Reproduced with permission, the full text of Dr. Delisle Worrell – former Governor of the Central Bank of Barbados – October 2019 newsletter:
One often hears the comment that there are hundreds of millions of dollars of idle funds at commercial banks that ought to be directed to investment projects to create employment and grow our economy. However, we need always to bear in mind that every investment project is going need to computers, cell phones, supplies and equipment that have to be purchased from abroad, in US dollars. A basic feature of economies as small as Barbados is that all business investment, from hairdressers to supermarkets to power plants, has to be financed mainly in foreign currency, not domestic money. That is because the domestic currency cannot be used to acquire essential inputs from abroad, such as equipment, vehicles, materials, fuels and other inputs. This is true whether the project is large or small, private or public, for domestic production or export.
It follows that all investment of necessity requires a substantial proportion of foreign finance. This means that the Barbados dollars in banks cannot be put to use in financing investment projects; for that, the banks will need to receive a larger supply of foreign exchange, from tourism, international business, manufactured exports or other sources. It also means that new investment cannot be funded with the savings of local companies or individuals. Domestic savings are in local currency; in order to do any investment the saver has to acquire foreign currency in addition to (or in exchange for) their savings, so they can pay for the imports they need.
Read full text @caribbeansignal.com
David, link to Caribbean SIGNAL not working !
@Wily Coyote
Thanks, should be now.
We continue to loose any modicum of respect for Delisle Worrell.
As this American agent shows his ‘leanings’ more and more, we are reminded of another in his ‘field’ – Arthur Lewis – who mounted a similar project as a servant for empire. A project which caused several countries in a newly ‘independent’ Africa to cede billions to their ‘former’ colonial masters.
Everybody knows that the US dollar is under growing geo-political, geo-strategic pressures. And these will continue regardless of the apparent increase in value viz a viz other leading currencies. Yet, this man has nothing better to say but that we exchange one worthless currency for another fiat currency.
Not even death can save us from the mindset of the slave.
Worrell is clearly walking around with the mind of dead men!
@Pacha
Does it matter, Worrell is making the point we must earn foreign currency to pay our way. Local dollars is useless given our dependence on imports.
@Pachamama
You obviously have a partisan opinion of Dr Worrall, Willy is not a fan either, however the message carries a lot of truth. Get past the fact that FOREIGN currency is anything other than Bajan Mickey Mouse $. Dr Worrell is correct that as long as Barbados currency is pegged to US$, then local currency is irrelevant for the countries development. The fact that if Barbados has even a remote chance of gaining back a mediocre level of financial independence and progress the Barbarian $ will have to be significantly devalued or better still floated. This adjustment will have significant short and long term social and financial consequences, however it’s the only means by which Barbados recovery maybe possible.
Present DUPLOY are talking a good game, however the SAME OLD SAME OLD continues as the downward spiral gets worse. Basic infrastructure water, power social security are now FAILING and there is no short or long term plan for recovery.
FOREIGN DEBT REPAYMENT IS SPIRALLING OUT OF CONTROL, and present government is doing it’s ostrich act hoping issue will solve itself. Well think again, Barbados is playing a dangerous ARGENTINEAN game with the three large OFFSHORE BANKS which appear to be getting ready to pull the financial trigger on the execution gun. If these FOREIGN DEBT holders are not addressed the consequences can and will be disastrous.
Time us quickly running out.
@Pacha
Careful my friend……. shaming a Nobel Laureate!! Suppose Dr. Worrell get a Nobel….. then you would have shamed not one, but two…..!!
(Quote):
It follows that all investment of necessity requires a substantial proportion of foreign finance. This means that the Barbados dollars in banks cannot be put to use in financing investment projects; for that, the banks will need to receive a larger supply of foreign exchange, from tourism, international business, manufactured exports or other sources..(Unquote).
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Isn’t what Worrell arguing as basic as ABC when it comes to any ‘informed’ analysis of the Bajan economy?
Why did he abandon this economic commonsense and facilitated the continuing printing of Mickey mouse dollars during his time at the monetary control wheel?
Where was the US $ to back the Mickey mouse symbols printed on paper with less ‘trading’ value than a white 2-ply sheet on a roll found in the WC.
Worrell is telling you guys, in a roundabout way, that those imaginary projects along the hotel corridor like the Hyatt are just political pipedreams for politicians to get high on.
Why didn’t Worrell support the Hyatt case by making it abundantly clear that the financing of this project would be by way of FDI or that the local principals would be pulling their own pockets filled with foreign money sitting in overseas accounts?
Now there goes Hal Austin’s recommendation that the Bajan government should establish a Sovereign Wealth Fund denominated in Mickey mouse printed paper and backed by IMF draw-downs approved by Uncle Sam.
Barbados must first earn and save forex to ‘save’ its sorry a**s soul from the pending death of its Mickey mouse monopoly currency; not borrow from other people holding foreign currencies.
Worrell is just full of sound and fury signifying nothing that is new.
“Out, out, brief candle! Life’s but a walking shadow, a poor player that struts and frets his hour upon the stage and is heard no more. It is a tale told by an idiot, full of sound and fury, signifying nothing.”
The government created an unshakable objective not to send home people come what may. The aftershocks of that decision reverberates to this day.
ks
Alfred Nobel made his money selling dynamite to several sides in WW1.
Do you really think such a man is worthy of the esteem you seem to attach?
It is precisely because of the work Lewis did for global capitalism, and against African countries, that such a bloodied award was bestowed.
Worrell is no more than another Lewis. In both cases we have raised the spectre of death!
That, my dear fellow, is way beyond mere shame.
David
You are sounding more and more like a prostitute.
Worrell is not making a mere point about earning foreign exchange. He is saying that we should shut down our CB and become a colony to the United States Treasury Department.
If Barbados really wanted to ‘pay our way’ we would ban the importation of over 600 million dollars is shiiiite every year.
But neither you nor any of the governments we’ve had since independence dear approach the real problems.
Instead, you all play into the current model of empire which requires all of its colonies to have supermarkets full of shiiiite food, and other items, which is already based on an American foreign policy. A foreign policy which tells countries like Barbados that you shall not feed yourself.
And Worrell is now the archangel of a mere shift in that said imperial American foreign policy.
And colonial subjects like you will eat up his shiiiite right off the back.
