IMF Gives Green Light to BERT BUT…

The blogmaster must be honest and admit that the reform and structural changes required to transform the Barbados economy and society will have its negative impact. No austerity program can be rolled out without negatively affecting people. Unless one is rabidly partisan or dishonest it is obvious the work rate of the BLP government is much higher than that of the Stuart led government.  The IMF has given the thumbs up to targets met under the BERT plan. We look forward to the plans to encourage investment to fuel growth.

What the blogmaster will not ignore are decisions that expose the government as engaging in more of the same. A comment posted on another blog by SSS sums it up beautifully.

We know the IMF calling the shots. I have no problem with her BERT plan or the fact that restructuring is necessary. I got a serious issue with her laying off people, and hiring her people; ensuring that her father gets a special gift from her in the form of a Knighthood so he can strut his stuff through immigration officials without check because he is no longer to function as an ordinary citizen;how she did not do enough to ensure the layoff process was fair; how she proposing wire tapping and ensuring that another one of her loyals, Dottin, is not too far from her side when she brings it into fruition. I got a serious problem with the transparency she has shown in writing off tax defaulters millions owed. I want her to publish the names because if you forgiving them and they already sleeping better, you should not have a problem publish names of those who benefited under her tax amnesty – Sunshine Sunny Sunshine (SSS)


IMF Staff Concludes Visit to Barbados

February 12, 2019

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board meeting.
  • Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program.
  • All indicative targets for end-December under the EFF have been met.
  • Two key pieces of legislation—the Public Financial Management Act, and the Town and Country Planning Act—were adopted in early 2019.

At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm visited Bridgetown from February 5–8, to discuss implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF). A concluding meeting was held with Prime Minister Mottley in Washington D.C on February 11, 2019. To summarize the mission’s findings, Mr. van Selm made the following statement:

 

“Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program.

“All indicative targets for end-December under the EFF have been met. The program target for Net International Reserves was met by a wide margin, as was the target for the Central Bank of Barbados’ Net Domestic Assets (NDA). The target for the primary surplus for end-December 2018 was also met by a wide margin.

“Good progress has been made in implementing end-December 2018 structural benchmarks under the EFF. Two key pieces of legislation—the Public Financial Management Act, and the Town and Country Planning Act—were adopted in early 2019.

“Preparation of the budget for FY2019/20 targeting a primary surplus of 6 percent of GDP is well underway. Full year effects of reforms set in motion during the current (2018/19) fiscal year, including the introduction of several new taxes and ongoing streamlining of public sector work force at state-owned enterprises, should help achieve this target. A detailed assessment of the budget will be made when it is finalized.

“Progress being made by the authorities in furthering good-faith discussions with external creditors is welcome. Continuing open dialogue and sharing of information will remain important in concluding an orderly debt restructuring process.

“The team is looking forward to return to Barbados in May to conduct the discussions for the first review under the EFF and would like to thank the authorities and the technical team for their openness and candid discussions.”

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Randa Elnagar

Phone: +1 202 623-7100Email: MEDIA@IMF.org

267 comments

  • Yesterday, Saturday November 16, 2019, two companies owned by the Ram Merchandani family, Furniture Limited and Tiny Tots Limited, took the Government to court seeking an urgent application to prevent the Government from taking possession of the building on Bay Street occupied by the Liquidation Centre.
    This property was acquired by Government through the compulsory acquisition process of Parliament, with the notice to acquire having been served on the owners since March this year. This property forms part of the tourism footprint identified by the Mia Mottley Administration for a number of hotel developments, including the new Hyatt.
    While Government now effectively owns the property, the process of compensation has not been completed. However, discussions have been on-going between the Government and the previous owners, with a commitment to pay as soon as agreement has been reached.
    In the meanwhile, the November 4, 2019 deadline to turn over possession of the property to the Government had not been met, but the company wrote Government asking for an extension of occupation until January 2020, which Government rejected, on the grounds that the company had been given more than enough time to complete its relocation.
    On Friday November 15, 2019 the operators of the Liquidation Centre were instructed to immediately vacate the property, and informed that if they failed to, on Monday November 18, 2019 Government would take active possession and remove to storage all items still inside the building.

    In response, the owners sought injunctive relief through the High Court, which dismissed the application on the basis that there was no serious issue to be tried. The company then sought a stay of execution, which the court also rejected.
    This means that barring any further instructions from the court, tomorrow morning, (November 18, 2019) personnel from the Ministry of Housing and Lands, with the assistance of the Royal Barbados Police Force, will take possession of the Liquidation Centre building and begin the process of removing and storing all materials within.(Quote)

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  • LOL….so they get free warehousing and removal of goods by challenging? In many places they would hold an auction on Nov 18, and the funds would go into the Treasury; the goods to the highest bidder who would responsible for their removal within a specific time period.

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  • This property forms part of the tourism footprint identified by the Mia Mottley Administration for a number of hotel developments, including the new Hyatt.
    +++++++++++++++
    Interesting choice of words by the Atty General “Mia Mottley Administration” I don’t think I’ve ever heard a Gov’t Minister refer to the Gov’t as a personal fiefdom of the PM. I know it’s customary for the US to refer to the US Gov’t as e.g “Trump/Obama Administration”, we have come a long way.

    Not a fan of Ms. Ram but what mechanism exists for a meeting of the minds re the value of the property? Does Gov’t get to say “this is our offer take it or leave it”

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  • Who is going to own the freehold of the property? If Hyatt is having it on a lease, how long is the lease for? If they are given/sold the freehold, then the decision should be challenged in court.

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  • @HA
    Hyatt doesn’t buy land. Like Marriott they are “asset light”. They operate. Whomever the development group is will own the land. May be the GoB is a “joint developer”. The key is what did they pay for the land, and how much did they sell the land for. But if we take recent past scenarios, Four Seasons, Cahill WTE, etc etc, Ladbrokes may give you 1000-1 on finding out

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  • @ Northern Observer,

    I am not speculating, someone MUST own the freehold. Who is that individual, institution or corporate? Even if Hyatt has a management agreement, there must be ownership of the physical enterprise, who is that?
    All this should have been public knowledge, since the Town and Country planning application should have been a public record; in fact, any such hearing should have been in public so that neighbours and interested parties could offer an opinion on the proposals. The prime minister is the responsible minister. She has a responsibility to inform the public.
    And, of course, all of it should have been fully reported in our media.

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  • Is it a secret that Vision Development owned by Mark Maloney is the developer?

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  • Under eminent domain does govt have a right to seize property for the sole use for private ownership purpose
    Under the law of emminent domain which gives govt the right to seize or purchase personnel.property there are laws which gives govt special rights such as infrastructure. military. Transportation public parks hospitals govt offices or those projects necessary and determined to be for the safety of state and people and interest
    I am of the opinion that purchasing or seizing personnel property for private ownership investment does not fall under such categories

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  • @ Mariposa

    You are again right. Under the doctrine of compulsory purchase, or emiment domain, it is abuse of process for the state to compulsorily purchase land to then hand it over to private ownership. This seems like oligarchic capitalism of the Russian kind. Compulsory purchase is only legitimate if the land is then used in the wider public interest.
    It is my case that a commercial hotel does not meet this objective. The case should be taken to the CCJ, unless the government can put forward a more powerful justification than just a need to fulfil a narrow government wish for a so-called hotel corridor. That does not meet any of the principles of public interest.
    Let us pretend that it is job creation: has there been an impact analysis? How many jobs? What types of jobs? And how would those jobs benefit ordinary Barbadians? As for tourism, Barbados already has too many hotel beds so how would Hyatt reduce these numbers?
    This is bad politics, bad public policy and, although I am not a lawyer, it seems like bad law.

