Governor Cleviston Haynes delivers the Central Bank of Barbados’ review of Barbados’ economic performance in 2019 and takes questions from the media and the live online audience.
Central Bank of Barbados’ Review of the Barbados Economy in 2019.pdf (4.16 MB)
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No growth no sustainable economy
Govt will borrow and tax people to death
Job prospect for all and sundry would remain low
Hyper – inflation would squeeze the small business man out of business
What benefits Sir have you tried catching a bus recently and standing on long lines to renew a license
What benefits u need to get out from your air conditioned building and talk to the bajan who is catching hell before presenting your report
Borrowed money to prop up resevers is nothing but economic tom foolery which will bite every bajan in the arse for years to come
Now everybody sounding like Delisle Worrell. Stranger things have happened. .Reason: same gift different wrapping paper.
Reality : Growth declined last year ; very little expected this year and as @ John A has stated elsewhere : inflation will take care of that.
Hop scotch recycled economic policies of an essentially bankrupt of ideas Duopoly.
William after all the smoke clears and the mirrors are put away let me show you what a $100 would actually be worth by December 2020 based on reality.
$100 x 1.5% growth = $ 101.50
Less 3 % inflation on 100 = $ 3.00
Buying power by Dec 20. = $ 98.50
Of same $100
So my friend don’t hold that Grantley in that wallet till December, cause then you will find yourself little short shopping next Christmas!
That my friend is reality vs fiction when you look at both sides of the coin in a real world scenario.
Before anyone assumes i am speaking of Williams wallet, I am not speaking of it in the literal terms. I am simplifying the economy as a wallet worth $100. What I am doing is avoiding all the talk of GDP and the rest of long talk and simply showing that based on figures if our economy grew by 1.5% with inflation of 3%, the $100 economy in January would be worth $98.50 by December.
Remember too the 1.5% growth is dependant on projects starting as planned. Any delay will affect the growth rate and could in fact drop it below the projected 1.5%.
What buying power a gallon of juice cost 30.00
On minimum wage it takes almost 8hrs day of work to buy a gallon of juice and that depends on how much work time the employer has available on any given day
The reality now stares govt in the face of making glorious promises and have nothing to give which would sustain the bajan pocket book
@John A
You are aware that when the economy was ‘performing’ in the OSA era it never grew mor than 3%?
But there is no denying that govt has performed admirably as beggars with cup in hand
That much deserves an Academy Award
The small business person is all but decimated as they struggle to compete with big business and an economy which has flatlined because of high unemployment
No consumers the dog dead
@ John A January 29, 2020 10:30 PM
“Remember too the 1.5% growth is dependant on projects starting as planned. Any delay will affect the growth rate and could in fact drop it below the projected 1.5%.”
+++++++++++++++++++++++++++++++++++++++++++++++++++++++
Are these primarily the same hotel projects which have been in the economic growth pipeline stretching back to the good ole days of Dr. Delisle and his ineffective prescriptions?
What has happened to that sugarcane industry lifesaver called Andrews the patron saint project of alternative energy sources?
The current tourism minister promised a Hyatt start date of February 2020.
Let’s hope his administration with its 2020 vision sticks to this promise by speeding up the planning approval stage in order to get the project off the ground and into the air, finance or no finance to pay the contractors.
The construction of a hotel- which has been in the planning pipeline since the days Freundel the sleeping giant was forced by the Press to rise from his slumber- is not as challenging as the construction of a new Panama Canal.
You made an excellent point by querying the accommodation preferences of the under 40’s modern day travelers.
The Airbnb and other small domestic-type arrangements seem to be more appealing to the young traveler not constrained by a family of ‘dependants’ requiring hotel-type full services.
Which brings to the fore the concerns about occupancy levels required to sustain that behemoth in the sky planned for the lower Bay Street corridor.
For which segment of the modern-day travel market is the local Hyatt planning to provide accommodation and services? Is it the business-tycoon city-dwelling type?
@ David
Do you really understand the difference between 1.5 and 3.5 percent? Do you know the difference between 2 and 4? Do you know what is meant by a difference of 100 percent?
