Dr. DeLisle Worrell Says Time to Jettison Caribbean Currencies

Dr. De Lisle Worrell continues to be a controversial figure in Barbados. He suffered the embarrassment of being sacked by former Minister of Finance Chris Sinckler. The blogmaster will remember him for the fact he presided as Governor of the Central Bank during a period popularly labelled the Lost Decade. He continues to be controversial in his current role sitting on the other side of the negotiating table by epresenting some of the external creditors.

The following text is posted to caribbeansignal.com  and makes for interesting reading given his  (Worrell) role as lead negotiator for external creditors and the current state of the Barbados economy.

Discuss for 10 marks.

-David, Blogmaster


Reproduced with permission, the full text of Dr. Delisle Worrell – former Governor of the Central Bank of Barbados – June 2019 newsletter:

The Time Has Come to Permanently Retire All Our Caribbean Currencies Caribbean currencies served a crucial purpose when they were first introduced, but they have now become a nuisance in today’s digitised world.

The world of commerce and finance today bears no resemblance to the world for which Caribbean currencies were devised. Up until the 1960s in most Caribbean countries, all retail transactions and many wholesale transactions were settled with notes and coins. The means of payment were always scarce in those days, because our countries are so distant from the European capitals that issued the world’s major currencies.

In the first half of the 20th century it became commonplace in countries of the British Empire to issue local currency notes and coins, with values fixed to Sterling (for the most part; the Bahamas and Bermuda were exceptions). These currencies were issued by special Government departments, termed Currency Boards. The Currency Board held an amount of Sterling with the Bank of England or with the British Crown Agents, and issued an equivalent amount of local currency. In this way the amount of the local currency issue could be more easily tailored to local needs.

This system worked well, so long as currencies were anchored on a single universally used reference, the US dollar price of an ounce of gold. However, the whole system of currency values fell apart when the US effectively moved off the Gold Standard at the time of the Smithsonian Agreement in December 1971.

Nowadays, currency notes and coin, mostly of uncertain value in terms of purchasing power of the everyday goods and services we need to source abroad, are little used domestically. Mostly we use electronic transfers, cheques and credit cards. Since these are all computer records, it is immaterial how they are denominated, so long as both ends of every transaction match. There is no reason to link the denomination of the electronic transactions to the value of notes and coins.

Replacing the Barbados dollar with the US dollar for all transactions, domestic and foreign, enhances the range of choice open to the country and its residents, in all international commerce. International transactions are conducted in US dollars or in currencies that are convertible to US dollars. In contrast, with Barbados dollars you cannot buy or sell anything outside of Barbados, not even in nearby St Lucia, much less in the rest of the world. The GDP of Barbados in 2018 was about US$5 billion, but the country had access to less than US$3 billion of international goods and services, because that was the total availability of US dollars and other foreign exchange from exports, tourism and other services, and foreign financial inflows. Once the economy is fully converted to US dollars and the local currency fully retired, the entire US$5 billion may be used to obtain the best value for money, in transactions anywhere in the world.

This is an executive summary of my Working Paper of the same title, issued at DeLisleWorrell.com.

270 comments

  • “You say that oil is only a ” promise” of wealth for Guyana. Let them decide tomorrow to put that promise up for sale and you would jump when you see the billions international oil companies would pay in USD for the exclusive drilling rights.”
    +++++++++++++++++++++++++++++++++++++++++++++++

    Are you that cocksure about the future of oil?

    This mirage of an oil bonanza is mere fool’s gold paving the road to economic wealth.

    The oil reserves in both Nigeria and Venezuela far exceed this promise of economic paradise in Guyana. What has happened to those well-endowed oil countries?

    Who will benefit from this economic manna falling among a corrupt East Indian controlled government? Certainly not the subservient economically marginalized blacks!

    How come Barbados has not been able to cash in on the oil bonanza claim by lying politicians to be in Barbados’s economic zone?

    Heavy demand for oil is not part of the world’s future economic development. It has had its day in the sun.

    The heavy crude off the Guianas is not attractive enough, profit-wise, to generate conflict among capitalists. Why do you think the Americans have not gone into Venezuela to secure its crude oil reserves which is cheaper to drill than in the more risky Guyanese offshore wells? Tax write offs, anymore!

    Soon the water off the Angels and Kaieteur Falls would worth more to mankind than the heavy crude in the ground.

    Liked by 1 person

  • Miller you can’t blame the failure of Venezuela and other poor run corrupt countries on oil being not valuable

    Why don’t you look at Dubai, Katar and others in that region and see how oil has transformed nomadic deserts ĺinto an oasis of wealth for its people.

    Poor management will destroy any economy regardless of its internal wealth. Just look at what many of the mineral rich African states have been reduced to today because of it.

    Finally your point about oil not having a future as demand has softened that too does not hold up to scrutiny. Yes alternate energy has played a part in reducing the demand for oil just as electric cars have. But you also must realise that electric and hybrid cars represent less than 5% of the entire vehicle market. The heavy users for the mass movement of people is still oil base for example Planes, Trains, commercial marine vessels both in terms of cruise ships and container carriers.

    So yes the demand for crude may soften slightly but it will be around for decades to come as the fuel that moves both economies and their human occupants. Also the share growth of economies in the world will take more crude, hence mitigating the loss due to more traditional markets implementing alternate energy sources.

    So my friend sorry to tell you we stuck with it for decades to come.

    Liked by 1 person

  • I for one am happy to know that Guyana a fellow Caricom island has hit on what is described in the Economist as ” one of the largest potential reserves found in decades.”

    Sorry it wasn’t us but still happy it’s them.

    Like

  • Isn’t US the defacto currency? Try staying at a local hotel and they will quote you the price of the Excursions etc. in US. The retail stores on Broad St. all have prices in US with some having the local currency equivalent listed.The real estate prices are predominantly listed in US, am awaiting July 1st when the floodgates open for Bajan citizens to maintain US accounts at local Banks.