Wily Coyote
We could have a discussion with you on several good points made.
@Pacha
Talk is cheap. How do you propose we disengaged from the global system?
Reaching for the popcorn.
“Worrell is not making a mere point about earning foreign exchange. He is saying that we should shut down our CB and become a colony to the United States Treasury Department.”
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Of course, should the greenback become the currency of Barbados there would be no need for a Central Bank.
The government’s Statistical Department can undertake any economic data gathering functions the CB currently performs.
The high-rise building can them be turned into high-rise flats for the many homeless people seen around Bridgetown.
Maybe this is Worrell’s way of wreaking vengeance on an organization which made him and then turned around and destroyed him for being a version of Dr. Faustus.
Pachamama
October 6, 2019 8:24 AM
“We continue to loose (sic) any modicum of respect for Delisle Worrell……..
…this man has nothing better to say but that we exchange one worthless currency for another fiat currency.”
Pachamamum,
You, and those voices in your head, need to read and listen more. After going through that process, maybe you will start to develop a modicum of understanding.
The world has undergone rapid economic and technological change over a short period of time. The analytical and predictive models used hitherto as tools to help formulate most governments’ economic policies have now proven themselves to be anachronistic and downright useless. We have to go back to the basics, and start fresh.
The blogmaster knows that Dr. Worrell’s few paragraphs above, which form the basis of this discussion, are basic but they are as true as John 3:16.
Rather than create an opportunity for commenters to wallow in incessant, sickening DLP/BLP back-and-forth nonsense, the article seeks to identify those among us who can apply what little knowledge or experience we have of import substitution, exportable products/ services, and foreign direct investment to help move forward a small, high-employment, open, fragile, severely damaged Barbadian economy. .
Like a horse gone mad on racing day, you bolted out of the gates early at break-neck speed. Alas, you set a record running in the wrong direction!
*high-unemployment..
Walter blackman, the infants a boy.
It was only a few years ago when you were exercising your lack of knowledge on these matters.
At that time you were an adherent to those very outdated models.
What a genuine asshole you have always been.
@Pacha
Your last comment suggest that to err is not human?
Now there goes Hal Austin’s recommendation that the Bajan government should establish a Sovereign Wealth Fund denominated in Mickey mouse printed paper and backed by IMF draw-downs approved by Uncle Sam.(Quote)
Oh insanity. If it is not true, then make it up. It is true Hal Austin did say we should create a SWF, the rest is the result of a demented mind.
Why you cant critique the comment without attacking the anonymous person?
Miller
October 6, 2019 9:49 AM
“…the financing of this project would be by way of FDI….
the local principals would be pulling their own pockets filled with foreign money sitting in overseas accounts…
Hal Austin’s recommendation that the Bajan government should establish a Sovereign Wealth Fund denominated in Mickey mouse printed paper and backed by IMF draw-downs approved by Uncle Sam.
Barbados must first earn and save forex…. not borrow from other people holding foreign currencies…..”
Miller,
You are wandering around in the correct intellectual ball park. You touched on direct foreign investment, exportable products/services, and import substitution. Can you put some of these concepts together and package them as a proposal, idea, or project to move Barbados forward?
@Walter
Are you satisfied we have been attracting the kind of fdi to transform the Barbados economic landscape?
Miller
October 6, 2019 10:53 AM
“Of course, should the greenback become the currency of Barbados there would be no need for a Central Bank.”
Miller,
Name one Barbadian Prime Minister, or Minister of Finance who ever proposed making the US dollar the actual official currency of Barbados.
You were never taught to construct straw men in your youth. Don’t start now that you are approaching the “3 score” mark.
David
To err is one thing, but to mislead the blog, like that cunt walter blackman has done, is another.
When we were telling blackman that he was a cunt, and you should well remember the many times, his madness prevented vision.
There is nobody here who has been talking about a financialized economy more than this writer, for nearly a decade.
Now this fucking Columbus has discovered that the shiiite in his mad head is too far dated.
Now that idiot wants to tell us about his recent discovery. Maybe he reads too many books.
What a cunt.
@Pacha
Succinctly put to the topic?
Traditional models will not work for us, the BU intelligentsia agrees on this point.
The fact we have ian investment pipeline the greater percentage going to tourism says it all. We are transforming the economy in the same space. In other words two steps forward and three backward.
Pachamama
October 6, 2019 11:13 AM
“Walter Blackman…What a genuine asshole you have always been.”
Pachamamum,
Call me whatever you like, but rest assured that I am the only one on BU that consistently provide an opportunity for you to display the only talent (cussing) you have been blessed with.
Am I surprised to discover that the development of that talent is accelerated by staying far from books and reading?
No.
David
October 6, 2019 11:27 AM
@Walter
Are you satisfied we have been attracting the kind of fdi to transform the Barbados economic landscape?
David,
No.
I hold the personal view that there is an extremely close link between “successful” (defined differently by different people) FDI and a well-crafted foreign policy.
Can you tell me what the main pillars of our economic and financial foreign policy are? Please don’t tell me friends of all and satellite of none.
Can you name one minister of foreign affairs who used his/her ministry to systematically and energetically seek out foreign markets for the sale of Barbadian goods and services? Or to generate a sustainably high level of Fdi?
Let us all hope that Dr. Jerome Walcott, the present Minister of Foreign Affairs, is able to at least start the transformation process.
walter blackman, the cunt
the type of information needed to understand present phenomena, far less the future, is never contained in books, yuh cunthole!
for us books are purely historically bound.
we well prefer discussion groups and unpublished materials.
by the time it takes to publish a book, for us, the information is nearly useless for our purposes.
maybe someday you will read that in a book
since you have some time today, why not go and suck Charles Herbert’s dick
@ David October 6, 2019 11:23 AM
That’s Hal’s way of communicating with members of the BU Anonymous.
He just can’t help but to look past the relevance in front of the mask in order to attack the person behind.
Just a simple question to Hal:
In what currency would your proposed SWF be capitalized?
Even Grantley Adams had to borrow from overseas to make his great infrastructural leap forward in the 1950’s.
Artax, where are you when we need you most to protect us from this ‘blackened’ mad Englishman?
He is suffering from what Samuel Selvon would have described as the Psychosis of the Black ‘Bajan’ West Indian; just pretending to be what he will never be.
