The Central Bank of Barbados economic review of the economy was delivered today by Governor Cleviston Haynes.
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“He is calling for the same thing we on BU are calling for. Cut the fat from the empty-headed cabinet.
Real leaders lead by example!”
Can’t ,as long as you are not a real leader, trying to distract so they don’t have to cut their salaries and that of their twol-egged termites and parasites sucking on taxpayers..
Will these bonds carry in small print on the bottom a disclaimer that says?
“The Barbados Government reserves the right to adjust both the yield and maturity date of the bonds as they deem necessary.” LOL
@John A
Whether issuing bonds or increase in taxation the haves as determined by the government will be asked to support the have nots to be determined by government.
Has the government published literature on the pandemic bonds yet? Are we still discussing the CoVid stimulus? What is the post CoVid rate of unemployment in Barbados? What is the state of government revenue?
How about holiday entitlement: are civil servants entitled to holidays during the lockdown? Was the pandemic bond decision made, or discussed, by parliament? Will there be a part two of the stimulus when the CoVid economic council reports? What precisely will the pandemic bond loans be used for? Will it form part of the Bds$200m tourism facility? Will any hotel who prior to the crisis owed government national insurance or VAT returns be eligible for any loan/grant from the facility? Will hotels have to show there were viable prior to the crisis to qualify?
@ David.
So what about the oversized civil service what we doing about that? What we doing about the efficiency about government? You mean we going pull a Sinkyuh now and print money to keep a bloated underperforming government as is and ask the tax payers, who themselves struggling to pay more tax?
Do they realise instead of addressing the cause of the problem, that more taxation will drive this economy further into recession?
I got to tell you if this is the best they could come up with God help us all. They back to using pre covid ways to treat post covid problems.
Let me put it in real simple terms to the powers that be.
WUNNA CAN’T OPERATE WITH THE ESTIMATES OF INCOME AND EXPENDITURE GOING FORWARD, WUNNA HAVE TO CUT BOTH BY 40% OR RUN A BIG FRIGGING DEFICIT BY MARCH 2021.
Can’t say it no simpler than dat!
@John A
Can the government afford to send home public officers in the short term given how the ‘multiplier effect’ works?
@David
What short term? This economy will not be back to pre covid levels in the medium term far less the short term. The new economy that presents itself post covid will be much smaller and will then grow incrementally like all economies do. What we talking about here is operating in a global economy that has lost 30% of its wealth.
Also the unemployment claims are not over by a long shot. You still have the private retail sector etc who will open to an economy that will be smaller. Many of these entities were barely holding on prior to Covid, as a result of years of recession and austerity. They are in no position to battle say 4 months of sales that are 30% lower this year, after not earning a cent in sales for weeks.
This is no short term issue my friend this is the new economy, so who can’t survive on sales that are 30% lower will pull in their doors. Neither political long talk or slide of hand will change that either. Government must also accept this too and forget trying to prop up a bloated government by printing money in any form. They too will have to ” cut the suit to the cloth dem got.”
Plus the more they delay the bigger the deficit come March 2021 and the more tax in we tail, which will in turn cause a deeper recession and the domino effect on the economy will then come into play.
@John A
To put a wrap to your comment you support retrenching public sector workers?
Can the government afford to send home public officers in the short term given how the ‘multiplier effect’ works?.(Quote)
How does the multiplier effect work?
@ David.
Government has a choice.
They can either increase their efficiency and tax collection by 30%, hence no more forgiving of $500M in VAT going forward, or reduce the cost of government by 30%, choice is theirs.
Stop and ask yourself if government had done its dam job and collected that $500M in VAT how far it could go now in supporting the same civil service you speak of. The point is we do not have the economy we had pre covid. Its that simple so without that level of revenue how can they expect to run on the same pre covid level of expenses?
To show they don’t understand the waters they are in have you heard the ministers have taken a 50% pay cut for six months yet?
I am telling you they don’t understand the seriousness of our financial reality. They are forming a committee, have we been told what the targets and agenda for the said committee are, or do they plan to say ” fellows go and see what wunna can do, Chris there so if wunna don’t come up with nothing he could show yuh how to print money.”