    Liked by 1 person

  • William Skinner

    @ John

    Amazing. During the last years of the then BLP government , we heard about oil prospects in our waters. Then the DLP came in and the efforts died. Typical duopoly nonsense.
    Imagine if we had found oil. Now these jokers trying to pour cold water on a sister country ; a member of CARICOM ,whose fortunes are on the rise. So typical of some of us.
    We should be rejoicing at Guyana’s good fortune. However I cannot say that I’m surprised.
    Go and build hotels from Batts Rock to the Esplanade and try your best to meet IMF targets.
    Guyana May bail us out……..

    Like

  • @ William

    Let me share with you why oil and by extension the USD will be with us for LONG!

    Alright below are the global consumption figures for oil listed in MILLIONS OF BARRELS DAILY as stated by Statista.com as supplied by the oil producers directly. Wunna ready?

    85.3
    86.3
    85.3
    84.3
    86.3
    89
    89.8
    91.8
    92.7
    94.9
    96.2
    97.9
    99.2
    100 based on usage to Apr

    So to all those that say oil demand dying and with it the USD known here as the petro dollar, the figures show that you all are quite mislead, as far from shrinking demand is growing and should this year set a new record at 100 million barrels daily!

    Like

  • For some reasons the dates got cut out. The first number at the top of the page listed is 2006 ( 85.3) and the one at the bottom is 2019 ( 100)

    David you censoring mg data! Lol

    Liked by 1 person

  • Brazil’s Central Bank Breaks With Bolsonaro on Unified Currency

    Brazil's President Jair Bolsonaro gestures before a toast at the Casa Rosada government house in Buenos Aires, Argentina, June 6, 2019. REUTERS/Agustin Marcarian

    Brazil’s President Jair Bolsonaro gestures before a toast at the Casa Rosada government house in Buenos Aires, Argentina, June 6, 2019. REUTERS/Agustin Marcarian | Photo: Reuters

    Published 8 June 2019 (17 hours 50 minutes ago)

    Bolsonaro made the proposal to create a unified currency to expand to MERCOSUR countries in order to snuff out socialist ideas.

    In a statement issued Thursday, the Central Bank of Brazil rejected a proposal made by the Brazilian President Jair Bolsonaro that promotes a “monetary union” with Argentina, however, the president doubled down Friday dismissing the Bank’s statement.

    RELATED

    ‘Told You, I Don’t Understand the Economy’: Bolsonaro

    Brazil’s principal institution for financial control in the country indicated that it has no ongoing projects or studies related to a monetary union with Argentina. They also clarified that it’s important to engage in conversation of macroeconomic stability in the country to reduce institutional risks and vulnerabilities.

    The statement by the Central Bank came in response to a meeting held Friday between President Bolsonaro and his Argentinian counterpart Mauricio Macri, in which he proposed the creation of a common currency named the “real peso,” combining the terms for Brazil’s currency named the real and Argentina’s currency called the peso. The idea would expand a unified currency to countries that make up the Common Market of the South (MERCOSUR) and act as a “brake on socialist ideas in South America.”

    According to Mercopress, Bolsonaro insisted that the idea would move forward despite the Central Bank’s statement.

    The idea has been widely panned among economists who have called the move “premature,” and others calling it “dead weight,” playing on another meaning of the Spanish word peso. Brazilians for their part used the opportunity to poke some fun at the idea:

    Leaked image of one of the Peso Real bills

    The Lower House of Brazil believes that the refusal of the Bolsonaro administration to engage in alliances with world political leaders will lead the largest country in South America to fall into a deep crisis, and that the executive’s habit of implementing policies without due diligence would lead to institutional destabilization and conflict over power in Brazil.

    Liked by 1 person

  • Finally let me put in perspective what this oil find will do for Guyana by the mid 2020’s according to The National a global publication which tracks these events.

    ” By mid 2020’s Guyana will benefit from an additional $13 billion USD a year from its new oil find. That along with is current economic activity of roughly $3.4 billion USD will place it per capita at one of the wealthiest players in the hemisphere.”

    You all understand now that we got a neighbour that in a few years will have an annual economy of $16.4 billion USD up from just $3.4 billion now?

    Oh and for the record them is the same USD that some here say don’t have no future as it’s strength based on its ” dwindling” link to oil! Lol

    Liked by 1 person

  • @ John A June 9, 2019 1:54 PM
    “Miller you can’t blame the failure of Venezuela and other poor run corrupt countries on oil being not valuable
    Why don’t you look at Dubai, Katar and others in that region and see how oil has transformed nomadic deserts ĺinto an oasis of wealth for its people.”
    +++++++++++++++++++++++++++++++++++++++++++++++++++

    Venezuela and other oil-blessed states like Nigeria, T&T poorly-run corrupt countries did not ‘fail’ because of oil but in spite of oil.

    We are no longer living in the oil boom era of the 1970’s when oil was king.

    How come Saudi Arabia is weaning it self off the baby oil milk?
    Why is the same Dubai, UAE and Qatar lending (and in some cases giving grant funding) to countries pursuing alternative energy paths especially solar energy?

    Which country financed the building of solar panel charging station at the BWA sewerage plant (even without water collection capability) while Barbados is claiming to have large fields (blocks) of crude oil reserves offshore with some allegedly ‘sold to Billiton for exploration to turn Barbados into a mini Kuwait?

    The future is not oil, my friend, but potable water; they just do not mix for environmentally good living.

