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Does White Oak Have a Plan B?

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The Mia Mottley government forced a debt restructure on locals holding bonds. The government boasted about the speed it was completed although truth be told it was a Hobson’s choice.

On the other side of the debt restructuring transactions the external bond holders have so far been nettlesome at the negotiating table. Approaching 18 months and there appears to be a stalemate in the negotiation. The Mia Mottley government has been unable to deliver on a promise that the debt restructure transaction would have been closed by now.

Senior members of the BU family have taken umbrage to a recent comment by one of the government’s financial advisors Avinash Persaud.  Here is a pertinent quote.

What we have been trying to do is to get the best deal possible for Barbados, which means that it can’t be the quickest deal possible. If you play poker do you fold early? If you don’t need to borrow for four years you have a good hand. So, we are following the right strategy – No backing down

The blogmaster must agree at the idiocy of the statement when viewed through the eyes of a good poker player.  A good poker player will fold based on the game situation. It does not have one Rh to do with early or late in the game.

The blogmaster appreciates there is an element of table craft that will be exercised by actors sitting around a negotiating table. One must however critique the judgement of Persaud to feel embolden to have issued such a statement at this juncture in the negotiation.

Despite a bevy of officials recruited by the government with job descriptions to cover finance, communications, public relations and media liaison –  the public is left to speculate as to the current state of negotiations with the external debt restructure transaction.

Given the perilous state of the Barbados economy and the time it is taking to close the debt restructure deal with external creditors – the more aware citizens excluding the yard fowl variety – have started to examine the increasing downside risks threatening the Barbados recovery program. The blogmaster counts himself among those who is now very concerned that the high price White Oaks team has been unable to resolve the wedge issues.

It is time to go to plan B.

Do we have a plan B?

 

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322 responses to “Does White Oak Have a Plan B?”

  1. Tron Avatar
    Tron

    I recommend the following procedure:

    If the negotiations with the international barons get stuck, the government should simply cut the debt again for the local creditors with the exception of the foreign banks: i.e. pensioners, NIS and other naive fellows who deserve no better. The layoff of 10000 civil servants would also have a very positive effect on the national budget. That would give us a strong boost to the balance sheet and the necessary sacrifice at the negotiating table.

    The international capital market demands some human sacrifice here.

  2. Tron Avatar
    Tron

    Here’s a good plan:

    http://www.nationnews.com/nationnews/news/240912/foreign-currency-accounts-soon-locals

    This could establish the US dollar as a second currency and gradually devalue the poor Barbados dollar to an affordable level. Of course, food, houses and cars will then be sold in US dollars.

    The income from tourism and other industries would then be increasingly in US dollars. At the same time, the government could feed the many civil servants with worthless Barbados dollars. If the civil servants can no longer afford food, they will of course resign in the end and look for a decent job.

  3. WURA-WAR-on-U Avatar
    WURA-WAR-on-U

    Another scam, we looked at it already, transfering funds into US accounts in Barbados…ya can only bring foreign currency into the island…and can’t utilize any that is already there, in essence ya will be just bringing foreign currency to convert to bajan …to SPEND..

    the thieves in the BANKS will have ya banking info…and the money will be SWIPED FROM YA ACCOUNT…as usual…

    Ya ain’t get it yet, the only human sacrifice will be YALL…the universe DEMANDS IT….and yall WORKED HARD for it.

    To make this even uglier from the mouthings of Professor No Banking Down.. there was absolutely NO REASON…for the then brand new Mottley adminstration to DEFAULT..she LIED…again.

    let’s hope her lenders see where this is going.

  4. John A Avatar
    John A

    The comments today by the professor has confirmed what has concerned me for the last 18 months and it’s this. I honestly don’t believe those given the responsibility of dealing with this foreign debt restructuring, have a clue what the words ” negotiating in good faith” means.

    The message we sent the foreign debt holders today is this. ” WE REALLY AIN’T IN NO RUSH TO PAY YOU CAUSE WE DON’T PLAN TO BORROW FROM WUNNA AGAIN IN NO HURRY.” Now this message was not sent by the clerk in the office of the MOF either, but by the PM ‘s chief negotiator. So let’s summarise where we are today in the eyes of the foreign creditors.

