National Meeting Hand

Submitted by Tee White

If it’s now going to be ‘national meeting hand’, then obviously the first principle would have to be that it’s voluntary. I have never heard of a meeting hand where you have to be in it even if you don’t want to. If individual public sector workers choose to accept the government bonds on that basis, then that’s their choice. If however, any individual is forced to be part of the ‘national meeting hand’, whether by the union leadership or government, then it’s not a meeting hand at all.

The government is persisting with this idea, claiming that its aim is to “carry as many Barbadians as possible”. But there’s a simpler and much fairer way to “carry as many Barbadians as possible”. That is that those who have benefited the most over the last 6 decades from turning the island from a sugar cane plantation into a one legged tourism economy must put their hands in their pockets and put some money on the table now that the wheels have come off the donkey cart that they, and the politicians they paid for, built to serve their own interests and which has now got the entire country in a predicament. They’ve become multi-millionaires and billionaires by changing agricultural land into residential land and selling it to developers, by signing lucrative contracts with the government to manage government owned hotels, by linking up with foreign tour operators and in a million other ways. They have full their belly for the last 60 years and now the bill has arrived, they want to pass it to the workers to pay. No way!

A special Covid 19 tax on those with deep pockets should provide the government with all the funds it needs. Remember if you tax a billionaire at 99% of their wealth, they would still be a multi-millionaire at the end of it. They still wouldn’t have to worry about where their next meal is coming from, how to pay their rent or  water or electricity bill.  That’s the way to “carry as many Barbadians as possible”.

https://barbadostoday.bb/2020/05/26/govt-signals-shift-from-forced-to-cooperative-savings/?unapproved=673434&moderation-hash=7f0f8d4337e5dcb6d1bf4a53d7a8055c#comment-673434

401 comments

  • Disgusting Lies and Propaganda TV

    @Tron when a gov’t is elected they control the ship SS Barbados with 280,000 souls on it…..They either can either navigate the ship or let it set adrift . COVID-19 is a GLOBAL catastrophe that is hitting all countries. It is no different from a meteor threatening to hit the earth in 6-9 months. All govt’s worldwide are thinking how they can navigate their ships. The investors are looking at all these ships to see where they will put their money. They can look at the SS China, SS Japan, SS South Korea or or look at the SS USA or SS Brazil whose leaders seem not to care where the ship may go or the souls in it. I prefer to HOPE NOT to fail than no simply ASSUME it will fail. Once a crew can convince the others souls and investors that they have a VIABLE survival plan they will gain their confidence. The old captain and crew were tossed over board, people are allowing the current captain and crew to do their job. In MY OPINION it is so far so good…the other souls would have their opinion.

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  • @ Disgusting Lies and Propaganda TV June 1, 2020 1:13 PM
    “For what its worth fact that Dr. Kevin Greenidge, a Bajan, was able to work with the IMF and able to turn around govt’s DIRE economic position in May 2018 to have Bdos receive several upgrades from default in less than 2 years and now devised this BOSS program tells me we have an “extraordinary” person at work here. Further credit to all Bajans here and worldwide.”
    +++++++++++++++++++++++++++++++++++++++++++++++++++

    We agree with you, totally, that little Kevin G. the ‘Home Alone’ kid, has been the big ‘BOSS’ of a star boy in the management of the Bajan fiscal affairs for the last 2 years.

    As a matter of fact, he ought to-out of pure patriotism- resign his posting with the IMF and return to the MoF as the overall titan of a man in charge.

    Now where would that leave poor Ryan, Avinash, Marsha and the outcast Clydie, the Malik with teeth?

    You even have qualified bullsh**iters like the ant the physically deficit Jepter fiscal Inch coming out of the wood work to advise you lot on what to do.

    But we just can’t have so many smart academic rats in just one economics advisory hole, can we now?

    After all, poor little Bim is no bigger than the average county in NY or borough in London.

    The people of Bim deserve a real ‘BOSS’ in the art of financial gerrymandering, not so?

    But before you reply just, please, let us know where are those statutory agencies (like the BTMI) so dependent on the receipts from the tourism business going to get their funding to pay meet their monthly payroll commitments.

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  • @ Disgusting Lies and Propaganda TV June 1, 2020 3:19 PM

    Our government has indeed dealt with the pandemic much better and much more successfully than many other governments. In particular, the tourism industry trusts us because we have not closed the airport. That was a good move. I therefore do not see any problem with the recovery of the tourism sector. We are in pole position here compared to other West Indies.

    Surely our government has also managed better than the previous one with the few resources available. Let me just remind you of the sewage treatment plant on the south coast, which was put back into operation just a few weeks after the 2018 elections.

    As you can see, the BLP has a clear prerogative with neutral commentators like me. Those who constantly criticise the elected government instead of critically examining the objective circumstances work for the DLP, which we certainly do not want to see again in power.

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  • Annunaki, surely you jest at June 1, 2020 6:48 PM or help us to understand.

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  • Suriname now has 34 infections, up from 0, after only opening for one week for the election.

    but don’t mind me.

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  • So where did the gossipy fowls disapppear to …ah fell asleep, slept well too, but still drowsy…hope yall slept as well.

    Social media is well and truly lit up..

    Going back to catch a few more winks…bonne soiree…or is it bonjour….lol..peu importe, vous rappatre plus tard.

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  • @Greene

    Does this article explains it better for you?