Some time ago, with great fanfare, the government told us that it had reached a provisional agreement with external creditors, thanks in large part to White Oaks. When is the full and final agreement going to bee signed off? Or is this more PR rhetoric, smoke and mirrors? Was the governor asked about DeLisle Worrell’s recommendation of abandoning the Bajan and using the Greenback as legal currency?
Like your last question Hal……. we must pay a fortune to keep our bloated currency. When they turn the Treasury Building into housing, don’t build a new one!!! Convert to the Greenback and let the high-paid financial wizards find jobs in the private sector or go overseas and earn…. then they can really contribute to our country by sending back some money for their relatives…lol.
@ks January 30, 2020 7:30 AM
How about using the existing Central Bank premises to house those functions previously performed out of the ‘old’ Treasury Building?
Wouldn’t the “Green-backing” of the Bajan economy make many of the current functions undertaken by the Central Bank- in a fast moving digital world of AI- obsolete with any remaining ‘supervisory’ functions undertaken by a much slimmed-down section in the Ministry of Finance which can be ‘accommodated’ in the same functionally-retrofitted Tom Adams Financial Centre?
We are a pack of real jokers. New market 150 stalls parking space :39 cars! Plant a bundle of trees on beach only to discover they block the lifeguards from seeing people in danger: trees uprooted.
Same crap happened at Grotto: not enough parking space for number of apartments.
Boy we get it right every time………
@ David.
You remember in 2017 when Owen Arthur said that we needed to get our growth up to 5% in order to get out of the hole we are in? He said that because he could see that if we don’t grow in excess of inflation, we would in fact never recover based on the decade of zero growth.
When you hear the average Bajan say things like ” my money don’t go as far as it use to” that simply means my pay check has not grown at the same rate as inflation so I am in fact poorer than 8 years ago.
Remember for the last 8 years we have shown zero real growth. In those 8 years though inflation has ticked ahead let’s say 2% to 3% a year. The Bajan also in the Sinkler era did not have a raise for 7 years. So compounded by the end of the period he was in fact roughly 20% poorer than when he started, hence the ” money ain t stretching syndrome.”
In Owens time growth kept up with inflation and in the odd year surpassed it, so the Bajans buying powered was maintained.
When he called for growth in the area of 5 % a year being needed he was basically saying to correct the 7 years of no growth and put the economy to where it was in 2007 we would need to grow by 5% going forward.
We need to stop with the fanfare and glossy ads and realise how far behind our economy is with regard to inflationary growth between 2009 say and now. If you doubt this ask the average housewife how “she money stretching dese days”
The last decade was probably the first time since Independance that our economy’s growth has not kept pace with inflation. All like now the Dipper and Tom must be cussing wunna blind!
@John A
We all understand the arithmetic, you are intelligent to appreciate that the opposite to devaluation of currency is to support internal devaluation.
@ John A
Growth, or the illusion of growth, under Arthur was debt-driven.
@ Hal
Yes I agree it was debt driven but at the time economic growth was able to support and service the debt, hence there was never a default. A larger economy can service a larger debt. The problem is that in real terms we ended up with an economy by 2018 that was 20% smaller still trying to sevice the same debt.
As long as the economy can service it’s debt and grow I don’t see debt as a bad thing. It’s when our debt service exceeds our income that we end up in dodo.
Yes . Hal so correct
The illusions or some called vodoo economics
@ Hal
@ John A
@ David
The Arthur myth lives on. How much attention did Arthur really pay to the infrastructure. All Sinkler did was make things worse.
We are not heading toward any Singapore model – we are heading toward a Signaturepoor country.
@ John A
There is good debt and bad debt. Debt to buy a new car or go on a cruise is bad debt, debt to build our infrastructure or invest in education is good debt. Arthur, Stuart and Mottley (so far) have let us down.
@ David.
No the answer is to cut public spending which sinkler did not do and balance it with income while pursuing genuine growth options.
Our problem is we have an economy and a people now that are in real terms 20% poorer than in 2008. Inflation has weakened both as we failed to keep up with it. Attempts now to bring the economy back to where it has caught up with a 20% loss to inflation, therefore has to encompass the entire economy and not just the hotel sector.
@ Hal
I would say that at least Arthur ensured that economic growth kept up with inflation. The others have failed to do that.
