The Grenville Phillips Column – The Way of the Dictator

The Debt Holder Bill is currently being debated in Parliament.  It is an attempt to make the Government’s plan to restructure some of our national debts legal.  What is this restructuring all about?

The Government normally spends more money than it receives in taxes.  One method of making up the short-fall is to invite persons and institutions to lend the Government money for a fixed period.  In exchange for this loan, the Government promised to pay investors a fixed amount of interest every year.

To give investors sufficient confidence that they would get their money back with interest, the Government guaranteed that the loan and interest payments would be paid from the same fund that pays parliamentarians, namely, the Consolidated Fund.  Should that fund become insolvent, then Government assets were promised to secure the loan.

With these ultra-low-risk terms, individuals and institutions were encouraged to enter into binding contracts to lend the Government money, and the Government agreed to repay the loans, with interest, under the specified terms.

The Government now wants to change the terms of repayment.  That is not unusual since borrowers typically want to renegotiate repayment terms if they encounter adverse economic circumstances.  However, rather than negotiate with the other party to the contract, the Government is planning to pass a law, to allow a vote, to make the repayment terms less favourable to investors.

The Bill notes that if at least 50% of eligible voters participate in the vote, and 75% of the participants agree to the new terms, then the vote will be binding on all loan contracts – both of those who agree to less favourable terms and of those who do not.

Our Parliamentarians are using a very crude method of getting their way.  There are far more elegant solutions that they could have considered.  However, they seem too terrified of their economic advisors to consider any other solution.  Let me identify three principal concerns with this approach.

First, to justify their planned actions, the Government declared that it did not have the ability to repay the loan as agreed.  This declaration of insolvency causes investors to lose confidence in the Government.

Tragically, the declaration was unnecessary.  The Consolidated Fund reportedly has severe leaks, including the mismanagement of public services, excessive wastage and gross corruption.  Why not patch those leaks before declaring an inability to pay.

Further, since the Government claims that it cannot pay investors from the Consolidated Fund, then why did our Members of Parliament vote to increase public worker’s salaries (including their own) by 5%, if they knew that the Consolidated Fund was insolvent?  Does this mean that our Parliamentarians were not paid last month?  If they were, then clearly the Fund is not insolvent, and we were misled.

Secondly, the Bill appears to give power to the majority of voters.  However, a voter is defined in terms of the size of the investment.  So, it is not the number of voters, but the size of the voter.  Therefore, one large voter can have more weight than 1,000 individual voters.  Let me explain.

Approximately 85% of the National Insurance investment fund comprises approximately $3.5B lent to the Government in Treasury Bills, Treasury Notes and Debentures.  It is unlikely that 1,000 pensioners’ individual investments are anywhere close to this amount.

The votes of the NIS, banks and insurance companies exceed the 75% limit for the measure to pass.  If the NIS is excluded from the vote, votes of the banks and insurance companies still exceed the 75% limit.  Since these entities are all-aboard, it makes the vote farcical – but it is good public relations.

Thirdly, and most importantly, the idea of crudely legalising changes to a contract between two parties, is concerning.  If the Government wants to change the terms of an existing contract, then they should simply renegotiate, which is a normal business action – not dictatorially pass a law to unilaterally make it so.

The Constitution of Barbados recognises contracts.  In my opinion, the Government’s intended action is unlikely to survive a constitutional challenge.  However, who will bell the cat now that the former cat-beller appears to have been offered spillage?

Grenville Phillips II is a Chartered Structural Engineer and the founder of Solutions Barbados.  He can be reached at NextParty246@gmail.com

161 comments

  • @PUDRYR
    I was being just a tad mischievous when I wrote the piece but just a few years ago when the BLP was being flogged by the blogs the “substantive PM” 😊 mused about putting a metaphorical collar around the necks of the blogs but now we are in a honeymoon period all has been forgiven but who knows what two or three years will bring and one should never say never.

    “David” used to be a lot bolder, the blog that made me sit up and pay attention a few years ago was when he wrote that Rayside Co might have been “hammered because of his affliction for making withdrawals from the hairy bank!”
    Dem was de days of the Wild Wild West.

    https://barbadosunderground.net/2007/04/08/rayside-construction-companywhy-did-this-respected-black-owned-business-fail/

    Like

  • @Sargeant

    You like the salacious stuff?

    There ND these day to fill that void not so?

    Like

  • pieceuhderockyeahright

    @ Sargeant

    Much earlier in the day de ole man had commented thusly.

    And had said “…@ Sargeant

    If Mia Mao Mugabe Mottley were to be stupid enough to invoke any such laws in Barbados that would bring her regime of the Mottleyian regime to a close, FASTER THAN ANY ONE OF THESE STOOPID INCESSANT POSTERS COULD!

    Because Sargeant “IT WOULD NOT ONLY BROADCAST TO THE WORLD THAT THIS GOVERNMENT IS ABOUT SUPPRESSION BUT IT WOULD GIVE CREDENCE TO THE EFFECTS OF ITS PSYCHOGRAPHIC WARFARE.

    Let me explain the construct of and the science about these Stoopid Cartoons.

    Drip, drip, drip!!!

    Each cartoon carries its “small form” package of truth for a viewer.