    Teachers get deeper insight into BOSS

    MEMBERS of the Barbados Union of Teachers (BUT) were given deeper insight into how the proposed Barbados Optional Savings Scheme (BOSS) would work, as educators began the process of mulling over whether they would participate in Government’s plan to create fiscal space.

    Yesterday, more than 500 teachers met with Government’s senior economic advisor, Dr Kevin Greenidge, via Zoom,where teachers were able to ventilate concerns about the plan, which entails public workers agreeing to take a percentage of their salaries in bonds.

    The robust discourse ranged from concerns regarding the procedures for opting in and out of the programme, to guarantees that investors would receive their monies once the bonds matured in four years.

    Teachers were especially mindful that during the debt restructuring in 2018 by the Mia Amor Mottley administration, bondholders took a haircut and they were worried about a repeat of history.

    However, Greenidge told them that savings bonds were not touched in the

    debt restructure and that bonds issued under BOSS had the same iron-clad protection.

    “Everything is guaranteed, because a bond is a financial instrument bonded by laws. The last time we did debt restructuring, we didn’t restructure savings bonds. So it is guaranteed; you will get your money,” said Greenidge.

    He explained that workers did not have to undergo the tedious task of opting in and out of the scheme each month, should they not desire the savings instruments.He revealed that civil servants could get forms as early as July, where they would indicate how much, if any, bonds they would like and that decision would stand for the duration of the 18 months unless a change was indicated.

    “After the initial form, anytime you change your mind, you have to send instructions. So if at the fifth month you decide that you want to stop or that you want a little bit less, you just send instructions with the changes, but if you don’t send new instructions, the old instructions would be acted upon,” he pointed out.

    Teachers also asked the

    economic consultant to explain why public workers were at the centre of this programme, and why the bonds could not just be sold on the open market to whomever might desire them.

    To this, Greenidge replied that Government did not have a financial problem but rather a fiscal space issue that could only be resolved by shifting around line items on the current expenditure.

    “You need to understand that there is a difference between fiscal space and financing. Imagine that I have a 40-foot container and in that container I have all of my expenses. Even if I have all of the money in the world outside of the container, I am only allowed to spend what is inside of that container. It means that you don’t have a finance problem because you have all the money in the world, but rather you have an issue of fiscal space.

    “So if you want to add expenses, you have to pull from an area,” he explained, adding the country’s foreign reserves were quite healthy at $1.7 billion. (CLM)

    Source: Nation newspaper

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  • https://www.dailymail.co.uk/news/article-8377793/Seven-members-staff-single-primary-school-test-positive-coronavirus.html

    “Seven members of staff at the same primary school have tested positive for coronavirus, as thousands of pupils returned to the classroom across the country today.

    Arboretum Primary School, in Derby, has been closed following the positive tests, with the staff members, who have mild symptoms, now recovering at home.

    The school is believed to have remained open throughout the lockdown, with children from local schools and those of key workers attending.

    It will now remain closed for a week to undergo a deep clean, before reopening next week.

    It comes as thousands of children returned to school today, with restrictions eased to allow reception, year one and year six pupils to go back to the classroom.

    Up to two million pupils were due to return to lessons, though it is thought that as many as half a million did not.”

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  • Pingback: Barbadians, ALL Together NOW! | Barbados Underground

  • Why is Dr Greenidge blatantly misleading ordinary Barbadians about these bonds? Why is he assuming a political position, when he is an unelected consultant?
    The bonds are legal instruments, that much is true, but they can be defaulted on? They are also call bonds, so the issuer (the government) can call them in at any time and decline to honour the coupons, just paying the principal. A call bond has no greater legal status than any other form of IOU. Its strength are within the four walls of the contract.
    He also claims the government does not have a financial problem, just one of fiscal space. He must define what he means by fiscal space since it means different things to different people. It is at best, economic hocus pocus. The government of Barbados is insolvent, its outgoings are greater than its revenue.
    Further, it has ran out of ideas. What Barbadians urgently need is transparency and honesty. Let us go back two years and work forward. What is the current situation with White Oak and the two-year old default? We were told last year that a provisional agreement had been reached with external creditors. What is the current situation? Is White Oak still being paid?
    Plse explain in simple terms the transition from BERT, to BEST now to BOSS. What are the economic forces that have driven these changes? The president also came off her sick bed to announce a CoVid economic council; since then the name has change and eight chairpersons of sub-committees have been announced.
    Were these eight the extent of the economic council? Who are the members of the sub-committees? The sub-committees were given four weeks to submit proposals. How is that progressing? Why is government announcing plans ahead of the reporting by these sub-committees?
    Dr Greenidge has inadvertently allowed himself to be caught up in political trickery. He, and others, have perfected the art of turning economic debate in to political debate then in to definitions of party allegiance.
    So, in this little universe, to object to BOSS is to object to the government and the BLP. In warped minds, this extends to a rejection of Barbados. In simple language, to oppose BOSS is to be unpatriotic and un-Barbadian. This is the extent of the corruption of our public discourse.

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  • @David,

    thanks. but that does not change anything. i believe i understand the bond issue details and the talk about fiscal space for want of a better term. i do not discuss matters in any depth that i dont have more than a passing familiarity with.

    bottom line is that govt wants to cut it wage bill- the financial and economic fallout from covid has depleted its resources. the public/civil is where most of the wage bill is located. so short of firing workers govt has to cut salaries. the only difference between this and Sandy’s 8% is this comes in the form of a bond that matures at 5% in 4 years. Sandy’s was a straight wage cut. To make it palatable and make use of the bond money Govt will direct it to capital works. this is suppose to ease its borrowing in the open market (if there are any lenders) for said capital works

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  • @Greene

    The reason for posting the article is to address an earlier comment by one about making the bond issue available to the general public first time. We can move on,

    >

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  • ok…cool.