The argument about good debt and bad debt can swing however we want to spin it. For example I could arguing buying a new car and replacing the one that breaks down daily will increase my productivity. Not that I am saying that under Arthur money wasn’t wasted too like in Greenland.
My point is that if growth keeps up with inflation an economy has a better chance of bouncing back from mistakes than one that is in fact getting further behind yearly.
@John A
We have had this discussion on BU many times and will defer to Vincent and others except to suggest if you drastically cut public sector spend other factors have to be considered. How it impacts the tax base. How it impacts the economy, one that is public sector led. Our model is predicated on growth. We have to dismantle the model, it is not working for us, all to satisfy popularity for the duopoly.
ONE MAN CAN MAKE A DIFFERENCE
Think of the Influence that One man can have in the world …Nigel Farage Started the BREXIT movement Twenty some years ago… After decades of wallowing in the fringes of British politics, the country’s premier anti-Europe politician cemented his place in history after helping to lead the country out of the European Union (EU). Even though He did not become Prime mister of England the seeds he Planted Sure Came to Fruition…
England is Now the Fastest Growing Economy in the European Union as of today with more people employed than ever before and Historically Low Unemployment! And they are not even out yet Just the Promise of being out is causing them to boom, that’s called Optimism!
Do you Recall the Naysayers on BU and all the Tourism Officials who were singing England is at the Death Door.
This is what Freedom does for a Country. Maybe Barbados should think about cutting oppressive Policies pushed on the people through the UN, the Lending Agencies and the WOKE Religious Communities.
GP11 IS ONE MAN WHO CAN MAKE A DIFFERENCE FOR BARBADOS…ONWARD AND UPWARD GP11.
https://cms.qz.com/wp-content/uploads/2016/06/rtr3qu1r.jpg?quality=75&strip=all&w=1600&h=1040
The Governor looked a lot more relaxed. He opened himself to direct questions from the floor and on line. At the personal level he did well. Unfortunately, questions of policies that should be directed to the political directorate were asked of him. Even here he employed a measure of tact and diplomacy.
Nothing surprising in the report. John A and Miller have covered all the areas.
The Financial System continues to evolve and the CBB is responding adequately IMO and at this distance away from the centre.
Nigel Farage was not the founder of UKIP.
John AJanuary 30, 2020 9:22 AM
@ Hal
I would say that at least Arthur ensured that economic growth kept up with inflation.
John
Explain the above in lay man terms
@Vincent
As relaxed as the Governor was he finds himself in a similar position to his predecessor. The investment mix in the pipeline and inability to mobilize them.
There has been significant no change in the economy for the betterment, in real terms, since the oil crisis going back to forty or so years. We seem to equate cosmetology with surgery.
Arthur was a cosmetologist and Sinkler was a quack.
@ Hal you will never get any proper answers to your questions. You will notice that many of your tormentors have been silenced because they are not equipped for disciplined discourse.
@ John A : We can’t build a future on “at least “ economic theory. Arthur had fifteen years and Sinkler and company ten. Twenty five wasted years of political and economic skullduggery.
Like the kid on the television says: “Mom washes the dishes before she puts them in the dishwasher so what does the dishwasher do?”
@ David BU
You have raised an interesting issue about the economic growth model that appears to be presently in use.
I think we need some clarification on this. In the past , and even now, the economic transformation process has been Public Sector driven;starting with the building of the Deep Water Harbour and Seawell Airport under the Grantley Adams administration.
Are we going to wean ourselves off this model? From time to time you appear to be ambivalent. You want a small Public Sector but expect Public regulation of every aspect of the Society. David you cannot have it both ways. Either the Private sector step up to the plate or we must endure Big Government along with the moral hazards that have plagued us over the last eleven years.
@Vincent
In the world we live given the blurring of national boundaries domestic our growth economic model has outlived its usefulness. Our private sector is not aligned but the question must be asked – to what?
This blogmaster sees no transformative polices or frameworks within actors both public and private can be aligned. We are seeing a hodgepodge of policies. Not strategic at all.
@ William
I am aware of the bullet dodgers, I call it the Bajan Condition. It goes right up the food chain. You will notice some make statements without evidence, and others treat a question as a statement, while a few make it up as they go along. One or two will Google rubbish and publish it as unqualified fact. That is the BU way.