@ Walter Blackman October 6, 2019 11:33 AM
Which Bajan de facto dictator would want to shoot himself (and now herself) in the politically powerful foot?
The use of the US$ as the currency of the Bajan economic realm would remove the power of the PM and his shadow MOF to go on spending sprees to underwrite their electoral campaigns.
Such a currency replacement would have to be imposed by exogenous economic realities.
What’s the sense of holding onto a currency merely out of jingoistic feelings if that currency has to be put into the same wheelbarrow as the Zimbabwean dollar?
At UWI, Mona the tuition fees for a number of programs are quoted ONLY in US dollars. In Jamaica US dollars are freely bought at commercial banks. Ordinary Jamaicans can hold US dollar accounts. In fact even some Bajan students at UWI, Mona have US dollar bank accounts.
@ Walter Blackman October 6, 2019 11:23 AM
“The longest journey begins with the first step.”~ Laozi
Let’s start with the simple building blocks of economic restructuring and transformation.
How about getting Barbadians to start living with their forex earning means?
Why do Bajans need to import high-powered luxury vehicles to engage in road rage exercises along the make-over cart roads crisscrossing a 2×3 flat island?
Why do Barbadians have to import stale water in plastic bottles and coconut bilge and artificially-sweetened juices in tetra packs and aluminum cans all the way from S.E. China?
@Miller
How would your approach mesh with obligations Barbados is party as a member of the global community?
Miller
October 6, 2019 12:27 PM
“Such a currency replacement would have to be imposed by exogenous economic realities.”
Miller,
Until then, Barbadian dollars will continue to be spent. Earn as much as you can.
PS:
Would you like me to “read up” Stanton Gittens, cane and all, to settle things between you and Hal?
@ Walter
Stanton Gittens was despicable. The problem is when people stretch and fabricate things to make a point. What is more, some people on BU believe them.
Miller
October 6, 2019 12:42 PM
@ Walter Blackman October 6, 2019 11:23 AM
“The longest journey begins with the first step.”~ Laozi
Let’s start with the simple building blocks of economic restructuring and transformation.
How about getting Barbadians to start living with their forex earning means?
Why do Bajans need to import high-powered luxury vehicles to engage in road rage exercises along the make-over cart roads crisscrossing a 2×3 flat island?
Why do Barbadians have to import stale water in plastic bottles and coconut bilge and artificially-sweetened juices in tetra packs and aluminum cans all the way from S.E. China? taken
Miller,
So we are starting the discussion with import substitution.
Your point is well taken. We really do not need to import those things you mentioned, plus a lot more articles we see on the supermarket shelves. We also do not have to import cannabis from St. Vincent, Jamaica, Arizona and Canada. Hopefully, the day will soon come when we have developed our green energy sector to the point where we don’t have to import petroleum (a product that uses most of our foreign exchange?) . However, because of the paucity of natural resources, there is still some minimum level of imports we will have to purchase as a country. Some minimum level of foreign currency would still have to be earned and reserved.
To effectively implement import substitution, the government would have to come up with some creative strategies so as to “punish” or create a disincentive for those who insist on purchasing “luxury” goods. This is not a trivial matter. because, in third world countries, almost everybody is trying to show the world that they are somebody through conspicuous consumption.
Between Worrell,Sinckler,Stuart and David Cameron crapau smoke Barbados pipe.Brexit is the sow under the counter hence lack of foreign currency flows into Bim.
@ Walter Blackman October 6, 2019 1:18 PM
You would have to first ask Major Nook to chastise the cocky boy Hal for being downright rude obnoxious and obstreperously arrogant towards the Blogmaster David.
But then again your old school buddy Bush tea had already informed the BU members about this black Billy Bunter-looking blithering fool.
Hal Austin
October 6, 2019 1:31 PM
“@ Walter
Stanton Gittens was despicable.”
Hal,
Every single time I felt so about Stanton, I realized that he had just inflicted 3 or 6 warm lashes with his cane on my backside. Other than on those occasions (too numerous to mention), I found him to be fine.
For those on BU who don’t know, Stanton Gittens was a former headmaster of Combermere.
@ David October 6, 2019 1:20 PM
“How would your approach mesh with obligations Barbados is party as a member of the global community?”
+++++++++++++++++++++++++++++++++++++++++++++++++++
Easy as Hal Austin’s Babel -like creation of a Sovereign Wealth Fund by a country effectively broke as far as foreign currency holdings are concerned.
This will happen when a forex trade-off must be made between meeting the renegotiated foreign debt obligations, buying garbage trucks and buses against the ‘luxury’ of importing fancy cars and bottled water when the local BWA could easily open a profit centre to cater for this demand of water on convenience.
Miller
October 6, 2019 1:49 PM
“@ Walter Blackman October 6, 2019 1:18 PM
You would have to first ask Major Nook to chastise the cocky boy Hal…..”
Miller,
We have known each other for a very long time. I would bet my last dollar that , left unhindered, you will be lumping “Major Nooksie” with “Hal Cocky” before the day is o’er.
As a pre-emptive strike, may I ask if the gentleman’s name was actually Major Noot?
LOL
@ Walter
Exactly my point. If Bush Tea was at school with you then he could not be at school with me. But since I do (did) not know who he was it is difficult to say. He could fabricate anything. Another regular on BU also claimed he was a friend and we were at school together. He was at Waterford in the 1970s. I wish.
Pachamama cussing sweeter than my fisherman grandfather! Don’t know when last I enjoy a cussing so!
But when you remove the spice he is saying that you guys are now straining to reach where he reached a long time ago.
But Pacha, better late than never!
I am now going to remove myself and allow you bright guys to pontificate on economic matters. Some of what you will say will point to a need for a paradigm shift that needs to occur in the minds of Barbadians.
Import substitution, reducing imports etc etc etc will occur only when we manage to redefine ourselves and stop judging ourselves by the cultural norms of other peoples.
This discussion should help to point out that need and so it is good.
@ Walter Blackman October 6, 2019 2:07 PM
Of course you got the pun at first go. Major “Noot” would be a rather disappointed man if he were to read some of the dream-like stuff Hal proposes on BU.
Here is an intellectual eunuch who strongly argues that Barbados does not need to maintain foreign reserves and instead be playing a game of Russian roulette in the international finance casinos.
