Caribbean Economist Marla Dukharan Reviews 2017 Budget, “I expect growth to decline significantly…”

Click to read the full Interview with Chief Economist of RBC (Caribbean) Marla Dukharan

43 thoughts on “Caribbean Economist Marla Dukharan Reviews 2017 Budget, “I expect growth to decline significantly…”

  1. Bajan Free Party/CUP/.Violet Beckles Plantation Deeds from 1926-2017 land tax bills and no Deeds,BLPand DLP Massive land Fruad and PONZI on said:

    There can be no Growth with Fraud, Land Fraud, Laundering of Money and PONZI, As I repeat in every post. As many of you feel and now need to see how much pain you can take,

    Well if the DLP or BLP get back in then the Level of PAIN, Will ring out in more different types of Drugs and Guns,

    Barbados was set up to fail from 1986 now in 2017. A road map help paved by greed and the greedy,

    Voices on BU are now adding more and more, You all better wake up by Election Day or you will be in 1937 in 2018,, Brace for Impact

    Lawyer, QC, Sir , Judges will be on the?

  2. Bajan Free Party/CUP/.Violet Beckles Plantation Deeds from 1926-2017 land tax bills and no Deeds,BLPand DLP Massive land Fruad and PONZI on said:

    racehrse June 7, 2017 at 8:26 PM #

    “2017 Budget is why Sinckler doesn’t work in the banking, or financial industry!

    lololololhahahahahhah he works in spending fraud and laundering,

  3. Quote Dookeran. “What the Minister has articulated APPEARS TO BE A FISCAL DEVALUAION – one which holds the nominal exchange
    rate and wages steady, but in effect increases import
    tariffs uniformly, such that fiscal revenues grow, while
    outflows of foreign exchange decline, based on higher
    import prices. Since the purchasing power of the Barbados
    dollar will be reduced, and it will now cost BBD

  4. The minister does not have a clue so he has been learning on the job.

    He would never understand what Marla has written…………way beyond his pay grade!

    Time for these dems to go though!

  5. The minister of finance does not have responsibility for the NIS………..I thought that his constant use and misuse of the fund at will was the reason the piss poor PM reassigned it to the poor Minister of Labour.

    I am at a lost how the Chairman and his board under the minister’s “leadership” could allow the minister of finance to raid the people of Barbados pension funds with no intention of ever paying it back. Who is goint to repay all of the millions that the dlp has taken out of these funds. The last figure I heard from the House was 74%.

    We are lost in Maxwell pond…………..

  6. Barbadian consumers will no sooner stop wasting foreign exchange in a shortage than they will stop wasting water in a drought . . . . unless they are made to shoulder the economic cost of these commodities. The economy can increase its export (tourism) competitiveness and simultaneously reduce the demand for forex by adjusting the peg to 2.70: 1. The growing strength of the US dollar vis-a-vis our European, British and Canadian currency areas is going to stagnate our tourism and investment even further. The budget lacked a policy to EARN foreign exchange !!

  7. Again Marla repeats the point about the volume of the monetary base of 2.49 billion compared to 353 million in foreign reserves a ratio of 7:1. This and other keykey observations we need to have serious discussion and leave the political poppycock at the door. That is if we care about Barbados.

  8. @Gabriel

    Thanks for posting the link. Here is the last paragraph of Basil Springer’s column.

    My tuppence worth as a problem solver, in the form of a high level summary of how to kick-start the economy, may be encapsulated in the following seven point strategy: (1) Assemble the best problem solving brains; (2) Restructure the debt ; (3) Invite investment; (4) Rationalize government services; (5) Incentivize the private sector; (6) Shepherd entrepreneurs; and (7) Pursue manpower needs-driven training.

  9. I hope people understand that a “monetary base” of 2.5 billion means that there are 2.5 billion Barbados Dollar bills in circulation and that at an exchange rate of 2 Barbados for one US dollar we would need to have a reserve of 1.25 billion US dollars to support the WORTH
    of the Barbados dollar, and by now we can probably count on less than 353 million in foreign reserves. There has in fact been no convertibility since 2014 and it continues to erode partly because of the inflated value of the US dollar which compounds our other inadequacies.

    Can’t anyone see the writing on the wall ? The longer we put off a reasonable autonomous currency adjustment, the more impossible it will be to argue against a deeper gouge mandated by an IMF programme. Are we in denial?