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  • This is Barbados govt knows that the people are as dumb as nails and would complain for a few days and say not
    If any one is in doubt as to what rights govt have in seizing they can give a read of the following article

    https://www.justice.gov/enrd/history-federal-use-eminent-domain

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  • This govt is becoming more and more like terrorist
    People eyes are closed so govt is doing whatever it dam pleases

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  • Hasn’t this topic been discussed before? It sets an awful precedent. Two landowners cannot reach an agreement so the government steps in, to forcefully, take a side. Mirchandani is correct to challenge. Exactly how the courts could conclude there was ‘no serious basis’ for a challenge, is beyond my understanding. Clearly the courts are biased. Another reason why potential investors need to take stock of the possibilities which exist.

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  • Really how is this possible that a opposition led by Atherley who wants to be one day Guardian of this fair land has mouth closed to this dastardly act of govt ignoring the Constitution and trampling over peoples right
    What a blantant bastardization of the peoples right
    Unbelivable

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  • @ Northern Observer

    Yes. But we can say the same about almost every subject discussed on BU. Do you remember how it finished? Thought not. Also look out for the fabrications, people claiming you have said things you have not on the issue.

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  • This issue was ruled on my the Barbados Courts, are we to blame the government?

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  • The issue is, how can the Court decide, there is NO SERIOUS ISSUE to be heard? The government only comes into play because they were the acquirers, and a politician, Dale Marshall, spoke to the matter.
    When this story broke in March, I fully expected a court challenge. The news it has been declined is beyond belief. It is one thing to hear the case and have a result, another entirely to find “no serious issue to be tried”.

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  • @NO

    Agree with you. Why did Ms. Ram wait until the eleventh hour to seek injunctive relief? Something is not adding up.

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  • When was she told her case had no merit and would not be heard?

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  • We can only go by what is contained in the AG’s statement.

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  • The courts’ job is to enforce (interpret) the law, but the government has abused the process. We badly need public policy lawyers. We need to discuss policy and we need the rule of law.
    There is no legitimate government argument about the creation of jobs, of additional tax revenue, or a wider one of a hotel corridor being in the benefit of the nation.
    This appears to be a straight transfer of ownership from private owner to private owner, using the weapon of compulsory purchase or eminent domain to facilitate a perverse policy. This is one for the CCJ. Local courts appear biased.
    The prime minister, as planning minister, needs to explain this decision to the public. Is there a DLP view?

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  • The DLP has a poor communications apparatus. The president issued a statement that was carried on the news concerning Miss Ram matter, a check of the DLP Facebook page or her Facebook wall, nothing.

    Should the DLP subcontract Jong?

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  • A challenge should be sent out to the opposition to clarify what happened to the liquidation centre aaking questions that go deep into govt actions against property ownership and their legal right under the Constitution

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  • Yes the courts should be blamed as blatant co conspirators ruling in favour with govt demand against the rule of law known as the Constitution

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  • The challenge should come from the Bar Association why the matter was rejected by the Court. What were the points argued and why they failed.

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  • A blatant miscarriage of justice
    Even a blind man on a trotting horse can see

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  • The DLP have nothing to do with this. Forget the %^&* lawyers and their association, which we already known to be a group of eunuchs. Where is the BPSA? At least one of the two parties must be a member of one of the bodies for which the BPSA acts as the umbrella. The precedent is such, they MUST SPEAK. What member will be next to bear the brunt of compulsory acquisition for nebulous reasons. If this was lands from Sagicor’s B’dos Farms or Kensington from GEL for private commercial development, we would hear from BPSA, pronto.

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  • @NO

    The DLP has a power base in the Barbados landscape that can serve to add weight to the lobby. In that context.

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  • I appreciate that. However, whatever comes from DLP statements is seen as partisan. Expected, as most of it is. Ditto for BLP statements.The issue at hand is not a partisan issue. Ultimately, this is an issue between two private companies, where the GoB has stepped in. Hence the BPSA is the appropriate mouth piece. I can accept, if they, like myself, assumed this matter would end up in Court. Now it hasn’t, they need to be VERY LOUD.

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  • Agree with you but change will come with a strong lobby from all stakeholders.

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  • As a matter of fact what influence does the dlp have in making change in Parliament
    The people gave them the boot
    Why is not a called ask of from the opposition in parliament on this issue
    The opposition lead by Atherley can only lead a charge no one else
    The voices on the outside looking in has made plenty in put in the last 24hrs now it is time for the opposition to speak out and show Mottley and her crew what metal they are made of
    The Constitution is the only sword of arms that is legitimate and legally binding to protect the people and upon those grounds Atherley ought to say something in the protection of the peoples rights

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  • Is the issue parliament or why the Barbados Courts theee our the matter.

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  • This legal matter has not entered the political arena
    Therefore it is incumbent that those ministers on the opposite side of govt who vowed to protect country and people take a stance and speak out openly and with clarity about govt actions done to a citizen of this country for those actions are dammning precedent being set by govt

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  • This legal matter has now entered the political arena
    Therefore it is incumbent that those ministers on the opposite side of govt who vowed to protect country and people take a stance and speak out openly and with clarity about govt actions done to a citizen of this country for those actions are dammning precedent being set by govt

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  • Pingback: Miss Ram and Karma Meet | Barbados Underground

  • When I say the President has no time for details, that she has no vision, I am often ridiculed. Below is what she thinks passes as a long-term vkision for Barbados, nonsense about being bilingual, ablle to swim not afraid to take on bujsiness risks.
    Maybe someone should tell her that if bys and girls entering the school system when she was minister of education that entire generation would already be bi-lingual. And what does she mean by blingualism: seaking Mandarin? Or Spanish? Or French? Or Gujerati?
    And when can’t school children be taught to swim now? Why do they have to wait until 2030? As to business, that should have been part of the current government’s programme; what about reforming t he educational system NOW and not wait for the future? And what is she doing now, to make these things happen by 2030?
    It is all smoke and mirrors, waffle, proselytising, hand-waving, evangelical humbug.

    As the Government prepares to unveil its Vision 2020, Prime Minister Mia Mottley revealed a personal vision for a Barbados in the 2030s where all young people are full of confidence, bilingual, able to swim, unafraid to take business risks and are taking part in a sport or the arts.

    And she suggested that if this vision was made possible there would be less feeling of alienation among the youth and less likely to get involved in antisocial behaviour.
    Mottley also suggested that it would result in a lower chance of young people “risking life and limb to do ignorance either on the road or to themselves”, and instead, they would be more confident to “take on the world”.