Even Hal’s contemporary Glynne Murray would not be impressed by his failure to even raise at least one question in the presence of his PM MAM while he had the golden opportunity to question her about BERT, White Oak and even SWF when the country is practically living on a shoestring forex budget.
The PM would have welcomed his support of the copied proposal of a Bridgetown Regeneration Housing programme which has been part of the National Development Plan for donkey (y)ears probably stretching back as far as when you were a budding senior man under the Tom Adams administration.
Donna
October 6, 2019 2:17 PM
“Pachamama cussing sweeter than my fisherman grandfather! Don’t know when last I enjoy a cussing so!
But when you remove the spice he is saying that you guys are now straining to reach where he reached a long time ago.”
Donna,
I have openly admitted that sometimes (sparingly) I use BU for entertainment. Pachamamum is my favourite target and I have observed that no one, except me, can get the cuss words to flow from his lips with such ease. As a means of relaxation, I giggle uncontrollably for a while after and then remind myself not to trouble the modern day Rasputin again until a few months have passed. This pattern has been woven and repeated for quite some time now.
On a more serious note, I have been reading BU for more than 10 years, and if you were to ask me if I remember Pacha cutting and pasting and answering questions on the financialization of any economy, anywhere in the world, I would honestly say no. Pasting and cutting stuff to demonstrate his love and admiration for Vladimir Putin? I would have to say yes.
Any human being trying to reach where Pacha reached a long time ago is simply searching for trouble.
Enough jocularity on my part. We have serious and important national issues to discuss on BU.
But Walter, I have more lately come to BU and I have experienced the opposite. Perhaps his colourful mode of expression diverted your attention from his main point which has been, as far as I can tell, that the economic and financial system set up by the colonizers is performing as it was intended to do. Hence we need to wipe the wool from our eyes and stop tinkering with a system designed to keep us under. We cannot change them and so we need to change ourselves. We need to have our own system within the system that works for us.
Donna
October 6, 2019 4:30 PM
“But Walter, I have more lately come to BU and I have experienced the opposite. Perhaps his colourful mode of expression diverted your attention from his main point which has been, as far as I can tell, that the economic and financial system set up by the colonizers is performing as it was intended to do. Hence we need to wipe the wool from our eyes and stop tinkering with a system designed to keep us under. We cannot change them and so we need to change ourselves. We need to have our own system within the system that works for us.”
Donna,
I understand and appreciate the fact that my experience reading Pachamamum over 10 years will differ from yours which started relatively recently. What you have written above has been articulated clearly and I can respond to that. Pachamamum does not write that clearly so you must forgive me if I fail to grasp most of the points he has been trying to make during the last decade.
Let us put the discussion into historical context.
Our European colonizers went through the evolutionary processes of feudalism, slavery, and capitalism. We (the betrayed and sold Africans) came on the radar to feed the institution of slavery. As Dr. Eric Williams pointed out in his book “Capitalism and Slavery”, slavery was extremely critical to the development of capitalism. However, contradictions eventually emerged, and the development of early industrial capitalism spelt the beginning of the end of the slave trade. The Europeans went on to fully develop capitalism and to produce multi-national corporations. They formed the G7 (now the G20) and its agenda. They manufactured WTO and trading regulations which wiped out our regional banana and sugar industries. Finally, they brought financial regulations to ensure that small developing nations remain mired in the marshes of perpetual poverty.
Contrastingly, most of the small islands of the English speaking Caribbean were eventually cut loose by the mother country, and their leaders were flung into a world of capitalism which they had no influence or control over. Today, the region shows no signs of being able to produce multi-national corporations, and any creative attempts made at attracting or generating foreign exchange are viewed with suspicion by the developed countries. Trying to attract foreign currency by utilizing low tax rates resulted in the punitive label of “tax haven “. Trying to establish a medicinal marijuana industry, without having a national bank, has led to foreign banks informing us that they will not be accepting any cash from the industry.
The point I am making is that it is not an easy task for a small country to achieve sustainable development in the current global set up. The blogmaster has been reminding us consistently that, when all is said and done, we have to recognize that we are now part of a global network and are constrained and must act accordingly.
As for.changing ourselves, good luck with that. We have become extremely envious, bitter, and selfish towards each other.
Our roads are overcrowded with vehicles. Are you bold enough to tell your neighbor not to go to the dealer tomorrow to purchase his BMW? Are you going to tell your 3rd cousin to be proud of her African heritage and not to buy imported hair? Barbados is almost saturated with garbage. Do you think that you can stop the individual who took bags of garbage from his home this afternoon and is driving around right now looking for somewhere to dump it?
A scary but pragmatic synopsis of the state of things Walter. There is a draconian recalibration required in policy if we are to sustain a. quality life for our children. Will the real leaders please stand up!
@PINGPONG. No wonder foreign currency deposit in jamaica commercial banking system is close to 50% of total deposit. The consequences of that is a volatile unstable currency. The Jamaica dollar($) has deprciated on average at least 6% per year since the 1980s. The time has come for Jamaica to formally dollarize its economy. It’s long overdue.
Dr Worrel is on point. The obsevation though is nothing new. Pacha is living in a parallel universe. Blackman observation about third world countries conspicuous consumption behaviour is very profound.
fortyacres,
I guess you too do not understand Pachamama.
Walter, you and I agree. You ask me though if I would tell my neighbour not to buy his BMW. No. Would I tell my cousin to be proud of her African heritage and not to buy false hair? No. That would be a futile approach bound to make me an enemy. The conversation would have started a while back and would not have been personalized. This is not a short-term fix. We are damaged, Walter. Our psyche’s are damaged. Do I think I can stop the illegal dumper from dumping? No.
But here’s the thing, my mechanic did stop me from trading in my old dependable, fuel efficient car for a more costly vehicle several years ago. He did that by appealing to the good sense he knew was there. He explained his position to me. I knew it was not because he was looking for work on the old car. I knew that because whenever he fixed my car he said I would not be back for ages. And he was always right. I have since had that conversation with many others who I’m sure will stop and think. They know I am not bad-minded because they know me.
I recently butt in on a conversation between two young ladies, one of whom was wishing she had “good hair” like the other one. I asked her what was wrong with her hair and told her that it and she looked quite beautiful to me. She smiled and thanked me. I started a thinking process, I’m sure.
