Middleclass the Forgotten Group After ‘Staying the Course’

The newly elected Barbados government took the unprecedented decision on 1 June 2018 to suspend domestic and eternal payments on debt.  Credit rating agencies were predictably swift to respond by adjusting Barbados’ credit rating to selective default (SD).

Even the most ardent of Democratic Labour Party (DLP) supporters would have admitted the economy was in a free fall and the 28 May 2018 general election confirmed the prevailing sentiment. Never in the history of Barbados has a political party fail to win a seat in parliament, the BLP won all but 2 ‘boxes’.

The decision by the government to default resulted in the holders of government treasury notes and debentures taking a LOW haircut with maturities on the investments extended by 15 years. The good news story is that the local debt restructuring – if we accept the official report – has resulted in the national debt shrinking from 170% to 125% of GDP__ government has announced that by 2033 the debt should be 60%.

This blogmaster freely admits the BLP was dealt a bad hand on the 28 May 2018 and some hard decisions had to be taken to stabilize the economy. We can debate the how. The previous Freundel Stuart administration has justifiably earned the label as the worst government Barbados has experienced by a wide margin.

While listening to Senator Caswell Franklyn debating the Debt Holder (Approval of debt restructuring) Amendment Bill 2019 in the Senate this week doing a good job to remind that Chamber the misery government’s austerity policy is having on the poor, it reminded this blogmaster of the forgotten middle earning class. The decision by the government to restructure the domestic debt has impacted this group of persons who were encouraged to invest in government’s gilt edge securities by successive governments. You are reminded that for almost 10 Rh years under the Stuart administration the middle class – the majority with a mortgage, car and education loans – were asked to hold strain.  BOOM the first thing the Mottley government did was to yank a belt that was already fitted tightly around the waist of the middleclass Barbadian.

A middleclass Barbadian should be synonymous with being an educated Bajan. Middleclass Barbadians understand decisive decisions had to be taken by the Mottley government to meet head on the economic challenges facing the country. Here is what this blogmaster does not understand. We have the largest Cabinet in the history of the country and given the current state of affairs in the country several will be elected for a second term. We have a BU commenter who is quick to advise he doesn’t have to read and spell for the BU family.

The following blog retrieved from the BU archives should explain the grouse of this blogmaster.

Unfunded Government Pension a Worry

Fiscal Problem In Barbados ! eb2d17288e33d24ec34a90fd04dca0d0 Dr. Justin Robinson recently shared some interesting information on Facebook, he attempted to breakout government expenditure and revenues – see the presentation, ‘facts on the Fiscal Situation in Barbados last 20 years. A focus on Transfers and Subsidies‘.

Successive governments have been challenged by the size of the transfers and subsidies allocation and it has become more so in the last decade given the fiscal challenges being experienced. Although out of the scope the blogmaster used the opportunity to question the chairman of the NIS about government’s non NIS pension liability. Private registered pension plans AND the NIS receive input from actuaries to inform the level of funding required to ensure they are able to meet future obligations.

It is an open secret the pension plan which covers statutory agencies, members of parliament and other public sector agencies continue to be a significant pension expense for government. From arms distance the fund appears to be ‘under-funded’. This is the interesting point of the exchange on Facebook with the Chairman.

https://barbadosunderground.net/2018/01/19/unfunded-government-pension-a-worry/

If the blogmaster overestimated the ability of some to understand the thrust of the blog, Hants may be able to read and spell fuh wunnah.

114 comments

  • Do you mean discipline, or punishment for being incompetent? @ John A, I worked with a group of exceptional colleagues, but for the purposes of this discussion, two stand out: Gillian Tett (PhD Anthropology, but never describes herself as doctor) and Martin Wolf (MPhil, economics and ex World Bank), debating IMF policy and the global crisis, along with dozens more, internally..
    It was Tett who was the major reporter on the financial crisis a decade ago. A keen anthropologist’s eye to the workings of fund managers.
    In fact, the CEO of Pearson’s, the then parent company, once asked me what I thought of the seminars. My reply was it was like working for a think-tank that published newspapers. It was a fair assessment.
    I say that to say the debate about austerity is dead. The president is getting very terrible advice. By the way, has there been an impact assessment of the decision to withdraw from the global capital markets? How was this decision made? In Cabinet, or did it come from Prof Persaud, or from the fertile imagination of the president?
    Do the highly respect ted Ms Caddle and Mr Straughn agree with this policy? If so why? If not, why are they still in the Cabinet?

    Liked by 1 person

  • @John A

    Why are practically all the countries in the world members of the IMF? When did Barbados become a member? Why do countries- mainly the so-called developing (third word countries) the ones to have to drawn down enter their technical surveillance programs? Are you sure blaming the IMF is the way to go? How about what Barbadians see in the mirror?