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  • NorthernObserver

    @HA
    You know the answers to your multiple questions.
    Dr. Greenidge, it has been said, is soon departing. Hence any future criticisms can be laid upon him. A good candidate to wear the current mask.
    The obvious mislead, and it was not in “..” is that Barbados does not have a financial problem. But no good salesman seeks to explain himself? You are correct fiscal space has several meanings, but it ‘ sound sweet doh’, so the listener can allow it to mean whatever they choose.
    The secondary mislead is this continuance that a pile of borrowed Fx is an asset, when it is largely a bunch of loans. But this isn’t new either.
    The tidbit continually avoided, is the GoB defaulted on T-Bills. They converted a short term instrument into a long term bond. This was a direct shot at the monied, because few, if any, ‘ordinary’ Bajans (MTA tells me this means those who take public transport) owned them.
    Early call, extension of term, cut in rate, all mean getting less.
    You are similarly correct, Barbados despite the default, which decreased it’s debt and servicing costs, (a major expense category) remains insolvent.

    Doan worry, de Steel Donkey coming down……

    Liked by 2 people

  • @ Northern Observer

    I try almost every day to keep the discussion about financial economics, but those cleverer than I am keep shifting it to politics, in general, and party politics, in particular.
    Then there is the mantra, an illogical obsession, about foreign reserves. And, when you asked what is FX needed for, they go in to some mumbo jumbo about paying for imports. @Vincent raised this earlier. And these believer are so convinced they are saying some spectacular that they pat themselves on the shoulder.
    But, Dees and Bees, they continue on their own sweet way, singing from the same song sheet. They are of the same mind set, not one can tell the other to stop. Then our wonderful media will turn to people of a younger generation, preaching the same message, for quotes, as we call it in the business.
    Let us start again: decouple from the Greenback and fix against a basket of goods and commodities; make the use of the Greenback as legal tender illegal; get rid of parliamentary pensions and replace them with a six-month resettlement grant; get rid of the BDF, by transferring most of the men and women to the police (with re-training), and the Coastguard and re-establish the Regiment as the principal military organisation; and establish a prices and incomes commission to manage any increases in wages and prices.
    Once we have done that as stage one of our economic reforms, then we can move to stage two: reform the educational system from nursery to university; establish a sovereign wealth fund; re-start some of our industries such as shrimp finishing, the dry dock and invest heavily in rum (with a legal definition of Barbadian (Bajan) rum; create a compulsory savings scheme (Not BOSS) with a strict investment mandate (locally, regionally and globally), reporting annually to parliament, not to the minister or government.
    I can go on and on, but you get my drift. The final proposal will be explaining to Barbadian in simple, understandable language, any new policy proposals.

    Liked by 1 person

  • @NO

    All you have stated where do we go from here?

    You didn’t address the confidence factor, it is worth anything?

    >

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  • @Hal,

    do go on. may come in handy. i want to see what the rest of your ideas look like

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  • @ Greene

    We have fifty years of an economic mess to clean up, which cannot be done on a blog that functions like a Tower of Babel.

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  • There you again. Always disparaging. Tell you what, share your email with Greene and take your arrogant self offline BU if it serves no value.

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  • NorthernObserver

    @HA
    Allow me to dig down.
    Tomorrow the CBB announces the decoupling proposed, and institutes a new peg in whatever combo of currency/commodities. What are the benefits? Does the “new” $BDS have greater global acceptance? Will this stop local people and businesses from seeking the Greenback, Sterling or Euro?
    Which parliamentarian is going to forego the current system in favour of yours? Even your Ivyman Prescod will object. I say meet me halfway, force them to contribute to a pension plan, the longer they serve (and contribute) the larger their pension.
    Get rid of the bodies listed.
    I tend to avoid ‘commissions’, so you would need to explain how it is formed, run etc.
    You can make the Greenback illegal, along with any of the other currencies in the basket, again what challenge are you solving?

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  • NorthernObserver

    I used peg but I meant fix.

