Mia Tells Sinckler to ‘Zip it’

A disappointment the blogmaster holds of the incumbent DLP government of ten years is the inability to communicate forthrightly with Barbadians.  Whether at a personal or impersonal level, without clear communication, a wholesome relationship will be elusive. What is the state of the foreign reserves, important to infusing investor confidence? Why has the governmentagain withheld the IMF report from the citizenry?

The following message was posted to the timeline of leader of the Opposition Mia Mottley. It is a message worthy of unpacking for a BU discussion made so in a poorly performing economy. We eagerly await the Quarterly Economic Review of the newly installed Governor of the Central Bank of Barbados.

Zip it Minister Sinckler!

Stop fooling Bajans.

When discussing the state of Barbados’s international reserves earlier this week, Minister Sinckler urged people not to panic. We would concur that panic is seldom a productive reaction. However, the Minister fails to understand that the Government’s practice of infrequent release of information itself breeds distrust and fear. This Government seems surprised that, even at a time of national crisis, the people of Barbados would want even monthly updates.

Minister Sinckler, if there is no need for noted regional economists, such as Ms. Dukharan, to be concerned, then why has the Government refused to release the 2017 Article IV report approved by the Executive Board of the IMF in January? The publication of Article IV reports is widely considered around the world to be sound practice in terms supporting transparency in economic policy-making and strong investor relations. It is only troubled governments, fearful of the political fallout of IMF criticism, that shun publication. While we have been the first to question prescriptions of austerity, we believe that transparency and openness to debate are essential in our democracy (and we note that the IMF Article IV reports from the BLP years are available online for all to scrutinise). What is in the document that Minister Sinckler does not want people to find out as elections loom?

Minister Sinckler, if there is no need for ordinary Barbadians not privy to ‘the facts’ to worry, then why are there rumours circulating that the Central Bank is desperately knocking on doors, pleading with financial institutions to pledge their foreign assets and those of their clients in order to allow the Central Bank to then use these assets to raise emergency external on a secured basis? When the Central Bank reports on the first quarter results later this month, will it confirm these last-ditch schemes, which skirt the Parliamentary approval process, or deny them?

Minister Sinckler, reserves are now at a crisis level of 6 weeks’ worth of imports – half the CBB’s target: if the people are not panic, they will need to have not just the facts, but also the details of how the Government plans to save our dollar. This plan must be a credible one that goes to the heart of our economic malaise, and not one that pathetically relies on uncertain, one-off fire-sales of Barbados’s national assets for a temporary recovery in reserve levels.

The Minister is totally out of his depth. He is swimming in waters too deep. I am Not having a debate with Chris Sinckler on the economy. He is looking for a political landing platform.

The Governor of the Central Bank needs to take notice – he must decide which God is he serving, Barbados or the Minister of Finance. The Governor of the Central Bank is a servant of the people – not a creature of the Minister of Finance.

To tell us that the country is good because the reserves are at $420m – only $10 million more than December 31 – . is to distract when he knows that the trajectory is going downward; when he and everyone else in the financial sector locally knows that the Central Bank has been desperately seeking to get a loan of US$100 million and asking people to bring back home their second tier reserves.

Chris you are swimming in waters too deep for you – you need to stop it and zip it up and stop fooling people.
The Minister needs to speak plainly to the country but, maybe, that is what he is afraid of.

Barbadians need to be told:-

  1. How many times you have been written by the same Governor of the Central Bank with respect to the state of affairs. And when? Has he not told you that there is an urgent need to seek foreign financing to support the reserves given the delays in your planned divestments and the high levels of foreign debt financing the country must face.
  2. Why you as Minister of Finance will not release the IMF Article IV Report for last year.
  3. That there were no foreign debt payments in March unlike February; and that when combined with the inflows from CDB/IDB meant that there was no decline in what would otherwise be higher receipts in March. Bajans need to know that there will be more than $330 million in foreign debt payments in the next 12 months – provided that there are no further downgrades – BUT THE official projected foreign exchange inflows are less than $100 million.
  4. That even with that, the increase in March 2018 is less than half of what the incerease was in March 2017.
  5. What will be our fate in June? How much foreign debt must be paid in the month of June? Is it not more than 3 times what we had to pay in foreign debt payments in February. Do we not have to pay $120m in foreign debt payments, immediately after the date by which the election must be held?
  6. Is there a Central Bank projection that places the worst case scenario of our Reserves as low as $100 million in December 2018.

The Governor of the Central Bank must speak plainly to Barbadians and not allow a Minister with an electoral interest to serve to paint a picture with his blue-Coloured lenses.

The Minister is consumed with telling us that his policies are working. That is his only interest. The Minister is taking figures out of context deliberately. It reminds me of the story once told in Parliament of the man who jumped out the skyscraper from 120th floor and when he passed the 30th floor he said “So far so good”.

This notion that better cannot be done is a nonsense. And too much mock sport is now being made of Bajans and the state of our country.

Our Debt was unsustainable for years now. And we have said it – Clyde, Ryan, Marsha, myself – the former PM, Minister Estwick and independent economists.

There is a way out of this, of our economic malaise.l We have said over and over we will do whatever makes sense to the local, regional and international community and economists. But we need to see the data – unvarnished. We need ALL of the facts – all of the arrears.

If things are getting better why has the PM abruptly ended negotiations with unions.

Why is it that your boast of VAT Returns causes us to ponder? Some people may have had VAT returns paid but at what costs? Some say 20% 30% – I don’t know. What I do know is that Not Everyone is getting their returns.

Look Barbadians need independent data so that they may understand how serious the country is. What are our true vital statistics? The blood pressure improving early in the morning and then dropping dangerously low again by the next day or next week cannot be used as a measurement that the patient is out of the woods and is recovering. The truth is the underlying bleeding will resume with a vengeance in June and December. And we have not prepared for those moments.