    Liked by 1 person

  • @David

    If You notice I said earlier on we have no one to blame for having To go to the IMF but ourselves. That was my first statement.

    However for those having now gone to try and say our economy will pick up under their leadership is misleading to say the least. I am not saying it may not improve AFTER we are out of their program but only time will tell.

    Liked by 1 person

  • @ John A
    @ Hal
    @ David

    Just read David’s view. That is exactly why we have visited them three times since independence and yet our economy has never exceeded growth of two percent in the last twenty years! Now to my recollection the non economist Sinckler had his stint during that time and also the giant economist Arthur.
    What does that simple fact tell us . As the ole people say: same difference.

    Like

  • @William

    The answer is simple, successive governments read elected by Barbadians have not done the job, including your former leader who was a member of the ‘duopoly ‘.

    Liked by 1 person

  • @ David
    The problem isn’t that “successive “ governments didn’t do their job.It really is that apologists keep defending their failures and join them in trying to manipulate the masses, into believing that there will be “joy in the morning”.
    As Hal repeatedly states , we need a level of public discourse and forthrightness that is absent . He knows that forty years ago ,we as young men , were exposed to progressive thinkers . Today there is no compass for the youth to follow. We are into theatrics and hocus pocus economics.

    Like

  • Everyone one knows that those countries IMF has micro.managed their social enviroment has deteriorated
    .Presently those seeds are being planted aas well as being reaped as barbados crime rate continues to increase with aan added dose of gang related murders and violence and death among our youth
    Any one who would like to think differently has marbles for brains
    The writing is on the wall

    Liked by 1 person

  • @William

    It is my understanding that Sinckler did an MA in trade (an economic discipline) at Cave Hill. I rest my case.

    Like

  • https://barbadostoday.bb/2019/11/16/local-karaoke-singers-to-compete-in-toronto/

    This event will form part the Barbados Consulate in association with the Barbados Tourism Marketing Inc annual Independence anniversary celebrations that usually climaxes with a church service and a gala.

    Like

  • The IMF purpose is questionable. The democracies (versus dictatorships), all elect persons to govern. Then these elected persons financially drive their economies into the ground, and cry “help”. The alternate option is bankruptcy. If that happened, maybe the same citizens who elected them, would not sit idly back and allow those elected to financially destroy them. The only reason destruction isn’t met more strongly by the population, is because the IMF will be there to bail them out.
    So now the complaint is about austerity and its pain. Admittedly, the only solution austerity provides, is comfort to the IMF that they’ll get their money repaid. The benefit to the country is avoiding all out bankruptcy, which in the longer term, maybe no benefit at all.

    Like

  • @ NorthernObserver

    You said and I quote

    “…The democracies (versus dictatorships), all elect persons to govern.

    Then these elected persons financially drive their economies into the ground, and cry “help”…”

    De ole man would modify you submission slightly and I beg you indulgence to do so.

    “…The democracies (whic is in fact a de facto dictatorship), are all elected by a set of obviously retarded persons, to pretend to govern.

    For, every election term, this electorate, in a frenzy of pretend democracy, fuelled by the customary fetes and community brams, euphemism for political meetings, elect a set of incompetents ON THE BASIS OF IMPOSSIBLE MANIFESTOS.

    Then these elected persons, PEOPLE WHOSE BRAINS ARE COMPOSED OF THE MATTER THAT ENSUETH OUT OF THE NORTHBOUND END, OF A SOUTHBOUND COW, proceed to financially drive their economies into the ground, and they, the electorate, cry “help”.

    And, SOMETIMES, after driving the economy through 24 downgrades OR 6 SHORT OF THE MINISTERS AND SENATORS THAT MUGABE APPOINTED, these incompetents ALSO CRY, and go to the IMP sorry IMF, for “help”

    Which comes in the form of more RH suffering for the ingrunt electorate…

    Like

  • @ the Honourable Blogmaster your assistance please with an item here for NorthernObserver thank you

    Like

  • @PUDRYR
    never confuse a dictatorship with a government elected every X years, where the transition of power has been free of violence. It may appear their time in power maybe akin to doing as they please. Yet as you know, indentured servitude and slavery were not the same.
    As GPII reminds us, there are 11 parties, plus a number of candidates who ran without a political umbrella. Choice existed. Never underestimate the privilege of choice.
    Your conclusion as to the cranial capacity of fellow citizens, is your conclusion. And their actions are unfortunately similar to many around the globe when faced with similar choice.

    Like

  • We have about 80% of government projects being failures under both BLP and DLP and a civil service particularly at the top, that has gotten lots of money for failure.

    Like

Join in the discussion, you never know how expressing your view may make a difference.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s