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Governor DeLisle Worrell Warns Foreign Reserves Continue to Fall

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…

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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 responses to “Governor DeLisle Worrell Warns Foreign Reserves Continue to Fall”

  1. David Avatar
    David

    No Jeff Cumberatch column today.

  2. charles skeete Avatar
    charles skeete

    “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”

  3. Violet C Beckles Avatar
    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/

  4. ac Avatar
    ac

    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

  5. Snusmas Avatar
    Snusmas

    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

  6. Dompey Avatar
    Dompey

    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.

  7. David Avatar
    David

    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.

  8. David Avatar
    David

    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/

  9. Bush Tea Avatar
    Bush Tea

    @ 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”

  10. Snusmas Avatar
    Snusmas

    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.

  11. David Avatar
    David

    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

  12. David Avatar
    David

    “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?

  13. Hal Austin Avatar
    Hal Austin

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

  14. Kevin Avatar
    Kevin

    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?

  15. Hal Austin Avatar
    Hal Austin

    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.

  16. Gabriel Avatar
    Gabriel

    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

  17. Gabriel Avatar
    Gabriel

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

  18. Well Well & Consequences Avatar
    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

  19. Snusmas Avatar
    Snusmas

    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.

  20. Artax Avatar
    Artax

    @ 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.”

  21. Well Well & Consequences Avatar
    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.

  22. Snusmas Avatar
    Snusmas

    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.

  23. Snusmas Avatar
    Snusmas

    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.

  24. Well Well & Consequences Avatar
    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.

  25. Dompey Avatar
    Dompey

    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.

  26. Well Well & Consequences Avatar
    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.

  27. David Avatar
    David

    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

  28. Hal Austin Avatar
    Hal Austin

    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.

  29. Hal Austin Avatar
    Hal Austin

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

  30. David Avatar
    David

    @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?

  31. Vincent Haynes Avatar
    Vincent Haynes

    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.

  32. ndtewarie Avatar
    ndtewarie

    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.

  33. ndtewarie Avatar
    ndtewarie

    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

  34. Seth Avatar
    Seth

    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.

  35. David Avatar
    David

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

  36. Artax Avatar
    Artax

    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.

  37. Artax Avatar
    Artax

    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

  38. Hal Austin Avatar
    Hal Austin

    Artax,
    What are the foreign reserves for?

  39. Hal Austin Avatar
    Hal Austin

    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.

  40. Gabriel Avatar
    Gabriel

    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.

  41. David Avatar
    David

    @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.

  42. Prodigal Son Avatar
    Prodigal Son

    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!

  43. nineofnine Avatar
    nineofnine

    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/

  44. Prodigal Son Avatar
    Prodigal Son

    @ 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!

  45. David Avatar
    David

    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.

     

    https://barbadosunderground.files.wordpress.com/2014/03/butch-stewart-chamber_.mp3

    Who is laughing now?

  46. nineofnine Avatar
    nineofnine

    @ 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?

  47. Well Well & Consequences Avatar
    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.

  48. are-we-there-yet Avatar
    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/

  49. bajans Avatar
    bajans

    @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.

  50. Prodigal Son Avatar
    Prodigal Son

    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!

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