Hal Austin to Mariposa -The role of the press is to ask difficult questions. You are a one-person interrogator on BU-
now 13 questions in 3 consecutive posts, the 11.48 post contained 10 questions
sample, What is the post CoVid rate of unemployment in Barbados?
who knows, we are not yet post covid.
Will hotels have to show there were viable prior to the crisis to qualify?
what constitutes viable, an employer of 30 otherwise unemployable.
do questions have to be absurd to make them difficult
please explain
@John A
You are supporting sending home that is clear because the current state of play does not support businesses maintaining sales/revenues.
@ David May 3, 2020 12:08 PM et @ John A May 3, 2020 12:27 PM
There are increasing signs that the Americans and Europeans will not allow long-haul flights until we have a vaccine. Operation “Airlift” was a one-time operation. Nobody wants to rescue poor tourists from the savages, for example from Tobago, again. Barbados is a positive civilizing exception here, but I do not think they will make an exception for Barbados in the travel warning.
David, you need to understand the scenario we’re facing: 30,000 overpaid civil servants (some earn more than 250,000 dollars per year, if we include the value all privileges like free cars) on the one hand and 70,000 soon to be unemployed on the breadline on the other. It’s a very dangerous mix that will cause unrest. It is obvious that both Enuff and Mariposa leave out the issue of civil servants because, as representatives of the BLP and DLP, they both believe like pagans in the idol of bloated bureaucracy.
We can save a lot in public service without a SINGLE dismissal.
I repeat my suggestions that I have been preaching here for many years:
Early retirement of civil servants at the age of 60, if they are dispensable.
Hiring freeze for 10 years.
Income cuts for all civil servants who earn more than $5,000 per month. Hey, the higher the pay grade, the bigger the cut.
In addition: freeze of basic salaries for 10 years.
Abolition of all additional payments (allowances) and additional benefits (e.g. free car and driver). We all know that ministers and judges used to move around their children for school in the past. That must stop.
Cut for all existing pensions to a maximum of $5000 per month. Also for ministers, judges and high bureaucrats.
Structural: Merging of ministries, reduction of hierarchies, privatisation of state enterprises.
How realistic is the implementation of these measures, which have proven themselves around the globe?
0 percent. Our government advisors are politically unwilling to propose unpopular measures. Our Most Honourable Prime Minister should finally fire her advisers and listen more directly to the IMF.
@ David.
How long can you run your home based on $3000 in expenses monthly but only $2000 in income?
So you borrow from you neighbour the first 2 months, then you run up all you credit cards but your debt to income ratio still remains unsustainable. You have only 2 ways out of your problem. You can either find a part time job paying a $1000 monthly or if renting, look for a cheaper house.
Government is no different. They can either cut expenses or try to put in place programs to grow the economy. Once that happens they will then collect more taxes in VAT etc. We allowed as I said $500M to be forgiven that we could not afford. We operate a customs department at the port of entries with more holes than a big hole strainer. We do nothing to fix them, but then we come to the overtaxed bajan and say ” we taxing wunna more so we don’t got to fix nothing.”
That is what I call pre covid thinking.
@John A
The government is banking that the injection of cash from loans/reserves will bridge the period the economy is required to come back 1 or 2 years who can predict? If the time period approached where funding injections start to become exhausted then it will be held to pay.
By the way, what is the private sector doing?
@ David.
I think you will see some major restructuring when the sector fully reopens by month end.
Unlike government they can’t increase taxes to fill income shortfalls, nor can they run massive deficits and then go to the banks and ask for debt restructuring and forgiveness, as the government did last year. Plus they can’t print money either.
The harsh reality is the private sector is weaker than it has ever been right now. After 10 years of stagnant economic growth, coupled to brutal increases in taxation many are on the brink. When you add to that many have not been open for weeks, you get an idea of their reality. Some will jump up and say “but Mia reduce the corporation tax to 5% so that help them nuff.” One problem with that argument is that you got to make money first, so the tax ease don’t really help all that out there losing money now. If you doubt me take a walk through the city and see the amount of commercial space that was locked up pre covid.
What will also hit them hard is that the 30,000 unemployed will not be able to buy the way they did when they were employed. So cashflow for businesses going be hard hit until employment returns to some that were laid off.
