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Barbados Public Debt to GDP 1980 to 2012

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by Amit Uttamchandani of caribbeansignal.com

The objective of this post is to locate, explore and compare/contrast historical public debt to GDP data for several Caribbean countries.

First, we have to find the data: The Google query “debt to gdp imf” brings us – ironically – to the IMF (Barbadians take note). In particular, this page: “A Historical Public Debt Database.” The IMF’s data set contains public debt to GDP data for 170+ countries going back as far as 1692 all the way up to 2012. The second step is to extract Caribbean countries that are of interest to me (including Barbados) and a time period of interest to me (1980 to 2012). The third step is to pull the data into Excel and build a few charts.

Here is what 32 years of public debt to GDP, expressed as a percentage, looks like for Barbados:

Here’s the same chart but with red and blue lines added in at specific years (WARNING: Correlation does not imply Causation). I will leave it to the reader’s imagination to infer what these lines mean.

My next post will look at several other Caribbean countries.

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119 responses to “Barbados Public Debt to GDP 1980 to 2012”

  1. Artax Avatar
    Artax

    GDP is calculated for a specific period of time, usually a year…. and cannot be confined ONLY to output of goods and services, without taking into consideration the actual levels of consumption, investment, government spending and net imports…….. C + I + G + (X-M).

    GDP to debt ratio is measurement or comparison of a country’s national debt to its total economic output for a year. However, for the past few years, Barbados’ expenditure has been exceeding revenue, hence the reason for government’s sustained deficit. And it is important to note that deficits are added to the total national debt.

    Using some of the proceeds from the sale of a state asset to service debt will produce a temporary decrease in the debt levels for a specific time. If ceteris paribus…..the economic variables remain consistent (i.e. consumption, government spending and net imports are increasing, while investment has fallen), the decrease may not be reflected in the debt to GDP ratio calculation.

  2. Artax Avatar
    Artax

    In other words, if all things remain equal, a one off sale of a state owned asset to service debt will indicate a temporary decrease in the debt level at the time of the transaction and may not be reflected in the debt to GDP ratio.

    Unless, there is a comparison between two years….. for example, if the asset was sold in June 2017 and there was a comparison of debt to GDP ratios for the years ended June 2016 and June 2017.

  3. John Avatar
    John

    In other words, if all things remain equal, a one off sale of a state owned asset to service debt will indicate a temporary decrease in the debt level at the time of the transaction and may not be reflected in the debt to GDP ratio.
    ++++++++++++++++++++++++++++++++++++++

    Remember, it is a simple arithmetic ratio.

    Not only will a fall in debt make the ratio fall, so too will a rise in GDP!!

    Lets say there was a construction boom.

    Actually there was!!!!

    The GDP rose, so the ratio fell!!!

    But if you have really been understanding the points I make about water then you would understand, as I have said before numerous times, that construction is a dead end activity!!!

    That’s why you see Williams Industries diversifying into other business activities.

    They know only too well!!!

    So a construction boom will cause the ratio to fall … look carefully at the period!!!

    Surprised no one took me to task on this already but perhaps by now they get it!!

  4. John Avatar
    John

    So, if the BLP were to get in, assuming they are not complete idiots and irresponsibly ignore our water issue, then the only source of $$$$ to them is …… no prizes ….. the IMF!!

  5. John Avatar
    John

    The question we face is “How do we get the GDP to increase?”

  6. John Avatar
    John

    I have given an answer already!!!!

  7. Gabriel Avatar
    Gabriel

    A passion for success and a capacity for hard work is what escapes this DLP.This government is operating on idle.Every man looking to break for ‘eself.You can make all the speeches quoting Greece and Rome and you at a sister’s funeral service having to read from 2 sheets of paper to say you and your sister were close is damning evidence that you stray even in times of family grief.You are no better than the clown and impostor named Blackett,a fool if ever there was one.

