Governor Cleviston Haynes delivered a sobering review of the economy in 2018. The economy flat-lined or negligibly contracted as was described at today’s press conference. The focus of the government at the early period in office is to stabilize the economy that was in free fall for close to a decade. This cannot be denied.
The blogmaster is hopeful we will see growth strategies rolled out in the coming weeks and months. We live in hope?
Press Release Dec 2018v14.pdf (1022.19 KB)
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Latest Best example of FALSE ACCOUNTING, stating that FORGIEN RESERVES have significantly increased is a LOAD OF SHIT. SLIPPERY ACCOUNTING, COUNTRY DEFAULTS ON REPAYMENT OF LOANS, BORROWS MORE MONEY AND CLAIMS RESERVES NOW INCREASED. REALITY IS DEFAULT ON LOAN REPAYMENTS AND NEW BORROWINGS ARE IN FACT INCREASING THE COUNTRIES DEBT OBLIGATIONS AND SHOULD BE SHOWN AS LIABILITIES AND NOT ASSETS. The fact is the countries debt obligations have significantly INCREASED. This type of rational is like the average person FAILING to make is mortgage obligation payments and then claiming his cash flow is now positive, ignoring your debt obligations does not make your financial outlook more positive.
Eventually the robbing of Peter to pay Paul will BITE YOU IN THE ADS BIG time and the lenders of last resort will vanish. Anyone with at least one brain cell can see the falisy of this BERT scenario is doomed to FAILED STATE STATUS.
So how you want that accounting to go/say?
We have no FX because we have a 1 billion but we owe out 2 billions?
Isn’t that on billion still not reported as reserves?
What those criticizing do not address is that foreign reserves was trending downwards each year since the former government took office. There is a relationship between investor confidence and level of reserves, there is a requirement given our peg to the US dollar to defend the peg, there is a need to demonstrate to exporters and the market at large we have adequate resources to pay bills and service loans as they come due etc etc etc. Be critical all we want whether through a political, ignorant or other lenses but address the central issues in play for crissakes.
some times it better to present data as opposed to information.
sirFuzzy what data are you asking that is not already available?
We have to invoke meaning to the data for it to be relevant?
The central point being that as we hailed our reserves intake we cannot lose the fact of the truth that once again we have chosen the path of rebuilding an economy on borrowed debt which has proven to be unsustainable
You like a parrot repeat a rote position. The question being asked is given the state of the economy as at May 25 with debts to service, junk status credit ratings, single digit foreign reserves- what were the options? Bear in mind the many iterations of your former government failed, miserably.
@ david.
Information is data that has been curated. it can or may have a narrative. Data once accurate is neutral. That all i will say.
@sirFuzzy
Sorry but you are not clear. Data is neutral by a sterile definition. It does not change the fact that different interpretations can be applied to the same dataset.
David January 30, 2019 9:51 PM
There are many among us that know economics. The Central bank governor in my opinion has two distinct audiences whenever he does this presentation.
After this presentation we look for the one handled economist and very few are ever found.
The 2 groups are those that want to hear his take on the data that should support his take, and those that just want the numbers or data he used to come to his opinions or observation or projections.
Just saying..
Hostage Financing cannot be considered a prudent government economic policy
“Politicians like to tell people what they want to hear – and what they want to hear is what won’t happen.” ~ Paul Samuelson
“The stock market has predicted nine of the last five recessions.” ~ Paul Samuelson
I have found those two quotes by the Nobel Prize Economist to be very interesting. It often colours my view of information and how we use it.
” That glum news was revealed by Governor of the Central Bank Cleviston Haynes this morning during a press conference to review Barbados’ economic performance for 2018.”
@David
“foreign reserves was trending downwards each year since the former government took office.”
We have bee saying this for at least 8 years now. I would dare say that even under Owen forex was trending, supported by strategic sales here and there.
Just observing
David
To say that a matter of economy ‘cannot be denied’ is an extremely high bar – toooo high!
To state that the economy was in ‘free fall for close to a decade’ is at least imprecise. And while we could agree that for much of that time there was protracted decline after decline, we have not seen any evidence to suggest that it was all downward and nothing else but. Therefore, your simplistic statement is at least imprecise.
Yes, the last regime failed in more ways than a few. And Mottley has had a lot of remediation to do – all true. But this government still leaves a large gap in their planning – their BERT.
Just talking about phantom growth as though it could happen again like how its main proponent, OSA, harps on, will not make it happen because like Mottley and her advisors there are no responses for current externalities far less the coming generalized corrections within the international economic system.
@Pacha Simplistic or not the data supports.
David
10 years from now the same commentary will be applicable to MAM and her tribe!
@Pacha
We will not survive ten years on the present trajectory.
David
That is just a way of speaking. But yuh right. That is why it is so important to be clear eyed.
@ David & Pachamama. Never mind you two – you can always fall back on your favourite hobbyhorse of wittering about Trump’s proposed invasion of Venezuela and giving publicity to your commie chum Comissiong.
