est. 2007

Barbados Underground

Bringing News and Opinions to the People

, ,

Barbados Economic Recovery and the Falling Pound

Benidorm in Spain was a small fishing village, then the big boy’s moved in the Spanish Govt rubbed their hands €€€€€€€€/ now look at it. Barbados a wonderful little golden island in the sun and the big boys are wanting to move in, Gov’t is the $$$$$/ €€€€€€or ££££££so important that you become the concrete Benidorm of the Caribbean, LET US HOPE NOT! – Gavin Dawson

There are significant trends unfolding in the global financial markets that will impact Barbados. The perilous condition of the local economy – vulnerable to exogenous shocks –  demands that the government and citizenry demonstrate an alertness to ensure there constructive dialogue. We allow the politicians and talking heads vested in the ‘system’ to lead a narrative that is decoupled from national imperatives.   It explains why we are in the deep hole we find ourselves.

The commitment of successive governments the Barbados dollar pegged to the US dollar  has attracted criticism and support. The decision by the Federal Reserve Chairman to reduced interest rates by 25 basis points will spur the debate.

Of greater concern is the trending of the GBP/USD currency rate.  The currency rate has experienced a 2-year low of 1.21603 as at closed of trading. The political uncertainty in the UK over BREXIT and the flavour of politics practised by new prime minister Boris Johnson could see the pound free fall to a parity with the US dollar. This is what leading market analyst Morgan Stanley and others have speculated.

Screenshot 2019-07-31 at 19.56.25
XE.com

If the forecast is proved correct the immediate concern for Barbados given how the tourism sector is positioned- it contributes the most to GDP both direct and indirect – should be a matter of concern. In simple terms the average UK tourist travelling to Barbados will see a reduced spending power in such a scenario. The statistics read that the UK tourist spends more and vacations longer than those coming from other countries. There is also the investment factor. The wealthy Brits have always targeted Barbados as a preferred country to invest in a second home especially on the West coast of the island.

Relevant links:

Why is the conversation important some will ask?

If we listen to Prime Minister Mia Mottley and members of her government, Barbados economic recovery and growth plan is being placed mainly on tourism.  Barbadians are being conditioned to expect a hotel corridor to be built along the Bay Street area. With the slide of the pound to USD and UK being our most important tourist and investment market should we have a plan B? The blogmaster recalls when the global economy went south in 2007/8 so too did Cinnamon 88 and the Four Seasons project to cite this example to expose the fickleness of a tourism investment pipeline of 1 billion dollars?

One gets the impression we have hitched our hope of recovery to an economic model whose shelf life has expired.

Thanks to John A for prompting this blog.

206 responses to “Barbados Economic Recovery and the Falling Pound”

  1. John A Avatar
    John A

    I support the UK Leaving Brexit hands down. The cost of them staying in with ” annual contributions” and other nonesence meant the cons far outweighed the pros.

    What Boris has planned is to let the pound hover around the same price as the EURO to the USD, thereby making his exports as competitive as any similar product out of the EU.

    Now for those who state that Britain has nothing of quality to export, let me help enlighten you with a few brands you may or may not recognised, based on your basic lack of exposure.

    JAGUAR
    BENTLEY
    AIRBUS
    MORGAN
    ROLLS ROYCE
    RANGE ROVER

    I could go on but I guess you get my drift. Not only do they have quality items to export, but many are the most prestigious brands in their respective segments.

    Last year they exported 55.4 billion USD in vehicles alone, along with another 19.7 billion USD in aircraft. Just those 2 categories mentioned only made up for 15 percent of their total exports, so they are exporting in excess of 120 billion USD to global clients yearly.

    So trust me they have plenty to gain in exports from a more competitive sterling. With a 20 percent decline in sterling a Jaguar and a Lexus will sell for basically the same price in the USA, which incidentally is their biggest export market.

    So it is clear England has much to gain from holding sterling around 1 to1.05 to a USD. We on the other hand have much to lose in tourism if we don’t address this issue quickly.

    You starting to see the pieces of the puzzle coming together yet?

  2. John A Avatar
    John A

    @ David.

    Yes I noticed that, the last thing we need now is a spike in oil prices combined to a weak sterling.

  3. David Avatar
    David

    @John A

    There are political considerations. You maybe aware the Tory government is being supporter by one seat. That party is not seeing we to eye with him either. While all this is going on Jeremy Corbyn is holding a no position.

    The UK is in a constitutional mess and is a failed state some will argue.

  4. John A Avatar
    John A

    @ David.

