is a reminder of the exchange between Butch Steward and Adrian Loveridge at a BCCI luncheon when our captains of industry laughed at Adrian’s attempt to pin Butch on the issue of Sandals retaining USD offshore.

     

    [audio src="https://barbadosunderground.files.wordpress.com/2014/03/butch-stewart-chamber_.mp3" /]

    Who is laughing now?

    Like

  • @ Prodigal Son
    ….all inclusive vacations are destined to eventually drain the country of all foreign reserves. Just a matter of time…..

    …cause we know they are not paying a dime in taxes, they operate free of taxes…

    Well PS, that’s very interesting, government allows this?

    Like

  • Well Well & Consequences

    “While we have your attention what are your thoughts on Barbados adopting the US dollar as the currency of the realm.”

    This might be the only ootion left, butmgiven all the warnings from everyone for the last 10 years to bith hardheaded stupid governments, it should have been done over 6 to 8 years ago.

    Like

  • are-we-there-yet

    NineofNine; re your 4:15 pm post

    Perhaps you should consider passing on some other fake news from the source of your info on the CBB being a rothschild bank.

    http://www.anonews.co/

    Like

  • @nine of nine; Afghanistan, Iraq and Libya were added after the wars. Canadian economists have said the civil war in Syria has the same goal and is partly funded by those who stand to benefit.

    Like

  • David

    I well remember how the cabral laughed at Mr Loveridge…………it was a set up. I believe that the businessmen who who laughed were the ones feeding high at the trough getting all the contracts.

    I wonder if they are still laughing………….Butch is getting all the tax concessions, reaping the sweets and the same minister with whom they sided……..who gave Butch the information to embarrass Mr Loveridge……is killing their backsides with taxes while Butch goes tax free!

    Like

  • @ Snusmas
    These two have made a deal with the Devil and have common objectives. Neither will work after politics.
    +++++++++++++++++++++++++++++++++++
    Boss, typically after such ‘deals’, they will neither work after politics, …or play…
    Their mentor David T was much more astute than all of them put together, and thought that he had an ironclad ‘deal’ too…..
    Bushie has reached the stage where he just feels pity for such idiot ‘dealers’.

    As another ‘David’ put it…
    Fret not thyself because of evildoers,
    neither be thou envious against the workers of iniquity.
    For they shall soon be cut down like the grass,
    and wither as the green herb

    In Bushman lingo…
    Let dem keep on thieving…. brass!!
    …and doan bother to wail..
    Cause their ass will soon be grass
    when Karma puts her whacker in their tail…

    Like

  • Is Hal serious with his question?

    Barbados currency is akin to a village in Chalky Mount deciding to adopt ‘broken ceramic plates’ as their currency of trade among themselves….because lots lie around the place.
    This is all fine and well in Chalky mount if there are exchanging local fruit and clay pots, and rewarding their kith and kin etc.

    When they want to buy stuff from ST George and St Thomas however, where no one wants their shiite currency, it is ONLY by pointing to REAL REAL money that they have – in a REAL bank somewhere, that anyone will take them seriously.
    Such funds are accumulated by some residents who are working for REAL money, while the other residents are mekking shiite sport with their mock money.

    The problem, with adopting REAL money instead, is that your WORTH is then judged by your productivity vis a via other persons in other jurisdictions WHO ARE PRODUCTIVE.

    …and there is NO way that our shiite public sector army of occupation could justify their salaries in US dollars without being subsidised by the few productive private sector workers AND BY UNENDING GOVERNMENT LOANS.

    It is BETTER by far to legislate an across-the-board 20% wages and salary cut, ….but, (brass bowls that we are,) we have instead, legislated that option away….

    Jackasses never cease to amaze…..

    Like

  • @ Well Well & Consequences

    My thoughts on Barbados adopting the US dollar as the currency of the realm…dictates a wait and see position, from what is developing on the world stage.

    The USA dollar is as strong as it ever was though figures and reports do reflect differently.
    Expect change.