    You all borrowed money from us in good faith, no problem. You then defaulted 18 months ago and we have gotten no where with trying to reach closure on this matter. We have also not received a blind cent from you over the period either, so we far from happy about this. To insult us further today the head negotiator says in the press ” we don’t need to rush to pay them cause we ain t going back to them in no hurry for money anyhow.”

    So folks let me ask you one question and you need to be honest here. If you were one of the foreign creditors being told this, you wouldn’t say fine the line in the sand had been drawn and we will now be coming for our money at all cost?

    Now I have no doubt the professor will try to back pedal on what he said tomorrow with statements like ” I was misquoted or I was misunderstood”. The truth is the statement was made and I have no doubt Mr Worrell has sent, or will send these statements by the learned professor to his clients the foreign creditors. It is also not for us to cuss the last governor either for doing this, as he is simply representing his clients interest. If he didnt take the job someone else would of.

    Madam PM I really think you need to rethink who you have handling this negotiation and look for people who understand the meaning of a negotiator. Today has set us back big time and I have no doubt based on the utterances of your chief negotiator today, the foreign creditors will now look to adopt a different approach to settlement.

    We the public therefore await the details of your decisions and the sharing of them with us. I don’t want to hear any more foolishness about “playing poker” either, as today’s play was a dismal failure that may of caused us to lose our hand and threaten our pot as well.

  5. WURA-War-on-U Avatar
    WURA-War-on-U

    They just had to go and COCK THIS UP TOO…unbelievable….

    Mia better put her Professor No Backing Down on a leash…,although he was really ridiculously dumb today so i dont see any workable damage control..lol

  6. m Avatar
    m

    @ John A July 25, 2019 7:49 PM

    So, finally, you have spotted the ‘sneaky’ rat coming from under the White Oak tree to nibble at the US $85,000 p/m slice of Bajan taxpayers’ funded cheese.

    What do you think plan B ought to be in this poking game of ‘nudge nudge, wink wink’?

    Should White Oak get up from the poker table -with a million in their ‘fleece’ pocket to share among themselves including the fees for their ‘intelligence’ capita(l) finder Persaud- and let Barbados walk down the inevitable Devaluation street?

    How can a country, with its begging hand in the IMF’s mouth of an austerity programme, expect to dictate to its foreign creditors while it continues to live big off the hog by importing millions of litres of stale water in plastic bottles and driving around in luxury vehicles on roads in dire need of upkeep?

  7. John A Avatar
    John A

    @M

    I think the next few weeks will show us a change in game plan from the foreign creditors. Also based on the ramblings of the professor today damage control will be required. His error today therefore strengthened the hand of the foreign creditors, as they would now be seen as being disadvantaged and disrespected by us.

    As I said i am more convinced than ever that those given the job of negotiating are well out of their debts at this critical juncture.

    What is also becoming glaringly obvious is that we seem to be adopting the exact same approach as Argentina did where they dismissed the frustrations of the lenders and we know how that ended for them.

  8. NorthernObserver Avatar
    NorthernObserver

    Do we know the composition of the foreign debt and who holds what? Do we know what the loan collateral is, if any, and what the remedies available to the creditors are?
    This was always the weak link in the WO deal, too much for settling local debt. WO have already made the bulk of their commissions. Now they make $$$ by stringing this part out.
    So Plan B is you do to WO what you did to the creditors. You cut them loose, and seek a preemptive strike with one creditor. Then u wheel and deal with what is left.

  9. john2 Avatar
    john2

    NorthernObserver

    “You cut them loose, and seek a preemptive strike with one creditor. Then u wheel and deal with what is left.”

    Care to explain this more?
    it seem the 45% of the external creditors are sticking together and holding up a deal with us.

    How would you go about cutting the preemptive strike with one creditor?

    Then if you wheel and deal with the other of the 45 % then you may have to do the same with the 55% that seems to be willing to take our offer.

    Ours = the people of Barbados.