    Yes they have their challenges but this is a major move for them so you will expect some hesitancy and opposition. The thing is though the people want out of Brexit and most are glad to see the back of May, so politicians will have to walk a thin line bearing all this in mind. I think Boris will push through with the departure.

    I also feel Italy may not be far behind if the UK pulls out too.

    After all he and Trump are brothers from different mothers. Lol

  5. John A Avatar
    John A

    @ David.

    The thing about the UK we have to accept as a reality is this. With a weaker sterling 3 things are unquestionable. First their exports will be more attractive by say 20 percent. So the $120 billion plus USD they exported last year should definitely increase. Secondly as a tourist destination they themselves will become more economical to markets like the Japanese and others who want to visit there.

    A third thing is that once the Brexit issue is settled and the pound holds in the area of 1 to 1 against the USD, many businesses that left and went to places like Ireland may well return. So on an economic front they are on solid group to fight any Brexit fallout.

    We on the other hand will have to try and reposition our tourist market for a lower pound going forward, as we did in the 80s when it was also weak for a while. Unfortunately for us all this is happening at a bad time economically.

  6. John A Avatar
    John A

    Remember too the UK welcomed 41.7 million tourist last year up 4 percent from 2017. Weaken Stirling 20 percent and that can only grow.

  7. David Avatar
    David

    @John A

    Can the 1:1 parity be sustained by Boris or who ever? What are the determinants affecting the rate? Perhaps a question for Vincent.

  8. John A Avatar
    John A

    @ David.

    A government with it’s own currency can find ways of doing what it thinks serves their interest best.

    We saw that happen here when sinkler thought opening his print shop would be our salvation.

  9. peterlawrencethompson Avatar
    peterlawrencethompson

    @John A
    JAGUAR: Owned by Tata Motors of India
    BENTLEY: Owned by the Volkswagen Group of Germany
    AIRBUS: Owned by EADS, a European aerospace company. Registered in the Netherlands and headquartered France with production and manufacturing facilities mostly in France, Germany, Spain, China, the United States, and, yes, the UK.
    MORGAN: Has been sold to Italian venture capitalist firm. InvestIndustrial
    ROLLS ROYCE: Rolls-Royce Motor Cars Limited is a wholly owned subsidiary of BMW
    RANGE ROVER: Also completely owned by Tata Motors of India

    So you see John, ALL the iconic British industry that you can come up with is not British at all. NONE of them give a tinker’s damn about British people and will do whatever it takes to maximise their profit margins.

    I am surprised that you have been so misled by the lies about Brexit. It probably will happen and nothing about it will be to the UK’s long term advantage.

  10. John A Avatar
    John A

    @Hal

    The ownership is not what is at question here we are all aware of where the ownership lies. The fact is the manufacturing is still being done in the UK by British workers being paid in sterling with exports being done in sterling.

  11. John A Avatar
    John A

    Sorry meant PLT not Hal my apologies.

  12. John A Avatar
    John A

    If you check the country of origin on the export declaration form for all that I have mentioned it still boldly state UK. Uk built by British workers in a British plant. So while the shareholders will benefit regardless of who they may be, so will the UK and it’s people.

    The ownership is not what we are therefore debating.

  13. peterlawrencethompson Avatar
    peterlawrencethompson

    @John A
    Check out the public statements from the management of these companies. They think that Brexit is a totally stupid self destructive idea.

    Tata has called for a new referendum and warns that a no deal brexit will cause big layoffs at Jaguar Land Rover. They are projecting layoffs of 4,500.

    BMW has already moved some engine production out of the UK and 3 days ago their CEO was warning Boris to abandon the idea of a no deal Brexit.

    Italian VCs InvestIndustrial have also been vocal in their opposition to Brexit. In addition to Morgan they own the much larger Aston Martin as well, which they are pushing vigorously to an IPO so they can cash out before the shit hits the Brexit fan.

    The Airbus CEO described the handling of Brexit by the UK Government as a “disgrace” and has been vocal about his opposition to Britain leaving the European Union.

    Volkswagen is saying that a no deal brexit will mean the “Bentley brand would need to plan new investments in other countries.”

    Wake up and smell the toast John… it’s the UK economy.

  14. peterlawrencethompson Avatar
    peterlawrencethompson

    Range Rover is typical of what is happening to these iconic “British” brands. Tata has already built both a manufacturing plant in India to move some of the production there as well as a huge joint venture factory in China with the Chinese state owned car company Cherry.

  15. Freedom Crier Avatar
    Freedom Crier

    ANYONE WHO THINKS THE EU IS GOOD FOR BRITISH INDUSTRY OR ANY OTHER BUSINESS SIMPLY HASN’T PAID ATTENTION TO WHAT HAS BEEN SYSTEMATICALLY ASSET-STRIPPED FROM THE UK.