    President-Elect trump has won the election which is an election process of The United States Corporation Inc, (a French registered company). This Corporation will be dismantled in the very near future and replaced by THE REPUBLIC OF THE UNITED STATES OF AMERICA. President Trump will resign and new elections will be called. He will win AGAIN.
    He will usher in the new currency which will be of even greater value than what it is now, bringing benefits to every living person on the face of the planet by a system/economic entitlement termed NATIONAL ECONOMIC SECURITY and REFORMATIONS ACT… (N.E.S.A.R.A.) . THIS ACT is already formulated and in place. All systems AND countries are abreast of and await its initiation. All new currencies are already printed and in place with real gold and precious metals as its backing. (Not fiat instruments).

    N.E.S.A.R.A. must be initiated by the Republic of the USA.

    Trump is being bashed by opposing forces. Lay aside this onslaught for his purpose has been duly prepared for this cause for he will alieve the world of debt as fore-ordained by The Royal Families of Antiquity. It matters not whether you accept this or not. It is eminent.

    Disclosing this initiative, will it matter in the very near future whether we adopt the US Dollar as the currency of the realm? Maybe we should, although we as well as all nations and people will be debt free and enriched. This is the new beginning and we may be all on equal footing as it relates to status of economies. Pass events curtailed its implementation..(the assignation of Kennedy and 911), yet it is eminent

    Also on the world stage, we see the BRICS Alliance on the move to counter the strength/dependence/use of the USD. With $100b pooled in contributory reserves, there is still much to be done for membership must increase to really have a greater effect, This alliance to me is a mare facility for lending of which Barbados has also aligned itself. Subject to correction, $80m was the membership fee.

    Also to watch is the Chinese economy, it may be termed the dark horse for global dominance, but they too are having issues economically though their expansion is something to watch as we see they are mining Africa, holds a substantial percentage of economic business (Corporate) in the USA as well as in many countries worldwide, Though their footprints are expanding, they will need to build many more allies in order to be effectively regarded as a global consideration.

    The European Block has nothing to offer as they are currently being destabilized for ruthless ulterior motives. This also includes the British pound.

    So evaluating current conditions and near future edits, I would say we should .

    @are-we-there-yet January 8, 2017 at 6:37 PM #

    “Conspiracy Theory” was a term coined by the CIA to thwart the truth, so too is the term “FAKE NEWS”.
    The same fake news will return to haunt you… its only a matter of time.

    Like

  • David,
    Solution 1. Buy fewer vehicles. Thus use less fuel, oils, parts etc.
    2. Import less.Tighten the belt tighter. Pay more attention to your needs and not your wants.
    3. Buy more bonds (Government)
    4. Encourage more visitors.
    5. Grow and consume more locally produced products, and consume more agricultural commodities.
    6. Be more contented with what you have

    Like

  • Well Well & Consequences

    Nine of nine, it’s a wait and see.

    Like

  • Bush Tea,

    Yes. It is a serious question. I am sure the people in Chalky Mount are decent people, but what is the economic case for a mountain of foreign reserves in the present global economic architecture?

    Gabriel,
    You are more right than you might have intended. Look at those countries that have adopted the Greenback as their legal currency. In fact, in Barbados it is already unofficially so, you can use US dollars as your currency when in Barbados; US dollars are also used as a tool to shift capital from Barbados.
    The problem with this is that it takes monetary policy out of our hand and puts it in Janet Yellen’s, which by pegging is already the case.

    Like

  • “BRIDGETOWN, BARBADOS, CMC – ECONOMIC Affairs Minister Dr David Estwick says the economic situation in Barbados is so bad that there is need for a wage freeze and the sale of state assets to help the government ride out the situation.”

    As far as I am aware public workers have not had an increase since 2009 so there has been in effect a wage freeze which does not appear to have assisted Government in their efforts to arrest the situation.

    Like

  • He is obviouslytalking about a wage freeze across the board both private and public.

    Like

  • @ Hal
    There is a need for a mountain of foreign reserves (a large Chalky Mount bank account) because the brass bowls are addicted to imports from St George and Christ Church. They apparently CANNOT live without such luxuries as BMWs, imported fruit and wines etc. Even to fix potholes requires FOREX, since they cannot be bothered to develop local approaches to solving even basic problems.