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  • NorthernObserver

    #Blogmaster
    I am swapping windows today, I’ll reply later

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  • @ Northern Observer,

    The Bajan dollar will not have global acceptance in our life time. That is not the purpose. The thinking behind fixing to a basket of currencies and commodities is that we have an idea of our weekly, monthly, quarterly, annual commitments. It means we can plan with a degree of certainty.
    At present the Greenback is used for about 60 per cent of global trade, the euro for about 25 per cent and the elephant in the room, is the renimbi.
    That is the main benefit. Floating against other currencies means the cost of importation will reflect market changes. I have said before, we can trade in derivatives for a basket of essential goods.
    At present we have no control over our money, as real monetary policy is set in Washing DC, not Church Village. Every time the US dollar appreciates, the Bajan appreciates. And at a time like this it is the last thing we need.
    About the parliamentary pensions, asking this lot to vote for such changes is like asking a turkey to vote for Xmas. We have a 29/1 parliament and if our president had any ethical bones in her she could change this at a stroke.
    It is not appealing. Most of our lawyer/politicians enter politics not to effect change, but to secure a lifetime pension. We need ethics in our politics. We do not need a pension plan just for politicians.
    As things are, Barbados, with 280000 people, has more pensions than the tax man can remember. We need pensions reforms, and urgently, but for every working man and woman in the country. If you want to discuss my proposal, then we can do that at some other time.
    If a member of parliament loses his or her seat s/he will be entitled to a resettlement grant then they are on their own. A part -time job in parliament should not entitle anyone to a pay packet for life.
    We have a perverse system in which a former prime minister (and governor general) get a 100 per cent pension. This is madness, lunacy. Extravagant. Robbery.
    Then you get a greedy persons like Owen Arthur, entitled to a 100 per cent pension, then accumulating other appointments like kids picking sea shells. Mottley knows this level of greed and can exploit it. She is head and shoulders above these mediocre politicians. And, of course, you get the Donville Innisses who no matter how much they get they still want more. Mottley plays them like toys.
    The way to change this is to change our politics. Instead of tolerating politicians getting on platforms and ranting, (like Kerrie Symmonds getting on a public platform talking repulsively about horning a man) have them in a community centre answering questions from voters and get candidates to commit to change. No change, then they know not to come again – nor their parties.
    We also need to control the uncontrolled rises in consumer prices, which trigger wage demands. To control it we need a body; call it a commission, working party, authority, council. The name is not important; it is what its role is. Just look at the prices at Massy in Oistins or Emerald City to see what I am talking about.
    As to making the Greenback illegal, the benefit is obvious. At present government does not have a clue about the money supply in Barbados because a large part of that is this foreign currency. There are US$70bn dollars in circulation outside the US. Do you know how much of that is in circulation in Barbados?
    It is a matter of controlling our currency (liquidity). That is the challenge. If you have US dollars in Barbados then change them at the bank.
    There is more than that, but that will do for now. At some point we must move to the west coast and attack the moneylaunderers who use inflated property prices to shift money in and out of the country. The problem with this is that the property owners get their cut, the lawyers get their cut, the estate agents get their cut, and government gets its cut. So who cares about a little moneylaundering? At some point we must start jailing some of these crooks.
    But when the OECD and others attack such criminality they are called racist.

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  • NorthernObserver

    @HA
    I have crunched some numbers and while I agree a ‘basket + commodities’ will yield a fluctuation more in line with global reality, I cannot foresee the ‘degree of certainty’ you suggest. Any control by Church St seems no truer, than the current.
    We will have limited monetary tools then, as is the case today.
    So I ask, are Barbadian challenges monetary or fiscal? In the last 20 years, the island has been largely unable to balance between inflows and outflows (as you noted) I am unsure how a different peg will change this?
    Close the BDF and move them to police; rearrange the furniture? Pension reform is meaningful, but it won’t happen tomorrow.
    We control our own currency. Since forever, Barbadians have sought safety in a hard currency. I cannot blame them. The liquidity issues pertain to the GoB, not the island. They spend more as a legal entity than they collect.
    I am confused, as to how we change that by your suggestions.

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  • NorthernObserver

    @blogmaster
    To briefly answer you, politely, Barbados needs a recalibration of responsibility and accountability. At both the public and private levels.

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  • The BOSS economists should say that they are managing cash flows if that is what they are doing and stop talking about reducing the wage bill. The wage bill is the wage bill paid in cash or any other item of value.

    Liked by 1 person

  • @ Northern Observer

    Nothing is certain. The success or failure of all social and economic policies depend on where they come on the axis of probability. As to monetary and fiscal policy.
    My proposals are monetary (ie central bank responsibility), but all this can be reinforced by sound fiscal policy (ie under the minister of finance). If you believe exercising our sovereignty by controlling our economic future, rather than drifting along in the jet stream of the Fed, will not make a difference, then good luck to you.
    You said things have only gone bad over the last 20 years, or imply that. I say things have been bad for the last 50 years. I am afraid I cannot explain this any more simply to someone who has financial knowledge, but by fixing to a basket of currencies and commodities that we consider essential to our day to day living, then anything outside that can be considered a discretionary spend.
    Since we will know our outgoings (servicing debt, essential imports, etc), then we can trade in the futures markets. That will make a huge difference because trading in the futures markets means we do not have to pay up front and that cash can be invested more creatively.
    Let us make it simpler: if you work and earn X Can dollars; you know your outgoings: food, mortgage, heating, etc. You plan for this. Some of those bills are paid monthly, some quarterly, others annually. In the old days, my mother would keep piggy banks for each future payment. So, when the payment is due it will not come as a surprise. Futures trading, covered with suitable insurance, is the equivalent to this domestic planning.
    I am surprised you should say getting rid of the BDF and transferring most of the soldiers to the police and Coastguard is shifting chairs on the Titanic. I will not try to explain this to you or BU readers again, work it out for yourself.
    You say pensions reforms would not happen ‘tomorrow’. I am not sure if you mean literally or figuratively. Why not? Pensions reforms can take place within six months in a small island and progressive changes will transform the nation – from expanding the capital markets, to the future enrichment of households because members will have two sources of retirement income. As you know, pensioner poverty is the worst kind of poverty.
    Modern pensions planning is not rocket science. Since 1981, when General Pinochet introduced the new pension scheme to Chile, the world over has been modelling it pensions on that creation of a dictator – the Australian superannuation; the New Zealand Kiwi Saver; the UK’s stakeholder (and others), the Police pension scheme, the 401(K), and numerous.
    As you know, the Canada Pension Plan Investment Board was created in 1997 and now holds assets of Can$400bn. Also look at Sovereign Wealth Funds, from the Norwegians to the Pacific islanders. We cannot continue making excuses for our inaction.
    Further, at present we DO NOT control our own currency. It is fixed to the Greenback, the superior currency, and fluctuates along with the Greenback. We have no control over that. That reality is not talked about in public in Barbados, but that is the reality.
    For example, most global trade (60 per cent) is priced in US dollars. If the dollar appreciates, as it has been recently, then we pay more for the importation of the same goods and services; if it depreciates, then we pay less.
    As tourism from the UK is our main product, then the exchange rate between the Greenback and sterling is important. If the rate is not favourable to sterling, then we will lose tourists. The only people who will come will be those with a heritage connection to the island.
    The liquidity issue is not just one of the government; that is true for the simple reason if government has to service more debt than it can afford then it has problems. But the major problem is the money supply. As I said, there are two currencies operating in Barbados: one official, the Barbados dollar, and an unofficial but popular one, the Greenback. None of the authorities in Barbados know how many US dollars are in circulation in Barbados. All they can do is guess.
    I am saying ban the use of the Greenback, thereby giving government full control over the money supply, since by definition, use of the Greenback will become a criminal offence – both by the customer and the shop owner – the spender and receiver.
    My apology, if you are confused. When I am confused I usually take a walk and a gin and tonic.