    Like

  • William Skinner

    @ John A
    Here we are in the grip of the most draconian IMF program. We are laying off people and shouting nonsense about getting rid of the “welfare state” . But we finding time to beat up on Guyana that actually has a bright economic future.
    The experts on BU weighing in on matters beyond their immediate knowledge.
    Pacha is correctly saying that investing in Guyana gold minerals and other futures should be considered in future currency / monetary matters. That is the type of thinking needed at this time. Look within to build the new Caribbean nation!
    It’s a known fact that oil will play a major role in the global economy for decades to come. The only obstacles that impede Guyana will be the politics of race and senseless political tribalism.
    There are many Guyanese who maintain that Burnham’s major error was trying to destroy all opposing forces. He can never and should
    never be forgiven for the death of Walter Rodney.
    I went to a trade show right here in Barbados during Burnham’s reign. For every local product we had on display, Guyana had about six!
    I was stunned to observe that a country in such political turmoil was still so creative.
    Rather than deal with the multitude of problems confronting us here we are constantly fooling ourselves that political grandstanding is economic policy.
    We should by now realize that we are either going to swim together or drown one by one.
    Be careful because you will soon be told: you want the government to fail ; you are a Dee; you don’t live here; nobody knows when last you visited and you are a traitor.

    Like

  • @ John A

    This collection of small islands will pay the price of disunity. This is 2019, no one owes us a living. Have a good look at Caricom and at Asean and tell me which organisation is working?
    We have been discussing regional unity since 1876. The only functioning regional bodies we have been created by the former colonial masters: UWI and cricket.
    Another issue raised by the prime minister in London was a desire for a world-class (that phrase again) women’s football team. In saying that, she either forgot, or did not know, there was an attempt to form a West Indies football team in the 1950s with Reggie Haynes and other outstanding players (one former player also later played cricket for Spartan). The team toured England, was badly beaten and they gave up.
    When Usain Bolt won the 100metres in Beijing, I remember being interviewed on BBC Caribbean Service about a totally different subject, but mentioned we should also have Caricom athletics and netball teams. I was screamed at by some listeners.
    But maybe the prime minister thinks that Bajans teaching Rwandans to play cricket may be good for our economy, punching above our weight. Whatever happened to Rwandan genocide? Let’s have a CARICOM central bank.

    Like

  • @William

    There are reasons investing in Guyana has always been viewed with suspicion. In theory in makes sense but there are many determinants to be factored in assessing the risk.

    Like

  • @ Miller

    There is nothing wrong with oil rich countries diversifying. Dubai recently announced it is going into tourism in a big way. Plus places like Qatar and Dubai are right to invest in solar as it makes perfect sense. They have an abundance of sunlight and if they can use it for free, it gives them more crude to export long term. Those guys started out as traders and they ain t forgotten how to either.

    Think about it if you were the finance minister of Dubai and you could convert your entire grid to solar, thus exporting the crude you are burning at home for say even $50 USD a barrel wouldn’t you do that?

    As for water Dubai can desalinate all it needs using the same solar as an energy source and save its crude for export. Remember this year consumption will hit 100 million barrels a day globally, the highest ever in recorded history. Those guys sitting back and saying ” let’s go to alternate energy domestically as long as the price of it cost less than what we can export a barrel of crude for we winning”

    As I said born traders to the end.

    Like

  • ”””””’Amazing. During the last years of the then BLP government , we heard about oil prospects in our waters. Then the DLP came in and the efforts died. Typical duopoly nonsense.
    Imagine if we had found oil. Now these jokers trying to pour cold water on a sister country ; a member of CARICOM ,whose fortunes are on the rise. So typical of some of us.
    We should be rejoicing at Guyana’s good fortune. However I cannot say that I’m surprised.
    Go and build hotels from Batts Rock to the Esplanade and try your best to meet IMF targets.
    Guyana May bail us out……..””””””””’

    Sir William Skinner

    You are misleading the blog.

    In the first place oil and other strategic resources have proved more than a curse to small developing countries, generally. In some circumstances the bane!

    This writer knows more that enough about the Guyana oil dealings to assure you that the government is getting some money up front, less than a billion, and then only 3% as royalties.

    And the local sharks have already lined-up to thief as much as possible.

    It (Guyana) might even find itself in the middle of a big power war for its troubles. In toto, the jury is still out as to whether petroleum resources, as developed by Haliburton and Exxon, will help or hinder.

    Like

  • William Skinner

    @ Hal
    You continue to be a traitor! Going to have to borrow Pacha’s guillotine and take off your head. Don’t you know a professional women football team will bring in forex. That’s the problem with you people living overseas. Why don’t you go and look after Brexit and replacing May. I am backing June!
    Next thing you will be saying is that we should try to save LIAT as if we’re not capable of getting our own airlines. You think just because we can’t buy buses and garbage trucks that we can’t buy planes.
    I hope you never come back round hey to live. Traitor!

    Like

  • Readers should also know that all the trouble in Venezuela has been caused by the Koch Brothers. Aa oil refinery group, amongst other things, which can only process Venezuelan crude at its Texas installations but wanted to turn over the tables in Venezuela in order to reset profitability, meaning reversing the structures put in place by Chavez.

    Guyana and Venezuela still have desputed lands, though the recent oil finds are not implicated, but with Haliburton and Exxon around the place the US military are sure to be not far behind.

    Sir William, are you aimlessly walking into a ZONE OF PEACE.

    Are you?

    Like

  • disputed

    Like

  • @ Hal

    Yes it is sad but true what you just said. I mean why can’t we just say to Guyana congrats and wish them the best? Why must we see their progress as a negative thing and hope for their failure?

    That kind of thinking really annoys me but I guess is imbedded in some of us. I am therefore not surprised you were nearly stoned for your comments.

    You know I support you on the regional central bank. I just say that each island if it did ever occur, should be limited to I seat on the board and the chairman should be elected only by the said board I just outlined.

    I covering the back door against political leverage ever being levelled at it as was the case locally.

    Like

  • @ David,

    SOL has invested in Guyana after making a fortune in Barbados.

    Like

  • @ William Skinner June 9, 2019 3:34 PM

    Guyana might have a bright economic future alright, oil or no oil.

    The only thing is that it would not be for black people; either native or those migrating from ‘failing’ economies like Barbados.

    Have black Trinidadians benefited significantly from the Trinidad oil wealth when ‘Money was No problem’?

    Who owns and control the commanding heights of the T&T economy including its offshore subsidiary Trinbados?