  8. David Avatar
    David

    Barbados, Trinidad and Tobago and Jamaica: Debt as a Percentage of GDP, 1980 to 2012

    by Amit Uttamchandani

    Thanks to the IMF’s Historical Public Debt Database, I am able to fulfill this special request: Public Debt as a % of GDP for Barbados, Trinidad and Tobago and Jamaica:

  9. Bernard Codrington Avatar
    Bernard Codrington

    Bush Tea at 3:20 PM

    Nice try.
    The fact remains that the insolvent borrower cannot hide his insolvency from the bank. If he pays his rent to the lessor ,he will not be able to repay his consumer loans ; if he does not pay his rents to the friend ,he will lose his housing. So there is no way at the individual or national level to hide debt. The only way to reduce debt is to earn more. Increase the GDP. Or cut expenditure. Catch the bus,if there are any.

    Of course if you refuse to pay rents for buildings on lease, from say the NIS ,you will compromise the NIS scheme as well. You can run but you cannot hide.

  10. John Avatar
    John

    Is Jamaica at the IMF?????

    https://www.imf.org/en/News/Articles/2017/09/15/pr17351-jamaica-imf-staff-concludes-visit-to-jamaica-to-discuss-progress-of-economic-program

    Looks so!!

    But IMF doesn’t seem to have altered the upward trend!!

    … and Trinidad,

    http://www.imf.org/en/News/Articles/2017/11/06/pr17423-imf-executive-board-concludes-article-iv-consultation-with-trinidad-and-Tobago

    … and Barbados

    http://www.imf.org/en/News/Articles/2017/11/22/pr17455-imf-staff-completes-2017-article-iv-mission-to-barbados

  11. John Avatar
    John

    Haven’t got a clue what Article IV consultation means without reading at length!!!!!

    Can anyone condense it into a simple sentence or three!!

  12. Bernard Codrington Avatar
    Bernard Codrington

    @ David at 8 :33 PM

    Wait , are these graphs counterfactual? Did we not read somewhere that when a country goes into an IMF program a country’s ratio of Debt to GDP falls. What is the story behind the Jamaica experience ? No wonder Bush Tea does not know what an Economist is.

  13. David Avatar
    David

    @Bernard

    You are the economist!

  14. Amit Avatar
    Amit

    David,

    Thanks for sharing the chart on BGI, TNT and JAM re: debt to GDP. There was also a second chart where I highlighted what looks like a convergence during 1993 to 1997.

    Any ideas/thoughts from you or the BU family re: possible causes?

    https://www.caribbeansignal.com/wp-content/uploads/2017/11/BGITNTJAMDebtGDP19802012Ques-1.png

  15. John Avatar
    John

    https://en.wikipedia.org/wiki/List_of_countries_by_public_debt

    Singapore slightly worse than Barbados!!!!

    How big a deal is this measurement?

  16. Bernard Codrington Avatar
    Bernard Codrington

    @ Amit at 9 :25 PM

    I see no convergence in the referenced period. In Barbados’ case ,more rapidly than in the other two countries, the graphs show a decline in the ratios from an historical high.The graphs need to be supplemented by GDP graphs and a term structure of these debts. For example the debts could have been repaid and no new loans saught or granted. Similarly, if there was an upturn in the international markets and the economies grew then the denominator i,e GDP would have grown , with debt remaining fixed. So we need to examine the raw data for debt and GDP.
    There is a break in the data for T&T and Jamaica . This usually takes place where the data is unreliable.

  17. millertheanunnaki Avatar
    millertheanunnaki

    @ John November 28, 2017 at 9:05 PM
    “Haven’t got a clue what Article IV consultation means without reading at length!!!!!
    Can anyone condense it into a simple sentence or three!!”

    It says that given the continuing poor management and performance of the economy the Barbados dollar, de facto speaking, is worth less than a Mickey mouse dollar on a monopoly board.

    In addition, the broken down sewage system will ensure that the country continues to stink to high heavens and will destroy any opportunity to stem the incoming tide of the dreaded devaluation.

    You see now, John, the leaking shit on the South Coast has nothing to do with the level of rainfall or the movement of the tide but due to broken underground pipelines as you were told sometime back.

    A situation long known about by the authorities but who tried to cover up for political expediency. But the shit has eventually hit the fan and not even you John can save their sorry asses from embarrassment and exposure.

    Smelling shit is now the country’s No. 2 pastime in its No.1 Business called Tourism.