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  • What is the difference?

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  • (Quote):
    The BOSS economists should say that they are managing cash flows if that is what they are doing and stop talking about reducing the wage bill. The wage bill is the wage bill paid in cash or any other item of value. (Unquote).
    ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

    A man or woman who knows his or her genuine accounting onions from the BS in those economists’ doublespeak.

    Hasn’t the government moved away from the cash basis to the accrual basis as copiously explained by the inventor of that branch of accounting cum economics called ‘Kellmanomics 101’ specially written for those who like things as clear as mud?

    The government is about to face severe cash-flow challenges which only a blind juggler in a circus can fathom.

    When are these people going to stop pulling wool over the eyes of the financially-naïve Bajans?

    Shouldn’t the elected members of Parliament assigned the responsibilities for such financial and economic matters be communicating with the public sector workers and the people of Barbados instead of some ‘hired’ advisor?

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  • @Miller

    What is your point?

    If revenue inflow has slowed isn’t obvious the government must implement short term fiscal measures to counter?

    You have lodged your criticism now move to alternatives.

    >

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  • @ David June 3, 2020 7:40 AM

    There are only two ways to reduce the wage bill.

    Cut the pay or reduce the numbers on the payroll.

    The private sector players have seen the necessity. It’s only a matter of time before such realities catch up with the government as does the printing of money to meet expenditure commitments without the capacity to earn future incomes.

    Can you paint another scenario?

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  • @Miller

    The predicament the country is in does not make it a binary problem to solve. Sacking thousands of public workers will not improve the country’s lot at this time.

    >

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  • Miller…look at the bright side, the fowls ran off to start their gossip blog with the best gossip and only truth they could NOT REFUTE about the corrupt in the parliament and their bag man, they never thought it would happen, they did not even leave a feather….so in a hurry to start their gossip blog..

    ..now we get to dismantle the evil apartheid racist system that they enabled and condoned againdt their own people for decades….and we await those who have the power to do their jobs and dismantle the money laundering empire and criminal syndicate that not only stretches across jurisdictions but that the crooks and thieves will refuse to dissolve themselves…

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  • @ David June 3, 2020 8:06 AM

    How about doing a Sandie déjà vu which eventually earned him the political encomiums which even the great OSA had to acknowledge since he benefited tremendously from such a bold decision?

    So what is the government going to cut to suit its current revenue cloth?

    Debts obligations? Expenses and material costs? Transfers to statutory agencies and persons like pensioners and those on welfare?

    Why have public sector workers on the job with no materials and equipment to work with?

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  • @Miller

    The government has to buy time until global economic growth takes root.

    There is a time for short term strategy, to compliment medium and long term.

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  • @ David June 3, 2020 8:42 AM

    Exactly!
    So why not lead by example and cut the fat where it exists the same way the private sector players are forced to trim? There is a symbiotic relationship between the two players.

    How about getting rid of some of those ‘excess to current requirements’ advisers and consultants and keep those who can make a difference like the Greenidge fella who has made ‘measurable’ contribution?

    This not the time to carry deadweight as ballast in and around the kitchen Cabinet. Too many cooks paid to concoct dishes of BS can sink the leaking lifeboat.

    The country needs a lean mean management team to keep it above water; not those paid to just piss in the boat.

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  • Of course when you think a person like Dr Greenidge is “excess to requirements”, we don’t hold out much hope for sensible contributions to flow therefrom.

    Of course when you think these individuals are “concocting dishes of BS”, when both union leadership as well as many rank and file overwhelmingly and enthusiastically support the proposals, we don’t hold out much hope for any sense to flow therefrom.

    Enuff, you need to come and make light work of these clowns as you usually do.

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  • @ Khaleel Kothdiwala June 3, 2020 2:01 PM

    Are you implying that those economists employed (and on the payroll) in the standing army for finance matters and economic affairs (and who have been trained at the great University of the West Indies and others overseas) are worth only diddly squat (or what the Bajan Paddy shot at) in the grand scheme of things and in the eyes of the IMF and other lending institutions?