Truth is the private sector will try but with tourism consumption lost and 30,000 without a job, the pitch real bad for scoring runs on. I have heard though of landlords offering big rent discounts for the next 3 months to good tenants and stuff like that. So everyone is trying to work together to help each other. Problem is this is not sustainable much after August say. Then we have roughly $100M in economic activity being lost in Cropover to factor in as well.
Having said that i see great potential in expanding the agricultural base. It may be time for the supermarkets to diversify into farming and put some money into that sector, either directly or in partnerships with the farmers.
Thing is all of the above will depend on the level of economic activity from June to December.
@ Tron
You may well see some of what you have listed above materialise after December 2020.
It will all depend on what unfolds between now and then. What is needed now is for the MOF and Minister Straughn to sit down with the public and have a frank talk on what lays ahead. Share facts and numbers and explain to them what a drop of 20% say would mean to government.
In other words no window dressing just an open and honest discussion.
@ John A who wrote ” Having said that i see great potential in expanding the agricultural base.”
Some of us on BU have been emphasising the need for FOOD security and an expansion of Agriculture in Barbados.
@Hants
I tired talking about agriculture and alternative energy being 2 areas for urgent attention and that was before covid.
Hearing all the talk about the monies borrowed to stimulate the economy
But not hearing about measures /policies put in place to repay
The IMF says that they are confident that barbados can repay the loans
My question asks what does the IMF been told on repayment that the people have not been told
This mega-ton of money would most likely be placed at the people feet and with govt rehashing the same ole motto of asking people to hold strain
Cant see how with a global economy under such economic strain how in any world of economics can govt pay these huge loans without another set of harsh measures handed to the people
@John A
I tired talking about agriculture and alternative energy being 2 areas for urgent attention and that was before covid.(Quote)
Glad you have seen the light.
@ John A May 3, 2020 1:51 PM
“December 2020”. I gather from your remark that you do not believe that the decisions of the COVID19 Council are the last word. Neither do I. We will see a gradual adaptation to the economic reality, at the latest with the absence of tourists next winter.
I am expecting a new IMF programme (called STARVE programme by me) and many other adjustments, even long after the return of the tourists (who do not come 100% before 2025).
At some point the government will also have to deal with the unpleasant question of what happens to those citizens who fall out of unemployment benefits.
By the way: 30000 additional unemployed are only the beginning. The upward potential is almost unlimited.
Currency devaluation is a law of nature, even if David, Sandra, Enuff et al. vehemently deny it. The question is only whether we can control this process or whether the currency is collapsing uncontrollably.
This is the REALITY…not fantasy nor political delusions….,get used to it ….ADAPT…plant your OWN FOOD…do not work on any slave plantations for the greedy, lazy and wicked…everyone witnessed when dumb and dumber shut down the supermarkets and the hot fowls APPLAUDED…people suffered, the elderly anf fisabledbwere leftnin heat, humidity and long,long lines just to hold a show….lessons learned…they are depending on you to FORGET what they did…..NEVER DEPEND ON SUPERMARKETS FOR YOUR FOOD, YOUR SURVIVAL….YOU AND YOUR FAMILY WILL STARVE…PLANT YOUR OWN..,
https://www.facebook.com/groups/sohee/permalink/2914623911963496/
“The Caribbean will suffer its deepest contraction in more than 50 years due to the downturn in tourism activity.
The Cribbean will suffer its deepest contraction in half a century due to the coronavirus.(Photo: Carib Journal)
The abrupt halt to tourism, which accounts for 50 to 90 per cent of gross domestic product and employment in some countries, will result in economic activity falling 6.2 per cent this year as the region continues to be affected by the coronavirus (COVID-19) pandemic.
This assessment was made in a blog post by International Monetary Fund (IMF) on the global institution’s website yesterday, April 30.
The effects of the virus were worsened when many nations implemented containment measures such as border closures and lockdowns to “flatten the curve”, the post said.”