    What about the estimated 20 billion barrels of oil reserves off Cuba?

    Like

  • @ William

    As you said can’t people see that if they pursue this road of closing themselves off from their neighbours it may come back to bite them long term, let me explain what I mean.

    What is to stop Guyana as it’s crude money starts coming in from saying to caricom ” fellows I got the crude and willing to go to next level now and set up a refinery here to supply all of caricom and who ever want.”

    Are you telling me this group of inward thinking jealous islands would turn their back on a chance to be free from international crude supply and it’s problems?

    Then again maybe you right and they would say no Guyana getting too big for their boots who knows.

    Like

  • @ William,

    Are you saying I have a target on my back? That I am not loyal enough. I am not going to buy the growth and innovation bond, give the government’s recent default.
    By the way, the prime hinted that she may make Rihanna a national hero. May I suggest no. We must not make any other living person a National Hero, not even Rihanna..

    Like

  • William Skinner

    Pacha earlier today:

    “And it matters not whether that fiat currency is a single Caribbean dollar, the US dollar or the Euro. The only answer has to be real money. Money backed by real value – gold, silver, certain food items etc.”

    @ Pacha
    The question I pose to you is whether Guyana is going to be in a position to have a better economy for the reasons you posited above. You state that Guyana will only get 3% out of the deals. What does 3% equate to. You know that apart from oil Guyana has gold silver and other goods and minerals to trade.
    Dear Pacha it is not that regionalists are stuck in a past era; it really is that we are marching toward a new one. Get on board Pacha !!

    Like

  • @ Hal

    You know anytime you don’t pull the party line and drink the Koolaid without even asking the flavour, you get a target on your back. Don’t worry you far away no one can’t hit you with a bajan big rock from here!

    Liked by 1 person

  • @ John A June 9, 2019 3:45 PM
    “Think about it if you were the finance minister of Dubai and you could convert your entire grid to solar, thus exporting the crude you are burning at home for say even $50 USD a barrel wouldn’t you do that?”
    +++++++++++++++++++++++++++++++++++++++++++++++++++

    Why aren’t you proffering that ‘enlightened advice to the Bajan minister(s) of Finance and Energy?

    It would mean less finished petroleum products to import resulting in Barbados not having to run to the IMF for balance of payments support to import the same oil products or even look to the UAE to become Barbados ‘friendly’ loan-shark.

    Bajan politicians have been talking about the huge oil reserves off Barbados for the past 30 years. When is that black gold going to be struck and make the Bajan big payday?

    It would be nice to have a war of words between the T&T callaloo and flying fish and the Bajan macaroni pie and chicken land over the imaginary river of oil that lies between them.

    Like

  • @Hants

    He does business in the area and is prepared to take on the risk.

    Like

  • The region is far apart on a common financial arrangement. It will not happen in our lifetime if one can be willing to bet. What we will see is some form of functional cooperation, IF we are lucky. The OECS has formed a working union. They are currently in the process of enacting harmonizing legislation. A child shall lead them.

    Like

  • Sir William Skinner

    3% equates to what ever the oil company says. For the country is reliant on them to say what production is, will be. Of course, there could be mechanisms to make an independent judgement.

    But you’ve asked the wrong question. Why would the oil major get 97%, is more obvious?

    And then, if they are controlling the bulk of Guyanese oil that control serves to strengthen the fiat currency of the United States of America. The US dollar has been based not on ownership byt control and they rely on their oil major to ensure such control. Of course, oil is priced in US dollars, mostly.

    Don’t you know that that is the game being played since 1971?

    And if the value of Guyanese oil serves to support the US dollar it then CANNOT act also in supporting a Guyanese currency.

    More generally, the mere presence of gold and other strategic resources under Guyanese lands cannot of and by itself translate to an increase in the relative value of the Guyanese currency viz a viz other currencies.

    Guyana will have to put a framework in place to show it has redeemable amounts of bullion relative to the number of dollars in circulation. More importantly, there would be geo-political issues as well. For the USA would then be likely to invade any country having real money as a competitor to its fiat dollar.

    Can’t get on board. Your regional boat is leaky, and has been for far too long. Let’s patch the many holes first, lest we all drown Captain Skinner!

    Sir William, Trinidad has had oil for over 100 years, has it served that country well? We now know it’s running out!

    Like

  • William Skinner

    @ Miller

    Everything you have said about wealth in Trinidad is practically true throughout the Caribbean . The post independence leadership fell short on true economic enfranchisement for the blacks. Guyana therefore has and will encounter this truth but it will not remain so forever.
    @ David
    First you must accept that leadership is the problem. Strides are being made but the political class is trapped in colonial thinking. You will note that only today right here in Barbados a new political party was launched with not one word about how it will address the economy. Vote catching is the order of the day..
    @ Hal
    You have been warned. They know where you are !!
    @ John
    Slavery left us the divide and rule concept. Note today that we were told on BU to invest in the brand new political party to split votes among the opposition party in order to ensure that the governing party wins. Nothing about policy only votes.
    Even on BU silly attempts are made to divide “overseas” Bajans and those living in Bim.

    Duopoly Rules

    The struggle continues.

    Like

  • William Skinner

    @ Pacha

    “Can’t get on board. Your regional boat is leaky, and has been for far too long. Let’s patch the many holes first, lest we all drown Captain Skinner!”

    I guess you can fix the leaks by telepathy !!!

    “Sir William, Trinidad has had oil for over 100 years, has it served that country well? We now know it’s running out!”

    You know that Trinidad was a virtual ATM for the region during its boom years. The wealth of Trinidad was badly managed.

    Historically my people went from the abolition of slavery in 1835 to political independence in the 1960s. It saddens me that you are only seeing leaks. Everyday ordinary citizens are pressing ahead. I can see you now relaxing on the deck with your favorite drink after the work is done.

    Like

  • Let’s face it, dear BU community!

    How many times have you been in Guyana in recent years to have a say here?

