RBC Chief Economist Reviews the Barbados Economy

“I think the most important number to watch right now is foreign reserves. Central Bank of Barbados (CBB) online data to February 2017 show that reserves declined by 29% year-over-year (y/y) to USD 329 million, which I estimate at roughly two months of imports. (2) that USD inflows raised from debt (from the development banks or otherwise) have to be repaid with even more USD over time, and the Barbados Government is already running a primary fiscal deficit. This means they are borrowing to pay interest on existing debt – and further debt will drive total debt servicing costs even higher (already 26% of total revenues), (3) that in light of chronically weaker USD inflows, borrowing more USD now, could make things worse in the medium-long term, (4) and finally, USD inflows for projects are largely temporary – they flow back out as materials and equipment are imported for the execution of the project.” – Marla Dukharan, Group Economist of RBC

Marla Dukharan has been criticised in the past by Minister Chris Sinckler regarding her analysis of the state of the Barbados economy. However, based on every economic indicator she has been proven to be correct. In light of her recent review of the economy many will want to contrast it with the first quarter economic review due from the Central Bank of Barbados. The review will be presented by the acting Governor of the Central Bank who was elevated to the job when DeLisle Worrell was fired by Minister Sinckler in a controversial affair that required intervention from the court.

Dukharan has expressed concerns about Barbados’ capacity to defend the peg of 2:1 with a monetary base of 2.34 billion and foreign reserves of 329 million as at February 2017 – a result of massive printing of money by the Central Bank of Barbados. She also mentioned the 74% holdings of government securities by NIS which exceeds the prudential limit of 54% and NIS target of 60%. The lack of transparency by this government of the NIS fund and the management by successive governments has been discussed many times in this forum.

The big economic challenges for Barbados are 1) reduce the public sector debt significantly and 2) earn foreign exchange to pay our bills. The government if it wants to win the next general election due in the next 12 months will be hard pressed to position the interest of the country above the goal of the party, FACT. The foreign exchange earnings projected from the sale of BNTCL and the Hyatt hotel are stuck in the pipeline because of litigation brought by David Comissiong and RUBIS respectively (it must be noted the BNTCL deal is pending FTC approval). Even if the two projects are released in quarter three or four, it is unrealistic to expect the economy to benefit in the current financial year from the Hyatt hotel deal given the time required to mobilize a project of that size. Marla Dukharan has echoed the view of local commentators that a significant percentage of the foreign inflows for the Hyatt project will have to be be expense in imports therefore the net benefit to the foreign exchange account will be a lot less than 100 million dollars.  The assumption BU is making is that the developer has sourced funding for the project from outside of Barbados. At the time of writing Barbadians have not been apprised about the financial arrangement by Vision Development Inc for the project.

Unfortunately Duhkaran has recommended that the Barbados government MUST find a way to reduce the deficit by 600 million dollars. The three areas that afford the opportunity to do so are wages, interest and transfers and subsidies. Further, that Barbados enters an IMF program, FACT!

Read the Marla Duhkaran’s INTERVIEW with Caribbean Strategic Research


  • What is the common thread is that the DLP tend to promote square pegs into round holes in the name of political payback.Was Springer not an accountant?What the heck does he know about economics.A Central Bank Governor is better off with a background in economics.Too often we have seen people misled by data because they cannot unravel what the true significance conveys.
    There is no way a present day DLP candidate would convince me other than that he/she is on a mission to buy a food and thief some money for 5 years minimum.


  • @Gabriel

    Didn’t Calvin Springer sing in St. Mary’s choir?


  • carson said ” Carson C. Cadogan April 19, 2017 at 5:43 PM #

    That is understood.

    This is a Barbados Labour Party blog”

    So, just because your party, who are in current government, get some criticism, you label the blog.

    Was not so when the blog commenters were disagreeing with policies of the prior government, was it?

    I really do not get why those in power cannot take some disagreement. And just just Barbados. Russia, current in US, Venezuela, Turkey, none can take some criticism.

    What the heck is it?

    Or do we just accept the old adage that ‘power …’.


  • David
    The few times I have been at St Mary I have never seen him in their choir.I have never associated him with that church.I think he hails from St Lucy and more likely associated with St Clement.


  • William Skinner

    I think Calvin Springer was a career
    civil servant, who served with distinction
    In government departments such as
    Accountant or Auditor General depts.
    He was therefore well versed in govt Finance
    He then joined the Central Bank and
    was a deputy governor before he was
    made GOCB. He certainly had a stellar
    career as a public servant .


  • NorthernObserver

    @C3’s 5.15pm post….glad to see not a shiite has changed in Bajan politics. GPII would do well to watch, and realise that apart from having a Bajan Passport and a heartbeat, you need to be able to talk nuff, in the vain of a preacher.
    Crank up the volume and listen to the party supporters in the background, sounds exactly like my Auntie Velda listening to the ray-dee-yah and the old time gutterperk/brasstacks.