CORRECTIONS:
everyone witnessed when dumb and dumber shut down the supermarkets and the hot fowls APPLAUDED…people suffered, the ELDERLY and DISABLED were left in heat, humidity and long,long lines just to hold a show….lessons learned…they are depending on you to FORGET what they did…..NEVER DEPEND ON SUPERMARKETS FOR YOUR FOOD, YOUR SURVIVAL….YOU AND YOUR FAMILY WILL STARVE…PLANT YOUR OWN..,
JohnA is on point. The economic fallout from this pandemic will not returned to its pre-covid level until at least a vaccine is in place. Between now and then the economic trauma will continue. Bankuptcies will increase, unemployment increase, poverty rate increase etc.
The government sector will have no choice but to make major adjustment to share the pain. It should start from the top. Follow the New Zealand government lead.
(Quote):
Ask the Cabinet why don’t they sacrifice some or all of their salaries for the duration of the crisis to show that we are all in this together? (Unquote)
++++++++++++++++++++++++++++++++++++++++++++++++++
If they don’t want to put any of the professional politicians on the breadline, at least they can get rid of some of the hangers-on calling themselves “cun*tsultants”, to borrow from the Master Piece’s flowery lexicon.
There is the Covid advisory committee on economic transformation headed by the Prof. OSA why then is there a further need for both a Prof. Persuadie and a Dr. Clydie to feed from the taxpayers’ hog trough.
They can keep Clydie because he comes across as a bit more genuine and a smaller bullshitter than the other slick talking guy who is not hand-to-mouth and lives a cushy lifestyle from the All Seasons job.
Covid is the opportune time to put out of business those peddlers of bullshit and purveyors of highfalutin verbosity. Let them look for real work, preferably in the CLICO field(s).
@ Tron
You need to understand that the only real policy you have is devaluation and that is not an option because you have nothing to support devaluating a currency that is extremely stable despite the collective poor management of the economy going back to the early 70s.
@ David
@ John A
@ Hal
Within the so called stimulus the PM said that the private sector will be engineering some $800 million. She then Identified the following as representative of that $800 million:
Sam Lords Castle
The Hyatt Project
The Sandals Project
I notice that the same Sandals that we castigate on BU is pumping more money into the economy.
Sandals should now tell the government that if they want to get some employment going, it should not only give them what was promised for the West Coast Project but even more concessions because whatever they build would not see any real occupancy for at least three years , after completion.
The US State Department now openly accuses China that the Wuhan plague has escaped from the laboratory there. The Americans even claim to have evidence. So it’s a superpower cold war. Huawei was just the beginning. A military confrontation cannot be ruled out.
Our government cannot stand idly by because the DLP concluded a military pact with China back then and probably made other secret arrangements. The Americans will therefore look very closely at Barbados. If there ever is a hot war and the Americans discover a Chinese electronic reconnaissance somewhere on a Bajan hill, expect a military strike.
Mariposa and her DLP must finally account to the government and the people for the extent to which the party sold Barbados to the Chinese between 2008 and 2018. Our government must finally know what really happened back then.
#blame-the-dlp-for-Wuhan-Plague
@William
Will believe it when the projects mobilized.
@ Tron
Is that why the US State Dept (through the local embassy) is sponsoring journalism awards in Barbados, buying them off local journalists with a soft tease?
@ William
It will be nice to get a precise breakdown of where this $800m will be coming from and how it will be used. I think there is a bit of smoke and mirrors here. Does it include the $200m tourism facility?
Where is the Sam Lord’s Castle funding coming from? I thought that was a Chinese loan, with the right of residence thrown in?
What is the full value of the concessions given to Butch Stewart, including using foreign rums as the primary drink?
You also seem to know more about Hyatt than is in the public domain. Am I right?
It appears as if we have swapped the incompetence of Stuart for the slick waffle of the president.
@ William Skinner May 3, 2020 4:06 PM
“stable” what??? Look at the numbers: The BBD has appreciated massively against the GBP and EUR over the past 5 years because we have chained ourselves to the USD. We are losing more and more competitiveness compared to many other islands without a dollar peg.
Moreover, the dollar peg is accompanied by excessive consumption taxes and customs duties, without which the massive increase in the value of the BBD could not be protected at all.
All those on BU who deny the necessity of a devaluation should please tell the people clearly that the people have to bear the high food and consumption prices so that the elite can continue to enjoy the dollar peg.