    Adopting the FOREX as their default currency is UNTHINKABLE.
    ..Local politicians cannot then manipulate the money supply….
    ..Earnings would be tied to actual productivity (by international standards)
    ..The whole order of society would then be based on MERIT – shiite man!! ..we can’t have THAT!

    In short, it would become VERY difficult for politicians, lawyers and other low life scammers to maintain the kind of society where shiitehounds who contribute little, are able to reward themselves handsomely with ‘cut plate currency’ ..and to then glibly convert that to FOREX ..to acquire real worth for their albino-centric desires.

    If you think the grand-master-crooks in society will give that up (.. or that the brass bowls who they are exploiting will ever realise that they are being played…) then good luck to you boss.

    Like

  • Piece Uh De Rock Yeah Right - INRI

    .A den of thieves…

    There are and continue to be many here who, even in the face of the obvious, continue to believe, erroneously that

    a.there will be a modicum of recovery under any administration that is run by, or composed of ANY one of the DLP read Donville or Estwick – You have seen what any one of them is capable of and it is faeces

    b.There are others here who, (i) even in the face of the obvious ineptitude of this administration through its criminal cohorts, (ii) even with the daily evidence of diminishing forex (iii) exacerbated tenfold by a pervasive miasma of death of requisite innovative thought and a dearth of any strategies whether in food substitution/growing our own/collaborating with Guyana to grow our own**, generating income in traditional areas read tourism or other areas.

    When anthropologists or them bright menses dat does study societies speak to the seeming disproportion between poverty and “breeding nuff chilrun” they speak to a what a gambler might call “Point spreads or even money propositions.

    These fellers say that with nuff chilrun the parents in these dire socio-economic circumstances arrive at the notion that nuff kids means that one going get out and IF ONE GET OUT THEN ALL GET OUT.

    But his is a coolie concept read, it works for different ethnicities other than for black people.

    Notwithstanding that self denigration comment “in the Castle of My Skin” de ole man puts it to you that with 16 DLP ministers (and the other clowns that have been appointed but did not face the polls) WITH 16 horses or is that donkeys, more like waste foops, in 8 years the cuntry has been unable to even field 1 person in that assembly of jackasses that has been able to make a difference IN ANY EFFING THING.

    Now the Honourable Blogmaster hath posited elsewhere that Pornville is safe but and de ole man is a sorta-reader of characters read guesser, de bajans in Pornville’s cuntstituency (and it has to be a cuntstituency since a king ruleth over a kingdom, a duke over a dukedom that it follows that a cvunt rules over a cuntstituency) dat he got it “lock down”.

    But de ole man respectfully submitteth that ALL DEM AS*ES IS GRASS and every single on of them is seen as being the reason that the country has all these potholes, all this crime (and violence) all this employment disruption/unemployment

    These men are not in the category of Josephs who would have shorn up the granaries for the lean years but they are seen as the rodents and rats that came in the full light of day, while the Bajan populace was awake and teifed the resources of the country.

    $5 million dollars fuh my dead mudder, nuff millions at the Grotto, more millions at all the Housing projects, even more at the Barbados Water Authority, several millions more at MTW and the transport board WHEREVER YOU GO TEIFERY!!!

    Worrell was out of his depth for a lonnnnnggggggg time long before we say him doing this sort of buffonery depicted below.

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  • Bush Tea,
    I agree with you. People are living above their means. I have previously pointed to people on moderate salaries trying to live the life of Riley.
    But the imports only cover the current amount balance; what is the economic argument? Bush, I will argue that most people who talk about foreign reserves, including economists like Frank Alleyne, do fully understand the economic argument.
    It is a consensus view they were first told as students and repeat like parrots from their student notes to generation after generation of students. Get DeLisle Worrell to tell you about the economic case for foreign reserves, or that economic illiterate Chris Sinckler.
    It is like talking about the classical gold standard in these new times.
    Bush, we have car dealers offering 100 per cent loans to buy new cars. Where is the regulator, the central bank, the minister of finance?
    To restrict this will not infringe WTO rules. I suggest corruption is at play. Another example, this time a failure of education: why do people want big gas-guzzling SUVs when they cannot pay their bills?
    It is all based on the fraud that Barbados is a developed country; a country that cannot even supply water to large sections of society, even if the owners of golf clubs can continue to water their courses; even if people can continue to wash their cars.
    We are badly governed, and have been for the last 50 years? But like alcoholics we must first admit that truth.
    In the meantime, Bush, you or any politician can still advance an economic argument for large foreign reserves in contemporary society.