On a serious note, all you get is the mantra of growth; but where is this growth going to come from? A corridor of hotels? Of more cruise liners? Passports for cash? Medical Cannabis? Sacramental Cannabis? Refusing to pay your debt? In 20 months we have heard nothing but the mantra of growth.
@ William, why debate issues when we can be abusive?
@ David BU at 9 :46 AM
It is not the Governor’s of CBB job to move projects ,investments or otherwise, through any pipe lines. He is to manage the stability of the Financial System. He really should have distanced himself from this trap. He was quite careful in pointing out that economic growth was the tide that will raise all boats. The G o B is putting all its hope on the materialization of these pipe ?line? projects.
A growing economy increases foreign exchange growth. It expands the tax base thus reducing the need to borrow and the fiscal deficit. It reduces the need for balance of payments support borrowing.
So David you need to ascertain how to move these investments through the pipe line do not use the one on the South Coast. That is already overloaded.
Is English grammar compulsory on BU? Do we still teach proper grammar in our schools? To communicate we must speak a common language.
@ Vincent,
What is the economic model in use?
Correction;
Economic growth….”should shrink the Fiscal Deficit”.
@Vincent
Agree that Governor Haynes should disassociate himself from this talk about projects etc. in fact he should have stayed with the IMF forecast of less than 1% growth. His analysis should be cold translation of the economic indicators.
This is why you always attract criticism. Instead of making your Rh point you have to flower it with irrelevance. Many here are typing comments while on the go because they have professional lives- in fact there are other reasons some make deliberate errors. Some here do not have the luxury of time to sit on a stuffed couch and commenting on all that is negative.
#steuspe
@ Hal
@ David BU
We have been asking for a declaration /disclosure of this model for over 15 months. We are debating in a vacuum. I share yours and Hal’s concerns.
@ Hal
I do not know what the Economic Model is. We have been told to stay the course. One that we are ignorant of.
So do not yell at me.
@ David BU
We are on all fours with the need for a new Barbados centred Economic Transformation Model .Or at the very least, a clear exposition of the Model currently being used.
I also agree with you that the G o CBB should have stuck to a progress report and avoid commenting on matters that are outside of his responsibilities. In this particular report it was raised by a member of the press. He did the best he could without appearing to be disrespectful.
@Vincent
Understand his need to be respectful but the time has come for our leadership to be strategic in delivery because they are opinion shapers. Next time Governor Haynes needs to direct the reporter to the minister responsible. What it may do is to recalibrate mindsets and expectations bu the media.
@ David BU
I can only hope that the Governor of CBB reads your Blog.
@ Hal
Standard English is not compulsory on this blog. The cursive algorithm generally corrects or counter- corrects. BUT Good manners are a requirement.
RE • Hal Austin January 30, 2020 9:42 AM “Nigel Farage was not the founder of UKIP.”
‘Nigel Farage, “I founded the Anti-Federalist League in 1991 to take Britain out of what became the European Union. The party was renamed UKIP – the UK Independence party – in 1993 and was a thoroughly mainstream one.”
In 1993 he became a founding member of a new party – the United Kingdom Independence Party, UKIP, which had one principal goal: to get Britain out of the European Union.
@ David
You will never hear a governor “ direct” any reporter to a minister. That simply is not his job ! This is the same nonsense that was directed at Dr. Worell. Pure rubbish. What on earth do you expect Haynes to say? He is just another creature of the Minister of Finance. Just like all the rest before him.
I hope Dr. Worrel is having a good laugh.
@ mariposa
Ok when I say economic growth kept up with inflation let me give you it as if the economy was a working person.
Suppose every year the cost of living went up by 3% and your boss gave you a 3% increase in salary each year, it would mean your ability to buy a $100 item that went to $103 would not be affected as your salary also would of increased by 3%.
What happened here between the wage freeze of 2009 to 2018 was the $100 item went up over the 9 year period to say $120 with compound inflation, but your salary would of stayed at $100.
So the same happened to our economy hence when Arthur said it would have to grow by at least 5% for the next 10 years, what he was saying is that 3% of the 5% would keep up with current inflation and the other 2% would go to bringing down the inflation deficit if you want to call it that, which we chalked up over the 9 years of zero growth.