    Prime Minister Mia Mottley
    “That is the kind of Barbados that we want,” said the Prime Minister . “One that is defined collectively by the kind of young Barbadians we want to build and nurture and foster such that they will speak with purpose and passion… from wherever they are in this nation.”
    But her message fell on the ears of a modest gathering of mostly elderly people at the St Mary’s Church in The City on Wednesday, as she inaugurated a series of monthly Barbados 2019 and Beyond lectures.
    Declaring that it was her mission to help “build the kind of society that has a large middle-class”, Mottley said it was for this reason that her administration was committed to the deconstruction and reconstruction of the educational system, which she wants to “unleash more creative and passionate citizens”.

    “That is why we reintroduced free tertiary education last year even while being in the middle of an [International Monetary Fund] programme,” she said.
    Mottley argued that the current education system was constructed to focus on a minority while “carrying along the rest to be orderly and capable of taking instructions”.
    But the Prime Minister insisted that every child should be given the opportunity to be the best they could be, adding that “deconstructing our educational system has taken far longer than we had hoped for”.
    She said: “Our educational system cannot be about training lawyers and doctors, priests and teachers, but it has to be about unleashing a purposeful, compassionate, passionate, disciplined and creative citizens.
    “We have said that by 2030 every child under the age of 18 must be prepared for the lives that they can live in order to help unleash this country’s greatest potential.”
    Mottley also hinted at an ambivalent position on corporal punishment in schools. She said: “I am not going to tell you that some level of a lash or two is bad because people respond in different ways to different things.

    “What I think we have to be clear about is that corporal punishment in the form of abuse is completely unacceptable, but a lash never hurt anybody with a ruler or a belt.”
    She also pointed to the need for parental education, saying that there were many “children raising children” and they needed guidance, something Mottley said she already mentioned to Minister of Education Santia Bradshaw.
    Describing her vision for the country as a “mission-critical activity that has to be nationwide”, Mottley called on the church, community organizations and other civil society groups to come out of their comfort zones and work closely with Government to help young people who need help.
    She said: “My government has set out some very simple objectives for our period in office in this country.
    “We believe that we can build a better and stronger Barbados but we believe that stronger and better Barbados is the sum total of the actions of our people, and that it is our duty, if the people of this country allow us, over the course of the next decade to lay the foundation that will secure the next 50 years of our nation as an independent country and the way we do it is by unleashing the purpose and passion in our people.” (Quote)

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  • The end of austerity……..

                Governments need to take “urgent” action to improve the medium-term prospects for their economies, the OECD said on Thursday, as it forecast that weak global growth will continue for the next two years. The Paris-based international organisation recommended that advanced economies should kick-start private investment in new energy technologies and digitalisation with “bold public investment”. The OECD said that stimulus efforts, along with greater international co-operation on trade and taxation and more active demand management, could boost the growth performance of the G20 group of major economies by more than 1 per cent over three years.(Quote)
    

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  • Governments need to take “urgent” action to improve the medium-term prospects for their economies, the OECD said on Thursday, as it forecast that weak global growth will continue for the next two years. The Paris-based international organisation recommended that advanced economies should kick-start private investment in new energy technologies and digitalisation with “bold public investment”. The OECD said that stimulus efforts, along with greater international co-operation on trade and taxation and more active demand management, could boost the growth performance of the G20 group of major economies by more than 1 per cent over three years.

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  • @HA
    OECD? Is this the same body which dictates via “black-grey listing” countries which do not comply with THEIR version of how a tax system should work, now talking about “greater international co-operation on trade and taxation”. Or am I confusing organizations?

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  • @northern Observer

    The rich countries club. They make the rules.

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  • Can someone plse help in solving this Barbadian Puzzle? On coming to power in May last year, the Mottley government defaulted on its sovereign debt, sacked hundreds of public sectors workers and instituted a programme of tough austerity.
    The government leading economic adviser is Prof Avinash Persaud so, it can be assumed, that government acted on advice given by the professor, or, which is unlikely, ignored his advice and took its own course.
    I say unlikely since if that were the case the professor would most certainly have resigned or the prime minister would have sacked him for giving bad advice.
    Now the name Avinash Persaud has turned up on a list o UK economists who have signed a letter to a national newspaper caller for more public sector spending as advocated by Jeremy Corbyn and the Labour Party.
    Now the professor has got to come clean: is he in support of austerity, as practised by the Mottley government, or a massive infrastructure spending programme, as proposed by Jeremy Corbyn.
    Will our dynamic media unearth the truth behind these conflicting positions?

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  • “You have a further restructuring exercise that will take place over the course of the next couple months. We had started the restructuring process last year with a view to reducing the staff complement because the reality is that even when you compare current staff complement to some of the major broadcasting entities overseas, we are still in a situation where the staff complement of the Caribbean Broadcasting Corporation is significantly higher than any organisation or operation whether similar or even larger. Technology has allowed us to reduce the number employed,” Bradshaw said.(Quote)

    What nonsense. And I thought she was one of few sensible people in the government. CBC does not need fewer staff, they need BETTER staff.

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  • Robyn Rihanna Fenty has surpassed many people’s expectations throughout her career, and she’s got the receipts to prove it. She has been certified by Forbes as the wealthiest female musician in the world.

    Rihanna is reportedly worth $600 million. That’s $30 million more than the Material Girl, Madonna; $150 million more than Celine Dion; and $200 million more than the Queen Bee, Beyoncé. Those numbers are even more impressive considering her career isn’t as long as the three aforementioned women.
    Earlier this year, the Bajan beauty officially launched her luxury fashion label in partnership with French luxury goods company LVMH, becoming the first woman of color to be in the lead position for a LVMH business. She has sold more than 60 million albums and 215 million digital tracks, securing her place as the second-best-selling digital artist of all time.
    Forbes predicts that Rihanna’s Fenty Beauty make-up brand “could swell to more than $200 billion in sales by 2025.” Fenty Beauty, reportedly earned $100 million in sales in just its first few weeks and $570 million last year. Rihanna owns about 15% of its $3 billion worth. Fenty Beauty launched with a bang by releasing 40 shades of foundation, separating itself from the competition and changing the cosmetics industry in the process.
    Last year, Rihanna launched Savage X Fenty, an online-based lingerie company. The line recently received money from Jay-Z and his venture firm, Marcy Venture Partners L.L.C., as well as funding from Avenir Growth Capital. The latest round of financing brought the total amount to $70 million from investors, according to The Wall Street Journal.

    On Sept. 20, Amazon Prime Video will stream the premiere of Rihanna’s Savage X Fenty Show from New York Fashion Week featuring her new Fall/Winter 2019 lingerie collection. The collection will also also be sold on Amazon.
    In 2012, the superstar founded her own charity organization, the Clara Lionel Foundation, which supports health and education efforts in impoverished communities around the world, which led to Harvard University naming her humanitarian of the year in February 2017(Quote)

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  • Government is planning to increase training and recruit more internal auditors as it introduces a rigorous independent oversight of financial management in the public sector.

    Minister in the Ministry of Finance Ryan Straughn says he hopes the effort will improve operational efficiency and reduce the “salacious” issues frequently flagged by the Auditor General.
    Straughn said while the new Internal Audit Office in the Ministry of Finance would not be fully implemented until September 2021, steps were already being taken to improve Government’s internal operations.
    He was speaking yesterday at the Institute of Internal Auditors Barbados Chapter’s 20th anniversary celebrations and seminar at Radisson Aquatica Resort. (Quote)

    Another example of the creeping hand of government. Internal auditors Internal auditors should be independent o political control, reporting to the auditor general. We must not only avoid cooking the books, but we must be seen not to cook the books.