  10. If an economic analysis is based on false information, then the conclusion must also be false. The monetary base in Barbados is not Bds$2.5bn, but an unknown amount – up to US$70bn.
    Although Barbados is an independent jurisdiction with its own currency, the reality is that US dollars are used daily as ‘legal’ tender and since there is no monitoring of this money, there is no official estimation of how much of the Greenback is in circulation.
    I suspect that there is more than is popularly imagined, given that when some of us use Greenbacks as currency in local shops, the first thing the proprietors do is to put it in their side pockets.
    This is a loop hole that should be blocked. Make the spending of any other currency than the Bajan, or the stockpiling of more than US$5000 domestically a criminal offence with a mandatory prison sentence.
    Government must take back control of the economy.

  11. Hal Austin June 8, 2017 at 11:05 AM #

    Correct me if I am wrong……Projections can only be made on what is known.

    Every country in the world has an underground/black market…..yet they still make projections.

    The black market wherever it is found in this world cannot be valued accurately……So how can one do an economic analysis anywhere in the world?

    I am baffled please correct me and explain.

  12. Vincent. A forecast can be as accurate or as wrong as the date fed in to it. We need to know the models used by the forecaster to know how seriously to take it. I have long been asking for the Barbados central bank to publish it models, so far without success or any support.
    Remember until June 2006, Bernanke still thought that the US economy was strong, completely missing the winds of the Great Recession.
    We also know that in mainstream economics there is an obsession with the efficient market hypothesis; we also have the intervention of mathematics, behavioural psychologists and now neuro-scientists. It is all boloney. Modelling techniques have taken over from basic common sense in academic economics, which is what separates it from financial economics.
    The Great Moderation ran from about 1984 to 2007, look at the peer-reviewed journals, the books and media commentaries to see who the contrarians were.
    As Keynes said, the ideas of economists and political philosophers have an enormous influence on policy, even if they are right or wrong. He said that in 1936. Remember that both mainstream economists and policymakers missed the size of the sub-prime mortgage problem.
    Mainstream economists do not factor in the distribution of wealth in their models, yet 80 per cent of the global population live on under US$10 a day. To them this is absolutely unimportant.
    So, in simple language, an analysis based on the BD$2.5bn monetary base and ignores the use of the Greenback as an alternative currency has missed an important factor.
    You nd |I know the Greenback is used without going through the banking system.

  13. Just a brief note to help those Bajans who are confused or misled by Hal Austin:

    (1) “We know that in mainstream economics there is an obsession with the efficient market hypothesis…” [Grade F: The efficient market hypothesis is an INVESTMENT THEORY about the speed with which the STOCK MARKET adjusts to new information. Its corollary is that most stocks are fairly priced]. Hal does not understand the difference between Finance and Economics, so he confuses MARKET CLEARING THEORIES in classical and neo-classical economics with modern finance theory.]

    (2) “Mainstream economists do not factor in the distribution of wealth in their models.” [Huh? Some models do and some don’t. A model is only meant to capture the most important factors in the subject being studied. There are excellent reasons why some economic models exclude the distribution of income from consideration]

    (3) “Boloney” [Reminds me of “potatoe”]. It’s B-A-L-O-N-E-Y, Hal.

  14. @ chad99999June 8, 2017 at 2:58 PM

    Welcome back, Chaddie the 9X5 king of free-market spin!

    Trust your sabbatical was most fulfilling.

    You ought to be aware that Barbados has as many economists available to attend to its economic ills as there are lawyers a dime a dozen to comatose its judicial system.

  15. @ Vincent
    That is my point. We do not know the level of Greenbacks in circulation because as a currency it does not have to go through the banking system. That is why I have called previously for all foreign monies to go through an approved money dealer.