He is recommending ‘Do not be bullied’..by taking loans from such as IMF, but then basically recommending other agencies to borrow from, such as Chinese agencies.
What a laugh. Put the country in a position to be colonised by financial programmes, which cannot be paid back. Aside form which, certain ‘programmes’ always result in the lender country’s own construction companies, workers etc, getting the work.
Against the ‘stigma’ of having direct oversight of the country’s programme? I for one welcome such oversight, particularly in light of recent experiences.
If the tourism industry is to continue to be Barbados’ largest foreign exchange earner it has to evolve.
That is the view of new president of the Barbados Economic Society (BES) Simon Naitram, who has described a slowdown in the sector despite a 2.8 per cent increase in visitor arrivals in 2018 as “puzzling”.
Simon Naitram
His comments have come in response to Governor of the Central Bank Cleviston Haynes’ review of Barbados’ economic performance for 2018.
During that review this morning Haynes revealed that Barbados’ economy had contracted by 0.6 per cent, mainly because of a sub-par performance by the tourism sector. Naitram said Government needed to take notice of this development.
“The value the country gets from tourism is a combination of two things: visitor arrivals and visitor spending. And while more visitors visited Barbados, they have been staying for shorter periods and spending less.
“This sends an early warning about the structure of the tourism industry. The tourism industry’s contribution might continue to underwhelm, as Brexit looms over the British economy and new tourism taxes take effect. If tourism is to be a viable source of broad-based economic growth into the future, then the industry needs to evolve. This evolution will need innovation, investment, and broad social engagement,” Naitram said.
While noting that government’s debt restructuring had reduced the debt-to-GDP ratio to 126.9 per cent of GDP by December 2018, down from 155.8 per cent in September 2018, he said this was due to the combination of debt restructuring and the fact that Government’s fiscal measures had generated a surplus of revenue over total spending.
However, he warned that government might have to introduce further taxation to spur economic growth.
“If economic growth remains weak in the short to medium-term, the Government may continue to collect less revenue than it expects. The Government may then need to resort to new expenditure or tax measures to meet its fiscal target. Capital expenditure is an easy target for spending reduction, but capital expenditure has a large positive impact on economic activity. Reduction in public investment would do severe damage to Barbados’ ability to grow,” Naitram cautioned.
“The need for growth is pressing. We are under no illusions that fiscal measures alone will stabilize the nation’s debt. We need growth in economic activity to reduce the burden of the country’s debt obligations.”
The new BES head said since the implementation of the Barbados Economic Recovery and Transformation (BERT) programme signs of reform were encouraging among them, the Planning and Development Bill 2019.
“Reforming the public sector serves two purposes: reducing government spending, and improving the environment for Barbadians to invest and do business.
“Much like the West Indies cricket team, the Government of Barbados appears to be on the right track. Consistency, stamina and broad social support are needed to see the job to its conclusion,” Naitram said. (Quote)
What patent nonsense. The challenge is to diversify away from tourism and we have had over 50 years to do that. It is a pity that we have young economists repeating the same old, same old. Any of our retired professors could have sad the same nonsense.
I repeat: when you learn by rote you repeat nonsense as if reciting a poem. Think for yourselves, for Heavens sake. Just try it and see.
As is almost always the case with the IMF: the operation may be successful but the patient will be in the morgue.
@Hal
“Simon Naitram, who has described a slowdown in the sector despite a 2.8 per cent increase in visitor arrivals in 2018 as “puzzling”.”
As Wily and IMF have pointed out on numerous previous discussions, there is no reason to be puzzled, its the result of poor statistical anaylisis and its manipulation(massaging) of the numbers. Barbados politicians are not too competent in many capabilities except thier masters in reporting and rigging figures to make themselves appear competent.
@David
Putting blinders on when reporting finances is what Barbadians do BEST, present data that makes them look good to the ignorant reader. This only makes good press to the POORLY informed readers and these individuals come away thinking ALL IS GOOD. Then you expect the masses to react appropriatley, off to Price Smart and spend significant FORGIEN RESERVES and the problem continues. Country cannot continue to borrow money to support an unsustainable lifestyle. Populace has to FEEL THE PAIN if corrective action is the expected result.
@David
Remove the BORROWED MONEY and UNPAID DEBT OBLIGATIONS from the reported FORGIEN RESERVES and what to you have…… RESERVES that continue downward as per the trend over the last several years. Report what’s real if you want these reserve numbers to reflect in the future what is actually happening to determine if whatever corrective action you’ve taking is working. Reporting reserve numbers(hidden, massaged) will be political GOOD PRESS however will be meaningless for performance evaluation.
Blinders ON wearing DARK MIRROWED SUNGLASSES and the story continuessssssssss.
I repeat that a country of two hundred and seventy five thousand it is almost near to impossible to.pay off an 8 billion dollar debt off the backs of low income earners and retirees
One will notice govt first step towards recovery was to siphoned retirees pension funds
This policy would continue as Professor Don Marshall indicated that Bert fatigue would be a challenge for govt to over come
Bert fatigue is inevitable as people struggle to find a balance between paying govt debt and their personnel household debt
Well said Wily. The ridiculous over=importation of motor vehilcles is a prime example.