  10. WURA-War-on-U Avatar
    WURA-War-on-U

    What i am looking at is since there was NO NEED FOR THE ISLAND TO DEFAULT…..it was FORCED…those VULNERABLE Bajans who are NOW SUFFERING..most with helpless CHILDREN..for food and BASIC necessities….because of Mia’s LIES TO THE CITIZENRY…and overseas creditors…..are doing so NEEDLESSLY….she BROUGHT SUFFERING ON THE PEOPLE WHO CANNOT AT THIS TIME OR AT ANY OTHER ..AFFORD TO SUFFER.

    And for that alone she will PAY..

  11. WURA-War-on-U Avatar
    WURA-War-on-U

    Shows ya just HOW MUCH…Mia does NOT CARE..about the black people who LOOK JUST LIKE HER..

    …..how they hell do YOU SET UP YOUR OWN VULNERABLE and UNAWARE people to SUFFER…you WRETCHED BEAST..

  12. Hal Austin Avatar
    Hal Austin

    Can someone plse remind me of the unemployment level in Barbados? While you are at it, plse remind me of the educational level of the average school leaver? Is Barbados a failed state? Can our policymakers think logically?

    A six-member team will leave Barbados next month to start the recruitment of nurses in Ghana.

    But before that happens, every effort is being made to ensure that all of the registered nurses and nursing aides here at home who have applied to the Queen Elizabeth Hospital (QEH) and general health services will be given the opportunity to be seen, interviewed and hired.
    Minister of Health and Wellness Jeffrey Bostic made the announcement today during Government’s post-Cabinet press briefing at Government Headquarters, Bay Street, St Michael.
    Bostic said some of these health professionals have already been hired and about 20 more are going through the process.
    Meanwhile, the six-member team will comprise the chairman of the Board of the QEH, a second board member who is a representative of the Council of Trade Unions and Staff Associations of Barbados, the director of nursing and the director of human resources. The Chief Nursing Officer in the Ministry Health and a representative from the Barbados Council will round out the delegation.
    They will travel from August 13 to 26.
    An assessment will be made of Ghana’s system and certification, followed by registration and recruitment.
    Last month, Ghana’s president Nana Akufo-Addo made an official visit to Barbados and offered the services of up to 400 nurses to address the shortage here.
    Bostic said he was also pleased with the operation of the 24-hour polyclinic at Winston Scott Polyclinic. (Quote)

  13. WURA-War-on-U Avatar
    WURA-War-on-U

    These are NOT policymakers…these ARE self-serving CRIMINALS….and NO ONE IS SAFE..

  14. William Skinner Avatar
    William Skinner

    Stuart: Downgrades don’t matter
    Persaud: Paying our debts does not matter
    We now playing Duopoly styled poker!

    The Duopoly Rules

  15. Wily Coyote Avatar
    Wily Coyote

    This forgien debt is a MAJOR ISSUE to be resolved as recieving the next TRENCH OF IMF BAILOUT depends on this issue being resolved. This forgien debt is a significant amount, CIBC is on record saying their portion is approximately $1B Bds(500M US), SCOTIA has a similar amount, plus, plus for others.

    Mickey Mouse retained debt negotiators have no incentive to resolve this issue, the longer it’s dragged out the more they make. TURD WORLD negotiations at thier best.

  16. WURA-War-on-U Avatar
    WURA-War-on-U

    Just so everyone knows..you can BUY a plane and HIDE the transaction…without leaving a paper trail back to yourself.

  17. robert lucas Avatar
    robert lucas

    Avinash Persaud is at it again. Whenever this whole thing is over Persaud who is a very smooth operator, will be left laughing all the way to the bank, just like he did with the “Four Seasons’ caper. This country is really in a very bad way. With Mottley and Persaud doing the talking how can the general populace tell day from night ?

  18. WURA-war-on-U Avatar
    WURA-war-on-U

    Yall better START WATCHING this Beast and all her little Beastlets….in that parliament..very, very carefully..

    ..your SAFETY and that of your CURRENT and FUTURE generations..DEPEND on it.

  19. Pachamama Avatar
    Pachamama

    David

    Patience in these matters has never been a characteristic of the Bajan.

    ‘Afterrall’ man its just been a year. And if debtholders want to play hard ball then government too must so engage.

    The austerity economic model so much discussed previously is rigorous enough to take all these variables into consideration.

    Mugabe and her government must stay the course, once the initial decision was made that this was indeed the correct action so necessary.