  18. Amit Avatar
    Amit

    @ Bernard

    Thanks for the feedback. I guess what I am trying to say is that when I look at the chart from a lay person perspective – especially between ’93 and ’97 – it looks as though debt to GDP ratios for all 3 countries were “close together” i.e., between 40 and 80+ percent. Looking even closer, For JAM and BGI specifically in ’94, the ratio was the same (i.e., around 70%).

    I agree with you re: the need for additional information. This would help to shed some light on the cause of the recorded debt to GDP ratios themselves. Besides the raw spreadsheet data that the IMF published, they also included a working paper including sections re: their data sources and methodology.

    The link is here: https://www.imf.org/en/Publications/WP/Issues/2016/12/31/A-Historical-Public-Debt-Database-24332

    While reading up on debt to GDP and locating relevant data, I noticed that different entities measure debt to GDP differently. For example, when I look at the IMF historical data and their ratios, and then I compare it against the World Bank data (for the same period), I get different ratios.

    I want to point out here an old disclaimer: IANAE (I Am Not An Economist or Expert). However, I am a curious person and a tax payer. For me, debt is debt. One hundred pounds of stuff, no matter the composition, is still 100 pounds of stuff (50 pounds in feathers, 50 in rocks). Take local vs. foreign debt. If I owe my brother $100 (local debt) and I owe you $150 (foreign debt), my total debt is $250. Again, that’s my simplistic view. There may be valid reasons for mixing up the debt composition depending on if you are an individual, business or a country.

    Cheers,
    Amit.

  19. John Avatar
    John

    You see now, John, the leaking shit on the South Coast has nothing to do with the level of rainfall or the movement of the tide but due to broken underground pipelines as you were told sometime back.
    ++++++++++++++++++++++++++++++++++

    If the pipes are broken the Manholes should never stop running water … which they do for long periods of time.

    … unless the BWA stops pumping to the outfall at the Hilton and pumps into the swamp

    …. or isolates areas from the system and sends sewage trucks constantly to clear septic tanks.

    I don’t see any excavations on the South coast suggesting the pipes are not broken.

    I interpret what I see.

    http://www.nationnews.com/nationnews/news/89165/bwa-moving-reduce-sewage-overflows-south-coast

  20. Artax Avatar
    Artax

    You cannot compare Barbados with Singapore simply because both countries may have high debt and debt to GDP ratios, and without taking the significant differences in the economies into consideration. Additionally, since that country runs a balanced deficit, there isn’t any need to borrow or issue bonds to finance expenditure.

    In Singapore, government, investors and banks borrow to finance investments and projects in that region. There are also a number of foreign owned banks that lend money to and accept deposits from territories in that region.

    As a result of government investments, the country has been able to accumulate several assets, with the “balance sheet” showing assets far exceeding liabilities. The investment assets are essentially used as “collateral” for borrowing and the returns from investments are usually sufficient to cover the debt servicing costs.

  21. John Avatar
    John

    As a result of government investments, the country has been able to accumulate several assets, with the “balance sheet” showing assets far exceeding liabilities. The investment assets are essentially used as “collateral” for borrowing and the returns from investments are usually sufficient to cover the debt servicing costs.
    ++++++++++++++++++++++++++++++++++++

    Singapore seems to be accumulating and using the family silver (assets) intelligently.

    Barbados …. well Barbados doesn’t seem to get the concept.

    Guess that is one big difference which would make the comparison like chalk to cheese.

    So we can conclude that a high debt /GDP ratio can’t be a yardstick on its own for the health of an economy!!

  22. Bush Tea Avatar
    Bush Tea

    Singapore borrows lots of money and uses it to make lots more money….
    OBVIOUSLY anyone with sense will RUSH to lend money to them…. indeed, BEG them to borrow their money…
    Result – HIGH Debt to GDP ratio, BUT also high return on investments.

    Barbados borrowed as much as it could, and used it to enrich baloney, bizzy and COW …with associated bribes to our national Judases, and unavoidable inefficiency caused when massive scam games are played in the process.
    Result – Only money launderers, Criminal enterprises and complete jackasses (like the CAHILL woman) would invest with Barbados …. or agencies whose long term objective is to take over the land or other assets when the stupid local brass bowls finally bankrupt themselves and become SERFS again… OR THE IMF….