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  • Barbadian students who are looking for avenues to broaden their skills and preparation for the world of work may soon be finding new opportunities in the African nation of Kenya.
    This was revealed this afternoon when Prime Minister Mia Amor Mottley and Minister of Foreign Affairs and Foreign Trade, Senator Jerome Walcott, met with that country’s Minister of Education, Professor George Albert Magoha, at the InterContinental Hotel in Nairobi.
    While the discussion focused significantly on a memorandum of understanding that would open up places for Barbadian medical students who annually outnumber the internship opportunities at the Queen Elizabeth Hospital after they have completed studies at the University of the West Indies, the professor broadened the scope of the talks.
    He told Ms. Mottley he looked forward to an arrangement that would allow Bajan secondary and tertiary students to undertake practical training in Kenya for a prescribed period.
    He added that in any such arrangement Kenya “would take care of the Barbadians”, just as he would expect Barbados to take care of any Kenyans who want to undertake a similar programme in Barbados.
    In fact, Kenyan officials noted that President Uhuru Kenyatta was so serious about forging practical relations with Barbados that officers in the ministries of Education and Health had already been tasked with getting the programmes started.
    The Kenyan Minister also hinted that there may be opportunities for young Barbadian doctors who do their internships in Kenya to remain if they desired.
    The Minister told Ms. Mottley they were not anticipating any problems in getting the medical internship programme off the ground, noting that the appropriate agreements would be concluded speedily and that all Barbadians students would operate in hospitals of Kenya’s Ministry of Health and supervised by personnel from the University of Nairobi.

    Prime Minister Mia Amor Mottley and Minister of Foreign Affairs and Foreign Trade, Senator Jerome Walcott, met with Kenya’s Minister of Education, Professor George Albert Magoha, to discuss new education opportunities. (FP)
    Prime Minister Mottley told the Kenyan officials that as soon as everything was completed to allow the medical programme to get started, she wanted to press ahead with arrangements that would allow for educational exchanges in areas of culture, international trade and bio-security.
    These discussions, she said, would be led by officials from the University of the West Indies, which is now preparing to open on August 1, 2020, a new Faculty of Arts and Creative Economy at the Cave Hill Campus.
    “If we want to have greater control of a lot of what we are doing in terms of South-South trade, then the issue of bio-security will become even more critical,” she added.
    However, on the issue of exchanges at the secondary school level, Ms. Mottley said her Government preferred an approach in which the two governments set the policy framework and leave the school administrators to work out twinning and exchange opportunities.
    “I believe that will work best without us,” she said. “Let the secondary schools deal with each other directly, and that way they can raise money on their own, establish partnerships and organise visits. We are talking about 15 and 16 year olds who are old enough to handle being away from home on their own, but young enough still to be sponges to new culture.(Quote)

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  • How. does this exporting of youth help to strengthen the declining barbados population
    Or it doesnt matter long term

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  • (Quote):
    The Kenyan Minister also hinted that there may be opportunities for young Barbadian doctors who do their internships in Kenya to remain if they desired. (Unquote).
    +++++++++++++++++++++++++++++++++++++

    What a laughable paradox of conflicting confusion! Barbados can export doctors to Kenya but has to import nurses from Ghana!

    Where are the training priorities for national development?

    What next is Barbados going to do?

    Import priests and pastors and export drug dealers and gun men?

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  • The woman is a madman
    All over the place exporting duppies now the children 15 and 16 years she states cause children like sponges can absorb things easily
    What next

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  • @ Mariposa

    Who is advising her? This is madness upon madness. Is she OK?

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  • So the basic premise of BERT was misleading? It is all voodoo. Snake oil nonsense.

    Barbados does not have the capacity, given its population, to go it alone to achieve economic development, and thus should be more welcoming of its regional neighbours, said Prime Minister Mia Mottley, as Parliament moved to tweak the law governing the entry of skilled CARICOM nationals.

    Introducing the CARICOM Freedom of Movement of Persons Amendment Bill to the House of Assembly this evening, she declared: “Barbados has a trade surplus with one region in the world, and that is the Organisation of Eastern Caribbean States, as well as with Guyana.
    “So when xenophobic staements come, we forget to recognise our economic stability is linked to our neighbours, and Trinidad is where the second or third largest source of investment into Barbados comes from.
    “And when we add that one in every five visitors to Barbados comes from the CARICOM region, we begin to understand why the political party I lead has a constitutional objective to pursue regional integration.
    “We cannot survive only on the 280,000 people who live here, because we do not have enough economic activity on our own.”
    The new bill clarifies some aspects of the original freedom of movement legislation as well as makes some new provisions.

    The Prime Minister said: “The bill before us defines very clearly what is meant by an agricultural worker, an artisan, an artist, a security officer, and we have also used the opportunity to clean up aspects of its functioning, to define what is a “community national”, a “qualifying CARICOM State” and we are also allowing for provisional entry for dependents of the person (for example spouses or young children), and over the last 18 months we have brought clarity to the Protocol on Contingent Rights to allow people to see what benefits they can get in moving from country to country.”
    Mottley noted Barbados was once a major exporter of labour in the years immediately following emancipation in 1838, and that once again, one of the dilemmas the region faced was that countries like Guyana and Suriname, despite having enormous potential for economic growth following the discovery of significant oil reserves, are short on people with the requisite skills to profit from it.
    The Prime Minister said: “Guyana is the size of England, Scotland and Wales combined, but while the UK has a population of 64 million, Guyana has 741,000 people.
    “While Suriname is bigger than the Netherlands but its population is 563,402.
    “Ironically, they are the least populated countries in CARICOM but they are expected to grow to unprecedented levels shortly.
    “Even with the best will in the world, we will have to work together, because if we don’t, nature abhors a vacuum and others will come in and fill it.

    “We have to recognise that there is great strength in unity and we need to build out a community greater than the sum total of us all.
    “The precept upon which the Revised Treaty of Chaguaramas was signed says we will treat each other better than anyone else who does not belong to the grouping, the most favored nation precept, so if we take that spirit, we must recognise we need to look at each other before we look at anyone else.
    “When the two energy ministers from Barbados and Trinidad signed an agreement to work together a year ago, it recognised Tirinidad has a century of working with oil and natural gas while Barbados does not.
    “It is better to work together than to have someone from ‘far and away’ to work with us and benefit themselves more than we do.”
    But she stressed that nothing in this amended law gives people who may be deported the right to stay.
    “So in all that we are doing, a country still has the right to protect itself from those who were deported for any particularly serious purpose, and the country has the right to take protective action to protect its borders, this normally relates to national security but also public health on occasion.”(Quote)

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  • That bill is a recipe courting disaster
    I remember a similar bill courting Haitians to come into the country
    Well we all know how that ended
    Commissiong pleading with people to but the Haitians airline tickets so they can return to haiti

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  • The population of 280000 people is the biggest it has ever been in our history. Is the president saying that at no time in history Barbados was capable of supporting itself? Has Barbados always been a failed state? Is sovereignty a mirage?
    If we need a bigger population, what is acceptable? And what would be the purpose? Tax revenue? Manufacturing output? Unfilled job vacancies?
    We need proper economic explanations, not rhetoric.