    We are however glad to see that the person who calls himself a master of something called a blog has seemingly come to realization that Persaud is no professor and never was!

    In fact Persaud has very limited scientific capabilities. In time, all will see him as the fraud which he has always been.

  20. David Avatar
    David

    @Pacha

    Some of us have a problem with the time it is taking to close yes. Note this WASan expectation set by the government. The other point is the public statements uttered by lead advisers deemed to be idiotic. Should citizens stay the course by being passive or should we exercise our right to agitate in a democracy.

  21. Pachamama Avatar
    Pachamama

    Sir William Skinner

    Is at it again!

    Skinner, after we wasted do much time to try to explain the finer points of a highly sophisticated economic model, you are again mired in the same shiiiite talk again.

    Tell us Skinner. Does there come a certain age when learning stops.

  22. David Avatar
    David

    @Pacha

    The decision by government to create the option to confer local honour alongside the Queens knighthoods should interest you?

  23. Pachamama Avatar
    Pachamama

    David

    The people who have a problem with the length of time it is taking would want to pretend that this government has infinite control over all the forces of nature.

    The government’s expectations were not unreasonable but shiiite happens, and people like you are well placed to so understand.

    Trying to interfere with these negotiations would be no different than trying to stop another force of nature – a hurricane. Can you do anything about that.

    Give the government a chance to do what needs to be done. Even 3 years would not be too long.

    What citizens should agitate about is to make sure no future government of Barbados could borrow money without a referendum.

  24. David Avatar
    David

    If shite happens the government has the opportunity to reset the expectation without the inflammatory comments attributed to Persaud. On other blogs this blogmaster has defended the process o& negotiating with sector savvy players. Some of us will not condone the arrogance coming from some.

  25. Pachamama Avatar
    Pachamama

    David

    Wha we can say bout these shiiite honours nuh!

    Everybody in Barbados is either a knight, legend, qc, professor, dr, a dame, or some other shiiite.

    Barbados has long been more form than substance.

    PLT said it best – when he spoke so succinctly about the ‘respectability’ ethos.

  26. WURA-War-on-U Avatar
    WURA-War-on-U

    “The austerity economic model so much discussed previously is rigorous enough to take all these variables into consideration.”

    You and i can both see the vsriables….hardball…yes, by those thus QUALIFIED…but in this instance…..with NO SUCH VIABLE SKILLS and cockup after cockup……….SO WHATS NEXT?

    Especially since there was no need to default….this default was designed to CREATE HARDSHIPS for the most vulnerable in the population…..in the name and for the sake of NARROW INTERESTS…it was not meant to BENEFIT the population as a collective…

  27. Pachamama Avatar
    Pachamama

    David

    You seem to be expecting perfection from a political party in government.

    For us, if they could get through this phase reasonably, they would have done well.

    All of that is baked into the system and will be more apparent now the honeymoon is over.

  28. WURA-War-on-U Avatar
    WURA-War-on-U

    Just bear in mind the Beast, would RATHER WATCH her own people SUFFER than to LOCK UP THE CORRUPT…or END CORRUPTION on the island…she would do ANYTHING to avoid those two scenarios..

    She has SHOWN US THAT..

  29. Pachamama Avatar
    Pachamama

    WARU

    We disagree! Only in certain limited circles could this ‘no need to default’ mantra retain any currency – pun intended.

    Persaud is only one man. The people of Barbados elected a whole government. We retain a modicum of confidence in their, the people of Barbados’, judgement.

    But where were you and the people of Barbados when these debts were being run up in our name?

    What have you done to stop the same thing from happening again, for a third time?

  30. David Avatar
    David

    @Pacha

    The citizenry must not relinquish its right to agitate in the system. We concede it must be dome responsibly. The blogmaster is observing there is a cabal that delight it promulgating BS/drivel on social media.

  31. Pachamama Avatar
    Pachamama

    David

    WARU

    Both of you seem satisfied to ignore the people who brought this mess.

    There have been no calls for the beheading of Stuart, Sinclair et al

    Instead you guys are content to allow these people to peacefully enjoy their ill-gotten pensions, from the public’s purse, not unlike the Mugabe regime.