@David
“Simplistic or not the data supports”
What exactly does the data support Blogmaster?
Voodoo economics placed on a cloud of smoke and mirrors to blind the unsuspecting and foolish
Reserves intact without a long term solution of action to repay
Question who will repay the money borrowed to rebuild the reserves
The younger generation will be in a ride for its life
Truth unlike milk does not sour
Playing economic games is tantomount to playing Russian roulette with the economy
AC/DC
Could it be possible to interrogate any issue at all absent your dead political invective.
The goal of the Barbados government and private investors SHOULD BE to make Tourism the THIRD biggest money earner in Barbados.
@ Hants
Third, after…???
@ 45govt January 31, 2019 9:24 AM
Well said Wily. The ridiculous over=importation of motor vehilcles is a prime example.
U need to say things like that in a whisper. The lender kinda like that we are importing too many vehicle, it is after all a lifestyle statement and a cash cow for those lenders.
Just saying
David
A. Dullard
https://data.worldbank.org/indicator/NY.GDP.MKTP.CD
We were trying to copy the chart to demonstrate our point.
You may see the World Bank statistics at the link above, I could not copy.
Does not cover the whole period bot you’ll see the general trajectory.
But it demonstrates why most absolutes within the social sciences are inevitably fraught with peril.
Our experience has been that systems hardly work within the absolutisms you described.
If you are not careful, someday coming soon what is now seen as horrible management by the DLP would be made to look like genius, be careful about over-reach.
@ Hal Austin,
There are enough really bright Bajans who can find a way to create better alternatives to the risky business of Tourism.
@ Hants,
You said tourism should the third strongest sector, what should be the two above it? I know there are lots of bright Bajans, like yourself, but be specific.
@ Hal Austin
@ Hants
Third, after…???
xxxxxxxxxxxxxxxxxxxxx
Drug trafficking and Human Trafficking.
They are well on their way.
@ Barbados Underground,
You are assuming that Bajans are clever enough to traffic drugs or people.
Drug trafficking and money laundering
wily
if you remove unpaid debt and borrowed money from the reserves then we have 0 reserves – not now or under the last regime but for decades.
in the mean time what would you prefer the borrowed money that had now become available to help pay off some of the debt/ invest (roads, buses etc) be call?
@A. Dullard
The data support the trending down last ten years of forex reserves does it not?
Wily
OK.
The BORROWED FX held at the central bank now stands and over 1 billion.
What is the fuss if we call it reserves or apple pie?
@ John 2
I have $500.00 in my wallet. But I will spend $200.00 on groceries and $ 300.00 on mortgage. And my utiities bills are due in two weeks. Does it matter that I have $500.00 in my wallet?
.
David
You are choosing your metrics selectively. We would generally expect forex to fluctuate, especially in short runs, seasonally etc. It always does. It recently increase because of borrowing as has happened many time before.
But that may not be the best metric as consistent with your claim.
VINCENT
the $500 in your wallet (if you earned or borrowed it) would allow you to pay part of each of your three bills or the two that is due and u can borrow to pay your utilities.
Many households go through your scenario.
Without the $500 (earned/borrowed) in your wallet you could pay nothing on any of your three bills.
I don’t know what you are trying to point out.
If the $500 in you wallet was borrowed it would still be yours even though you owe someone else that sum. you could use it however you wish. The same thing applies to our FX (if it is earned or borrowed)
.
what difference does it make if it is call reserves or by another name?
@Pacha
Trending down as in trend line.
Borrowing money to put mlney in my pocket= borrowed money to be repaid with interest and collateral attached
Economics A1A
First the interest is deducted from the loan and the balance of payments which is principal have to be repaid whichcan be cause for having to refinanced the loan in the event my financial support dwindled
Which might be a cause to happen to the borrowed reserves from the IMF
Btw what did we give up
Get a read of OSA comments in barbados today
Wuhloss muh belly
How much money did the previous government borrowed?
Economics A1A only came into effect after the last election it seems.
John 2
It is precisely your kind of thinking that have us in this mess and will keep us in this mess. It is called short termism. A line of thinking that deals temporarily with the symptoms and not the long term underlying disease. Quick fixes seldom solves the problem.
Vincent
What is my line of thinking?
All I was trying to point out is the FX, weather it is borrowed or gained, as long as it is being held by CB it is referred to as RESERVES.
What cant you understand about that.
it you guy that is harping on the “borrowed” part.
I have already stated – if you remove our debt and what we borrowed then we have NO reserves !!
For accounting purposes the FX held in our CB are referred to as our FX reserves.
If you want to call it by any other name then fine but the principle still remain the same.
You introduce your scenario and ask a question. I responded the possibilities that I can think of at that time.
Now here is my real thinking.
The government,, B or any other party that had won the last election, HAD to borrow to prop up our FX reserves. If not – (people think thing hard now?) we would have been wiping our buts with leaves.
The blogmaster invites you to join the discussion.