    HOPE FOR BRITTAN YET!!! ENGLAND LIKE THE U.S. HAS HAD ENOUGH …EU’S FINANCIAL ASSISTANCE (grants) TO FIRMS MOVING AWAY FROM THE UK….

    Did we all know that this has been happening for the last 43 years. I very much doubt it. A dreadful purge on industrial Britain… NEVER AGAIN.

    JUST TO LET REMAINERS know, exactly what the Disastrous Unelected EU, has cost Britain in lost businesses, over 43 Years of membership: (To name a Few)

    Terry’s (Chocolate Oranges) moved to Poland 2005.

    Cadbury moved factory to Poland 2011 with EU grant.

    Ford Transit moved to Turkey 2013 with EU grant.

    Jaguar Land Rover has recently agreed to build a new plant in Slovakia with EU grant, owned by Tata, the same company who have trashed our steel works and emptied the workers pension funds.

    Peugeot closed its Ryton (was Rootes Group) plant and moved production to Slovakia with EU grant.

    British Army’s new Ajax fighting vehicles to be built in SPAIN using SWEDISH steel at the request of the EU to support jobs in Spain with EU grant, rather than Wales.

    Dyson gone to Malaysia, with an EU loan.

    Crown Closures, Bournemouth (Was METAL BOX), gone to Poland with EU grant, once employed 1,200.

    M&S manufacturing gone to far east with EU loan.

    Hornby models gone. In fact all toys and models now gone from UK along with the patents all with with EU grants.

    Gillette gone to eastern Europe with EU grant.

    Texas Instruments Greenock gone to Germany with EU grant.

    Indesit at Bodelwyddan Wales gone with EU grant.

    Sekisui Alveo said production at its Merthyr Tydfil Industrial Parkafoam plant will relocate production to Roermond in the Netherlands, with EU funding.

    Hoover Merthyr factory moved out of UK to Czech Republic and the Far East by Italian company Candy with EU backing.

    ICI integration into Holland’s AkzoNobel with EU bank loan and within days of the merger, several factories in the UK, were closed, eliminating 3,500 jobs Boots sold to Italians Stefano Pessina who have based their HQ in Switzerland to avoid tax to the tune of £80 million a year, using an EU loan for the purchase.

    UK airports are owned by a Spanish company.

    Scottish Power is owned by a Spanish company.

    Most London buses are run by Spanish and German companies.

    NAME ONE MAJOR TECHNOLOGY COMPANY STILL RUNNING IN THE UK.

    Nor does it mention what it costs us to be asset-stripped like this, nor have I mentioned neither immigration, nor the risk to their security if control of their armed forces is passed to Brussels or Germany.

    But then find something that’s gone the other way, moved from an EU Country to there, I’ve looked and searched and you just can’t find any business relocating from an EU Country to England.

    BROTHER FROM A DIFFERENT MOTHER…HOLD MY COMB!

    https://grrrgraphics.com/wp-content/uploads/2019/07/bojo_cartoon-tina-toon.jpg

  16. Hal Austin Avatar
    Hal Austin

    @PLT

    So you see John, ALL the iconic British industry that you can come up with is not British at all. NONE of them give a tinker’s damn about British people and will do whatever it takes to maximise their profit margins.
    I am surprised that you have been so misled by the lies about Brexit. It probably will happen and nothing about it will be to the UK’s long term advantage.(Quote)

    An MBA does not familiarise one with modern business ownership. Location is important in terms of jobs, skills and taxation. If a company is listed then ownership is by the executive team and shareholders; if it is not listed it does not matter. You continue to make broad polemical statements but do not back them with any facts. Back away from politics for a minute.
    Plse explain Brexit to me and other readers and why leaving the EU will not be in the long-term interest of the UK? Facts, not polemics.

  17. John A Avatar
    John A

    @PLT

    from what you have written I know how you feel about England and you are entitled to that for sure, but let’s just examine only 2 aspects of a weaker sterling to the UK economy.

    Tourism since 2010 has been their fastest growing segment of their economy. It generated £106 billion for them last year and was up 4 percent on 2017 revenue wise. Here in Bim we struggled with Hardly any increase in revenue from tourism for the same period.

    Let’s now move to exports. The UK exported in excess of $55b USD last year in BRITISH MADE VEHICLES alone, regardless of who owns the companies. That only represented 11.4% of their total exports however.

    Both of these sectors will benefit from a weaker currency, that is just basic common sense.