And finally, I have recently stopped two young men from tossing garbage around by asking them just one question. In a pleasant way, Walter. People do not like to be ordered around.
It will never be perfect, Walter, and it will not be immediate. It is a process.
The vehicle, which comes in hatchback or saloon version, retails around $160,000.
Sales Manager at Simpson Motors Penny Johnson said she was delighted to work with Scotiabank on the sale of the new Mercedes-Benz A200 sedan,
https://barbadostoday.bb/2019/10/04/scotiabank-shifting-to-customer-demand/
It seems to be easier to get a car loan than a mortgage.
Car continuously depreciates in value.
” Hinkson said that of all the Government agencies that fall under his ministry, the BPS was the most heavily impacted by the retrenchments resulting from the Barbados Economic Recovery and Transformation (BERT) programme which went into effect last year ”
https://www.nationnews.com/nationnews/news/242102/hinkson-regrets-postal-layoffs
Donna,
I take your point.
We observe the stubbornness, the rudeness, and the ignorance coming from others, but we who know better must never give up or give in
I read somewhere that attitudes that take 10 years to develop would take about 20 years to be erased. These are not “normal” times. We are in a crisis situation and are responding, not with love and compassion for each other, but with unprecedented murderous hatred.
On reflection, when I told you good luck with changing people, I realize that you could have interpreted that to mean me telling you not to waste your time trying. I meant to convey my feeling that it was a very tough undertaking..
At the individual level, we can only do our best to guide and stimulate the thinking in others who show a need for it. I commend you for playing your part.
When read objectively Walter, Pacha, Worrell are saying the same thing. None of them see a genuine modern , progressive Caribbean solution to our problems. The main purpose of the educational system is to confuse those who are slaves to its doctrines.
Nobody apparently sees the benefits of a common Caribbean currency and the radical reorganization of our fiscal and developmental sectors and aspirations.
Hence we are here today debating how we can use a foreign currency to rescue us , from the same economic masters that put us in the current quagmire.
Because we do not trade in mikeymouse currency.
@William
You always bring common sense and intelligence to the blogs. We are witnessing the beginning of the end of the nation-state. For little islands in the Caribbean the future is to abandon or individual sovereignty and shared responsibility. We need a CARICOM central bank, a shared currency, a common fiscal policy. That is the future.
@William, keep on teaching. Ignore the loud mouths.
share
@ Hal
Thanks. Many here are see themselves as internationalists.
Strangely enough Shridath Ramphal said the same thing years ago and actually tried to do something about it. All detailed in the book Inseparable Humanity: An Anthology of Reflections of Shridath Ramphal by Ramphal, Shridath S., Sanders, Ron, Alister McIntyre
@Vincent and John A
Missing your erudite contributes to the matter? So far Walter has summed it well. We are too small even as a region to insulate and ring fence our issues. Operating in the disparate way we are accustomed exacerbates the issue. Why bother to educate our people?
@WS
Unsure that nobody sees the benefits of a common regional currency, what is more difficult to see is its formation and operation. The Caribbean area’s track record on regional initiatives is not the best. And will the CARI$ get wider acceptance? It is ultimately a trading issue. India has a population and GDP which exceeds not only the Caribbean if taken as one, but a few other areas, yet the Rupee struggles. S.Korea manufacturers still wish the Indian buyers to use another, more widely accepted currency. And Indian exporters are only too happy to accept $US/Euro/Sterling for their goods.
Possibly a ledger program which automatically finds buyers and sellers will expand the reach of currencies.
I wonder how many read Dr.W’s entire article. For beyond the currency discussion, the focus was the need to improve public services. His opinion was the latter was a greater stumbling block than the former. Fodder for @Tron “pun weeks”.
“Nobody apparently sees the benefits of a common Caribbean currency and the radical reorganization of our fiscal and developmental sectors and aspirations.”
Mr. Skinner
Yes, there may be a need for a united Caribbean region. But, in all fairness, this is a point you should be “drilling in the heads” of the political leaders……rather than castigating those contributors to this forum who may not necessarily agree with that opinion.
Successive political administrations of Caribbean territories have been discussing regional integration at for years, but “to little or no avail.”
As recent as July 2019, the 40th Regular Meeting of the Conference of Heads of Government of the Caribbean Community (CARICOM) was held in St. Lucia, where regional leaders were expected to discuss the implementation of measures to enhance the CARICOM Single Market and Economy (CSME). Yet, there are problems with immigration policies.
How serious are our leaders about REGIONAL integration, when they seem unable to convince their Dutch, French counterparts to allow islands such Aruba, Bonaire, Curacao, Saba, St. Eustatius, St. Maarten, Martinique, Guadeloupe, Marie Galante, St. Martin, St. Barthelemy and even the US Virgin Islands and Cuba are not members of CARICOM?
They can’t come together on West Indies cricket, because insularity is a big factor in the sport. We also witnessed an attempt by Gonsalves and Mitchell to politicize the game. Gonsalves “went over the head” of former CWI president, to seek an audience with the ICC, which basically told him he must do so through the CWI president.
A smart Gaston Browne said he is not going to become embroiled in any squabble concerning WI cricket. Instead, he joined with CWI to take over ownership of the former “Stanford Cricket Ground.” It was renamed it Coolidge Cricket Ground, where CWI training camps are held and hosted regional first class cricket matches, as well as ODIs T20s featuring WI women and the 2018 Super50 Cup finals.
They are together on keeping LIAT “in the sky,” but divided on administrative policy. The leaders of some islands would rather invest in extra-regional airlines. but would want to take advantage of the services LIAT provides. Although it is not a financially viable solution, Gaston Browne remains adamant the airline headquarters must remain in Antigua.
They are divided on the CCJ.
Then, we had Gaston Browne insisting UWI must allow him to build a university in Antigua, or he would do it on his own.
The problem seems to be one where we want regional integration, on one had,…… while holding on to individual sovereignty on the other.
William
You often lump Pacha in with your simplistic generalizations.
The writer has always seen the OECS currency authority as a solution. Many others have as well. Thought we think it would be impossible to achieve wider acceptance, for obvious reasons.
We certainly could not be including in the thinking of the people you suggest.
And if you are going to, you should give justifications for such.
As far as we are concerned our thinking is poles apart from those you have mentioned.
@ Artax
Please show where I “castigated “anybody. Otherwise your comments are quite reasonable and pertinent.