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  • @ Hal
    I agree with you. People are living above their means.
    +++++++++++++++++++++++++++++++++++++++++++
    It is not possible to agree the above with Bushie…. since the bushman actually believes that we are producing BELOW our capabilities. Bushie knows of the unimaginable capability of the human spirit…… and, painfully, of the abject brass bowlery that currently prevails.

    The above apart, you fail to appreciate that the ONLY reason these jokers can get away with the shiite that they are doing is by ‘fronting’ a large bank account to our external creditors as assurance that they are likely to be paid for the goods we want – but CANNOT afford -(because we are lazy and unproductive – not because we should not desire good things)

    …and don’t waste time asking Worrell one shiite.
    Did you see that video of him trying to explain the currency exchange tag? the old emperor had no damn clothes…
    It is obvious that Froon keeps him and Stinkliar in place so that as PM he would be the smartest of the lot – although he clearly has no clue….

    Like

  • current account……..

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  • Hal Austin January 9, 2017 at 8:24 AM #

    “Bush, I will argue that most people who talk about foreign reserves, including economists like Frank Alleyne, do fully understand the economic argument.”

    @ Hal Austin

    How is it that economists do not fully understand the economic argument about foreign reserves, but you do?

    Your argument re: “It is a consensus view they were first told as students and repeat like parrots from their student notes to generation after generation of students,” could be applied to subjects such physics, agricultural science, mathematics, chemistry, biology, Spanish or French.

    Explaining foreign reserves is beyond the scope of this forum for reasons of the complexity of the issue and space, because such an explanation would be lengthy due to the number of variables that must be explored. However, I will try as much as possible to stick to the basics so as to avoid the use of too much theory.

    Firstly, you must get past the mindset that foreign reserves are held specifically to facilitate the purchase of BMWs, Mercedes Benzes or to support exorbitant life styles.

    We must appreciate that keeping foreign reserves supports the economic model under which Barbados has been operating over the years. Successive administrations have MAINTAINED a FIXED EXCHANGE RATE monetary policy, pegged not to the £, €, or ¥, but to the US $, at an exchange rate of US$1 = BD$2. Therefore, since the dollar has not been devalued or floated, Barbados holds foreign reserves to support its exchange rate policy.

    You must also take into consideration that the US$ is the MAIN INTERNATIONAL MEDIUM of EXCHANGE. Similarly to how individuals “hoard” US currency because they are travelling to other countries that do not accept Barbadian currency and where the US$ is readily accepted, Barbados cannot use BD$ in the international markets to finance trade, purchase of goods and services, service debt, etc., and must have foreign reserves to undertake these activities.

    If the Barbados dollar was devalued or floated, then the country would have to change its economic model and pursue alternative, “compatible” economic policies. In a floating rate system, the exchange rate is determined directly by the relevant market forces of supply and demand, and is liable to fluctuate continually, as dictated by changes in market conditions. Although governments may not be keen on moving to floating the dollar, a floating rate system has many advantages, such as its relation to international economic stability, economic policy and the balance of payments and increasing the effectiveness of monetary policy. However, this is a topic for a different discussion.

    Foreign reserves are also held to provide markets with the level of confidence the country can support its debt servicing capacity or meet its external obligations; maintain a reserve for national disasters or emergencies; to provide a policy option if the country experiences serious liquidity problems in its foreign exchange market (foreign exchange markets have the potential to become unstable during economic shocks). There are also other considerations that I would not go into at this point.