    What a pack of BBBBBs

  23. Bush Tea Avatar
    Bush Tea

    What is the FUNDAMENTAL difference between Barbados and Singapore?

    PRODUCTIVITY …. which is driven by a focus on MERIT BASED PERFORMANCE in Singapore such that the VERY BEST talents are pushed to the front – while the national brass bowls are either jailed for spitting in the road – or hung for seeking to contaminate the youth with drugs.

    In Barbados, the absolute worst, low-live, degenerates, (mostly Lawyers) – who mostly COULD NOT FIND WORK OTHERWISE, are sent to parliament “so that they could feed their families…”

    These then make the MOST STUPID and backwards decisions based on the protection of yardfowl-brass bowls, and the ‘downpression’ of TRUE TALENT (such as Caswell and others) based on whether or not the person is willing to “get thee behind them” (kiss their donkey).

    As Man!!!
    What do you think should become of a country such as Barbados?
    …not EXACTLY what we are seeing…?

    A people ALWAYS get exactly what they deserve.

    Just Imagine a pack of complete Jackasses can pass a law requiring EVERY farmer to register with their inefficient shiite agency – in order to work as a farmer?
    …This in order to deal with praedial larceny?
    Wunna ass holes… !!!!
    What is to stop the damn THIEVES from registering as farmers… and continuing their stealing…. while multiple small farmers who have NOT the time to stand in a shiite line to register, are now made criminals by seeking to make a living?

    ONLY A SATANIC CURSE can explain how so many Idiots can be assembled in one shiite place in this world….

  24. Artax Avatar
    Artax

    @ Bush Tea

    I agree with your comments re Singapore……… but you missed one fundamental point……transparency of that country’s commercial and financial laws.

    “So we can conclude that a high debt /GDP ratio can’t be a yardstick on its own for the health of an economy!!”

    It depends on the specific nation’s economy. In the case with Singapore, their national debt is calculated using the traditional methods to determine gross debt (i.e. liabilities). However, if their assets are taken into consideration in the equation, Singapore does not have “net debt.”

    Although two countries may have similar levels of high debt and debt to GDP ratios, in such an environment, the levels of assets determines the fiscal sustainability of each economy.

  25. Tron Avatar
    Tron

    Agree on Singapore. While Singaporeans built up a very large investment fund, Barbadians used up F/X for SUVs, iPhones and other brassbowlery and to pay clueless civil servants and judges.

    However, do we want the art of flagellation back on the Royal Plantation? Would be funny to watch such correction on Nation Heroes Square with white tourists, black civil servants and Indian businessmen – equal in pain at least.

  26. John Avatar
    John

    Debt became an issue after independence.

    Prior to independence, Barbados was if not debt free, then close to it.

    I stand to be corrected if anyone can.

    Where GDP growth is concerned, look simply at the sugar output subsequent to slavery.

    A 20 fold increase.

    We know the difference, we have been there, done that.

    Seems like after independence we have become more dependent.

    To think we have a place named “Less Beholden” in St. Andrew to remind us of a basic core value.

  27. Bush Tea Avatar
    Bush Tea

    @ John
    Barbados was debt-free before Independence because all the damn white people owned all the assets and all the black people were sucking salt.

    With independence, LOANS were sought to bring black people up to some level of HUMAN DECENCY – you know…
    ..With water toilets, shoes, houses that did not leak, basic education – at least enough to know who you REAL enemies are…

    But then the Black politicians became infected by the bribes of the albino-centric and wanted more and more and more.. and they took the easy way of getting their fill ….MORE LOANS.

    Grenville is again right that 40% is a SENSIBLE maximum limit of such exposure… (Bushie says 25% for BLACK people borrowing from albinos)

    Instead of following Mazlow’s hierarchy of needs and moving on to HIGHER LEVEL needs (such as cultural and spiritual), these low-class JAs kept on with the ORGY of borrowing to buy shiite trinkets …like BMWs and Benzes….

    …and listening to albino-centric red men like John, bizzy and baloney…

    Now our goose is cooked….