You can just buy a set of toilet rolls for 50 Barbados dollars. For more than the toilet, a Barrow banknote is no good. Compared to North America, Europe and many other islands in the Caribbean, the purchasing power of 1.0 BBD is just 10 to 20 US cents.
Either the wages on the island must be adjusted sharply downwards or the dollar must drop.
it is unavoidable, Barbados will run a deficit for the next few years as the economy recovers. 30 000 new unemployed – to add more to that from the government services will also sent the economy into further recession and may cause a cycle where the private sector/ retail also have to send home workers (and will continue the decline).
Government need to spend, borrow and maybe print for now but it should try to maintain employments levels – even if it can hire some temporary workers – to keep as much economic activity as possible.
John A. is in panic mode and always likening the economy to running a private business.
We are in potta now and some entity has to spend to keep as much economic activity as possible. it wont be the private sector which was on the verge of more layoff. it wont be the laid off workers and the ones the are still working will probably cut back in all this uncertainty so it left to the government.
Whatever measures are taken (one way or the other) the tax payer will pay. Either this year, next year or 5, 10 , 20 years from now.
ITS UNAVOIDABLE!
It is worth repeating, the 800 million is promised by the private sector.
PS. not only Barbados but all the other islands will be
Listening to you, I think I recognize OSA, which is responsible for the bloated state apparatus.
Barbados has long since gone over the top. The tax rate can no longer be increased.
Incidentally: what are the temporary workers supposed to do? They would just hang around and sleep all day like the 30,000 civil servants already on duty. Take a look around the gov departments: Almost no-one works, people are getting fatter and fatter and strangling the private sector through acts of sabotage.
@ Tron May 3, 2020 2:36 PM
“At some point the government will also have to deal with the unpleasant question of what happens to those citizens who fall out of unemployment benefits.
By the way: 30000 additional unemployed are only the beginning. The upward potential is almost unlimited.
++++++++++++++++++++++++++++++++++++++++++++++++++++++
You are forgetting the 70,000 odd permanent unproductive limers which the Statistical Department euphemistically classifies as the ‘Voluntary Idlers’.
Bajans have to live within their productive and forex earning means or be forced to trade in a devalued Mickey mouse currency similar to what Guyanese or Jamaicans have grown accustomed to.
Where do you expect this massive jump in the voluntary idle (and lazy) numbers to end up other than on the tourist-patronized beaches eking out a living?
In a post Covid recovery environment which tourist on a shoe string budget would choose extremely expensive Barbados over another Caribbean destination offering the same visitor package where they can get more bang for their bucks?
@ David May 3, 2020 4:35 PM
“It is worth repeating, the 800 million is promised by the private sector.”
+++++++++++++++++++++++++++++++++++++++++++++++++++++++
But these are the same projects which were promised going back to the previous DLP administration which the governor of the Central Bank used to roll off his tongue in his quarterly reports.
Is this the same Private sector always with the begging bowl reaching out to the government with some of them benefiting from the VAT write-offs?
Aren’t the big players in the Bajan private sector owned by T&T based conglomerates where any investment home drums will have to beat first?
Where is this investment money coming from all of a sudden?
From FDI like the Hyatt?
From IPOs or from the commercial banks with some of them chomping at the bit to pull up stakes and exit the heavy tourism dependent market.
“Mottley said the private sector was also expected to contribute BDS$800 million in investment due to the start of six major projects in the next two years, noting that among those projects are the BDS$400 million Sam Lord’s Castle project, the Crane and BDS$25 million in improvements to the Apes Hill Golf Course.”
She said the BDS$60 million expansion of Sandals at Dover, the BDS$200 million Sagicor Retirement Villages Project as well as the BDS$400 million Hyatt Zero to begin shortly.”
+++++++++++++++++++++++++++++++++++++++++++++
I remember someone writing “stupidity wins on BU.”
Although I know there won’t be any explanation forth coming, but, as the old people used to say, “nothing beats a try but a failure.”
Taking the above information into consideration, PLEASE EXPLAIN: “I think there is a bit of smoke and mirrors here.”