    The oil quality in Guyana is definitely better than in Venezuela. The quantitative potential is very high.

    If all goes well, enough will be left for Barbados. However, the Guyanese will then determine what will happen in Barbados. The Guyanese are no longer as stupid as they used to be to elect an economic illiterate and caveman like Burnham as president. When they hear the name Burnham, even the blacks spit blood to the ground in front of you.

    Once the Guyanese have bought up all the hotels in Barbados, the question of casinos and brothels is no longer necessary. So I advise all islanders to practice with the Vaseline.

    Tron the Globalist

    Like

  • ON THE RIGHT: External debt not a serious problem

    Dr Delisle Worrell,

    Added 03 December 2014

    A lot is being said about the national debt in general and most of it is unnecessarily alarmist. The thing that we have to worry about in this country is foreign exchange and the debt that can blow us off course is the foreign debt, and as far as the foreign debt is concerned we are in a very comfortable place.

    Barbados in relation to Central America and the Caribbean in terms of our external debt to GDP we are well down in the league.

    And in terms of what it costs us to service that external debt, it’s this year about six to seven per cent of everything that we earn in foreign exchange so it’s really not a serious burden.

    What is a burden is the interest cost of servicing the debt but even the foreign interest costs, the part that we have to find foreign exchange for, is quite small, it’s five per cent of our total revenues, but the domestic interest is quite large.

    When I say to people that this is a redistribution problem, people don’t seem to understand me but it’s not rocket science. All I am saying is that this debt is bonds that the Government has issued which have been bought by Sagicor, pension funds, retirees and so on.

    It is funds that the commercial banks have in surplus over what they are lending out to you and me and to businesses and they take that and they buy Treasury bills.

    These are funds that they have raised from depositors in Barbados Barbados dollar funds. So the Government is saying, ‘You lend this money to us and we pay you an interest’ and the pensioners and the pension funds are depending on that interest so that they have money to pay their obligations.

    What’s wrong with that? How could we pay that back? What would the pension funds invest in? So the notion that the debt is too high and we have to pay it back is a ridiculous notion and it doesn’t matter how many economists with how many PhD’s get up and tell you that it is a problem.

    So because our debt is owed to Barbadians, because it provides an investment opportunity for Barbadians, it is us investing in ourselves in our own economy. Now insofar as the taxpayers who have to contribute the funds to pay the interest are by and large not as well off as the beneficiaries from the debt, you may want to consider that over time you don’t want the debt to grow too fast.

    But if you don’t want the debt to grow too fast, the only way that you do that is by cutting the deficit because any time you have a deficit you have to finance that, you have to borrow. And that is what we are doing; we are reducing the size of the deficit so you don’t have to borrow so much. That is why our policies are appropriate to our circumstances – they do not need to be changed.

    The so-called rollover risk, the risk that when debt matures the holders of the debt will choose not to put it back into Government securities is very low because people need the income.

    Dr. DeLisle Worrell is Governor of the Barbados Central Bank.

    Like

  • These public official love to play the a**.

    Worrell warns Barbados to seek urgent IMF help

    04 May 2017

    https%3A%2F%2Fbarbadosunderground.files.wordpress.com%2F2010%2F07%2Fgovernor_delisle_worell.jpg

    BRIDGETOWN, Barbados–Former Governor of the Central Bank Dr. Delisle Worrell has advised the Barbados Government to seek immediate help from the International Monetary Fund (IMF) to steer the economy out of its current rut.

    In an economic letter published on Tuesday, three months after he was fired as the Government’s chief economic adviser, Worrell insisted this was virtually the only alternative for the Freundel Stuart administration which has been struggling to contain spiralling debt, dwindling foreign reserves, high public spending and falling revenues, against the backdrop of major downgrades by international credit rating agencies.

    Stressing that the island had to act now to safeguard its 2-1 peg to the US dollar, Worrell further warned that job cuts in the public service must be a plank of any restructuring exercise.

    He noted that the IMF “can assist in designing the reform process to increase efficiency through the employment of higher levels of skill and the appropriate use of new technology, with no permanent diminution in the quality of public services.”

    The economist chided the Government for failing to take corrective action to halt the slide in foreign reserves, again raising concern about continued financing from the Central Bank, unchecked spending and the slow pace of public-sector reform.

    “The most pressing economic challenge Barbados faces today relates to the excess of public-sector spending over tax revenues, and the unsustainable level of borrowing from the Central Bank.

    “Reduced government spending and forceful measures for public-sector reform are the key to arresting foreign-reserves losses and securing the exchange-rate anchor,” stressed Worrell.

    The economist, who was sacked shortly after he publicly scolded the Government for spending more than it earns, again stressed that Barbados must bring its earnings in line with its spending.

    “In order to restore confidence and secure the peg, decisive action is needed to reduce Government’s ongoing expenditure to the amount of tax revenues,” Worrell said.

    His IMF call comes on the heels of similar views shared by noted economists, former Prime Minister Owen Arthur and Royal Bank of Canada’s (RBC’s) group economist Marla Dukharan.

    Both Arthur and Dukharan have said Barbados’ move to the IMF would be almost inevitable. ~ Caribbean360 ~

    Like

  • Sinckler rejects Worrell’s IMF prescription

    By Gaynelle Marshall on 8th May 2017 Top Stories

    Minister of Finance Chris Sinckler says though the Barbados economy is definitely not well at the moment, he is yet to see the logic of those clamouring for Government to immediately put it into the hands of the International Monetary Fund (IMF).

    In rejecting out of hand the economic prescription issued last week by the recently dismissed Governor of the Central Bank of Barbados Dr DeLisle Worrell, Sinckler warned on Sunday that even if the Freundel Stuart administration were to decide to go to the IMF tomorrow, it was unlikely that any tangible benefits would be realized from that move within the next six months.

    And while at pains to point out that the economic problems the country was facing could not be fixed overnight, he further cautioned that a short term fix was more than desirable at this stage.