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  • The reaction is mixed concerning Mia’s policies. However, there is common consensus from the phone-in-shows through to the limited print journals that Bert is hurting badly a large majority of the masses.

    On my return to Barbados – as has been noted in the press; there has been a mass clean up of Barbados. From what little I have seen of Barbados it looks extremely clean when compared to my last visit. I also noted that a lot of bush land has been cleared. A number of individuals were employed to carry out this duty. Apparently, they are going to be retained on a one week on; one week of basis.

    When Mia came into power, I suggested that it was critical to commence the regeneration of Barbados with similar low-hanging low cost work schemes.

    With regard to the recruitment of CARICOM workers. It puzzles me why Mia should want to invite these people to Barbados. The recent clean up campaign has proven that Barbadians are not afraid of hard work. The bulk of workers required would be agricultural workers. We need to find a way to reward our own so that they can benefit both financially and at the same time have a business stake within the agricultural industry.

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  • @TLNS

    Where is the BERT economic growth going to com from? Population growth? The president must spell out her ideas.

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  • You mean the prime minister?

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  • The president must level with the people of Barbados. What does she mean? This is not the first time she has talkd about the size of the Barbados population; she must fill in the missing gaps.
    What dos she mean by ‘capacity’ and when did she realise this? Dos this man th promiss of BERT were all bogus? If our economic future is tied up in CARICOM, why has it taken her nearly two years to say this, and how does she plan to improve matters?
    It will nd in tears.

    Barbados does not have the capacity, given its population, to go it alone to achieve economic development, and thus should be more welcoming of its regional neighbours, said Prime Minister Mia Mottley, as Parliament moved to tweak the law governing the entry of skilled CARICOM nationals.

    Introducing the CARICOM Freedom of Movement of Persons Amendment Bill to the House of Assembly this evening, she declared: “Barbados has a trade surplus with one region in the world, and that is the Organisation of Eastern Caribbean States, as well as with Guyana.
    “So when xenophobic staements come, we forget to recognise our economic stability is linked to our neighbours, and Trinidad is where the second or third largest source of investment into Barbados comes from.
    “And when we add that one in every five visitors to Barbados comes from the CARICOM region, we begin to understand why the political party I lead has a constitutional objective to pursue regional integration.
    “We cannot survive only on the 280,000 people who live here, because we do not have enough economic activity on our own.”
    The new bill clarifies some aspects of the original freedom of movement legislation as well as makes some new provisions.

    The Prime Minister said: “The bill before us defines very clearly what is meant by an agricultural worker, an artisan, an artist, a security officer, and we have also used the opportunity to clean up aspects of its functioning, to define what is a “community national”, a “qualifying CARICOM State” and we are also allowing for provisional entry for dependents of the person (for example spouses or young children), and over the last 18 months we have brought clarity to the Protocol on Contingent Rights to allow people to see what benefits they can get in moving from country to country.”
    Mottley noted Barbados was once a major exporter of labour in the years immediately following emancipation in 1838, and that once again, one of the dilemmas the region faced was that countries like Guyana and Suriname, despite having enormous potential for economic growth following the discovery of significant oil reserves, are short on people with the requisite skills to profit from it.
    The Prime Minister said: “Guyana is the size of England, Scotland and Wales combined, but while the UK has a population of 64 million, Guyana has 741,000 people.
    “While Suriname is bigger than the Netherlands but its population is 563,402.
    “Ironically, they are the least populated countries in CARICOM but they are expected to grow to unprecedented levels shortly.
    “Even with the best will in the world, we will have to work together, because if we don’t, nature abhors a vacuum and others will come in and fill it.

    “We have to recognise that there is great strength in unity and we need to build out a community greater than the sum total of us all.
    “The precept upon which the Revised Treaty of Chaguaramas was signed says we will treat each other better than anyone else who does not belong to the grouping, the most favored nation precept, so if we take that spirit, we must recognise we need to look at each other before we look at anyone else.
    “When the two energy ministers from Barbados and Trinidad signed an agreement to work together a year ago, it recognised Tirinidad has a century of working with oil and natural gas while Barbados does not.
    “It is better to work together than to have someone from ‘far and away’ to work with us and benefit themselves more than we do.”
    But she stressed that nothing in this amended law gives people who may be deported the right to stay.
    “So in all that we are doing, a country still has the right to protect itself from those who were deported for any particularly serious purpose, and the country has the right to take protective action to protect its borders, this normally relates to national security but also public health on occasion.”(Quote)

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  • Mia is over her head implementing policies which she does not have a clue
    All this free movement will end up like the Haitian debacle
    People does not enter a country just to be a helping hand for the new country but look for all the possible opportunities available to help themselves
    The long and short being people moving away from their homeland are seeking greener pastures
    Where are the greener pastures available for any one
    Right now the grass is dried and withered

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  • Who is the president?

    Who is the buffoon?

    Always so condescending for a big Rh man.

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  • Let us congratulate the Jamaicans for getting a licence to operate a bank in the UK. This is great news. Even though I dislike digital banking, as soon as it comes on stream I shall be opening an account with them. This is genuinely punching above your weight.

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  • Let us congratulate the Barbados government for signing a memorandum of understanding to share High Commissions/Embassies in the emerging markets of Africa and Asia. It embodies the spirit and mandate of Caricom.

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  • When are we going to get a revised BERT plan?

    Australia signals it may resort to QE after economic hit from virus
    Jamie Smyth reports from Sydney
    Australia’s central bank forecasts the coronavirus will knock at least half a percentage point off gross domestic product in the first quarter and signalled it may have to launch a quantitative easing programme to boost the economy.
    Guy Debelle, deputy governor of the Reserve Bank of Australia, told parliament the bank had capacity for only one more interest rate cut, which would reduce official rates to a new record low of 0.25 per cent.
    “Beyond that, we will have to consider quantitative easing,” said Mr Debelle, who spoke to MPs late on Wednesday following the RBA’s rate cut on Tuesday, which reduced official interest rates to a record low of 0.5 per cent.
    He said he did not think the RBA would consider negative interest rates.
    Economists are forecasting the economy will contract in the first quarter, raising concerns that Australia could experience its first recession in 29 years if the coronavirus outbreak is not brought under control speedily.
    Meanwhile, Australian authorities confirmed on Thursday that a 95-year-old nursing home resident who died on Tuesday had tested positive for the virus, making her the country’s second Covid-19 fatality.(Quote)