  • NorthernObserver

    tis known as the Peter Principle.
    Imagine if Gordon Greenidge was forced to open the bowling?


  • @Carson

    The videos with Big Sinck are pure horror. Imagine the Sinck meeting foreign investors.

    Such videos are the reason why I presented the theory on BU that Barbados has a very long way to go to evolve into a developed country.


  • There is a level of bellicosity that shines through with this lot. No decorum. No sense of calm. Nothing inspirational.


  • Frustrated Businessman aka 'Nation of Laws' my ass.

    Gabriel April 19, 2017 at 4:42 PM #
    Yes Clyde Mascoll made an outstanding contribution today on Brasstacks.I support his call for a return to local government(definitely not the toothless,blatantly yardfowl constituency councils) to deal with parochial matters such as refuse collection,roads,degrassing,lighting poverty alleviation etc………………

    .Further, I agree the Senate should be abolished and a unicameral legislature be adopted.


    Because Bim needs more levels of civil servant and bureaucrat jobs to be filled by lackies?

    Barbados needs simple, lead from the front, management!

    These idiots took over the plantation and are filling their guts in the big house without any idea how to manage the estate while crops fail and buildings fall down around them.

    We don’t need more political pontification, we need the people elected to do the job to damned-well do it.

    The senate could work it it was depoliticised and given more authority over the civil service. That is what all podium-heads fear most, oversight with consequences.


  • NorthernObserver

    “Herbert went as far to admit publicly they urged the PM to issue a press release”.

    In fairness, didn’t the B’s have a similar session with the local illuminati prior to the D’s? Both likely ended in the same indecision…..they are ways to alter the public financial situation, and other measures, but neither Party wishes to offer them publicly, and risk getting tarnished with anything negative. (salary cuts, jobs cuts etc etc)

    If the PM issues a release, and subsequently adopts any of the measures, the story will be he is yielding to the business community, which in Bim is interpreted as ‘not in the public interest’.


  • @ Tron
    Such videos are the reason why I presented the theory on BU that Barbados has a very long way to go to evolve into a developed country.
    Excellent theory…. it explains EVERYTHING.
    Yours is the absolute best explanation of brass bowlery in Bushie’s long search for its meaning and genesis…..


  • @NO

    You are echoing the point made in this BU blog that the paramountcy of the DLP party will trump national priorities. It is the big flaw in our system.

    Do we expect an incumbent political party to rollout austerity measures in an election year?


  • FB

    These idiots took over the plantation and are filling their guts in the big house without any idea how to manage the estate while crops fail and buildings fall down around them.

    No disagreement with the above statement,except to add that the fields are burning as well with violin music in the background.

    How can we change it??

    Elections are due mid 2018….can the country survive that long??

    What will you and your colleauges do come Friday??



    It makes one chuckle
    Not to use the buckle
    On some of these non-conforming fools
    So uncool for they do not have the tools
    They could be a man and his wife
    And many others in this little life
    As they go around and condemning
    Whoever would give them a hearing

    We read about them every darn day
    And even hear the lies as they pray
    It is as if we are in a third world country
    Committing white collar crime and go free
    They fortified themselves with fat pensions
    Changing jobs with prestigious institutions
    Getting off plundering the towns and  the provinces
    Leaving taxpayers holding the bag in many instances

    Let me put it to you without any sugar coating
    Life can’t go on well for these so and so conniving
    Fools, they have to suffer and get the full punishment
    For karma comes back biting badly and really hell bent
    To see the results can even make me sad
    But these fool hardy fools maybe feel glad
    Forgetting don’t spend what you don’t earn
    This little lesson is what they never learn.


  • Here is a question for the BU forum: why is it that despite the kleptomania, the thuggery, the numerous police states, and naked racism (neo-fascism), foreign direct investments are still flowing in to Latin America and not in the politically more stable Caribbean?
    Answers on a postage stamp, plse.


  • @Hal

    Without doing any research the answer will lie in the fact Latin America provides the opportunity for investment across sectors. In the Caribbean there is tourism and what else?

    FYI – S&P lowers T&T Long-term ratings to ‘BBB+’ on higher debt burden


  • Mascoll Mascoll smfh


  • NorthernObserver

    Undeveloped=opportunity, relatively inexpensive labour, open to change, and larger populations


  • David, you will come to a similar conclusion after the research as well.

    The Dom Rep. has long suffered under massive corruption and the other major ills cited by @Hal but investment funds going there yet far outpaces anything here simply because as you stated there is much greater scope.

    And of course tourism is a significant component of that economic spend. They welcome millions of tourists per year…we, hundreds of thousands.