    Drip, drip, drip, Every single day.

    Is the content of a Stoopid Cartoon lies?

    Lets examine this closely. Did Mia Mugabe not change the Constitution for Rawdone, McCunny & Wigfitting? Yes or No?

    Is the Constitution of Barbados for that type of fickle behaviour? Yes or No?

    Has Mia Mugabe not increased politician salaries for 26 of her ministers? Yes or no?

    Is not the cuntry in dire financial straits? Yes or no?

    If your response to the above and by extension the series of Stoopid Cartoons is yes, THEN WHAT IS YOUR ASSESSMENT WHEN THEY EITHER ARREST A BLOGGER FOR THE TRUTH OR CLOSE DOWN BU OR SMOTHER IT?

    WHAT WOULD BE THE BLP GoB FALLOUT, IF IT TRIED TO ARREST AN ANONYMOUS BLOGGER, BEHIND A SPUN UP HYPERVISOR?

    Let us run with this for a while Sargeant.

    BARBADOS UNDERGROUND does not validate used IPs.

    so my given name can be anything I attach to my chosen email. This is why Jack Boreman can periodically post what he likes here on BU with a false email address.

    Are you with me?

    Si is this caring government of Mia Mao Mugabe Mottley, which ran on this accountability and transparency platform, a government that is out there begging everyone for National indicative Programming, going to seek to arrest an ANONYMOUS blogger and his grandson?

    And how is it going to do that, based on an imputation of who the party is? Whu Tron and NineofNines write in a similar style heheheheh like lawyers!

    AND IN THAT SINGLE ACT, of seeking to throttle BU and the voices of dissenters, WHAT HAPPENS TO BARBADOS’ REPUTATION & THAT OF ITS AMBASSADOR PLENIPOTENTARY?

    I know that that last one will throw for a loop but all Mugabe and smiley tweets and Edmund can do is hope for something along the lines of a compromise of sorts, a place where de ole man gives them easement and they give him what is his.

    Speaking of that idiot AG Dale Marshall did you see his interview on YouTube where he and Eddie are touring the flooded areas?

    You heard the idiot call Mia Mottley “the substantive Prime Minister?”

    Do a search for this freudian slip Sargeant that forever records and presages what his deep dark thoughts are…

    Your warning is noted…”

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  • Ah hope they know that the Constitution…created, drafted and RATIFIED…not by any house negro in the parliament…but by the BRITISH…DOES NOT RECOGNIZE DICTATORS…

    So if anyone in the present government has plans to become a dictator to further blight the lives of the PEOPLE WHO ELECTED THEM….the majority population …the british will have to be immediately notified that their house negros owned by THE CROWN are projecting dictatorship on the people contrary to THEIR CONSTITUTION….

    …and that also includes Grenville with his dumb shit also..

    One of the first things I said when first reading the Constitution given to the island by the british is that it should remain in place a little longer, not because of any sentimentality. ..BUT because it gives the island time to get rid of the nasty politicians and ministers of BLP, just like the people got rid of DLP…AND gives the people…the majority population more TIME TO WAKE UP.

    Now I am not accusing Mia of anything…but just so she and those with their shit plans know….that they are ALL being watched …very, very carefully.

    Those present squatters in parliament would be a hell of a lot better off just doing the job the majority population elected them AND ARE PAYING THEM TO DO….and get the hell out of the parliament…when they are KICKED OUT.

    Like

  • Sargeant,

    The politicians destroy one another’s reputations more than any BU poster. And these days there is video. have you ever been to a political meeting in this place?

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  • And then they are found at one another’s funerals praising the one they trashed.

    The word to the wise should be to the politicians. WE GOT VIDEO.

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  • I have never seen anything like it before …the politicians/ministers/lawyers in Barbados are the true definition of..HARDCORE CRIMINALS.

    Not only do they trash each other mercilessly as it suits them despite being partners in crime, but they would steal from each other…as long as there is enough to steal…steal from each other’s children, grandchildren, great grandchildren….help each other along to an early grave…if they could….and STILL attend each other’s funeral and sing praises with absolutely no fear whatsoever that the church would burst into flames and CRISPY CRITTER all of them.

    They are ALSO the true definition of DEMONS.

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  • And they are ALL…useless, useless lawyers/ministers/their parasitic minority masters.. now famous worldwide for their thievery AGAINST the people…and their decades of CORRUPTION.

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  • When will the people realize that government has never been in the business of improving the social, political and economic conditions of the masses, because decade after decade government continues to grapple with the same problems over and over again? We have to sit down and seriously contemplate what it is about power that cause honest men and women to undermine the collective-will of the people after assuming elective-office.

    Like

  • I love certain aspects of American judicial system and the reason I love certain aspects of American judicial system is for this simple reason: if you violate the law you can be prosecuted at both the state and federal level. In other words: if the state doesn’t win a conviction then the federal government can take up the same case and prosecute you as well.

    Like

  • “because decade after decade government continues to grapple with the same problems over and over again? ”

    No..it is decade after decade the dumb governments continue using the same stupid solutions to fix the same problems over and over despite those solutions NEVER working..

    These foolish governments continue doing the same things over and over while expecting very different results.

    Like

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