    So don’t mind the haters and pro brexiters, the UK can stand on its own without Brexit just fine. The one challenged they would of had was a higher currency, but that too will be dealt with by a weaker sterling. That will trade close to the Euro in the market place for a while no doubt.

  18. peterlawrencethompson Avatar
    peterlawrencethompson

    @John A
    The country of origin on the export declaration form is worth exactly as much as the paper it’s printed on. What matters for an economy is where future investment and employment is going to happen. The decision makers in ALL these companies are plainly telling you that it won’t be in the UK. This does not mean that they will shut down tomorrow… but it does mean that the large investments required to move manufacturing forward will not happen in Britain after Brexit. Volkswagen & BMW will consolidate in Germany, Tata will use India if Trump picks trade fights with China, The very complex Airbus supply chain is completely dependent of freedom of cross border flows for components.

    Face reality. Brexit is game over for British manufacturing in the medium and long term.

    One of the only manufacturing executives that has been pro Brexit is James Dyson; but look what he did… in January he picked up his entire company and moved it to Singapore. What a vote of confidence.

  19. John A Avatar
    John A

    @ PLT

    The venture with Cherry in China is to build small SUVs. It will no doubt mean a sharing of technology probably as is standard in China, older cheaper technology. They never stated they will move the Range Rover manufacturing there. The investment with Cherry it was stated was to ” expand their domestic market offerings.”

  20. GreenMonkey Avatar
    GreenMonkey

    Re. The European Communist Union – send your thanks to the CIA and the US State Department, see below.

    The European Union was intentionally created by stealth, without telling the various European populations that the free-trade/common market promoters (heavily financed by the USA), who in the initial stages seemed to be promoting only a relatively simple pan-European free trade agreement, fully intended that it would, bit by bit, morph into a full political and economic union, i.e something like a “United States of Europe”.

    Historical Origins of US Covert Operations to “Assimilate Europe” Into A Federal State
    By Graham Vanbergen

    A memo from the US State Department dated June 11, 1965, advised the vice-president of the European Economic Community, Robert Marjolin, to pursue monetary union by stealth. It recommended suppressing debate until the point at which “adoption of such proposals would become virtually inescapable”. In 2000, declassified American government administration documents show that the US intelligence service started to run a large scale campaign in the Fifties and Sixties to build momentum for a united Europe. It also funded and fully directed the European federalist movement, something which many EU members states resisted with many eventually capitulating – “you’re either with us or against us”

    The documents show that the American Committee for a United Europe (ACUE) financed the operations of the European Movement, the most important federalist organisation in the post-war years. In 1958, it provided more than half of the movement’s funds.

    These operations were managed by the CIA but as documents show it took its orders from the US State Department. Operations included funding political groups allied to American values and/or policy, undermining trade unions and influencing cultural and intellectual trends in Europe. It went further with operations deliberately provoking dissonance in non compliant states and created ‘stay-behind’ or GLADIO networks designed to train special forces, spy networks and disruption teams to stem any potential for Soviet incursion or even business activity into western Europe.

    The leaders of the European Movement – Jozef Retinger, Robert Schuman and the former Belgian prime minister Paul-Henri Spaak – were all treated as hired hands by their American sponsors. ACUE’s covert funding came from the Ford and Rockefeller foundations as well as business groups with close ties to the US government and the CIA.

    SNIP

    Many British citizens and MP’s were uncertain and deeply suspicious of the intentions of this new club. The Conservatives pushed entry through in 1973 without reference to the electorate. In opposition, Labour ran a manifesto on the run-up to the 1975 election based upon renegotiating the terms and conditions of entry, won, and a referendum took place in June 1975. The Labour party itself voted overwhelmingly to leave the EEC prior to the referendum but the public voted 65% in favour.

    The Maastricht Treaty of 1992 laid the real foundation stones of the European Union which, was enhanced further by the Amsterdam Treaty 1997. The Nice Treaty of 2003 was next and then finally The Treaty of Lisbon (initially known as the Reform Treaty), an agreement which amended the two treaties to form the constitutional basis of the European Union (EU). The Treaty of Lisbon was signed by the EU member states on 13 December 2007, and entered into force on 1 December 2009, which remains in force today.

    More:
    https://www.globalresearch.ca/historical-origins-of-us-covert-operations-to-assimilate-europe-into-a-federal-state/5499410?utm_campaign=magnet&utm_source=article_page&utm_medium=related_articles

  21. peterlawrencethompson Avatar
    peterlawrencethompson

    @John A
    The UK runs a trade deficit of over 30 billion pounds sterling. This means that when the exchange rate falls the British standard of living falls. Period. Of course there is some short term advantage to competitiveness in some sectors, but across the whole economy the trade deficit widens, the cost of living increases, and the standard of living falls.