@ Artax
Please show where I “castigated” anybody. Otherwise your comments are reasonable and pertinent.
Mr. Skinner
Perhaps “castigated” was not the appropriate word to use.
@ Pacha
It’s all a question of broad interpretation .
@ William
The Greenbac k is losing its influence as the leading reserve currency. The World Bank predicts it will in time be replaced by the dollar, euro and renimbi. On this assessment, Dr Worrell is wrong. But he is also wrong for other reasons, including the steady shift of trade from north to south, to south south.
The US now as debt of $20trn, which once the dollar loses its influence will impact the US economy in a serious way. We are witnessing the dying days of the US.
As to using the Greenback as our legal currency, the very idea is silly. To do so, Barbados will lose control over its monetary policy, as we already largely have. On BU we often ignore the economics and concentrate on the politics.
As I have said before, we should uncouple from the Greenback, fix to a basket of currencies and commodities.
@ Hal
There seems to be a philosophical departure from Worrell’s earlier positions. He seems to have given into the traditional entrenched thinking that he avoided two or so decades ago.
Lloyd Best never caved but many intellectuals do . You note that Ralph Gonzalves is now a system politician. A far cry from his days at Cave Hill. Same with Hilary Beckles. Very few stay the course.
@ William
We call it going native. It is more comfortable. You get a gong, an official home, people defer to you and some, even on BU, call them people of wisdom. We abandon common sense when it comes to these Gods.
More importantly, we also abandon our reasoning; how often do you see people advancing an orthodoxy being celebrated on BU? How often do you see what passes as our media gong to the same people to speak on the same subject and they saying the same things? We celebrate mediocrity, especially if the person has a PhD in nonsense.
We cannot even agree on a one foreign policy. Shouting at each other across the Caribbean pond. We live in hope though.
Pacha would the OECS welcome Barbados in that sub grouping at this 11th hour?
@HA
while I have no personal objections to a fix on a basket of currencies/commodities, I am unclear how that would benefit the Barbadian currency, and the people of Barbados?
William Skinner
What bollocks!
@ Northern Observer,
By fixing with the currencies you mainly trade with and basic commodities it introduces certainty allowing for a better management of our foreign reserves, public accounts and monetary policy. The people of Barbados will benefit from greater investments, more jobs and improvements in the standard of living. A virtuous circle.
William Skinner
October 7, 2019 10:33 AM
“Nobody apparently sees the benefits of a common Caribbean currency……
Hence we are here today debating how we can use a foreign currency to rescue us , from the same economic masters that put us in the current quagmire.”
Pachamama
October 7, 2019 12:30 PM
“William
The writer has always seen the OECS currency authority as a solution. Many others have as well. .
We certainly could not be including(sic) in the thinking of the people you suggest…..
As far as we are concerned our thinking is poles apart from those you have mentioned.”
William,
Thirty five years ago, when I first started thinking seriously about the benefits of West Indian Federation and the creation of a Caribbean currency, my mind instinctively gravitated.towards the EC dollar. However, I did not feel comfortable using a currency arrived at by simply taking a snapshot of the potpourri of currencies belonging to various Caribbean islands at the time (e.g Barbados, Guyana, TT, Jamaica, Bahamas and EC all had different dollars) and picking what I thought had the potential to be the most “stable”. So my mind continued its search – this time for a currency which had international stability and acceptance built into it. For the purpose of stability (volatility in the financial world is seldom desired), I needed a currency backed by a basket of international currencies.
The most practical currency base that I could come up with was the Special Drawing Right (SDR), the unit of account used by the IMF. The SDR is not a currency, but it can be exchanged for the currencies of member countries. Today, the value of the SDR is determined by a basket of 5 international currencies: the euro, the US dollar, the British pound, the Japanese yen, and the Chinese renminbi. I want these or similar international ingredients to become part of my recipe for a Caribbean dollar.
I have no problem whatsoever being miles or poles apart from Pachamamum and his thinking.
Hal Austin
October 7, 2019 1:12 PM
“@ William
As I have said before, we should uncouple from the Greenback, fix to a basket of currencies and commodities.”
Hal,
I am acutely aware that we agree on this issue.
I simply wanted to show William the thought process which led me to my final position on the matter.
@ Walter
I agree the SDR is preferable as a reserve currency than the Greenback, but all reserve currencies are relatively recent: the Greenback since the end of the war, the euro since the turn of the 20th century and the renminbi since China joined the WTO.
A reserve currency is simply the currency international bodies prefer to trade in; it is all to do with the exchange rate. The stability of a currency flows from the strength of the economy – US, EU, China.
Even if the SDT becomes the global reserve currency, as it should, what would citizens in a nation use as their currency in their day to day internal trading? By the way, French West Africa all use a common currency.
@ Walter
Excellent response. If our leaders had vision , we would not be in this situation now.
Where there is no vision we beg Uncle Sam.
@HA
Thanks. Though it varies from WB’s, as you highlighted commodities.
Having been stationed in Mali years ago, the West African currency of which you speak is pegged to the Euro? Or at least to whatever the currency of France is.
@WB
still unclear as to the benefit. The IMF ‘reserve’ gets its value due to the IMF’s wide membership base. How does Barbados benefit? What makes a Bajan dollar, or a Cari $, more universally tradeable.
@ Northern Observer
We are on the same page, WB and I, I include commodities which we could trade on the derivatives OFC mar kets. For example, we can create a forward contract for rice from a Guyanese, Haitian, Nigerian or Sierra Leonean farmer, without having to pay up front. But we know the due date of delivery and can make the necessary arrangements to receive that delivery and pay.
In the meantime, it allows the farmer to go to his bank or funder and borrow on that order, a win-win for Barbados and the farmer. I was under the impression that was why we had a marketing board. We can do the same with other commodities: beef, pork, gas,, etc.
I am aware Barbadian business people and politicians are not familiar with derivatives and find it a dark hole, but they can buy in expertise. Done through CARICOM would be even better..
euro, since the turn of the 21st century,,,,,,
What bank in Barbados will lend based on an âorderâ?
Miller
Stop misleading the blog. Hyatt is local and Blue Horizon is local. The hotel stretch is internationally focused.