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  • The coronavirus pandemic is a human tragedy of potentially biblical proportions. Many today are living in fear of their lives or mourning their loved ones. The actions being taken by governments to prevent our health systems from being overwhelmed are brave and necessary. They must be supported.
    But those actions also come with a huge and unavoidable economic cost. While many face a loss of life, a great many more face a loss of livelihood. Day by day, the economic news is worsening. Companies face a loss of income across the whole economy. A great many are already downsizing and laying off workers. A deep recession is inevitable.
    The challenge we face is how to act with sufficient strength and speed to prevent the recession from morphing into a prolonged depression, made deeper by a plethora of defaults leaving irreversible damage.
    It is already clear that the answer must involve a significant increase in public debt. The loss of income incurred by the private sector — and any debt raised to fill the gap — must eventually be absorbed, wholly or in part, on to government balance sheets.
    Much higher public debt levels will become a permanent feature of our economies and will be accompanied by private debt cancellation.
    It is the proper role of the state to deploy its balance sheet to protect citizens and the economy against shocks that the private sector is not responsible for and cannot absorb.
    States have always done so in the face of national emergencies. Wars — the most relevant precedent — were financed by increases in public debt. During the first world war, in Italy and Germany between 6 and 15 per cent of war spending in real terms was financed from taxes.
    In Austria-Hungary, Russia and France, none of the continuing costs of the war were paid out of taxes. Everywhere, the tax base was eroded by war damage and conscription.
    Today, it is by the pandemic’s human distress and the shutdown. The key question is not whether but how the state should put its balance sheet to good use.
    The priority must not only be providing basic income for those who lose their jobs. We must protect people from losing their jobs in the first place. If we do not, we will emerge from this crisis with permanently lower employment and capacity, as families and companies struggle to repair their balance sheets and rebuild net assets.
    Employment and unemployment subsidies and the postponement of taxes are important steps that have already been introduced by many governments. But protecting employment and productive capacity at a time of dramatic income loss requires immediate liquidity support.
    This is essential for all businesses to cover their operating expenses during the crisis, be they large corporations or even more so small and medium-sized enterprises and self-employed entrepreneurs. Several governments have already introduced welcome measures to channel liquidity to struggling businesses. But a more comprehensive approach is needed.
    While different European countries have varying financial and industrial structures, the only effective way to reach immediately into every crack of the economy is to fully mobilise their entire financial systems: bond markets, mostly for large corporates, banking systems and in some countries even the postal system for everybody else.
    And it has to be done immediately, avoiding bureaucratic delays. Banks in particular extend across the entire economy and can create money instantly by allowing overdrafts or opening credit facilities.
    Banks must rapidly lend funds at zero cost to companies prepared to save jobs. Since in this way they are becoming a vehicle for public policy, the capital they need to perform this task must be provided by the government in the form of state guarantees on all additional overdrafts or loans.
    Neither regulation nor collateral rules should stand in the way of creating all the space needed in bank balance sheets for this purpose. Furthermore, the cost of these guarantees should not be based on the credit risk of the company that receives them, but should be zero regardless of the cost of funding of the government that issues them.
    Companies, however, will not draw on liquidity support simply because credit is cheap. In some cases, for example businesses with an order backlog, their losses may be recoverable and then they will repay debt.
    In other sectors, this will probably not be the case. Such companies may still be able to absorb this crisis for a short period of time and raise debt to keep their staff in work. But their accumulated losses risk impairing their ability to invest afterwards.
    And, were the virus outbreak and associated lockdowns to last, they could realistically remain in business only if the debt raised to keep people employed during that time were eventually cancelled.
    Either governments compensate borrowers for their expenses, or those borrowers will fail and the guarantee will be made good by the government. If moral hazard can be contained, the former is better for the economy.
    The second route is likely to be less costly for the budget. Both cases will lead to governments absorbing a large share of the income loss caused by the shutdown, if jobs and capacity are to be protected. Public debt levels will have increased. But the alternative — a permanent destruction of productive capacity and therefore of the fiscal base — would be much more damaging to the economy and eventually to government credit.
    We must also remember that given the present and probable future levels of interest rates, such an increase in government debt will not add to its servicing costs. In some respects, Europe is well equipped to deal with this extraordinary shock. It has a granular financial structure able to channel funds to every part of the economy that needs it. It has a strong public sector able to co-ordinate a rapid policy response.
    Speed is absolutely essential for effectiveness. Faced with unforeseen circumstances, a change of mindset is as necessary in this crisis as it would be in times of war. The shock we are facing is not cyclical. The loss of income is not the fault of any of those who suffer from it.
    The cost of hesitation may be irreversible. The memory of the sufferings of Europeans in the 1920s is enough of a cautionary tale. The speed of the deterioration of private balance sheets — caused by an economic shutdown that is both inevitable and desirable — must be met by equal speed in deploying government balance sheets, mobilising banks and, as Europeans, supporting each other in the pursuit of what is evidently a common cause.(Quote)

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  • Here is what a former journalist, turned academic economist, has to say about the UK economy. Maybe now our tourism officials will get rid of their fantasy that tourism will return to normal after the coronavirus crisis. Are we going to get a revision of BERT?

    The UK economy is plunging into a deeper recession than the 2008-09 financial crisis, according to the most reliable data published so far, with unemployment surging and the public finances sliding sharply into the red because of the coronavirus pandemic.
    Economists said there was huge uncertainty over the depth of the coming recession and the speed of the subsequent recovery. Some predict the downturn will be short and sharp, but fear that like a decade ago, there will also be a painful transition to a persistently weaker path for economic growth.
    With most UK households under lockdown, high streets shuttered except for essential stores, and many companies struggling to keep going, large parts of the economy are grinding to a halt.
    Diane Coyle, professor of public policy economics at Cambridge university’s Bennett Institute, said the interconnected nature of the modern economy meant everyone was affected by the coronavirus crisis.(Quote)

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  • This government shows consistent economic incompetence, which boggles the mind. If they really want an austerity economy, then sell non-core assets, such as the 49 per cent share in LIAT. But, for reasons known only to their tiny minds, there is a belief that unless they have a major share in LIAT the struggling airline will stop coming to Barbados, a major destination. Nonsense.
    Sell the shares – in fact, auction them on the world market and sell to the highest bidder. LIAT will not miss a single flight to Barbados, unless there is an act of God.

    Barbados is putting $3 million into the operations of regional airline LIAT to keep it in the air during the COVID-19 crisis.
    Minister in the Ministry of Economic Affairs Ryan Straughn won approval yesterday to have the money transferred from the Consolidated Fund “to ensure the Government of Barbados can support the operations of LIAT”
    It was one of three money resolutions passed in the House of Assembly, and Straughn said it was being requested “in response to COVID 19”.
    He said: “There are limited aircraft coming into the country and goods and people still need to be transported around the region in a short space of time.”. (Quote)

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  • Five years ago this email was sent to a prominent Barbadian economist. The central issue remains today.

    A happy, healthy and prosperous New Year to you. Times have changed and we, even little islanders, must change with the times. There is nothing wrong with opening your mind to new ideas.
    In reply to Don Marshall, printing money – literally or electronically – does not pose any real insurmountable danger, as the latest theories have confirmed.
    We are in a low interest environment because we have learned to manage inflation, the major threat from the additional supply of liquidity.
    We can manage the over supply by removing some of the liquidity from the retail banks and managing bank lending or/and managing interest rates. I prefer a prices and incomes policy so that asset prices will not necessarily inflate, leading to demands for wage increases.
    That is the lesson of monetary policy globally – France, Australia, US, UK, eurozone, Japan, and other major economies.
    As to the warehousing of foreign reserves, we can best manage this through futures contracts and credit default swaps freeing up money to invest in local industry and infrastructure.