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  • Khaleel
    I have been busy. The first of my 4 meetings this month (the ones the Milluh and crew accused me of lying about) was today–a lovely 36 storey building with an impressive zero carbon energy strategy, circular economy strategy and an innovative way to blend public space with research, creative industries and education. It should be a beautiful addition to the area, especially as it will be right next to the 15-storey one I did a similar meeting on a year or two ago. I will now read the earlier posts.

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  • Khaleel
    I have nuffin to say to people who repeatedly said the debt restructuring would end in tears, in the court and not with a resolution. People who inspite of the assurances that the savings bonds were not touched in the debt restructure would be safe from any future haircut, continue to cast doubt. People who never advised a 4-H club but are experts. Some who berated the government’s handling of COVID and started to compare B’dos with Jamaica and other regional countries. Ask them for the current stats. I was strongly against reopening the supermarkets so soon and thankfully doing so did not lead to a spike. I ask again, where would be now without the debt restructure? I have been here long enough to realise that the Salemites’ predictions never come to pass. So I good.

    Liked by 1 person

  • I see Don Marshall is now saying Caribbean governments should get over the fear of borrowing from China. Is he mad, or simply got up on the wrong side this morning? Tell him to talk to the Sri Lankans.

    Like

  • NorthernObserver

    @HA
    You are correct, I remain confused. While I get the greater certainty, greater to me is still ‘small’. Nor the control you can foresee. Don’t forget I live within an hour’s drive of Greenback border. Everytime they have flatulence we feel a bowel movement coming. And we have in your terms, a currency heavily weighted in commodities, albeit it floats. We are hit just like you for a Bajan holiday.
    You seem to think $US is the only ‘other’ currency in circulation? If you effectively ban (force exchange)
    $US, you have to similarly ban £, € and $Cdn or they will just switch from one hard currency to another?
    We are back to exchange control?
    I prefer to focus on fiscal policy and other policy where the GoB acts as the referee and rule setter, and not the owner of any teams, or even the league. The latter is becoming more popular across the globe. And governments are known to be copy cats, just like other human groups.
    @VC keeps saying, the systems are in place. Some haven’t been used in so long, the developing rust makes me wonder if they are still operable.
    Or if anybody knows they exist.
    Appreciate I share many of your views on pension reform.
    In my simple world an expense is an expense.
    Nor do I object to derivates.

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  • @Northern Observer

    I think it is a question of understanding. I have not given any impression, certainly not intentionally, that the Greenback is the only other currency in circulation, either in Barbados or any other country.
    But, it is the most popular for the simple reason that most commodities are priced in US dollars (60 per cent of global trade) and that there are US70bn Greenbacks in circulation outside the US.
    I will give you an occasional experience of mine. Every time I am in Grenada I offer to pay huskers in Barbadian dollars and every time it is refused.
    I will ask the price of coconut water, for example, and they will say $7, then when I go to pay, they will say US. I will smile and walk away. It is an old Grenadian trick.
    No other currency, whether CARICOM, European or North or South American, is used as legal tender in Barbados the way the Greenback is. I am not talking about travellers cheques. When I say ‘ban’ I mean just that. ALL currencies will have to be exchanged in a legal institution, ie banks, cambios, etc. Make it illegal for traders to accept such currencies.
    Fiscal policy is fine, but for over 50 years we have not had any creative fiscal policies that would improve the life chances of ordinary Barbadians. The latest is BOSS, which is flawed in concept, execution and as economic theory. It is nonsense. Desperation. I find it difficult to understand how intelligent people can associate with selling economic snake oil in this day and age. It is governmental Madoff. Bogus. I will love to debate with Prof Persaud, Dr Greenidge or any of the leaders of this fraudulent policy, on line , in print, or live.
    But we must take back control of our monetary policy from the Fed by decoupling from the Greenback as a matter of urgency.
    As to fiscal policy as a vehicle for change, I have over the years given a long list and will gladly do so again.

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  • Disgusting Lies and Propaganda TV

    @Econodini From what i understand, with the BOSS program giving an option of a bond as part payment to a monthly salary, govt doesn’t have to look for that CASH for that month to pay that employee i.e…the “trick” is to get as much people to not take CASH for that month and for them not to “CASH IN” the bonds for the longest time possible (up to 4 yrs) and to put as much of a worker’s salary (as an individual worker allows) into to bonds. It is managing monthly EXPENDITURE i.e. diverting CASH payment down the road. I.e. in the best case scenario govt would only have to look for that money in 4 years.

    Also if one can read the Protection of Wages Act, it is not illegal. In fact with govt negotiating with workers unions, it reduces the ILLEGALITY of paying part salary as bonds. So, hypothetically, if the unions agree with govt that rock salt can be an acceptable form of legal tender it can be used. It is also OPTIONAL meaning that a public sector worker can opt NOT to accept the bond for that month and get cash instead.

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  • NorthernObserver

    @blogmaster
    If we begin to list the “Barbadian” operations no longer owned by Barbadians, one appreciates FDI. So confidence is a big factor. I think confidence was returning, it is now in abeyance. We can blame covid, but it was waning before covid. Some key areas were being deftly avoided. The broader market tends to interpret silence as negative.

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  • @NO

    It is the reason for asking about your pulse check of the big C. Agree with you.