    “We know the deficit is high, we know the Government is relying overly on the Central Bank, and that needs to be brought under a serious level of discipline and that we are going to do, but we have to do that in a responsible fashion,” Sinckler told reporters on the sidelines of his annual picnic at Bath, St John for senior citizens in his St Michael North West constituency.

    “We didn’t get there overnight and I don’t think we are going to be able to unravel it overnight by the waving of a magic wand, or going and doing an IMF programme and so on.

    “If we were to say, ‘let’s go to the IMF tomorrow’, it takes between six to eight months to negotiate and complete and have approved by an executive board at the IMF. But if you have an immediate problem that needs to be dealt with now you can’t wait six to eight months negotiating with anyone to get that done. And in any case, the IMF can say, ‘I want to see prior measures. Demonstrate to me that you are going to be serious about x, y or z.’

    “It’s not as simplistic as people make it out to be. These are options, but governance is real time,” the Minister of Finance stressed.

    However, Worrell is among leading economists who have been calling on Government to bite the bullet and get help from the Washington-based IMF “in designing the reform process to increase efficiency through the employment of higher levels of skill and the appropriate use of new technology, with no permanent diminution in the quality of public services”.

    In the first of a series of personal economic letters issued last Tuesday, Worrell, who was fired by Sinckler back in February at the height of their bitter public disagreement over monetary and administrative policy, suggested that in addition to cutting the size of the public service, Government would be “well advised” to seek the assistance of the IMF “without delay” in a bid to safeguard the Barbados dollar.

    Worrell’s call came against the backdrop of a worrying economic situation highlighted by dwindling foreign exchange reserves, which fell precariously from $1.4 billion in 2012 to $681 million by the end of last year. Government is also struggling to service its already high debt of over 100 per cent of gross domestic product that requires servicing to the tune of over $300 million annually and the ex-Governor is concerned that the situation will negatively affect Barbados’ currency.

    However, while acknowledging that the economy is not yet out of the woods, Sinckler remains buoyed by the fact that it “continues to grow”.

    And though very dismissive of Worrell and others, including former Prime Minister Owen Arthur, who have been seeking to push the Government down the IMF road to recovery, Sinckler said on Sunday he was looking forward to this week’s economic review by the Acting Governor of the Central Bank Cleviston Haynes of the island’s first quarter economic performance.

    “We wait to hear the acting Governor of the Central Bank’s report and we would have a better idea of what it is and what has happened for last year and for the first three months of this year,” he said, adding that “based on what we are seeing there and what projections we are expecting we would finalize the rest of the fiscal measures to be introduced,” he said.

    The Minister of Finance, who is yet to give a precise date for his much-anticipated National Budget, said Barbadians could expect it around the middle of this month.

    “We are just finalizing the measures, but as people in Barbados know we have issues to deal with, the deficit is still a bit too high. We have projected a deficit this year on the base line of 4.4 [per cent of the Gross Domestic Product]– that’s in the Estimates. That’s still too high, we have to bring that down by two per cent or below two per cent.

    “We would like to go to a balanced budget, but to do that in the remaining period of the financial year, might be a little to steep a hill to climb, but we will see how it goes,” he said.

    And while keeping his actual Budget announcements close to his chest, Sinckler said Government was focused on reducing its costs and increasing its earnings.

    “We have to look at our expenditures and our revenue collection,” he said.

    When asked if the country was in danger of another downgrade from the ratings agencies, the Minister of Finance said he could not run an economy worrying about rating agencies.

    “We can’t run an economy worrying about what S&P or Moody’s is going to do next week. What you do is you check and do what you deem to be best for the country and the economy and hopefully that comports what they may want to see. Sometimes it doesn’t but when you are governing, you have to make decisions that are real time and what you believe are in the best decision of the people,” he stressed.

    Like

  • William Skinner

    @ David
    Now you and all the others who cussed Worrell would recognize why he was fired. No Minister of Finance has to accept the advice of a Central Bank Governor.
    It is known that Sinckler was refusing Worrell’s advice. Governors prefer to be fired than resign. I think only one person on BU actually said Worrell’s firing was better for the country than a resignation.
    Read the articles carefully and you would discover that Sinckler is the person to be blamed not Worrell. When a Governor resigns it affects the institution and governance. When he is fired they get another Governor but everybody knows that it would have been occasioned by a policy difference beyond compromise.

    Duopoly Rules

    Like

  • @William

    You are therefore saying that when Worrell was sacked he took the matter to court because he expected to lose?

    Like

  • William Skinner

    @ David
    As I said , I don’t know why he chose court. I can only think that he felt such a move would have exposed the real reason he was fired and perhaps bring some reform such as what you Johnn A and others have suggested.
    My main position all along is that Worrell like all the ones before him could give advice but no Minister of Finance is obligated to follow it.
    BTW I never support IMF programs. I don’t care who recommend them !

    Like

  • @ William,

    The central bank governor is not responsible for policy. His/her job is to give advice. I assume the governor wet to court to pressure for higher compensation.

    Like

  • Sir William

    Maybe you are getting too old and toooooo set in your ways.

    Your logic about the acceptance or non-acceptance, of same, is truncated.

    The next logical step was for him to have resign when the instructions from the political masters was deemed untenable.

    The final step would then be a press conference to say why he was resigning.

    Like

  • People are talking about whether it is the job of the GoB or the bank itself to give advice or determine policy.

    There has never been any firewall in Barbados and most small developing countries between these two.

    Certainly, it has never been the tradition in Barbados to construct or maintain such a wall between economic policymakers and mere advisers.

    Like

  • GoCB

    Like

  • William Skinner

    @ Hal
    You are correct. This is the exact point I am trying to make.

    @ Pacha
    “People are talking about whether it is the job of the GoB or the bank itself to give advice or determine policy.

    There has never been any firewall in Barbados and most small developing countries between these two.

    Certainly, it has never been the tradition in Barbados to construct or maintain such a wall between economic policymakers and mere advisers.”