    Hal

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  • A Prime Minister Tries to Storm-Proof Her Island’s Finances
    Growing up in Barbados, Mia Mottley lived through the effects of climate change. Now she’s devising ways of shielding the nation’s budget from weather-related ruin.
    By Ezra Fieser
    4 April 2020, 10:00 BST

    Mia Mottley’s gravelly voice rang with urgency. Standing at the podium at the United Nations, the prime minister of Barbados was warning of the dangers her island faced as storms swollen by warmer oceans tore through the Caribbean. “This is a matter of life or death for us,” she said.

    It was late September 2018 hurricane season and Barbados was flooding. A tropical storm threatened neighboring St. Lucia. On the other side of the globe, a typhoon took aim at Japan. The confluence of disasters was almost unthinkable. Almost. “This is not a science fiction movie,” Mottley said. “This is not a cartoon. And if I ever thought that it was a fantasy, what transpired in the last 24 hours across the different poles of the world has reminded me that it is not.”

    Mottley had won office only four months earlier, becoming her nation’s first woman leader. This was her inaugural address to the UN, but she spoke with conviction, her words charged by decades of pent-up concern about a changing climate. She had seen for herself how flying fish, a once plentiful delicacy, were avoiding warming coastal waters, how rising seas were eating away at the wide white-sand beaches she’d known growing up, and how droughts were drying up aquifers that provide the islanders’ drinking water.

    Financially shaky Barbados had escaped the wrath of disastrous hurricanes, but for how much longer? “We cannot plan our affairs or that of our people on the basis of luck,” she said. “It must be on the basis of policy and decisive action, but above all else on the basis of caring and empathy. I ask the world to pause, pause, and just get this one right.”

    In front of her in the UN’s vast General Assembly hall, half the seats were empty. Some in the audience of dignitaries slumped in their seat. Others milled about. The signs were clear: Mottley was on her own. She returned to Barbados that day to work on a plan to protect the island, a plan of her own.
    With wildfires ripping through Australia and the Amazon and along the U.S. West Coast, rising seas threatening small islands, and supercharged storms killing thousands and costing billions of dollars, markets and public officials are grappling with how to respond. There’s little that the prime minister of a country of some 290,000 people can do on her own to cool the world. But she can prepare her island nation for the inevitable crisis and its financial impact.

    Now 54, Mottley has become a champion of what are known in sovereign debt contracts as natural-disaster clauses, measures that give the government a break from principal and interest payments in the event calamity strikes. Over the course of a year and a half of contentious negotiations to restructure Barbados’s sovereign debt, Mottley was finally able to persuade creditors to accept the clauses last October. She also needed to win the support of Bajans, as the people of Barbados are called, many of whom lost money when the government defaulted on its Treasury notes.
    “You’re not walking away from the liabilities, but you are walking away from the immediacy of the payments to create the cash flow that you need”
    But in the process, Mottley says, Barbados has developed a model for how countries can protect their finances from climate change, especially neighboring Caribbean islands, which have been prone to default. “You’re not walking away from the liabilities, but you are walking away from the immediacy of the payments to create the cash flow that you need,” she says, seated at the head of a conference table at government headquarters in Bridgetown.
    Under the deal the government and its creditors finalized in October, Barbados would get a two-year payment moratorium in the event of a disaster severe enough to trigger a payout from the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Co., a risk pool that provides coverage for calamities. The Mottley clauses, which now cover about 80% of the country’s outstanding debt, would free up as much as $700 million to spend on rebuilding if weather events cause the government to enact them in the next five years. That’s equivalent to almost 15% of the economy that otherwise would go to debt payments. After the moratorium, payments would resume, including on accrued interest.
    That sort of breathing space could preserve the ability of Barbados and other tiny nations to respond to ever-more-frequent disasters. Hurricanes have caused more than $212 billion in losses and damages in the Caribbean since 1980, according to the Center for Disaster Management and Risk Reduction Technology in Karlsruhe, Germany.
    The region is strewn with examples of the link between disaster and debt. The Bahamas, 1,400 miles northwest of Barbados, is borrowing as much as $300 million to deal with 2019’s Hurricane Dorian, the worst in its history. In 2017, Hurricane Maria crippled Puerto Rico’s ability to pay down the more than $70 billion in debt owed by the U.S. commonwealth at the time. Again and again, natural disasters have held back economic growth and, coupled with fiscal mismanagement, pushed countries into untenable situations.
    Caribbean countries have restructured debt more than a dozen times in the past 20 years. “We live in such a bad neighborhood in terms of our vulnerabilities,” says Monica La Bennett, a vice president of the Bridgetown-based Caribbean Development Bank. “Governments, multilateral institutions, and the financial markets are recognizing that this is now a new normal, and so these clauses have become more important as part of the armory these countries can put in place.”

    Mottley has lived under the specter of a natural catastrophe for all her life. At the decaying three-story concrete government headquarters in the capital, she recalls how two decades ago, when she was minister of education, she warned that a bad storm could set back the country, once one of the most prosperous in the eastern Caribbean because of a thriving tourism industry and its offshore banking businesses. “The gains of development you thought you had are immediately whittled away in hours,” she says.
    The 166-square-mile pear-shaped island sits closer to South America than the U.S. That’s put it outside the main Atlantic hurricane belt, sparing it so many times that locals quip, “God is Bajan.” And it can look that way. Across from Mottley’s offices, sailboats bob in the clear waters of a horseshoe-shaped bay while cruise ships the size of office buildings dock in the distance.
    But Barbados is small, flat, and vulnerable. Most of the population lives near the coast. Some Bajans live in rickety wooden homes known as chattel houses, their design dating to days when sugar plantations dominated the island and many residents were former slaves. “Nature—and what it brings with it—was our greatest threat,” Mottley says.
    In conversation, Mottley, who earned a law degree from the London School of Economics and Political Science in 1986, switches fluidly from climate science to international finance to economic policy. She wears polygonal glasses that contrast with a round face, and an occasional smile reveals a gap between her front teeth.
    Mottley’s immersion in Barbadian politics began early. Her grandfather was Bridgetown’s first mayor. Her father served as consul general in New York, where Mottley studied at the United Nations International School. She entered politics before turning 30, becoming one of the youngest education ministers in the country’s history. She rose to become leader of the then-minority Barbados Labour Party in 2013.
    By 2017 she was already hatching a plan to turn the country around. The economy had stopped growing a decade or so earlier, infrastructure was in such disrepair that sewage leaked into the sea, and the country’s debt-to-gross domestic product ratio was surpassed only by Japan and Greece.

    The economy of the former British colony depends massively on tourism, so when the financial crisis came along, it ravaged international travel. Growth contracted and didn’t return until 2015. The travel and tourism industry supports more than a third of the nation’s $5 billion GDP. In recent years, the number of foreign visitors has risen to more than 1.5 million annually. The coronavirus pandemic has hit the island hard. Tourists canceled thousands of hotel reservations in March, according to the Barbados Hotel & Tourism Association, even as cruise lines dropped voyages to the Caribbean, including Barbados, where some 800,000 passengers normally disembark each year.