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  • William Skinner

    @ Hal
    This is the problem. You say that you can’t understand intelligent people supporting BOSS.The question is : Why are we always saying we want change but find ourselves going back to the same models that have failed us.
    You support a basket of currencies, why not lobby for a common Caribbean currency instead. Does the BDS currency have the strength to really float about the market?
    The only problem with BOSS is the bungling the PM introduced. The idea is creative.
    It was the same thing with NSRL. It was not properly explained and stupid politics got in the way. The NSRL was an instrument to ensure the corrupt private sector paid its duties up front.
    So here we have two policies designed for the same exact purpose -to collect money, the Treasury needs now. It’s a creative fix.
    During the elections, it was said and we did match against the NSRL, that once it is removed, prices would fall. It has been removed and prices have still risen dramatically. Far from making the private sector pay money owed to the country, we wrote off their arrears.

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  • NorthernObserver

    @Hants
    Loan
    In IMF speak, an augmentation of the existing Fund Facility.

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  • @Miller June 3, 2020 7:05 AM
    (Quote):
    The BOSS economists should say that they are managing cash flows if that is what they are doing and stop talking about reducing the wage bill. The wage bill is the wage bill paid in cash or any other item of value. (Unquote).

    All bonds issues raise capital and create a liability. I this case the govt is borrowing the money from Barbadians. Why are we trying to make it make complicated when it is that simple.

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  • @ William

    I am not prepared to beat the same drum every day. I am for a United Caribbean, not only of the English-speaking nations, including a central bank, regulation and general standards across borders.
    ^That is not going to happen in my life time. Just look at the lack of cooperation following the 2008 global crisis. I am making proposals that can be introduced in parliament next week. I am not going back to any same model. If you think so, plse explain that model.
    You also say BOSS is ‘creative’. I am sure you are teasing me. What is creative about it? BOSS, as presently structured, is theft, nonsensical, economic lunacy and the act of a government mugging public sector workers.
    Give me one, just one, creative purpose of the BOSS as is. A duration of four years, five per cent interest, the promise of a secondary market, and the dark shadow of a call option by the issuer. Remember this is a government that defaulted just two years ago. I am sure you are familiar with trading in emerging market bonds.
    The problem is that we are in such a desperate state that even economic snake oil salespersons look as if they are our savers.
    I am all for compulsory savings, but not lending money to government in order to paint badly maintained building and patch up pot holes. Sadly, we have a despot as our political leader who has no respect for consultation, for her Cabinet colleagues nor for parliament. She feels entitled to impose ideas, no matter how bad, on the nation.

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  • It is shameful to see trade unions and civil servants sabotaging the government and causing serious damage to the nation. We now have around 40% unemployment. And what do trade unionists like the senator and civil servants do? They whine about a little solidarity contribution to support the unemployed. They are privileged because they have to work almost nothing during the lockdown and still get full pay.

    No, trade unionists like the Senator are not friends of the people.

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  • William Skinner

    @ Hal
    You ask for one creative feature, I am saying it’s a very creative way to save especially when banks are offering nothing on savings accounts. Also, I firmly believe that a culture of investment needs to be awaken in our people. My thinking is simple: If a civil servant can afford to contribute to BOSS with the hope of getting better returns on his or her investment rather put it in foreign own banks, I think it lends itself as 1 a personal investment and 2. Helping out our government out of the hole dug by COVID.

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  • @ William

    You are missing my point, with respect. I am a supporter of compulsory savings, the much is legitimate. What I am saying is that BOSS is bogus. I won’t go through its points again, apart from pointing out that a duration of four years is NOT an investment.
    Have a look at the Singaporean central provident fund, for a good idea of a positive compulsory savings fund. What I have said is that we should indeed have a compulsory savings fund, and I have put the percentage at 20 per cent of take home pay.
    You say the banks are not offering anything on savings accounts. There are a number of reasons for that: poor regulations, bullying by the foreign-owned banks, and the global financial ecosystem in which money is cheap and the people who pay for that are the savers. That has been the case sine the 2008 banking crisis.
    The money should be independent of the government and the minister of finance, be established as an investment fund, reporting annually to parliament, with a mandate to invest locally, regionally and globally – with a minimum return of inflation plus three per cent.
    It is indeed creative to slice off public sector workers’ pay in order to carry out infrastructural repairs that should rightly come from the consolidated fund.
    As yo helping the government out of a CoVid hole. It appears to me, with respect, that you are riding two horses. Throughout history we have suffered from pandemics, and will suffer more in future. Poor government, since independence, is what has us in this spot.
    Like you, I want Barbadians to get over this health crisis, but as far as the government is concerned it has no idea what to do. I am still waiting for the CoVid economic council to report.
    The truth is that we have a president that has survived politically on bluff, long, boring and repetitious speeches with flaring hands, and enormous fear of details.
    It is not her fault. She is a lawyer; she is briefed and she goes in to court and talks as if she was an eye witness or an expert on the issue. The court room is theatre with the main actors dressed in superfluous robes.
    There is no substance to her economic policy and, hear consultants/advisers/gurus are economic snake oil salespeople. BOSS in its current structure is simply bad economics. It is daily light robbery.

    Like

  • William Skinner

    @ Hal
    Why do we always have to do what Singapore or any other country does? What about creating and developing our own models of economic and fiscal development?
    We ask for creativity and innovation and then we always end up doubting our own ability to solve our problems.
    Neither NSRL or BOSS is perfect but there were both created to solve our problems. That is exactly where the creativity is my brother.