    You again come with this familiar refrain; ” There has never been any firewall in Barbados and most small developing countries between these two.”

    The Governor of a Central Bank is no “mere” adviser because a Central Bank is no “mere” institution. You are quite within your rights to posit why you think he should have resigned and how he should have done it; press conference etc. I was asked by David why I think he went to court and I simply gave my opinion.

    What you need to admit is the fact that Worrell gave the minister advice; he did not take it and Worrell was fired. By your own argument if indeed there was no firewall; he certainly would not have been fired !

    Please tell us when in the history of Barbados, you have ever heard a Governor of the Central Bank publicly oppose government policy while in office. You are saying there is no firewall but tradition suggests there is.

    For the record I don’t support IMF programs.I don’t care who recommends them.

    Like

  • Please tell us when in the history of Barbados, you have ever heard a Governor of the Central Bank publicly oppose government policy while in office. You are saying there is no firewall but tradition suggests there is.
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    Sir William:

    There is no record of this. You well know it. But yours is the proverbial strayman defense. Maybe, you have found too often a convergence with your English friend.

    That was certainly not a case we made. But in the strawman defense you have learnt well from your erstwhile colleague. We have never ordered the series of events you first outlined. Yuh catching at straws.

    We contend that there is no firewall expressly because of tradition and law. And we can quite easily justify.

    Courtney Blackman is the man who built the cultural framework of the CBoB. He not only gave advice to Barrow but also determined policy, at least in part. The formative policies of the bank. A bank whose primary responsibilities are to control the health of the economy. Where is the firewall between advice and policy? CBs make policies for banks and others every day.

    There have been members of the board, and senior employees, of the CB who, we known with certainty, and you should too, who were involved in writing budget speeches and election manifestos. Are these no longer policy instruments? Where is the firewall advice and policy?

    Worrell was required to resign once his position became untenable!

    Liked by 1 person

  • David

    What shiiite party is this?

    The Socialist Democratic Peoples’ Party – are we right?

    What duopoly thingah mehee is this this?

    Socialist to bring in BLPites

    Democratic to bring dead Dems

    And People’s for the rest, or Eric Fly’s former party members.

    What de shiiiite is this? Not one seat for dem!

    These jokers carrying a joke toooo far, much tooo far! LOL

    Like

  • @Pacha

    Waiting to hear and learn more.

    Like

  • William Skinner

    @ Pacha
    I never thought that you would set up Courtney Blackman as a straw man! Pacha you really out to sea.
    As for me and my English friend; I consider you both to be brothers in the struggle. Neither of you is a cool aid drinker.I think we three have a lot in common philosophically.
    David’s articles showed beyond a shadow of any reasonable doubt that Worrell gave the advice as his job description outlined and Sinckler said no to him and then fired him.
    You are very close to Worrell with your world view. Just go and read some of his papers.
    You and Hal are not like the cool aid drinkers that come on this blog pulling down people who have this country at heart.
    No man is perfect but the nasty cussing that Worrell got was totally undeserved and you know that. There is not an academic in the country with the humility of Delisle Worrell and you know that.
    More to come

    Like

  • “You are therefore saying that when Worrell was sacked he took the matter to court because he expected to lose?”

    David BU

    According to reports in the news media, then minister of finance Christopher Sinckler ordered then Central Bank Governor Dr. Delisle Worrell to resign by Monday, February 13, 2017 or be fired, “at the insistence of other senior Central Bank executives who have been critical of Governor’s management style.”

    “Relations between the Minister and the Governor also deteriorated on the heels of public warning by Worrell that the Government had to live within its mean and stop the practice of printing money.”

    Worrell went to Court on Sunday, February 12, 2017, to file an injunction during an emergency hearing at the High Court, to prevent Sinckler from terminating his services, which was granted by Justice Randall Worrell.

    Acting Chief Justice Sandra Mason, who along with Justices Andrew Burgess and Kaye Greenidge presided over the four-hour long hearing, dismissed a case in which Worrell CHALLENGED the right of Finance Minister Chris Sinckler to FORCE him out of office. Less than 24 hours after the Appeal Court lifted the injunction against his removal from office, Dr. Worrell was fired, which was confirmed by his lawyer, Gregory Nicholls.

    I’m surprised that someone mentioned Worrell went to Court “to pressure for higher compensation.”

    Like

  • @Artax

    It is called group think.

    Like

  • @ Willam,

    May suggest that one of our newspapers or phone-in radio shows interview Dr Worrell or/and Chris Sinckler and put tough questions to them. If Dr Worrell had signed a non-disclosure agreement, he has been out of the central bank for over a year now so should be free to speak of his time there.
    Where I live we call that journalism. But, may be, Bajans get a kick out of the speculation.

    Like

  • SirSimpleSimonPresidentForLife

    Is there something magical about one year?

    Why not two, or three or four or five?

    Why not for as long as you are collecting a tax payer funded pension?

    You are asking for people to be “freed-up?”

    Why not free the tax payers from paying pensions?

    Like

  • SirSimpleSimonPresidentForLife

    Do you know whether Dr. Worrell or Chris Sinckler have made themselves available to the press?

    If a person does not wish to speak how do you make them?

    You must know as well as I do that Bajans are notoriously closed mouthed.

    Liked by 1 person

  • SirSimpleSimonPresidentForLife

    David, I don’t know that I would consider it embarrassing to be “sacked” by Chris.

    Liked by 1 person

  • @ Simple Siimon,

    Are you OK? Have you taken your Green Tea this morning? You invite Dr Worrell and/or Chris Sinckler for an interview. They can either agree or say no. End of story. Simple.

    Like

  • William Skinner

    @ Hal
    Don’t hold your breath! No need for that. Who will risk that? Journalists can’t even get information on White Oak. They can’t get a proper interview with any of the ex ministers. And just yesterday a minister in the ministry of finance told a senior journalist that he (the minister) did not know that people were questioning the White Oak agreement.
    Same old same old.