Temp workers will try to hold on the “little pick” and probably increase efficiency
The main point in hiring extra is to keep the money circulating – the more people you have working the more economic activity ( money circulation ) will be achieved. more economic activity means more money for government
@David
the 800 pledge will help but we need it to move from the pledge stage ASAP.
!5 – 20 % minister salary cut.
@John 2
Are you sure the 800 million will be delivered? The majority of the projects are in tourism.
most of the private sector projects were in the “estimate” for a while now. we need them to start and more !
Delivered via jobs and some advertisement
@ Tron
Please show us how the BDS $ is worth 10 or 20 cents. Furthermore your relentless assault on the working class and the public servants is wearing thin. The radical thing to do is to freeze public servants salaries for ten years and use that period to retool the workers to the new economy. The next thing to do is to reduce personal income tax across the board and introduce a 2 to 3 percent sales tax to be revised after five years. The next thing is to abolish all the senseless garbage and waste taxes and let that money remain in the pockets of citizens. The object of the post CONVID economy is to make living comfortable and meticulously manage your Human Resources.
I am telling you right now that if we devalue the dollar , the country will be economically hopeless in two years.
In terms of national sacrifice by leaders . The cabinet should be immediately reduced to no more than seventeen. All junior ministers called parliamentary secretaries should be fired. Ministers and MPs salaries should be reduced and there should be a freeze on MP salaries for fifteen years. The stipend given to Senators should be set at $100 per month and it should not be taxed.All parliamentarians should pay $10 per meal and no alcoholic beverages should be served or sold on the precincts of parliament at any time. All graduates should repay the government ten thousand dollars as soon as they graduate and become employed. They should not be allowed to leave the country until the money is paid. Student loans should be abolished immediately.
All schools from primary to secondary should meet 45 percent of operational costs by fund raising activities and school projects. All schools must have properly run commercial activities on campus. All concessions to run school canteens etc must cease. Students will now run the canteens as part of their education and be accountable for profit making under the guidance of commercial officers that will be given territory. These officers / mentors should be strictly volunteers.
David
As I said earlier some one need to spend , I don’t expect it to be the private sector so government has to take the lead until….
Whether a government or a private company the same rules of economics apply. 2 books were never written thus the rules below stands.
Spend more than you earn = deficit
Spend less than you do= surplus
As much as we would like this to be different for state and private sector that will never be the case.
Both can run a deficit for a while, however with greatly reduced cashflow neither can maintain it. Sooner or later one has to either balance income and expenses, or reduce the deficit to what one can service. Here again debt service requires cashflow so we back to Base 1 then with a greatly reduced cashflow.
So In the end both the start and arrival point remain unchangeable for us all.
@John2
Once you accept that fiscal spending by government does not generate the kind of growth we need. This is a slide taken from presentation delivered by Marla a coup;le years ago.
https://barbadosunderground.files.wordpress.com/2020/05/marla-icab.png
@ David.
Good example that brings home the point well.
@ William Skinner May 3, 2020 5:38 PM
“Please show us how the BDS $ is worth 10 or 20 cents.”
Wake up out of your nationalist dream. My assertion is evidence-based.
Look at the price of milk here:
https://www.numbeo.com/cost-of-living/country_price_rankings?itemId=8
USA: USD 0.84
Comparison Barbados (not listed): 6.00-7.00 BBD
7 to 8 BBD = 1 USD
or compare the price of a BMW X5 xdrive 40i of the latest design:
USA 65,000 USD
Comparison Barbados: 450,000 BBD
6.9 BBD = 1 USD
The nation has suffered since the 1970s from the myth that 2 BBD equal one (1) USD. Anyone who can count knows that prices in Barbados are 100 to 400 percent higher than in North America and Europe – with the exception of the islanders themselves.
@ John A May 3, 2020 6:05 PM
The figures confirm what all (except the 90 percent of the natives who have been fuelled by nationalism and insulanism) have long known: That the public service in Barbados is a bottomless pit, which does not promote growth but on the contrary prevents it.
The government advisers to ANY local government since OSA will of course never change their idiotic advice. That would require an understanding of the basic rules of economics – and they obviously lack that.
The blogmaster invites you to join the discussion.