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  • Artax,
    A simple example. Financial economics are different to academic economics. When I was a little boy a car mechanic was a totally different beast to one today. Modern mechanics work with computer on wheels.
    One advantage I might have had, compared to people like Frank Alleyne, is that I worked through the crisis – eight hours a day, seven days a week, nearly 52 weeks of the year.
    This included listening and learning from people at the sharp end – and occasionally making a small contribution.
    No matter how much you read and study a subject, unless yo have some practice you tend to miss some of the details. Financial economics is an applied skill.
    With humility, I mention out of modestly that in 2008, I was awarded the Association of British Insurers Lifetime Achievement Award for reporting on the build up to the crisis. The year before I won the life insurance and investment award.
    It was this observation that led to my founding the MA in Financial Journalism at City university.
    When I speak I do not do so from any expert knowledge, but from a body of accumulated information gained from talking to real experts.

    Like

  • @Artax
    Austin poses some interesting questions.
    Why is the “accepted” cover 12 weeks and not 4, 8 or 16? In the 90’s didn’t Barbados slip well below 4 weeks at one point.
    Why is the peg 2:1 and not some other ratio?

    It would seem much of this is based on faith, trust and confidence? And the real issue is not the exact amount of forex in reserve, rather, other financial measures as it relates to other sovereign debt and operations, and our ability to cover those costs.

    In one breath the MoF tells us he is expanding our internal borrowing capacity by $1 Billion, and in the next we are told the BRA is owed $1 Billion (without mention of its ageing). And the BIDC owed another whack in upaid rents.

    Hence why the GoCB referred specifically to FISCAL measures/policy?

    Like

  • The problem is learning by rote, rather than putting on your critical faculties. The principal reason we stockpile foreign reserves is to hedge against an unlikely event ie bird flu, a serious hurricane, etc. and the reserves would provide with a means of meeting our outstanding debt.
    I have in front of my a copy of the Radcliffe report as I type. The arguments about foreign reserves are just a more recent one similar to the classical gold standard argument, and a century before that, the debate between the so-called Currency School and the Banking School, with the Currency School arguing that only notes and coins were good enough as real money, while the Banking School argued that deposits etc were also genuine money. We now know the Banking School won that argument.
    Barbados has not had what insurers call a once in 200 years event since Sept 22, 1955. Why are we saving Bds$1bn in a warehouse when it could be better used in these tough economic times.
    A better way of managing our foreign liabilities is through a rolling programme of quarterly hedging, in that way we will be guaranteed having the funds to cover any emergency costs, while having the freedom to use the money.
    I appreciate there is a limit to local expertise, but that can be bought in. Instead we have an unofficial policy of Barbadianising every senior position, no matter what the quality of the person.
    Credit is the oxygen of our financial system, which is being starved by the foreign-owned banks. It is the job of government to ease this logjam. Use $50m out of the $1bn to establish a post office bank, meeting the needs of households and small businesses.
    Let the credit unions establish a joint credit union bank; the truth is our politicians are ignorant of banking and financial engineering and do not trust any policy implementations that they cannot control. They will feel redundant.
    Monetary policy is about the control of borrowing and lending, ie the central bank; while taxation is that of the minister ie fiscal policy.
    What has happened is that this government has destroyed our international line of credit through its profligate borrowing and increasing debt to GDP, which is now one of the worst in the world.
    What are the liquid reserves? If you want an idea of how much the central bank is out of it, just apply the rule of 70 to their fantastic growth predictions. If we took the exaggerated 1.5 per cent projection, it will take us nearly 47 years to double the economy.
    Compare that with the projected 5 per cent aggregate growth for the region, giving them 14 years in which to double their growth. In other words, in simple terms, the region will outgrow us a minimum of three times.
    Apart from the unpredictable event, the other main reason for reserves is to re-balance the current account in cases of capital flight or sudden hikes in commodity and/or service charges.
    But fluctuations in capital movements are nothing new to Barbados, that is why despite claims to be a small open economy we still have strict exchange controls.
    The truth about accumulating foreign reserves is that we have always done it that way. I am sure that is what Chris Sinckler was told during his course on international trade at Cave Hill.
    We need a new paradigm, a new mindset, a new way of thinking, but the old guard is keeping out new ideas.

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  • @ NorthernObserver

    “Why is the “accepted” cover 12 weeks and not 4, 8 or 16?”