NorthernObserver
October 7, 2019 4:00 PM
“@WB
still unclear as to the benefit. The IMF ‘reserve’ gets its value due to the IMF’s wide membership base. How does Barbados benefit? What makes a Bajan dollar, or a Cari $, more universally tradeable.”
NorthernObserver,
I sense that you are understanding the ideas being expressed, but you can’t visualize the benefits that would redound to the various Caribbean nations involved. Part of my responsibility, as a public educator, is to create that vision in your mind. There are a lot of dots to connect, so I will present them in small bites.
Step 1 – Let us get an idea of the basic problem by taking a look at the current fixed exchange rates for the English speaking Caribbean. The list below shows the value of US$1 expressed in the local currency:
Barbados $2 (from 1973)
EC $2.70 (from 1976)
Bahamas $1 (from 1970)
Belize $2(from 1978)
These currencies have been pegged to the US dollar since the 1970’s. Why does this create a problem? It is problematic because successive USA governments have consistently pursued policies aimed at keeping the US dollar strong against other countries. A strong US dollar, relative to other currencies, means that the price of exports of goods and services from Barbados, the OECS, Bahamas, and Belize to non-USA markets becomes more expensive. Tourists coming from Britain or Canada, for example, would find their vacations in these countries becoming more and more expensive. Therefore , revenue flows to these small islands will decline.
Note that a level playing field would apply when these countries are trading with the USA.
So step 1 tells us that we need to do something about this fixed exchange rate problem.
@Walter
You started with the 101 stuff. You are aware Barbados and other Caribbean island feel comfortable with the peg to USD because of tourism. What the hell are we going to export anyway that will move the GDP needle?
It was Don Blackman who once stated that we must “demystify” economics
I think the time has come to demystify currency.
@ Enuff October 7, 2019 5:13 PM
“Miller
Stop misleading the blog. Hyatt is local and Blue Horizon is local. The hotel stretch is internationally focused.”
+++++++++++++++++++++++++++++++++++++++++++=
Don’t understand what you mean by “local”.
Do you mean the Hyatt will be financed with Mickey mouse dollars like the Valerie and the Grotto aka Dalkeith Woods housing projects?
One is only left to wonder what the disappointed foreign bond holders would have to say if Barbados has access to so much foreign money to make the pipedream of a rock-hard erection of a Bajan construction magnate come true while the foreign investors in the Four Seasons villas are left to suck the salt from the discharge of the Ionics plant at Spring Garden.
Given the time that your administration has been at the helm don’t you think it’s more than ample time this ‘wet-dream-world’ of a California-type hotel get off the ground having been in the pipeline since Adam was a DLP politically-conceived baby?
David, I know that I started with the 101 stuff. I want to make sure that all of us understand the basic problem first.
A country’s floating exchange rate is determined by the interplay of the forces of supply and demand for that country’s goods and services within the forex market
Looking at Caribbean countries with floating exchange rates, we have (the local currency value of US$1):
Jamaica $137
Guyana $209
Trinidad & Tobago $6.67
You will note that these floating exchange rates are considerably higher than the fixed exchange rates but there is no general agreement among economists within the region as to who is better off – the country with the fixed or floating exchange rate?
Some argue that the Caribbean countries with the floating exchange rates represent the most competitive economies within the region at present.
On the other hand, Dr. Worrell has argued that the Jamaica dollar does not float, the Guyana dollar does not float,
they sink.
This is the nature of the problem we face, and our discussion so far has suggested that the design of a regional currency (not floating, but fixed to currencies in addition to the US dollar) is a possible solution.
Showing how that regional currency can benefit Barbados and the other islands is where we are headed now.
@ Walter
The question I pose to you is this: In our current Duopoly , do you think there is the leadership and vision to take the next step ?
William Skinner
October 7, 2019 8:53 .
“@ Walter
The question I pose to you is this: In our current Duopoly , do you think there is the leadership and vision to take the next step ?”
William,
I prefer to look at life through a more pragmatic lens. All of us believe that we have leadership qualities and vision. Therefore, we hold elections periodically to determine whose leadership and vision will actually guide Barbados forward.
The general elections of 2018 produced a legislative monopoly, not a duopoly.This is only 2019. Given the short time that the Mottley administration has been functioning, do you think that any of us could come up with fair and conclusive pronouncements about leadership and vision at this point? I honestly believe that most Barbadians, after taking some early missteps of the government into account, would say that Mia is working hard and that the government is trying. They were dealt an extremely bad hand by the last administration.
As far as I am concerned, the next step after the 2018 elections was to try and arrest the speed at which the Barbadian economy was plummeting towards destruction. Do you get the sense that the economy is still in free fall?
If you don’t, then that means some progress has been made. Every step towards economic recovery, however small, must be applauded.
@WB
Thank you for explanation.
I gather the objective is maybe a blink, not a sink; a flixed rate. Some flexibility within a known range.
The tradeable strength comes via size, so for Barbados that comes from being part of a larger monetary group.
@ Walter
The fact remains that we have been in an economic free fall for four decades. This is our third trip to the IMF. My question was much broader than about correcting the obvious poor economic leadership of the previous administration. Beyond what is or is not happening now is the more important question of tackling the current currency debacle and the need for fiscal and radical economic reform as presented in this thread.
We have traveled the current path before.
We still have to deal with where we are going to end up, That will call for a different vision .
@HA
I “think” I appreciate what you are suggesting. An import risk management system which allows the buyer to buy on margin? Something more common in exports. If you wish, a futures contract (derivative) with guarantees.
Re CFA, backed by France, so tied to whatever the French currency of the day is. I am not sure a proposed currency for “Caribbean nation states” has external backing?
@Northern Observer
You are asking questions you know the answer. Like Walter correctly stated the word is pragmatic.
The trinidad dollar is so tightly managed, it is anything but a floating currency. It wouldn’t be unreasonable to classify the TT$ as a fixed currency within a band. The jamaica dollar is a one-way bet. That is to say, in Jamaica’s case, the currency depreciates only. A true floating currency moves both ways: depreciate and appreciate over time. Worrel’s classification of a sinking currency is quite apt.
With Guyana new found oil wealth, their currency should appreciate or at least become stable going forward.
Fundamentally speaking, ALL FIAT currencies are suspect. However, as a pragmatist, the US$ is still the only serious game in town for the time being.The prediction of its demise has been greatly exaggerated for years now. Will it eventually fall like other reserve currencies of the past? sure. But the present international financial system set-up favors the green back in most trading transaction, capital raising, forex trading pair, and central bank reserve.