    Tata/Cherry is the thin edge of the wedge… surely you can see that. What matters is where Tata’s future investment and employment will land. He is telling us with crystal clarity that it will not be in the UK post Brexit.

  22. John A Avatar
    John A

    @PLT

    Let me ask you one question. Why would shareholders move a prestigious brand like Land Rover that is profitable out the UK to India say, when their cost in the UK will drop by 20% based on a cheaper currency?

    Also with prestigious brands do you think the buyer of a Range Rover would still but it if it had a “Made in China” sticker in the door? Those brands will continue to be made in the UK for 2 reasons . First the cost will now be lower and secondly the prestige of owning a hand crafted Rolls made in the UK somehow doesn’t translate well into ” Made in China .” Do you remember what BMW said when they bought RR? They said “they will improve the technology but the brand is too iconic to have it made anywhere but In the UK.”

    IF I apply your logic then Rolex should move their watch plant to China as it would be cheaper to manufacture there.

    How many people you think will pay $15000 USD for a Rolex made in China, or a Porsche made anywhere but Germany?

    Sorry some of these arguments can’t hold up to market reality.

  23. Hal Austin Avatar
    Hal Austin

    @PLT

    Your multiple postings on the same issue suggest that you cannot make up your mind or you have not done enough Googling. Let me give you an ABC about Brexit.
    Pre-history – t he relatively new UKIP party was giving the Conservatives trouble on the campaign, so, having already given us a Fixed Term Parliament, David Cameron in his wisdom called a referendum, expecting to win. He mis-read the runes. The nation was divided in half (52:48).
    First, under our form of democracy, we do not have referenda, a form of direct democracy, so its outcome was problematic. Forget all the other stuff about Gina Miller, the constitutionality of the outcome etc…
    Since the referendum we have had a general election, which returned a minority Tory government, and a European election, which again repeated the national division. The nation has remained divided by region and demography and neither side will compromise.
    What is really important to me (and should be to Barbadians) is what Brexit means for a small island nation with a hybrid Westminster form of government.
    As I have said I am for a United States of Europe and think that Article 50 should be withdrawn. A bit of advice, plse do not watch CNN for an explanation of British politics. I watch it when I want a laugh.
    As to big business wanting Britain to reman in the EU. Of course. Britain now has 120 trade agreements to negotiate, having lost their expert trade negotiators over the last 40 years. It took Canada and the EU seven years to negotiate an agreement.
    I will tell you the Brexit outcome: Britain will leave the EU on October 31, a general election will be held shortly after which the Tories will lose, the new government will re-apply to join the EU and the EU will extract their pound of flesh: Britain will have to join the euro and fully accept every EU rule and regulation, including on immigration. Scotland will leave the union, an independent movement will rise again in Wales, and the campaign for a united Ireland will get additional force.
    Despite all that, I say press on with a United State of Europe. Death to the nation state. This is the only waay to control an aggressive US and Chinese expansionism.

  24. peterlawrencethompson Avatar
    peterlawrencethompson

    @John A
    Of course the UK tourist industry is going to grow rapidly after sterling devaluation. I hope the Brits enjoy their new lifestyle as waiters and maids being servile for Chinese tips. I might go myself to catch some theatre in London’s West End ater the pound falls to parity with the Canadian dollar. You can join me after it is on par with the Bajan dollar. 😉

  25. John A Avatar
    John A

    @ PLT

    yes they run a deficit of 30b now with the pound at 1.25 say to the USD. Do you think when sterling hits 1 to 1 on the USD that deficit will not be slashed if not completely disappear?

    You can’t look at market data today and not take into accoint what change will mean to it. To look at todays trade deficit and not factor in what a 20 percent fall in currency will mean to it therefore is not realistic, when such a large correction could cancel that deficit all together.

  26. peterlawrencethompson Avatar
    peterlawrencethompson

    @Hal
    I don’t watch CNN. Nor am I saying that I agree with the corporate titans who run BMW, Volkswagen, Tata etc. I am just pointing out that they are likely to do exactly what they say they are going to do.

    What the British people or the British government decide to do is no skin off my back. I admit that the frankly racist roots of the Brexit movement do annoy me, but that’s because racism offends me wherever it crops up.