    The year before the 2018 election, as leader of the opposition, Mottley recruited a team of advisers that included Avinash Persaud, a native Barbadian, who’d spent years abroad as an investment banker at global heavyweights including State Street Corp. and JPMorgan Chase & Co., winning recognition for his work on risk modeling.
    As Mottley’s team settled down to work, Persaud and the others couldn’t ignore what was going on around the region. The 2017 Atlantic hurricane season brought 10 of them, plus a handful of tropical storms that wreaked havoc in the U.S., the Caribbean, and Central America. Hurricanes Irma and Maria, Category 5 monsters, formed within days of each other, severely damaging Caribbean and Atlantic islands and the U.S. mainland. Irma destroyed tiny Barbuda. Maria left almost 3,000 dead in Puerto Rico. “It was just a horrific year,” Persaud says. “It led to a complete rethinking.’’

    Mottley was already familiar with debt clauses that could afford protection against storms. The idea was actually born in neighboring Grenada, a tiny island whose major exports are nutmeg, mace, and newly minted doctors from its medical school. Hurricane Ivan hammered it in 2004, beginning a decade of economic malaise that resulted in a default a decade later.
    During Grenada’s restructuring, financiers sought ways to cushion government indebtedness. A few ideas already existed, including so-called collective action clauses, which give a supermajority of bondholders power to make debt restructurings binding, as well as catastrophe bonds, mainly issued by insurance companies to protect against disasters.

    Grenada’s adviser in the restructuring was White Oak Advisory in London. Managing director J. Sebastian Espinosa, an ex-managing director at investment bank Houlihan Lokey Inc., and his partner David Nagoski, a former U.S. Treasury official, have advised governments throughout Africa and Latin America. In Grenada’s case, they developed a clause that would specifically address the government’s fiscal condition after a hurricane.
    “We wanted to come up with something that was conducive to bolstering resilience to rising climatic risks,” Espinosa says. “Adverse-weather clauses provide vulnerable sovereign debtors with a degree of flexibility by creating built-in buffers that can help them absorb some of the financial impact.”

    Grenada’s restructuring culminated in 2015, and Mottley would build on that work. Having won office in a landslide in May 2018, she promptly announced the island would default on its debt of about $8 billion. She took the born-in-Grenada idea and expanded it, hiring White Oak for Barbados’s restructuring. The company drafted clauses that would include all types of natural disaster and cover almost all of Barbados’s obligations. Mottley sees the clause as a way to free up cash for rebuilding that would otherwise go to creditors. “If you have an event, you need fiscal space,” she says. “How do you best do that but by suspending your debt payments?”
    To get the restructuring done, however, Barbados needed buy-in from skeptical creditors. Mottley also needed the support of her own citizenry, who in a restructuring risked losing money from their savings and from retirement plans.

    In the end, Mottley was able to spread out the pain of austerity. She raised taxes on tourism, reasoning that visitors use infrastructure and services as much as residents, if not more. She also announced that foreign loans and bonds would be renegotiated, a surprise from a country that once boasted of its investment-grade credit rating and history of fiscal prudence.
    Reaching an agreement with foreign holders of dollar-denominated bonds proved more contentious. Mottley tried to sell the natural-disaster clause as protection for lenders, because the government, without the clause, might default on its debts following a big storm.
    Creditors didn’t buy it. Several institutional bondholders formed a committee, including Eaton Vance Corp., Greylock Capital Management, Teachers Advisors, and the Guyana Bank for Trade & Industry. The group wanted Barbados to consider an alternative approach, such as an insurance policy, says Rafael Molina, managing partner at Newstate Partners LLP, an advisory firm in London for the creditors. “I can understand the government of Barbados is concerned about hurricanes, because the threat of climate change is very real,” he says. “But from the beginning, creditors said they didn’t want this clause. There is no market for bonds with these clauses. It has to be driven by the market.”
    Mottley took a hard-line approach. Negotiations dragged on and at times appeared stalled. Having secured a $290 million bailout package from the International Monetary Fund, she could afford to bide her time because Barbados didn’t necessarily need to borrow from capital markets.
    In the end, fatigue set in, Molina says. Despite the creditors’ objection to the clause and to other government demands, they wanted to close the deal. “The thought was, Do we really want this to drag on for two years? We’ll just take it and move on,” he says.
    The creditor committee accepted the government’s deal, with one caveat designed to make the bonds more salable: If natural disaster strikes, Barbados has to notify creditors of its intent to enact the clause. If a committee majority votes against its use, it can’t be enacted.
    The wrangling over the Barbados deal exposed a weakness that may inhibit widespread use of Mottley clauses: The market hasn’t figured out how to price the risk in such cases. So far, though, investors seem welcoming. Similar bonds issued by Grenada were trading around par before the March credit sell-off. Buyers have actually pushed up the price for the new Barbados dollar bond, which matures in 2029 and carries a 6.5% coupon, since it started trading in December.
    Just as Barbados built on Grenada’s experience, other countries may build on Mottley’s. As they consider ways to balance the needs of countries and creditors alike, the IMF and World Bank have held discussions on the clauses. In the Bahamas, where Hurricane Dorian caused $3.4 billion in losses and damages, the government has considered a similar provision in new debt sales.
    For now, the clauses are “experimental,” says Michael Papaioannou, a visiting scholar at Drexel University in Philadelphia and an expert on emerging-market debt. They could become common if multilaterals such as the World Bank and IMF include them in loan contracts. “We are seeing the first steps,” he says.
    “It does require a few pioneers. Financiers love to let someone else be first. They get paid a lot of money, but they’re risk-averse”
    Barbados is determined to keep taking them. Although wide-scale acceptance of the clauses “will take a while,” Persaud says, Barbados plans to include the clause in all future debt sales, blazing a path for other governments. “It does require a few pioneers,” he says. “Financiers love to let someone else be first. They get paid a lot of money, but they’re risk-averse.”
    On a January afternoon in Bridgetown, Mottley gathers her cabinet together to go over the numbers for the coming budget year. She whips out an iPad to check spreadsheets that show debt has declined to 114% of GDP from about 176% when she took office. She points to a part of the spreadsheet that shows how much the country will save if it has to enact the hurricane clause—a bit of certainty amid the wild unpredictability of climate change.
    Outside, a steady, light rain is falling. It’s a welcome respite from a punishing dry spell. But even this relatively small amount of precipitation is inundating streets that have never flooded before. “Even without hurricanes you have normal floods,” she tells the room. She mentions that it’s been six decades since a catastrophic hurricane struck the island. She turns to a wooden tabletop and raps it with her knuckles. “Barbados has been luckier than most.”
    Fieser is a credit market reporter based in Bogotá.

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  • The Japanese have just passed nearly US$1trn to stimulate the economy. Is there a lesson here for BERT and Barbados?

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  • Why should the Barbados government instruct its Central Bank to ‘Print Money’ for consumers to buy what?

    The hundreds of imported second-hand vehicles ‘lying idle’ in the numerous used cars lots owned by your favourite business clan of new Barbadians?

    What about the few remaining stocks of trinkets and processed food produced in China and imported by foreign-owned wholesalers?

    At this stage of the economic crisis the printing of Bajan Mickey mouse dollars could only help the local agricultural sector by stimulating the production of locally-grown foods which will soon become the saviour of Bajans from starvation and worshipped as the goddess Carmeta

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