    @ Chad,
    Welcome back. One of the most popular books used in undergraduate economics is Economics: Principles and Policy, by William J. Baumol and Alan S. Blinder, and Blinder is accepted by members of the American Economic Association as a leading mainstream economist.
    Of Blinder’s volume of work, he has made some small points: first, that ideology has taken over most of economics; second, that economics has drifted to the right; and, that some financial economics (and financial theorists, HA) “..have got carried away by the allure of the efficient markets hypothesis..”
    @Chad, I also suggest you see Jeff Madrick’s Seven Bad Ideas for a repeat of this claim. I don’t know about you, but I sat in on a Eugene Fama lecture at the Cass Business School in which he said something similar.
    @ Chad, who made the claim that most mainstream economists do not factor in income distribution in their theories? Ask Arnold Packer, the former assistant secretary of Labor in the Carter Administration and former chief economist to the US Senate Budget Committee. Plse name one current mainstream economist that does and the title of his/her work.
    In case you do not know, the Anglo-Saxon liberal debate around income distribution shifted in the 1970s from wealth to social justice.
    The global unemployed, estimated at 200m, and 80 per cent of people living on less than US$10 day – and in our little space, Barbados, wealth distribution is never discussed by any of the two main parties, to lend legitimacy to this view.
    It took Thomas Piketty’s Capital in the 21st Century, to return income distribution to mainstream economic debate. Even if you do not agree with Piketty, his online tables are invaluable. I suggest Chad you have a look at them.
    Finally, I am not an economist, but a regular Joe Bloggs. But I am informed enough to repeat that you Chad are an intellectual fraud. Even so, plse do not go away for such long period again. I missed you.
    As to boloney vs baloney, I won’t dignify such crass silliness.

  16. Hal

    All over the world you will find that a blackmarket exists where euros,pounds,greenbacks are traded under the counter.

    All over the world despite the blackmarket that cannot be quantified they do projections based on known facts.

    What is wrong with the same being done in Bim?

    That is the point I need to understand.

  17. Vincent,

    The Greenback is not a blackmarket currency in Barbados. It is semi-official. You do not have to hide and deal in it.
    If you are forecasting and ignore a large part of currency liquidity then your outcome must be inaccurate.
    It is like discussing wealth and just taking in to consideration your bank savings. It is an important part, but not all.

    • @Hal

      You are sidestepping Vincent’s question.

      How can the central bank or other authority track the behaviour of the greenback circulating in the economy?

  18. Hal

    As far as I can understand all that is reported is taken into consideration in her projections,which would include legal greenbacks.

    Could you point to where it was omitted.

  19. David,
    I have answered the bloody question, although it may not be good enough for you. Since the Greenback is a semi-official currency there is no way of tracking it. To do so it must go through the banking system. I can use a US dollar at Oistins or at Cave Shepherd.
    The way to ‘track’ it will be through a survey of tourists and other visitors or just an informed guestimate, which will include travellers’ cheques and credit cards.
    That is the point I am making. It is a black hole.

  20. David

    Hmmm…..once the greenback enters the system via dollars or credit card at Oistins or any Cave Shepherd……it becomes part of the system that can be used as data for projections.

    Black holes be they blackmarket,bit coin or some unheard of one exist in every country’s economy and projections are still made.

    What am I missing here as Hal states that he has answered my question???

    • @Vincent

      You are not missing anything. Local credit cards are settled in local dollars, nothing to do with the greenback. Your original query stands. Here is a snippet from Hal’s comment of 11:05:

      If an economic analysis is based on false information, then the conclusion must also be false. The monetary base in Barbados is not Bds$2.5bn, but an unknown amount – up to US$70bn.

      What are the assumptions used (back of the brown envelope or otherwise) by Hal to post a 70USDbn number. It is a simple question Hal.

  21. Vincent,
    Travellers cheques and credit card usage can be tracked. It is unlikely that Greenbacks can be unless they enter the banking system. You can track the Bajan because it is sprinted by the central bank.
    That is the best I can do, I am out of this discussion.

  22. It is unlikely that Greenbacks can be unless they enter the banking system.


    Projections still have to be made and that can only be achieved based on the known…..the unknown can never be known……..

    I see no reason to fault her projections based on the data provided……QED

  23. David,

    The US$70bn is the amount of Greenbacks in circulation outside the US. In theory they would be available to be spent in Barbados. The reality may be different.

  24. The economy is unofficially dollarized. The best way to bring US currency into the stock of reserves is to allow citizens and business to freely hold US dollar deposit accounts. The extent of the country’s dollarization of citizen’s holdings will dwindle when the interest rate on them is zero and confidence is restored.