    One of the reasons why countries have foreign exchange reserves is to limit external vulnerability by maintaining an adequate amount of liquidity to absorb external shocks during an economic crisis or when access to borrowing is curtailed.

    The 12 weeks is a calculated ratio.

    Reserves have shown to generally increase as a ratio of imports of goods and services. This ratio is used as an indicator of the country’s current account vulnerability and a common rule that a ratio of 3 to 4 months of foreign exchange reserves is considered adequate for the country to cover its imports or all external short-term debt.

    +++++++++++++++++++++++

    In the 90’s didn’t Barbados slip well below 4 weeks at one point.?

    Yes, “in the 90’s Barbados slipped well below 4 weeks at one point.” According to IMF international financial statistics, Barbados’ reserves in 1991 went to 1.139 month; 1991 – 2.259; 1993 – 2.08; 1994 – 2.472; 1995 – 2.294; 1996 – 2.812; 1997 – 2.262 and 1998 – 2.983.

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  • @Hal

    One billion in foreign reserves? That is a number from the past. Bear in mind also we have borrowed when the market rate was low to shore up reserves. The inflow was not linked to real growth.

    Artax can confirm.

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  • David,
    It is a rounded number. Common in financial mathematics.

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  • NorthernObserver

    @artax
    Thank you.

    So while the forex reserves have been slipping, that is of concern but not the primary issue.
    That issue is our overall DEBT load, which is taking a larger and larger bite out of our revenue annually, and also growing because we continue to spend more than we are taking in. This in itself limits our ability to borrow beyond our shores.

    What about our continued inability to collect taxes owing, land, VAT, income etc? Doesn’t this suggest, the citizens, like their government, are using borrowed money (unpaid taxes) to live on? This exacerbates the public accounting issues.

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  • There is also pressure of domestic spending on the reserves as well. This places pressure on the foreign reserves. This is why the printing of money has come in for tongue lashing from all and sundrysundry including the IMF.

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  • “David January 9, 2017 at 6:03 AM #

    He is obviouslytalking about a wage freeze across the board both private and public.”

    Are you nuts? Sure the private sector would definitely like that but how can that be achieved without the connivance of the BWU and Unity and would you think the Government would be so stupid to alienate such a large proportion of the voting public. And do you not think a public sector wage freeze would stagnate rather than stimulate the economy? I am not an economist so I just asking.

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  • @ NorthernObserver & David

    Many reasons could be attributed as to why Barbados’ “forex reserves have been slipping.”

    Despite what government would want us to believe, it is clearly evident investor confidence in the stability of Barbados has declined, mainly due to the consecutive credit rating downgrades. When this occurs, investors will engage in “capital flight,” i.e. they will take their money out of the country by converting the proceeds from the sale of their domestic currency investments into foreign currency.

    Government cannot continue to defend the exchange rate, in terms of political and economic factors, as well as the decline in foreign reserves.

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  • Want to bet that CariCRIS will be dismissed as a regional fly weight entity?

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  • Since 2008 I have been calling for a de-pegging of the Bajan dollar and fixing it against a basket of currencies and commodities. I was poopawed. Now it is getting serious currency. H|ad that happened years ago the economy would have been in a much better position.
    I blame Sinckler and Worrell, tweedledee and tweedledum.

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  • Peter Wickham , Mia Mottley’s political advisor told her “do not offer any SPECIFIC solutions” to any issues in Barbados. Notice the word SPECIFIC.
    Wickham’s memo includes the need to say cut spending but never say where so as to avoid any of the political fall out because the only place left to cut is WAGES and SALARIES or go and beg your creditors for an ease with the repayments which they most likely will not give and which would cause further panic in your financial system. So Mottley was advised to use buzz phrases like “spending can be drastically reduced with a little creativity”,lol, etc.

    Hence the BLP smokes and mirrors will continue as they try to push a narrative that they have some magicians who will find miraculous solutions to everything in Barbados with a bunch of recycled MPs like Trevor Prescod and Glyne “wuk fa wuk” Clarke and a few others that do not have a damn clue . Just give the BLP power and manna will start to fall from heaven, millions of taxpayers dollars will appear, tourists who were sitting in Europe waiting for a BLP administration will decide to take a vacation and spend like crazy.