    In Costa Rica there was a booming health tourism industry where many Americans would travel there for various cosmetic procedures principally and too other care and convalescence.

    There was also major interest in real estate and too in Panama by Americans.

    The others in Central America like El Salvador, Guatemala, Honduras, Nicargua and Ecuador are not as ‘attractive’ due to greater violence (and size) and in the latter two cases strong political disaffection towards the US but otherwise …as you continue on south to Chile, Argentina etc your base remark is absolutely correct.

    Of course Brazil stands alone. She is a behemoth and regardless of the worrisome issues she faces can’t really be compared to any of her neighbors realistically on the matters of investment and US interest.

    All that said means not much, however because for all practical purposes there is absolutely no comparative economic equation between the Caribbean and Lat Am. NONE.


  • Incidentally, this matter of political stability is not what our grandparents told us it was! LOL.

    As long as investors are confident that they can repatriate their profits (or move them freely anyhow…to Bermuda or Sweden) and that they will not be rudely shocked by some nationalization screed from a socialist takeover they will go wherever the best opportunities are.

    The point simply, power brokers will make friends and invest in all types of politically unstable countries as long as business matters are copacetic.

    Brazil is freaking totally unstable politically…wasn’t their Pres impeached and then the successor almost impeached too…all for corruption!


  • NorthernObserver

    Is it the system itself or the reality of ‘party politics’. Many candidates will win or lose, not because of what they offer personally, but which party banner they are running under and who is the leader. You can change the system, but candidates will still congregate in groups.


  • Carson C. Cadogan


    Barbados safest in region

    “”BARBADOS HAS BEEN ranked as the safest destination in the Caribbean by the World Economic Forum in the Travel & Tourism Competitiveness Report 2017.

    The island received a ranking of No.55 in the safety and security portion of the report coming in ahead of Trinidad and Tobago at No.115 and Jamaica at No.119.

    Finland was ranked as the safest country and Colombia the least safe at No.136.

    First compiled in 2007, the Travel & Tourism Competitiveness Index (TTCI) measures “the set of factors and policies that enable the sustainable development of the Travel & Tourism sector, which, in turn, contributes to the development and competitiveness of a country”.””

    Great governance of the country by the Democratic Labour Party ensures that Barbados is one of the safest places on Earth.

    However the crooked Barbados Labour Party and their supporters, including DAVID, WOULD HAVE THE WORLD BELIEVE THAT BARBADOS IS A DECAYING, CRUMBLING, HARSH place to live. Nothing could be further from the truth.


  • Truthfully with all the negative postings on BU about barbados it is always a breathe of fresh air when something positive about barbados is posted on BU. Any how reading most of postings for the first time would be lead to belive that barbados is a living hell hole
    Thanks Carson for taking the initiative of posting articles that are intuitive to giving another view of beautiful barbados
    I know the blp yardfowls must be having belly hurt when you post them.Anyhow be careful as most likely David BU might dumped them as he has already alluded to do in a previous comment


  • Tourists tour and leave,returning to their place of abode..Citizens live and have their being on this rock called Barbados 24/7.


  • NorthernObserver

    Yes Barbados is ranked No 55. In the 2013 report it was ranked No 32 and in the 2015 report no 44. (32-44-55)
    T&T was comparatively ranked 105-123-115, while Jamaica was 95-127-119. Thank goodness Barbados has ALWAYS ranked well ahead of both T&T and J’ca, and since T&T isn’t a noted tourist destination….who cares?
    Would you care to share the comparisons of Debt to GDP over the same time frame??


  • There is a VERY SIMPLE reason why we CANNOT go to the IMF for assistance – even though it makes consulate sense with low loan rates and technical assistance.
    The damn IMF people’s mouths are just too big….

    They have this habit of writing things down in reports … and then making them available on line…

    That makes sense to wunna????!!
    Can you imagine all the ‘business’ of Four Seasons, CLICO, CAHILL, VECO etc published in a report on line…?
    Wunna can imagine listings of bribes paid; deposits on mommy’s account; cheques deposited in PM’s accounts; …of $3.3M unexplained transactions; …all appearing in PUBLIC reports?

    Wuh de dog would bound to dead!!!

    These IMF people are so ‘ingrunt’ then!! … that they just locked up a former IMF boss for FOUR years (in Spain)…. for misusing a company credit card… flying bout the world and living large…. a routine activity of big ups in Bim.

    Wuh …what wunna think they would do wid a black Bajan ..who miss and tek a bribe…?
    …especially fellas who tek cheques, ..marked notes, ..big rides and who made arrangements in writing, by email and by whatsapp…?

    No IMF fuh we…..


  • Can someone from the Barbados press interview Marion Williams and ask her about her views on the 2008 global financial crisis, especially that it would not affect Barbados? Where do we get these public servants from?


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