Hope that helps if not come back to me. This is critical to understand in Bim and you picked up on it. Problem is other than Arthur no politician or bank governor wants to touch it!
That’s why people like Warren Buffet now speak of Net growth. This basically is growth minus inflation which gives the true growth. Or the true ability to buy the $100 item that went to $120.
Hope that helped.
Copied, pasted and linked.
“But Central Bank Governor Cleviston Haynes says they are monitoring the deadly coronavirus outbreak as this could potentially harm global tourism and ultimately, the Barbados economy.
The veteran economist also hoped that last year’s record 49 homicides was “an aberration”, since “high crime levels can be a deterrent for tourists”.
https://www.nationnews.com/nationnews/news/243680/concern-virus-crime-impact-economy
@ Vincent
@William
@John A
Most central banks use the DSGE model for analysis and forecasting. If this is the one the Central Bank of Barbados uses then why the secrecy? I know secrecy is a Barbadian cultural tradition, but this is going over top.
Even our leading economists often make contradictory statements, like Dr Worrell’s call to abandon the Bajan for the Greenback, and that we should be more like Canada and/or Singapore. Again, as I have said, he has not given any reasons for this rather strange recommendation.
That theoretical confusion apart, more fundamentally the theories that dominate our conversation are theories from the 1950s (remember my statement months ago about Prof Alleyne’s contribution to development economics?), including the myth of unending economic growth.
But since the 1980s the peg has been a deadweight on the Barbados economy, when Volcker and Reagan allowed the Greenback to rise by a trade weighted 60 per cent, a cost a little Caribbean island dependent on imports could not afford.
What followed was a 21-year depression on developing countries. We all remember the impact on Sub-Saharan nations, in particular Ethiopia, with people dying from starvation.
It was this economic climate: high interest, high inflation, a strong dollar and capital inflow that gave Reagan the freedom to introduce tax cuts, increase military spending and create jobs, which led to US economic growth.
Th key role of central banks under the current orthodoxy is to control the flow of money and credit mainly through policies and regulation. The economic theories that drive such policies, laden with algebraic formulae, are meant simply to intimidate. But these models with their Greek symbols are far removed from ordinary people and their day to day experiences.
Further, in economic terms, they are meaningless. Economic orthodoxy has failed to adequately explain the role of finance in the economy, apart from gobbledegook about the money supply and the so-called business and economic cycles. It emphasises market efficiency, asset price inflation, the idea of equilibrium and other hocus pocus.
All this leads up to the austerity that is now punishing the people of Barbados. However, cut-backs in public spending are not the easy way out of an economic deep hole. Such an approach, as we have seen, leads to the private sector hoarding cash, in anticipation of a rough ride down the line.
I have said all that to say that our president and her economic advisers are up a creek without a paddle; they have no answers to the serious problems facing the people of Barbados.
We need new ideas, new policies and radical policies.
@ Hants at 11:29 AM
Lovely ! Point made ; and point understood. Very perceptive.
‘FARAGE ON FIRE!!’…
NIGEL FARAGE LASHES OUT IN FINAL SPEECH IN BRUSSELS:… WE NEVER COME BACK!
•29 Jan 2020
Brexit Party leader Nigel Farage tore into the European Parliament as he unleashed his final tirade after 20 years as an MEP.
He said: “A 47-year political experiment which the British have frankly never been very happy with. Not to flags anthems presidents and now you even want your own army. “I’m hoping this begins the end of this project it’s a bad project it isn’t just undemocratic it’s anti-democratic and it gives people power without accountability people who cannot be held account by the electorate.” The comments provoked furious reactions from pro-European MEPs, who branded him a “liar”. Amid cheers, Mr Farage’s microphone was cut-off by the parliamentary vice-president chairing the debate on the Brexit deal.
@Vincent
Hal
Standard English is not compulsory on this blog. The cursive algorithm generally corrects or counter- corrects. BUT Good manners are a requirement.(Quote)
Nice to see you speak on behalf of the chairman. No one is talking about standard English, whatever that is. I am talking about communicating so others understand. AI cannot make nonsense understandable. As to good manners, the ball is in your court . I am not in the market for good or bad manners. Just good arguments. Each to his own.
Steuspe
Why others can understand?
The blogmaster invites you to join the discussion.