  25. The free use of the Greenback also helps capital flight. All people have to do is to hold on to US dollars and take them out of the country. Is better than selling assets at reduced Bajans while getting paid outside the country for the balance.r

  26. Bajan Free Party/CUP/.Violet Beckles Plantation Deeds from 1926-2017 land tax bills and no Deeds,BLPand DLP Massive land Fruad and PONZI on said:

    Hal Austin June 8, 2017 at 1:52 PM #@@

    I am not picking on you, I am not the MOF but sometimes a MF lololol,

    Did any of you really study Money, MONEY, or money?

    Let us do the NUMBERS as all things goes with numbers,

    USD vs BDS Todays rate is $199.37 BDS to $1 USD WESTERN UNION RATES TO BARBADOS.
    US debt is to be now 21 Trillion DOLLARS, and from what I see we can gain 4 Billion in debt for every 1 Trillion USD$ that means Barbados can go to about 84 Billion BDS$ in debt before our money and devalue if we are so tied to it?

    Once the CENT was removed that was the first stage as the government move up all taxes by 5% 5cents we are using, Its all internal fraud land backdoor way of going after more TAXES also at the ports where the new 10% will bring in even more VAT at the so called 17.5 which to me is really 20% VAT.

  27. See what we on BU have been saying……………the NIS Director is now very concerned about the high government debt to the NIS as reported in today’s Nation.

    These morons we have as a government have been misusuing our pension money and do not care.

    The minister is aware that they are misusing the NIS money …..was last week complaining that people are taking too much sick leave. Minister, you and your government’s policies are making Bajans sick, do you not realise that? Furthermore if the people take out too much sick leave, it is their loss when it is time for them to collect pension, so what is your problem?

    I have long realised that this constant raiding of the NIS funds has been affecting the NIS ability to pay claims. I have a claim in NIS, I was told about 6 weeks ago that the cheque is waiting to be printed…….I have not got it yet.

    • A couple weeks ago Brasstacks moderator threw UPP candidate Craig Harewood under the bus for suggesting the public should be concerned about the IMF finding insurance surplus will be depleted soon. Perhaps now is a good time to call the show again.

  28. “The minister is aware that they are misusing the NIS money”….it is being used for US. It is called a social transformation, which the MoF said “is not yet complete”. I am unsure of his definition of complete.

    Via an intricate weave of grants and subsidies, plus the obvious public service employment, Barbadians have never lived better. Bajans are flush with cash. Unsurprising given the money supply expansion and the funding provided by local entities, like the NIS. The only thing we are short on, is the Fx needed to fund the expanding lifestyle. But we will get by.

    Yet Fx remains the thorn. While the GoB is correctly tightening Fx controls, the challenge is the free market. People who want Fx and cannot get it via normal channels, are resorting to the “gray market”. Nobody knows the exact exchange rate, for it varies by transaction between a willing seller and buyer.

  29. During the austerity of Burnham in Guyana when FX was non existent and beer was made from rice(still is I think) and egg yolks were white,the natives were still able to smuggle the latest brand name goods over the porous border areas.

    Methinks the Bimmers will go back to the memory of our own Pirate Stede Bonnet and utilise the latest in cigar boat technology as used by the drug smugglers to solve our lack of any brand name goods…….have no fear Bimmers are an inventive lot.

  30. VOB’s Sunday June 11 brass tacks program is scheduled to discuss the 2017 budget and the invited participants are a BLP rep, a DLP rep, Lynette Eastmond of the UPP and a rep(s) from NGOs in Barbados. The DLP reportedly as not responded to the invitation, be we all know Dennis “Pound Food” Kellman will call the program to respond to something said by someone in the studio.
    One wonders why reps from the other newly formed political parties expressing the desire to contest the upcoming general elections (Solutions Barbados, Citizens action Partnership and Barbados Integrity Movement) were not invited.

  31. There are equally those who might argue, however, that the recently imposed levy on foreign exchange transactions does serve to reduce the value of the local dollar, resulting in a de facto, though not de jure, devaluation. When, concomitantly, there is an increase in the cost of imports owing to the increase in the rate National Social Responsibility Levy [NSRL], the die is cast.

    Does she read BU?

    • @Jeff

      You flatter the BU community 🙂

      Seriously, if you toss out the yardfowl and JA comments there are nuggets of wisdom on offer here that paints the reality. One does not have to be FT trained like Hal to be aware.

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