    As far as the impact of Brexit on Barbados is concerned it simply reinforces the necessity for us to move our economy beyond tourism, but that is what we need Brexit or no Brexit. You are right that it does point out the incompatibilities of Westminister and referenda, so I hope we learn that lesson, but I won’t hold my breath.

    I do hope that your crystal ball is shiny and polished and in top working order because I do think the world will be better off “with a United State of Europe.” But i’m not holding my breath.

  27. peterlawrencethompson Avatar
    peterlawrencethompson

    @John A
    The effect of devaluation on a trade deficit is not unidimensional. Yes exports will go up and imports go down, but the decline in imports will be almost entirely a decline in domestic living standards, while the increase in exports is dampened by the foreign tariffs that need to be paid and hardly contributes at all to increased living standards. All this means is that the fall in the trade deficit is almost all a fall in the living standards of average UK residents.

  28. Tron Avatar
    Tron

    I can only repeat myself here: PLT is a better analyst than all the newspapers and paid consultants on the island.

  29. David Avatar
    David

    @John A

    A consideration to polish your argument is that many of the industries you listed import a significant volume of components from outside of the Uk.

  30. Hal Austin Avatar
    Hal Austin

    Of course the UK tourist industry is going to grow rapidly after sterling devaluation. I hope the Brits enjoy their new lifestyle as waiters and maids being servile for Chinese tips. I might go myself to catch some theatre in London’s West End ater the pound falls to parity with the Canadian dollar. You can join me after it is on par with the Bajan dollar. 😉(Quote)

    Emotional, hysterical nonsense. Be rational. This should be a learning experience. By the way, a significant number of Barbadians have been having children in the UK since the 1950s, but few seem to have been badly emotionally scarred. In fact, a large number, if not the majority, seem to prosper.
    Britain, smaller than Guyana, and without any natural resources, has a population of 65m and the 5th/6th biggest economy in the world; its scientists are not only the leading ones in Europe, but among the two or three leading in the world. Remind me, how many patents have been registered in Barbados since 1966? Which Barbadian has won a Nobel Prize in science – or anything? Remind me what Barbados leads the Caribbean on, far less the world?
    London is the theatre capital of the world; what is the name of our local theatre again?

  31. John A Avatar
    John A

    @ PLT

    Once it doesn’t fall below the dollar they will be fine and should hopefully become bar owners and not waiters lol.

    The thing is they can adapt and survive. Drive a British made car and not a Japanese one say. Alot of their food is local and of good quality. They can still travel to Europe as long as their currency holds on par with the Euro. Actually if it stays between there and the dollar, they can travel to the USA too without too much stress. If they are in the right sectors of export and tourism their domestic income will possible be greater too, hence negating the weaker sterling.

    I do business with a few there and they all are in favour of leaving Brexit. Their biggest worry was how they would fear if the pound was strong against the Euro, but now that it seems to be falling to stay in line with it, they feel they can compete.

    Time will tell but I think they will adjust fine. We here though I am very concerned about. Our tourist product will be hit hard if we are not pro active and get out in front of the wave. All like now we need to be putting in place value added packages for the UK market like pay for 6 nights get the 7th free etc.

  32. peterlawrencethompson Avatar
    peterlawrencethompson

    @Hal
    You never seem to notice when I have tongue in cheek… after all my parents were among the “significant number of Barbadians have been having children in the UK since the 1950s, but few seem to have been badly emotionally scarred.”

    London is the theatre capital of the world, that is why I so look forward to my visits to London’s West End and if it is cheaper I will save money.

  33. John A Avatar
    John A

    @ PLT

    The other issue as Hal mentioned is alot of these guys got sweet trade agreements now under the EU. With the UK now having to renegotiate new trade agreements, the fellows would be concerned and little restless. You know they say the devil you know better than the one you don’t.

  34. John A Avatar
    John A

    @PLT

    If sterling drop to where we looking at then we could be the ones responsible for arrivals hitting 41 million and 2😂

  35. peterlawrencethompson Avatar
    peterlawrencethompson

    @John A
    “… these guys got sweet trade agreements now under the EU. With the UK now having to renegotiate new trade agreements, the fellows would be concerned and little restless.”
    +++++++++++
    That’s an important insight John. During these upcoming negotiations how do you think Germany will evaluate the prospect of have all the new investment in plants and employment to build Bentleys and Rolls Royces happening in Germany rather than the UK?