  32. David Avatar
    David

    @Pacha

    Of course not. We hope learnings are taking place. It is why the leadership in the different sectors must sow the seeds to feed a new normal. To use the jargon – a paradigm shift.

    #LoL

  33. WURA-War-on-U Avatar
    WURA-War-on-U

    “But where were you and the people of Barbados when these debts were being run up in our name?”

    Right here with you..CONDEMNING DLP beasts who were doing it, cant say i was in Barbados when BLP beasts were aldpso RUNNING UP the national DEBT…to finance THEMSELVES..same scenario.

    Professor No Backing Down unfortunately AND AT TAXPAYERS EXPENSE…REPRESENTS that government…

    Pacha…actually…IN THE CIRCLE THAT TRULY MATTERS…many said from DAY 1 that DEFAULT was NOT NECESSARY….i had my doubts…until NOW..

  34. Pachamama Avatar
    Pachamama

    David

    The shiiiiiite talkers will only do that which they have always done.

    At the end of the day however, we must be able to separate wheat from chaff.

  35. WURA-War-on-U Avatar
    WURA-War-on-U

    Do u see the Beast beheading Stuart or anyone else, she and Sinkler are friends…the Dubai connection..

    ….she POSITIONED EVERYTHING…to AVOID anyone being held culpable….now she herself needs beheading….if only for the crime of allowing offshore accounts to remain offshore safely…for her fellow crooks to access…when they feel everyone else has forgotten….and for not LOCKING up the corrupt, addressing corruption or even attempting to dismantle it.

  36. Pachamama Avatar
    Pachamama

    WARU

    We bow to your rhetorical rejoinder!

    Lord have mercy, Yuh got muh! LOL

  37. Pachamama Avatar
    Pachamama

    WARU

    You were the most avid supporter of Mugabe, against our advice.

  38. WURA-War-on-U Avatar
    WURA-War-on-U

    No i was not..if am beating up on DLP…by default BLP benefitted…we ALL had to wait and see how this played out, now we have. Mia always seemed a little off to me…too much smooth talking, as a female i spent all my life listening to smooth talk…and hers always sounded particularly deceitful…

    I never trusted politics or politicians and this stretches back to when i was 17 years old and someone introduced me to that psoriasis infested, mentally depraved now thankfully gone Lionel Craig…from that day until today…politicians would do well to stay the hell away from me..

    I have always known that politics AND politicians are the island’s BIGGEST PROBLEM…they can NEVER help but show how destructive they are…plus BLP have always had too many SEXUAL PREDATORS…for any black person on the island to be SAFE.

  39. John A Avatar
    John A

    Don’t be side tracked here by politics and who got us here. The point is we are here now and the question is did the professor utter his personal views only? Are they also the views of our government as well?

    Many of us are dissatisfied with how this matter has dragged out and how poorly we have been kept informed of progress by our government. It is clear now why that has happened as our chief negotiator has explained. We are in no rush to settle because we don’t need to go back to them in the medium term. That is what was said, that is the fact we must focus on.

    Throughout this entire fiasco we have learnt more in the foreign press than locally on this matter. While he refuses to speak and talks crap about playing poker, the other side is freely keeping their shareholders updated. Here however we the shareholders are being told nothing. Well guess what we all now know why.

  40. Pachamama Avatar
    Pachamama

    WARU

    This writer could never be persuaded that the government was misguided in defaulting.

    You seem to want to selectively forget that a year ago the former regime was holding fire sales of anything and everything to meet bullet loan repayments.

    In those circumstances, if default was not a necessary but insufficient requirement to an economic over hall then you have a duty to tell us what were the alternatives.

    You are wrong! And no amount of rewriting recent history could prove helpful.

  41. ks Avatar
    ks

    I am with Robert Lucas when it comes to Persaud. I am sure he will come out laughing when this is all done….. ie: laughing his way to the Bank!!

  42. Mariposa Avatar
    Mariposa

    The arrogance of asking the creditor to wait an unlimted time to collect a debt is mind boggling
    After all when one takes into account the debtor has not paid any of its debt and has placed itself into a defensive posture in avoidance to pay by activating the default mechanism
    The long and short will give cause for the debtor of having no alternative than taking barbados to court
    This govt thought method of playing cat and mouse would be barbados economic death nail

  43. WURA-War-on-U Avatar
    WURA-War-on-U

    Pacha…at the end of the day…THEY WILL ALL HAVE TO LEAVE…they have had a very, very, very long run…their time is UP.