The Minister needs to release the 2017 IMF Article IV REPORT TO THE PUBLIC.

Equally the Governor must ensure that he is not put in an awkward or invidious position. The Minister is trying to write the Governor’s Quarterly Report for April for him. He is putting the pressure on the Governor causing people to believe the Nation’s back page story of the IDB Report that places our Central Bank at the bottom of the pack when it comes to independence and transparency of Central Banks – a horrendous 84th place out of 89. Now you know why I have pledged for the last 4 years to deal with the independence of the Bank. The Governor needs to tell the country what he has written under sections 25 and 48 to say.

Whether there can only be recovery of reserves if the sale of assets.

Whether the Bank is warning that there will have to be more printing of money or building up of arrears or both to meet both the domestic deficit and foreign debt payments.

Independent economists, who the minister is intent on attacking, must not take fear. They must continue to speak truth to power about the state of our economy.

This Minister is out of his depth and really needs to zip it. It is no longer cute to be trifling with our economic well being – we cannot be the props to his re-election campaign.

Barbadians need the facts as they get ready to make decisions about their future in the upcoming elections.
We need to get on with our lives and let us all get on with the business of fixing this country.

4th April 2018

114 comments

  • “CIBC profit jumps 25% in 4th quarter to record $4.7B for the year”

    Profit comes in better than what analysts were expecting
    .
    The Canadian Press · Posted: Nov 30, 2017 9:04 AM ET | Last Updated: November 30, 2017

    http://www.cbc.ca/news/business/cibc-bank-earnings-1.4426113

    Like

  • If CIBC is exploring the idea of expansion on the North American market…….. and although noting there have been improvements in the financial performance of FCI…..….admit they have concerns about the prevailing economic climate and risks as a result of hurricanes and money laundering in this region………..

    …………and admit their intension to divest in FCI…….if the IPO was successful……..

    ………..then I find it reasonable to agree with Sargeant re: “CIBC found that the market from those “Institutional investors” was luke -warm or downright cold and rather than have egg on their faces from an undersubscribed offering they pulled the offer.”

    Like

  • Canadian banks may all leave the Caribbean.

    Like

  • FCIB: You cannot sell a bank sitting on all these Barbadian government bonds and other financial bombs called Barbadian mortgages, facing devaluation.

    Very soon, it is D-Day. Barbadian middle-class, goodbye!

    Welcome to the new masters of Barbados, the Guyanese oil barons!

    Like

  • @ Artax who wrote “.admit they have concerns about the prevailing economic climate and risks as a result of hurricanes and money laundering in this region”

    There is also the cost of maintaining branches in 17 Island nations.

    Like

  • Trying to understand the appetite of CIBC to enter the US market when it was touted as the reason the Canadian banking system escaped the ravish of the global meltdown of 2007/8.

    Like

  • David BU

    According to CIBC’s President and CEO, Victor Dodig, entering the U.S market “is purely a client-driven strategy.”

    “A significant number of (our commercial banking clients) have banking requirements in the U.S. we were not able to fulfill.”

    Like

  • Understood Artax, one would expect the wish to satisfy the client is accompanied by a risk framework to mitigate the challenges the US market presents. Anyway this is above the level of the blogmaster.

    Like

  • CIBC is already in the US market, they paid a premium to acquire this US commercial Bank as the shareholders didn’t accept its initial offer and held out for more. The bank’s client profile is what attracted CIBC.

    Bottom line CIBC wants to divest itself of FCIB but it doesn’t want to hold a “fire sale”

    https://www.theglobeandmail.com/report-on-business/cibc-in-49-billion-deal-to-buy-chicago-based-privatebancorp/article30672130/

    Like

  • @Artax

    Didn’t see your previous comment about CIBC’s acquisition of PrivateBank Corp

    Like

  • @ Sargeant who wrote ” Bottom line CIBC wants to divest itself of FCIB but it doesn’t want to hold a “fire sale”

    You could be right. I think this could have been the plan when they created FCIB.

    Like

  • NorthernObserver

    I concur. CIBC could not generate enough market interest, even at the 30% discounted price being floated. FCIB had the “For Sale” sign out for a few years, without attracting interest at a price acceptable to CIBC. The other reason for pulling the NYSE listing is IF they have indeed sold FCIB. (I doubt that) Last year, Butterfield Bank [Bermuda] listed on the NYSE and it was successful. Then again, the credit rating of Bermuda is not that of Barbados, and the IPO market has been spotty.
    I was interested to see how they were going to handle the “cross listing”. The initial ‘circulars’ referenced shareholders “resident in Barbados” but what about others? Could I, not a resident, now buy FCIB on the BSE and sell it on the NYSE? Money would pour out of Bim?

    Like

  • Imagine that Mia Mottley mounted her party’s posters for 110 days & counting ILLEGALLY on the Light Power electricity poles ……..

    But mekking noise that PM Stuart has LEGALLY delayed by 90 days……the calling of General Elections 2018 !

    Mia Mottley should be in jail by now !

    Btw ….. the said posters mounted on 1st January 2018…the images on them look like they were attack by chemicals being used in Syria 🇸🇾!!

    Like

  • I always watch how the lads at FCIB headquarters work in Bim. Lazy they are. Very lazy. Going to work at 9 AM and returning 3 PM, having an extensive break between.

    No wonder that FCIB is for sale. CIBC should close Warrens headquarters plus the big new retail center nearby and relocate the bank to the Bermudas, if they really want to sell the bank. There is no way to sell FCIB with a millstone around your neck called Barbadian work ethic and Barbadian credit rating.

    The failed sale of FCIB is just another symptom that Barbados falls apart.

    Like

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