    No wonder Peter told her not to be specific, just throw out the bait and let the fish bite. Bajans are more intelligent than Peter Wickham and his Mottley crew believe.

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  • It doesn’t matter who won’t say where to cut we will have to find where just not given the state of public finances.

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  • Hal Austin January 12, 2017 at 3:21 AM #

    “Since 2008 I have been calling for a de-pegging of the Bajan dollar and fixing it against a basket of currencies and commodities.”

    @ Hal Austin

    Once again I must admit that there is merit in you above comment.

    I prefer to discuss these issues by using models to further explain the theory, but I cannot do so in this forum.

    As I mentioned in a previous contribution, Barbados has to pursue economic policies compatible with the economic model under which the island operates. And this includes monetary (exchange rate) policies that afford us the capability of maintaining the exchange rate peg.

    You are aware that, and against the background of rapidly depleting foreign exchange reserves, Barbados has been running persistent balance of payments and fiscal deficits while pursuing exchange rate/monetary policies to maintain the fixed exchange rate.

    Under the prevailing economic environment, continuance of these policies will ultimately lead to a currency crisis, whereby investors, after losing confidence in the country’s ability to meet its debt and other international obligations, will see their domestic assets in favour of foreign assets, (i.e. CAPITAL FLIGHT), which may have 3 results:

    1) A devaluation of the dollar
    2) Moving to a floating exchange rate
    3) Borrowing from organisations such as the IMF or entering an IMF program.

    Under a fixed exchange rate system, monetary policy has proven to be ineffective in influencing economic growth. While, in a floating exchange rate system, monetary policy could bring about a short-term decrease or increase in GDP, because it affords the Central Bank the ability to adjust policy to affect the economy’s macroeconomic conditions.

    If there is sluggish growth or a contraction of the economy, under a floating exchange rate system, CBB could increase the money supply in an attempt to spur GDP expansion.

    Barbados has been experiencing sluggish economic growth for the past 10 years. Under a fixed exchange rate system, the CBB cannot effectively increase economic growth by increasing the money supply. We have been increasing the money supply to finance domestic spending and the deficit. Hence, we may soon lose monetary autonomy.

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  • NEW YORK – Moody’s Corp has agreed to pay nearly $864 million to settle with U.S. federal and state authorities over its ratings of risky mortgage securities in the run-up to the 2008 financial crisis, the U.S. Department of Justice said on Friday. … The credit rating firm reached the deal with the Justice Department, 21 states and the District of Columbia, the Department said in a statement. The agreement comes two years after S&P Global’s Standard & Poor’s entered into a $1.375 billion accord with the Justice Department, 19 states and the District of Columbia over similar claims. Standard and Poor’s is the world’s largest ratings firm, followed by Moody’s – See more at: http://www.nationnews.com/nationnews/news/92460/moody-agrees-multimillion-dollar-settlement-us#sthash.pWcZ59l6.dpuf

    Are these the Moody’s and S&P’s that persist in harassing little insignificant Barbados? The US government not only found Moody’s and S&P to be crooks and corrupt. The US government also deemed them cheats and fined them billions for misleading people. So much for the bandwagoners who jump and wave when Moody’s and S&P come to town to unfair little Bim.
    Fine the heck out of them USA………… USA !USA!USA!

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  • Commentator January 14, 2017 at 4:02 PM #

    So Moody and S&P are crooks……..who cares…….the world of business listens to them…..that is the bottom line…..so try and organise your affairs in such a manner that you do not need the business world……simple….can you do it?

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  • What about CariCriS?

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  • Vincent Haynes January 14, 2017 at 5:04 PM #
    Commentator January 14, 2017 at 4:02 PM #
    So Moody and S&P are crooks……..who cares…….’

    Pure hypocrisy when the Canadian solar investors brought projects your kind protested that they were prosecuted in Canada and therefore not welcome. A similar fate awaited a number of foreign investors who fled and took their FDI leaving Barbados without a cent in sorely needed foreign exchange, The situation is the United States the world most powerful government have convicted Moody’s and S&P as criminals. They are therefore unqualified to judge little B’dos. There is the equivalency. Knock off your childish hypocrisy.