  44. William Skinner Avatar
    William Skinner

    @ Pacha

    In one voice you say the Duopoly. In another you say it’s the same government. And then you come with this : “ Who brought us here.. “ retort.
    Pacha, THEY brought us here. Have you now joined those who believe that we got here between 2008 and 2018 ? It is they not who.

  45. Hal Austin Avatar
    Hal Austin

    @ John A

    So far we have paid White Oaks about Bds$2.4m, is this a reasonable arrangement? Any discount agreed with our creditors must include the White Oaks bill. Would it not be better for the creditors to sell the debt to a hedge fund and walk away? I think they should and just walk away, let our ruling elite see what it really means punching above your weight.

  46. WURA-War-on-U Avatar
    WURA-War-on-U

    “You seem to want to selectively forget that a year ago the former regime was holding fire sales of anything and everything to meet bullet loan repayments.”

    So wuh ya think the Beast is doing, she just picked up where Sinkler them left off……AND STILL DEFAULTED….despite all her SNEAKY FIRE SALES….which am sure has not presented a red cent to the treasury yet….people thought the sale of Blue Horizon had generated tax money…ha….

    I believe the default mechanism was used TO BUY TIME……

    Because in just 1 year plus…we can hear…oh we don’t need to BORROW FOR 4 YEARS, cause we got a poker hand……imagine that…,,that one happened too fast…had to have already been in the works…and we would have never known if Professor No Backing Down, did not get ahead of his uppity self..

    But we shall see, won’t we, we shall see….cause whatever is done in the dark……

  47. Enuff Avatar
    Enuff

    Grenada’s last debt restructuring started in March 2013 and ended in March 2015. Here’s an extract from a research paper on the details:

    “Both domestic and external private creditors suffered substantial losses in NPV terms. Using a discount rate of 13.9 percent, the NPV haircut was 50.3 percent on average, while the market haircut was 62.5 percent. Both the US$ and EC$ 2025 bonds (excluding the EC$ holdings by the NIS) were treated symmetrically with a NPV haircut of 49.0 percent. In contrast, despite no face-value reductions, domestic NIS holders of the EC$ 2025 experienced a NPV haircut of 58.7 percent.” NPV means net present value for the uninitiated. Y’all can continue, with comments such as the arrogance of asking the creditor to wait an unlimted time to collect a debt is mind boggling”. Igrunce abounds here eh.

  48. Mariposa Avatar
    Mariposa

    Also on july 21st a news article stated that Donald Trump had an eagle eye on the 290Million IMF loan to barbados govt
    One would have belived that news of such bearing to the barbados economy the media would have been in pursuit of knowning further details from this govt

    The Donald Trump administration has an eagle eye on Barbados’ US$290 million loan from the International Monetary Fund (IMF) – financing it could have obstructed.

  49. William Skinner Avatar
    William Skinner

    @ Pacha
    You need to avoid contradictions. In one voice you say that the current economic and fiscal system is doomed to failure. You then advise to give the Duopoly “three years” to bring us through a system you have repeatedly denounced as a failure!
    I simply pointed out that Stuart’s position on ignoring downgrades is quite the same as Persaud ignoring the foreign creditors.
    My position is clear. The Duopoly brought us here. You are quite free to intellectualise and lock horns with those who are trying to separate blame. That position cannot stand up to serious scrutiny although it fits snuggly into the BU format.
    I don’t see the common sense of declaring a plant poisonous and then advising others to eat it.

  50. John A Avatar
    John A

    @ Hal

    Yes it would appear based on what the professor said that we are paying white oak to simply drag out this deal for as long as they can. Which of course suits them and the other “negotiators” involved as they are all getting fat off the delay. The question is now that the foreign creditors know this how will they in turn react?

    The truth is it is not in favour of WO and others to bring this to a swift close. The longer it drags out the more they make. Plus if Persauds view mirrors the governments one, then they are doing so with the blessing of those we elected.

    This whole issue has now been turned into a completely new game based on what was said yesterday.

The blogmaster invites you to join the discussion.

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