    Duopoly Rules

    Like

  • The opposition raises its dirty head: Clown Jester Ince complains about the late payment of foreign debt. Wasn’t it this reckless clown who once said the Barbados dollar was a piece of s***, worth nothing?

    DLP means return to slavery, stench on the south coast, criminality, nepotism and any other nonsense and backwardness that is unfortunately so typical for many developing countries. Whoever chooses DLP chooses the economic neck iron and the sale to Arab slave traders.

    Our honoured Prime Minister must now be steadfast like Stalin during the Great War. She must not be distracted by the high treason of the opposition and must be smart in the negotiations with the creditors and prove her legendary endurance.

    Better doom than a new Sinckler.

    Like

  • It is no secret Chris Sinckler and several of his former colleagues
    prefer to operate below ground for the moment. This has been discussed many times in the public space. Why would Worrell get embroiled in this kind of a conversation given his role in the Bermuda economic council for example?

    Like

  • Sunshine Sunny Shine

    Robert Lucas

    Will Lucifer (Satan) on the day of reckoning be forgiven by his creator for the part he played in the Adam and Eve story and countless other atrocities througvout history’s pages? Worrell proved himself to be compromised until someone shone a light in his head and he started to rebel against the crook show that was Dem. Guess you will forgive the DEMs and let dolittle Stuart and his idiots come back to redeem themselves.

    Like

  • It is no secret Chris Sinckler and several of his former colleagues
    prefer to operate below ground for the moment. This has been discussed many times in the public space. Why would Worrell get embroiled in this kind of a conversation given his role in the Bermuda economic council for example?(Quote)

    Oh please!

    Like

  • SirSimpleSimonPresidentForLife

    @Hal at 7:56

    Yes I had my green tea. That is why my head was so clear, so early in the morning.

    Liked by 1 person

  • Well , well look at the Worrell apologists Austin and Skinner looking for all kind of foolish excuses , in my view for the ex Govenor.His behaviour was self serving and unethical full stop and no amout of window dressing will change that in my view so why don’t you two quit making youselves look like jackasses.

    Like

  • “TheOGazerts June 6, 2019 7:28 PM

    Small brain one-track mind here

    Can one of you big brain guys tie this to a single Caribbean digital currency and to Bitt…

    Don’t fall for the psuedo-adversarial role and a repackaging of the pork.”

    https://barbadostoday.bb/2019/06/12/bajan-bitcoin-bites-the-dust/

    You all are so busy with your big talk and advance ideas that you all miss the sleight of hands.

    I saw a next story that made me think of a Caribbean digital currency. They are feeding your egos and running their scams ….

    Like

  • Sunshine Sunny Shine

    Hal Austins

    Worrell laid with the dogs that had fleas. How can he be flealess? He missed his window of opportunity. He sold his soul for 12pieces of silver. Rather he is making sense or not, his voicings are cries from the wilderness. He is infirmed by a DLP that laid waste for a solid foundation. He would do well to come clean ask for forgiveness and admit that he was a shite. He can also spill the beans on whatever hemight know about underground workings of the stinking DLP so that Rougue Works would have the evidence she needs to start investigations into DLP corruption. BUT we done know that two face Mi Mottley aint gine do one shite to dem.

    Like

  • @SSS

    Your use of language is different to mine, more flowery. However, you are right. Dr Worrell damaged his own professional reputation by taking instructions on economics from Chris Sinckler. Given that, I am still keen to debate his ECONOMICS, and not politics. I think his economics are flawed.

    Like

  • Who is listening to Dennis Johnson on Brasstacks?

    Like

  • Sunshine Sunny Shine

    Hal Austin

    I have no pretty talk for these two parties. They both are responsible for a lot crookery and deceit. In or out, the shite is still brown.

    Like

  • U.S. Treasury Set to Borrow $1 Trillion for a Second Year to Finance the Deficit
    By Liz McCormick
    , Saleha Mohsin
    , and Alexandre Tanzi
    January 28, 2019, 5:00 AM UTC Updated on January 28, 2019, 12:39 PM UTC

    The U.S. Treasury Department is set to maintain elevated sales of long-term debt to finance the government’s widening budget deficit, with new issuance projected to top $1 trillion for a second-straight year.

    Many strategists at primary-dealer firms predict that this Wednesday’s quarterly refunding announcement will see the Treasury maintain note and bond sales at the record high levels they have boosted them to in recent months.

    The total amount of 3-, 10- and 30-year securities to be offered at next week’s refunding auctions is seen by most at $84 billion. While that’s $1 billion more than the total for these maturities three months ago, that’s only because the size of the three-year sale was already nudged higher in December.

    A heightened supply of Treasury securities follows tax cuts and government spending increases implemented under the current administration. That’s darkening a fiscal outlook already made worrisome by rising entitlement-program expenses and higher costs to service America’s nearly $16 trillion in debt. The Federal Reserve’s balance-sheet runoff is also adding to supply, forcing Treasury Secretary Steven Mnuchin to tap the public for more funding.
    Keep On Borrowing

    The U.S. Treasury has already boosted auction issuance to unprecedented highs

    Source: Bloomberg, Treasury Department

    Note: Combined total of each quarter’s 3-, 10- and 30-year refunding auctions

    “We’ve seen deficits continue to blow out,” said Brian Edmonds, head of interest-rates trading at Cantor Fitzgerald in New York. “We are going to see more and more supply.”

    Cantor, along with dealers including Citigroup Inc., TD Securities, Deutsche Bank AG and Wells Fargo Securities, sees the Treasury keeping auction sizes unchanged for nominal coupon-bearing debt.

    https://www.bloomberg.com/news/articles/2019-01-28/another-year-another-1-trillion-in-new-debt-for-u-s-to-raise?fbclid=IwAR1QHg85WYyVEM5vebCnshNsoLjr8MYe1go98UyjHpkzkUoB_NHzdHuC2Jg

    Like

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