@fortyacres
Are you a traditionalist or conformist?
Interesting comments by you, Barbados and this region does not have the capacity or knowledge capital to uproot itself from the establishment. This is an observation before the detractors chime in.
A floating exchange regime is more suitable for economies with a strong export-oriented manufacture sector along with a DEEP internal capital market. Those economies are more resilient to exchange rate fluctuations. Commodity dependent economies together with an unsophisticated financial system and small open economies are better off with a fixed currency regime or simply just adopt one of the IMF freely usable currency that is appropriate for you.
@David. I go back and forth between both points of view depend on the situation. I am flexible, reasonable and very pragmatic in my outlook. Idealism is a noble endeavor, but not my cup of tea.
NorthernObserver
October 7, 2019 11:02 PM
“@WB
Thank you for explanation.
I gather the objective is maybe a blink, not a sink; a flixed rate. Some flexibility within a known range.
The tradeable strength comes via size, so for Barbados that comes from being part of a larger monetary group.”
NorthernObserver,
As I expected, you have nailed it.
However, technically speaking, the tradeable strength comes not through size, but through what we have to sell to the world.
For example, let us assume that we initially establish a Caribbean dollar using a basket of currencies to determine its value. Let us suppose that research reveals that there is a strain of cannabis, found only in the tiny Caribbean, which cures all cancers and HIV. Almost overnight, the Caribbean dollar would become a tradeable currency because the whole world would be lining up to buy a product from us.
@ Walter Blackman October 8, 2019 7:30 AM
“For example, let us assume that we initially establish a Caribbean dollar using a basket of currencies to determine its value. Let us suppose that research reveals that there is a strain of cannabis, found only in the tiny Caribbean, which cures all cancers and HIV. Almost overnight, the Caribbean dollar would become a tradeable currency because the whole world would be lining up to buy a product from us.”
++++++++++++++++++++++++++++++++++++++++++++++++++++
That’s what you think!
How about the re-colonization of the region under the pretext of uncontrollable crime and corruption endemic in the Caribbean?
Wouldn’t you witness a return to a period of piracy and big-boys’ warfare and a modern-day form of gunboat diplomacy similar to what occurred in previous centuries over sugar, spices and slave trading?
Why do you think the Chinese have built up such a massive presence in Africa? Because they love poor struggling black countries with largely corrupt despots running the political show?
William Skinner
October 7, 2019 11:12 PM
“@ Walter
The fact remains that we have been in an economic free fall for four decades. This is our third trip to the IMF. My question was much broader than about correcting the obvious poor economic leadership of the previous administration…..We still have to deal with where we are going to end up, That will call for a different vision.”
William,
Barbados was extremely fortunate to have leaders like Grantley Adams, Errol Barrow, and Tom Adams following each other in succession. However, most 3rd world countries have to count their lucky stars if they get one “good” leader within a hundred year period. ,
Under the Adamses and Barrow, we were fortunate to get jobs and work at them for a lifetime. So much so, that given the small productive base of the economy, we have shut out the generation that came after us. Our young citizens have dreams and fears like the rest of us, but day after day, their anger and frustration mount as Barbados becomes a graveyard for their hopes and ambitions. If we do not produce enough young people and find jobs for them, the NIS will collapse.
Where are we going to end up? Follow the guns, knives, and the current unprecedented murder rate. Yes, I agree with you that a different vision is now required.
Does the current administration possess that vision? We have to wait and see.
The bright boys doing the dog! I reading.
Morning, Walter!
Miller,
I was making a point, intellectually.
However, in reality, events would quickly unfold to prove that you are right. That is the type of world we are living in.
Donna
October 8, 2019 8:08 AM
“The bright boys doing the dog! I reading.
Morning, Walter!”
Donna,
A very good morning to you also. May the Lord continue to bless you, your son, and the rest of your family.
David the blogmaster,
You might have observed, over the years, that some commenters are inclined to view calls for a West Indian Federation and for a Caribbean currency as part of a new vision.
However, we had a West Indian Federation that lasted only 41 months (Jan 58 – May 62). We also had a West Indies dollar that lasted from 1935 (some sources say 1949) until 1965.
These progressive initiatives were destroyed by typical Caribbean political pettiness and insular thinking.
The question is: have the attitudes of Caribbean leaders and citizens changed to the extent that a West Indies Federation and a Caribbean dollar will become successful, if reintroduced today?
“I doubt it,” said the carpenter. And shed a bitter tear. *
*The Walrus and the carpenter” -Through the looking glass, by Lewis Carroll.
@Blogmaster
It was not my intent ‘to question and answer myself’. I am no currency expert, and one can learn from others. I began on this thread, by questioning the ability of regional leaders to implement and manage an ‘alternate currency system’.
After much back and forth, it seems we ended up back at that question. @WB quoted his favorite poem to offer his opinion on the odds.
I did my personal best, by taking my BHL proceeds, and investing them in a combo Sagicor\ GEL. Why? Better return than deposits, I despised (correctly it turned out) any GoB instrument, but primarily because I “hoped” they might convert trading to a “better” currency. Sagicor is ‘in the process’, while GEL hasn’t budged yet. But it’s assets get more ‘elsewhere’ each year.
Hence it should follow, that I favor a ‘ready to wear’ solution to the currency issue. I still haven’t been persuaded otherwise.
It seems to me that opposition stems from pride, a belief we can do better, and a deep yearning to avoid anything which challenges our independence.
No easy fix. But I certainly lean towards reducing the tools politicians can manipulate and interfere with.
@Northern Observer
We live in hope!
All currencies in the world are fiat currencies meaning that they are not backed by anything. During the 1970s Richard Nixon took the United States off the gold standard which at the time backed U.S. currency to gold. At the same time Richard Nixon made a deal with Saudi Arabia to transact oil sales with the U.S. dollar to keep the U.S dollar as the world dominant currency. The biggest problem with the Bajan dollar is that it is pinned with the U.S. dollar 1 to 2.1 yet the U.S. dollar will lose 2% to 5% of its value every year making it a complete scam of currency. The best way for West Indian countries to go around this is to have a silver or gold backed currency which can be traded to other countries as gold and silver are the only true forms of currency.