It is the time of the year Barbadians and the other islands in the region prepare for the hurricane season. Last weekend the country was placed on Hurricane Watch with the passing of Beryl across the region. We breathed a collective sigh of relief at Beryl’s uneventful passing, however, there is anxiety brewing among others who are aware the IMF team visiting Barbados continue to conduct interviews with key actors in Barbados to inform talks about the type of IMF program we will have to enter to apply a tourniquet to a hemorrhaging economy.
As the blogmaster moves around Barbados there is the query whether Barbadians are aware of the perilous state the economy is functioning. It seems there is a perception in some quarters that having rejected the failed policies of the former Democratic Labour Party (DLP) of which the Barbados Labour Party (BLP) was the beneficiary by default on 24 May 2018 – unfortunately the third parties were unable to gain traction for reasons ventilated in this forum – the BLP as if by magic will be able to top up the foreign reserves from the crisis level it hovers, eliminate the need to operate the current account in deficit and by extension pay down the high level of debt. The blogmaster suspects the skills of Director of Communications Charles Jong will be required soon to assuage the fears of Barbadians when IMF policy prescription is implemented.
There should be no doubt that given the state of the economy delicate decisions have to be taken to reduce the level of expenditure by the government and at the same time allocate spend to target areas of potential growth while protecting the vulnerable. It will call for tip toe precision in decision making. Clearly the time has come to put Barbados first as a country and park the frivolous political snarking. Whether we like it or not the Barbados brand was besmirched in recent years by achieving junk credit rating status with the final puncture Barbadians having to join a world audience to witness raw sewage gushing on a street located in our tourist resort area of the South Coast.
The blogmaster anticipates institutional investors holding government paper will be asked to make a sacrifice to the national cause to rescue and rebuild (BLP’s election tag line). The delayed rationalization of several state owned entities will be implemented. The last government allowed political considerations to stall this initiative when clearly transfers and subsidies as an expense item had to be urgently addressed.
One other item which should be addressed is the rising pension expense of government. The blogmaster recognizes this is an area that requires a high level of expertise to sensibly tackle and will defer to the IMF team et al to address with the local parties concern responsible. Where is Walter when we need him? Not Maloney!
The blogmaster will not forgive the former Governor of the Central Bank for allowing the commercial banks to twist his arm by deregulating the minimum savings rate as a quid pro quo arrangement for dumping government savings bonds on a financially illiterate public hungry for a reasonable rate of return on investment. Daily we hear the ignorance being perpetuated for Barbadians to invest in Carilend, or deposit money with the credit unions. A simple question to clarify. If tomorrow 50% of deposits held with banks was transferred to the credit union balance sheet what will be the impact? Will their interest expense line item go up or down if they maintain current level of interest paid to members? Are credit unions able to lend for big ticket items like a mortgage to compare with other financial institutions? How does Carilend work? Who regulates Carilend? And no the blogmaster has no beef with Carilend or credit unions.
A fool and their money are soon parted.
Wild Coot has been a voice crying in the wilderness or so it seems.