  36. John A Avatar
    John A

    @ PLT

    I see the plants staying in the UK and the owners benefiting from the 20 percent increase in profit based on the weaker sterling. Plus Germany does not know if the Uks departure may not trigger others to do the same so they can’t risk being reactionary. Italy already has rumblings in it all like now on this issue. Plus lets be fair and agree that along with profit from the sale of each RR out of the UK factory at a lower cost, BMW already got the sale to RR for the engine and drive train from their plant covered as an input factor. They winning on all ends

    Remember the USA is the UKs biggest trading partner not the EU. Those agreement already would be in place there and will not need renegotiating. Plus as Trump hinted to Boris, ” you will now see trade grow between us after leaving the EU.”

  37. Scott Avatar
    Scott

    With reference to Hal Austins comments I find them both racist and farcical. You have no knowing of the colour of my skin or my ethnicity and whats more, how should this affect a discussion about Brexit?
    It seems as though you are in need of some education as you obviously were not very thorough in your Daily Mail reporting days.
    Back in the ’70’s and ’80’s the French were hell bent on preventing British produce from reaching their market place. Such to the extent that they set light to live truck-loads of British lambs (perhaps this explains the £300m handouts?) they also scuttled shipments of British fruit and vegetables – primarily across their own autoroutes. I know as my family ran a wonderful fruit farm in Kent which is alas no more, forced to close due to uncompetitively priced (and subsidised) imports.
    I presume you are referring to set-aside when you talk of the EU paying UK farmers to leave land fallow? This was only applied to arable farmers and was a large part due to the fact that UK farmers were running profitable operations with which the mainly French and German farmers could not compete. I did not agree with set-aside at the time and I am not in favour on subsidising any industry on an on-going basis. The primary reason for the disparity in farming standards was due to Napoleonic Law. Both France and Germany operate under this doctrine which in basic terms dictates that a landowner must divide his property equally among all of their children. Therefore it does not take too many generations for a 500 acre farm to be split into small 5-10 acre fields owned independently. Many of these fields are run as hobby week-end farms and simply doe not have the economies of scale of the larger farms. In the UK the farm was usually passed down to one of the offspring to avoid the break-up and consequent demise.
    You state my hostility to the EU is fake – it is certainly not. I believe the EU to be undemocratic and hugely wasteful in money and time. Many of the EU lawmakers are not fit for purpose, furthermore I do not agree with them overruling any national government.
    Had the EU remained as the EEC (which is what the UK population thought they were voting for in ’73,) then I am sure we would still be a member.
    If you are British I cannot comprehend why you want to be governed by an dictatorship hell bent on removing all national identities and turning Europe into a homogenised cauldron of proles.

  38. John A Avatar
    John A

    @ PLT

    I don’t know if you had a chance to read up on it yet, but what really surprised me was the venture between BMW and Toyota. BMW will be supplying the engine and drive train for the New Toyota Supra and then BMW will market a similar car under their badge as well. Who would of thought they would ever of seen a Toyota with a BMW engine and drive train from the factory!

  39. Hal Austin Avatar
    Hal Austin

    @John A

    The EU is the UUK’s biggest trading partner; the US is the biggest SINGLE partner. Have you noticed the elephant in the room, the 53-member Commonwealth? Not a mention, yet they a count for about 16 per cent of global trade, compared with the EU’s 19 per cent, ; 2 bn of the global 7bn population. and a total GDP of over US$2trn, level with or more than the EU, and the prospects for more rapid growth.
    Between 2002 and 2012, UK exports to the Commonwealth roe by 132 per cent against an average of 76 per cent and exports to he EU of 45 per cent and 66 per cent to the US.
    Maybe there are also lessons here for our economic experts.

  40. John A Avatar
    John A

    @PLT

    Yes for sure they are lessons for our people there to learn from. I think the fear about taking the EU as a single market stems from the fact that some other members are not sure if they should remain also. Plus we have to be fair and say if the UK Left, they would have to expand other markets like the USA, which of course a weaker currency would assist in. Plus it’s not like the EU will stop buying from them, they may just be a period of adjustment.

    What jumped me though was what it cost the UK to be a member of the EU.

    In 2018 the UK paid £13 billion to the EU in dues and the EU only spent £4 billion back on the UK, resulting in a net cost to the UK of £9 billion for 2018 membership.

    That is one dam expenses club to be a member of let me tell you!