  28. Hal Austin Avatar
    Hal Austin

    John November 28, 2017 at 6:33 PM #
    The question we face is “How do we get the GDP to increase?”

    Easy, increase productivity.

  29. Bernard Codrington Avatar
    Bernard Codrington

    Amit at 10:10 PM

    You are welcome.
    You do not need to apologise for not being an economist. I wish there were more Barbadian citizens, such as you, who are prepared to research matters when they appear to be at variance with common sense. Keep up your search for truth and understanding.
    Financially/economically it does make a difference if one’s debt is domestic or foreign. Your brother is unlikely to put you in jail if you do not or cannot repay him. He is more likely to forgive the debt or give you a life long moratorium on your debt.
    At the national level, provided the rate of return on GOB paper is higher than the inflation rate,the domestic debt will be rolled over by present holders of that debt or taken up by new domestic investors.

    International debt requires that it be repaid in foreign currencies. .If the country is not earning an excess of foreign income over foreign expenditure ,there is likely to be a debt repayment default. This ruins the country’s ability to borrow in the international market. In an attempt to bring about equilibrium between exports and imports the Barbados dollar will have to be devalued. For us it will be a continuous series of devaluations,a continuous spiraling down. It is extremely difficult to get out of this trap. Just imagine what effect that will have for the majority of Barbadians.

    I hope what I have attempted to say ,helped you.

  30. Vincent Haynes Avatar
    Vincent Haynes

    Bushie@ 11.56 am

    Chuckle…..as usual a stranger to the truth……hmm….The Wards,Deans,Tudors,Redmans,Bovells,Marshalls,etc,etc…..to mention a few who owned plantations,businesses,etc.

    Their is a definite attempt to show that between emancipation and independence,Bimmers did not achieve anything……why?

  31. Hal Austin Avatar
    Hal Austin

    International debt requires that it be repaid in foreign currencies……

    International debt is repaid in the currency in the agreement.
    ..

  32. Bernard Codrington Avatar
    Bernard Codrington

    @ Vincent Haynes at 12 :10 PM

    I wonder why there is this conspiracy to undervalue our achievements as a people. Do they believe that by repeating these lies a million times that lies will be turned into truth and the majority of Barbadians will believe them and act on them. Never !

  33. Vincent Haynes Avatar
    Vincent Haynes

    BC

    Sad to say…but the lies are getting currency…..some misguided soul has decided to throw paint on Nelson and place a badly worded placard in the 12.30 news.

    We have all agreed that if a well worded placard is needed for Nelson then place it appropriately.

  34. Hal Austin Avatar
    Hal Austin

    Vincent Haynes November 29, 2017 at 12:56 PM #

    Further. sign of the retreat in to barbarism by .a once great nation.

  35. John Avatar
    John

    But then the Black politicians became infected by the bribes of the albino-centric and wanted more and more and more.. and they took the easy way of getting their fill ….MORE LOANS.
    +++++++++++++++++++++++++++++++++++

    Sir Edwy Talma was known as the cashier for the DLP in the 60’s.

    My grandfather told me he was approached by Sir Edwy and told he would have to pay $35,000 to get land passed.

    When my grandfather objected he was told … “cuh dear, the boys have to eat”!!

    I got the nickname from William Ince, now deceased, who told me it was standard practice and the same procedure happened with Frere Pilgrim and Sir Edwy.

    He arrived one Saturday evening and left with the obligatory cheque for $35,000.

    Lennie St. Hill who was Chief Town Planner on contract in the 60’s told me he adopted the policy that anyone applying for change of use got it swiftly once it fell under the Physical Development Plan, part of the Town Planning Act.

    That was until he was approached by one of his employers and told he was making it too easy for people to get permissions, they needed to have some difficulty so they could be persuaded to pay.

    When he refused, his contract was not renewed.

    The “Black Politicians” could claim as the fake doctor claims to have been infected by “white” DNA but the corruption is all of their own making whether they “self identify” as black, or white.

    COW was a little boy back then with a single caterpillar tractor!!

    The problem was, $35,000 was never enough, they wanted more.

    The rest is history!!!