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  • Commentator aka waiting

    Like

  • Commentator January 14, 2017 at 7:28 PM #

    When will you all learn that the world is not fair,those “crooks” control the decisions made by the lenders,so continue crying as no one is listening……..better to get up and start trying to solve these problems in the next 18 months if you know whats good for you.

    Like

  • Violet C Beckles CUP

    http://epaper.barbadostoday.bb//launch.aspx?eid=bc6d1f24-5796-463c-9882-da1cdc6a2deb

    Once again SB, learn to Listen to CUP
    listen to the news cast
    then go to page 8 and 9
    listen to what MOF Sinkman say about IDB and land,
    When you read where the 60 million Dollars was to go ,
    Write down the names of the areas and what even plantation names you can see,
    Take notes this is real Life not a computer chart and no History.
    Living People , Humans , Who Live and DIE and need to Live Well in the middle of Life,
    Learn Barbados true History hidden and removed by crooks If you want to help the same people that you want Vote from , We did , We know , Catch up ,
    for right now we see you here to split the CUP Votes and to allow the DBLP or the BDLP to get back in , Know who your enemies are ,We have to clean out the Gully , Unless you are the back up of the DBLP Fraud government,
    We have all of what they said in this news cast that made it to much for the MOF,
    We I sat with him face to face in the UDC, He said, “We Do not pay twice” We told him he paid the wrong people,at that time it was over 90 Million paid out for fraud lawyers and fake land owners,

    He even used the word CLEAR TITLE , a term the lawyers of Barbados run from ,

    Like

  • Hi Hal Austin You stated
    “Since 2008 I have been calling for a de-pegging of the Bajan dollar and fixing it against a basket of currencies and commodities.”

    Like

  • imagine that not even an entire year has gone yet since MAM brought a no confidence motion againt the CBG and look what unfolding now. What these bunch of Political mishaps that call themselves the Deceitful Lied party will blame this on. The self inflicted blows they gave our economy. How much of the people money they got in offshore bank accounts. Lord help this small Island before it SINK.

    Like

  • whats the basket of currencys…the iranian rial the rupiah the dong the kwacha lol

    Like

  • Well Well & Consequences Observing Blogger

    http://bit.ly/2m3RkJv

    Lawson….. look, jokes cant done..lol

    Like

  • Well Well & Consequences Observing Blogger

    Hal mis-spoke…lol

    It totally makes no sense.

    Like

  • Well Well & Consequences Observing Blogger

    http://www.independent.co.uk/news/world/europe/europe-visa-free-travel-americans-european-parliament-vote-a7609406.html

    I totally agree with EU to restrict travel for Americans, they should not be the only people allowed to travel so freely when millions of their citizens are among the most violent.

    “The European Parliament has voted to end visa-free travel for Americans within the EU.

    It comes after the US failed to agree visa-free travel for citizens of five EU countries – Bulgaria, Croatia, Cyprus, Poland and Romania – as part of a reciprocity agreement. US citizens can normally travel to all countries in the bloc without a visa.”

    http://www.independent.co.uk/news/world/americas/us-politics/jeff-sessions-recusal-special-prosecutor-more-likely-russia-donald-trump-links-a7610056.html

    Look Lawson…exactly what we wanted..

    Like

  • Hindsight,

    Yes. Since the crisis In my Notes From a Native Son.

    Like

  • Lawson,

    Certainly not the Canadian dollar. The trouble with this forum is that one has to repeat the same thing for every new voice. I can’t be bothered. Get hold of Notes….

    Like

  • Artaxeerxes,

    I have also called for the government to abandon the popular consensus of foreign reserves and opt instead to play the currency futures market to meet the requirements of any shocks – what insurance companies call a once in a 200 year event.
    Even David likes talking about foreign reserves. I think the mantra of foreign reserves have got hold because it has been taught at Cave Hill for decades by people like Frank Alleyne, regardless of the changes in global finance since the 1980s.

    Like

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