  41. Hal Austin Avatar
    Hal Austin

    @Scott

    As to @Scott, his diatribe about the European Union is absolute nonsense. Those of us who are black and in the UK are used to these rural blinkered nationalists creeping out of the works and criticising the EU. (Quote)

    Where have I mentioned anything about your colour By the way, if you want to call me racist I have nothing to apologise for. We all know about French farmers and how they behave, they have been doing this since the 1930s and had its best expression in the Poujadists of the early 1950s.
    The point is that UK farmers were not disadvantaged, you are wrong. British farmers were well looked after, as they have been since the end of he war (the notion of food security is the primary lesson to come out of World War two) and UK farmers have exploited that. French farmers have also done well, too well, but that does not equate with UK farmers being disadvantaged.
    Yes, I am referring to so-called set-aside, when land remained idle and the EU paid for it, more than it would have earned if it was in production; then the greedy farmers turned them in to golf clubs.
    The rest of your argument is irrelevant; you preferred the EU when it was the EEC, I want a United States of Europe. Let us agree to disagree. As to the Welsh farmers who voted to leave after getting a £300m handout every year from the EU, they should suffer. I would not give them a single penny. Tell them to sell their 4x4s. Let them compete against the New Zealanders.
    The bottom line is that Brexit is economic suicide and we are led by an egomaniac to the slaughter. Supporters of Brexit allowed their narrow nationalism to overcome common sense. Britain, who genuinely punched above its weight in the EU, was a bloody nuisance. It was always last to the able and wanted to change the rules once it joined.
    Britain never threw its heart and soul in to the EU, falling back on fake nonsense of a special relationship with the US. Wait and see what Trump does once the UK has cut its links with the EU. I hope you are producing good quality wine in Kent because those Californian producers are coming for you.

  42. Hal Austin Avatar
    Hal Austin

    @Scott

    By the way, you say the EU is undemocratic – or do you mean not democratic enough. We have just had an EU election (I voted LibDem, by the way, the reman team). Voting is the foundation of our democracy. Ask Barbadians when last they elected anyone to CARICOM?
    If you have a union of 500m people, you will need administrators and uniformity and common standards; should the EU get rid of its civil servants and commissioners and the ECJ? Would Kent get rid of its County council?

  43. Freedom Crier Avatar
    Freedom Crier

    Freedom Agrees with Everything John A and Scott says and Hal is all about Ruling over people…. Halxist Socialist Marxist to D Bone!

    SOCIALISM IS ROOTED IN ENVY!

    https://www.facebook.com/turningpointusa/photos/a.376802782368444/2339302972785072/?type=3&theater

  44. peterlawrencethompson Avatar
    peterlawrencethompson

    “The bottom line is that Brexit is economic suicide and we are led by an egomaniac to the slaughter. Supporters of Brexit allowed their narrow nationalism to overcome common sense.”
    +++++
    In other breaking news Hell just froze over… PLT agrees with Hal Austin.

  45. Gabriel Avatar
    Gabriel

    PLT
    I am joining you in agreeing with Asstin for once.We are aware that London voted remain and for good reason.Interesting days ahead but let’s hope the so-called “bemoaners” get their opportunity to sink the Brexit ship.

  46. David Avatar
    David

    @John A

    @John A

    A consideration to polish your argument is that many of the industries you listed import a significant volume of components from outside of the Uk.

    You ignored this observation posted yesterday?

  47. William Skinner Avatar
    William Skinner

    @ Freedom Crier

    Having stated that socialism is rooted in envy , do you care to state what capitalism is rooted in ?

  48. Crusoe Avatar
    Crusoe

    I agree with the suggestion by the former Central Bank governor, that Barbados should move with haste to the US Dollar.

    Get rid of the Central Bank and its costs, get rid of the fees that the private banks make on foreign exchange transactions

    Make cross border business easy.

  49. John A Avatar
    John A

    @ David.

    Sorry yes I wanted to check on something before replying. The input cost of items that would be extra regional on most of their high end exports is not going to be that high in relation to the finish product.

    Let’s take for example their car exports of $54b USD. The Labour, electricity, building and infrastructure along with leather, interior and the core vehicle is all from the UK. So let’s say 80 percent of the input cost for argument sake drops by 20 percent and the imported component, which lets say is 20 percent increases by the same 20 percent due to sterling dropping to 1 to 1. Even on the same sales they will come out on top as their total cost will drop. But what happens say if because of a cheaper sterling export sales grew by 25 percent? Well the profit to the company would increase substantially.

    So if sales stay flat they will still be able to benefit from a lower production cost overall even after taking into account the imported input. If sales increase as a result of being more competitive however, they will benefit from the sale of more units at that lower production cost.

    Either way they benefit from the weaker sterling.

  50. David Avatar
    David

    @John A

    You will find this article enlightening.

    https://www.ifs.org.uk/publications/10302

Older Comments
1 2 3 4 5
Newer Comments

Leave a Reply to John ACancel reply

Trending

Discover more from Barbados Underground

Subscribe now to keep reading and get access to the full archive.

Continue reading