    They must have realized the Modus Operandi left them open to prosecution and adapted in the 1970’s to become more legitimate …. kind of like the Mafia.

    COW came into his own in the 1970’s.

    The result however is the same, their blight is on tens of thousands of acres of land in Barbados.

  36. John Avatar
    John

    I think you will find that the corruption came out of the Penny Bank fiasco and is related to CLICO and Trinidad … that’s my gut feel.

  37. Vincent Haynes Avatar
    Vincent Haynes

    Hal @1.12 PM

    You are correct….the vandals are at the gates…..ably spurred on by the misguided soul from UWI of his own agenda fame.

  38. Hal Austin Avatar
    Hal Austin

    @Vincent,
    Sadly, they are convinced of the rightness of their case. Oh what a poor state of national education..

  39. Vincent Haynes Avatar
    Vincent Haynes

    Hal

    Take a look at the sign……latest is that govt has employed a firm to give it a clean.

    https://www.facebook.com/photo.php?fbid=1769861689733354&set=a.494036083982594.124163.100001286198207&type=3

  40. Vincent Haynes Avatar
    Vincent Haynes

    https://www.facebook.com/CBCNews.bb/photos/a.1449437495336956.1073741828.1447053148908724/2022368754710491/?type=3&ifg=1

  41. John Avatar
    John

    Actually, COW was not a little boy in the 60’s.

    He bought the trucks from Costain after the Deep Water Harbour in 1961 and was up and coming at the time of independence.

    He wasn’t any big maguffie though!!

  42. Vincent Haynes Avatar
    Vincent Haynes

    Hal

    Try and blow up the sign and see what I mean.

  43. Hal Austin Avatar
    Hal Austin

    @Vincent,
    How do you explain the decline of this once great nation? The second-rate thinking that passes as scholarship, the aggression, the anger, etc
    .

  44. Vincent Haynes Avatar
    Vincent Haynes

    John

    Keep posting these facts…..some I am aware of,others I am happy to learn and double check.

    Remember this is for posterity and not for those that know not that they know not…..or the others with an agenda.

  45. Hal Austin Avatar
    Hal Austin

    @John,
    Your historical contributions to the blog are very important. We need this social and economic history, which our academics are disgracefully neglecting.

    ..

  46. Vincent Haynes Avatar
    Vincent Haynes

    Hall @1.44 PM

    A good question…..Caswell has given some insights as to EWBs destruction of the civil service then we have John on how old corruption has been although I presume Edwy looked on it as redressing the imbalance…..our worst years were the last two terms of OSA when much was expected but nothing delivered.
    I have skimmed the surface but it does require some indepth research.

  47. Hal Austin Avatar
    Hal Austin

    @Vincent,
    Edwy Talma was the God father of the St Lucian Mafia. It is .the corruption of the system. It is one reason why law is embedded .in our culture, because it gives a certain. amount of self-employment. It is one reason why lawyers have colonised politics.

    ..

  48. John Avatar
    John

    The irony is that Nelson saved Africa from French Invasion in 1798, 1st August in fact.

    Napoleon had already landed and defeated the Mamelukes at the Battle of the Pyramids.

    Funnily enough the Mamelukes were originally slaves, brought from Europe to Africa!!

    Napoleon aimed to get to India and attack the British there.

    One of the results of the French invasion and Nelson was that in building defenses at Rosetta to defend against Nelson, the French unearthed the Rosetta Stone.

    This allowed the translation of hieroglyphics on Egyptian monuments to be translated and understood.

    Nelson came to fame because of the Battle of the Nile and his contribution to our knowledge of African History is immense.

    What a bunch of idiots masquerading around as educated fools!

    They give Barbados a bad name and further convince us that independence was a total disaster!!

  49. Vincent Haynes Avatar
    Vincent Haynes

    Hall

    Edwy was Grenada born.

    Our present educational system is about rote and frowns on thinking.

  50. Artax Avatar
    Artax

    “Grenville is again right that 40% is a SENSIBLE maximum limit of such exposure… (Bushie says 25% for BLACK people borrowing from albinos)”
    +++++++++++++++++

    The Singapore example clearly proves the above comment is rubbish.

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