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  • @ William

    We do not have to do what Singapore or any other nation does. The point is not to reinvent the wheel, unless you belong to the Barbados is unique school. I simply gave an example of a positive compulsory saving scheme. I could have mentioned the Kiwi-saver scheme, the Australian superannuation and many more.
    The point is that compulsory savings is not itself a bad thing, but BOSS is. No one is doubting Bajans abilities to solve problems; there are Bajans all over the world quietly doing serious jobs. My argument is that the political class in Barbados has failed the nation.
    Why is a matter for psychologists.
    You talk about creativity, but you have not given any details. Why is BOSS so creative, as you would put it. @William, don’t try to ride two horses or to sell ordinary Bajans snake oil as some elixir.
    BOSS is economic rubbish; it is robbing the people. Has it got an investment mandate? I say again: a four-year duration is too short to be an investment; a five percent coupon is far too low compared with other emerging market bonds; it is a call bond, so could be called in at anytime by the issuer without honouring the coupon.
    And this government, two years ago, defaulted on its debt. It is a dishonest government. Further, what will inflation look like in 2024? I am sure it will rise by leaps and bounds, give the world economy is going in to recession, and four per cent will not be worth four per cent in real terms.
    Or let us put it another way. A compulsory deduction from take home pay will reduce the discretionary spend for ordinary public sector workers. In the meantime, supermarkets such as Massy’s and Emerald City will keep on putting up prices every time they re-pack shelves. So, ordinary public sector works will be worse off, poorer. BOSS is a weapon to impoverish these people.
    Only a couple days ago this incompetent government had to go to the IMF begging again for Bds$280m. This money has to be paid back sometime. Its incompetence is beginning to make Stuart look like a saver.
    Creativity is when you come up with new, workable ideas that will fix our social and economic fractured society and inspire the nation. .

    Like

  • @ Hal Austin June 4, 2020 4:42 PM

    The problem is that due to currency controls and the lack of currency reserves, citizens and NIS invest locally and thus incur losses instead of investing internationally. If the NIS had laid out its money like other funds (Norway, Singapore), the contributors to the NIS would be filthy rich. Instead, they have received worthless claims against the Apes Hill Plantation.

    Thank you, Professor Robinson, for helping to impoverish the population! (of course only meant ironically)

    Like

  • Disgusting Lies and Propaganda TV

    Some comments just make my head hurt. The fact that govt can even BORROW from the IMF is success because the last govt couldn’t even borrow ANYWHERE because of the dropping credit ratings. They had to resort to high interest loans in a shrinking economy. $US49 million was part of the usual BERT disbursement $US90 million was ALLOWED as additional support (a war chest) to get through COVID-19. Foreign reserves allows us to import items to help “grow” the economy, a growing economy helps us pay our bills and puts less pressure on gov’t. Once we get through COVID19 and resume on to the regular BERT program path the face value of those BONDS can be easily returned. The BERT program is projected to end in 3 years and hopefully then we wont have to borrow anymore from the IMF. For what it is worth the IMF will only lend once a govt has a program practicing good economics, good financial planning, proper spending not allowing for costly excesses in gov’t.

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  • @ Tron June 4, 2020 5:38 PM

    It seems that the SOEs (which have escaped the clutches of BERT) are the Achilles heel in your well thought-out ‘BOSS’ programme.

    How would you close this gaping wound especially those not so heavily reliant on quarterly transfers and subsidies from the Treasury?

    Just get the unions (including your friend Caswell) to sign on the dotted payroll deduction line?

    Like

  • @ Disgusting Lies and Propaganda TV June 4, 2020 6:35 PM

    As you know, I am playing the anti-tank dog here, testing for the government what the people can bear psychologically. Therefore I submit radical proposals for wage cuts and privatisation. Let’s leave that role aside and talk about what we’ve achieved

    You are absolutely right that going to the IMF was the right way. Let me just remind you of the numerous idiotic alternatives from 2008 onwards, such as the Credit Suisse loan with around 10 percent interest (!!!), or the even more insane proposal of a loan from Arabia or China in exchange for concessions for potential oil fields.

    I also agree with you that all this talk of diversification is more wishful thinking than reality.

    After all this we should pray together that Mia Mottley will rule for many more years – the island will definitely not survive a new DLP terror regime.

    Nevertheless, we still have to work hard on the topic called SOE. As a neutral voice, I don’t say this to you as a destructive critique on the side of the diabolical opposition, but rather as an incentive to continue to do good government work and courageously break up encrusted structures – if necessary even against the rebellious senator and union leader.

    Like

  • @ Miller June 4, 2020 6:49 PM

    Mergers save SOE a lot of money because we need fewer expensive managers. I would also go for privatization (for example, by selling SOE to the Williams brothers) and autonomous financing of SOE through user fees.
    Jobs will not necessarily be lost, but the state budget will be noticeably relieved.

    My proposals for the civil service are along the same lines. I am only arguing here for compulsory retirement and a stop to new recruitment. Existing jobs for people of resilient age will not be jeopardized.

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  • “What ails the Barbados economy has been an open secret for many years. It is a public sector that our taxes cannot support, and one that does not deliver administrative services efficiently,” the former Central Bank Governor has underlined.” (Delisle Worrell)

    The statement is correct, even if he did not implement it under the not so grandiose MoF called Sinckler. Under OSA, the public service has mutated into a bloated catchment basin for the “deplorables”, for all those who are not good enough for the private sector or do not want to work. Chris Sinckler is the prime example of this failed policy.

    We need to downsize the public sector by 30 to 50 percent. Otherwise we will NEVER get back the economic growth. In such a small government sector we will then have only tough service providers, such as our hard-working garbage men, nurses and the like, but much less useless government advisors, lazy ministry staff, ambassadors with ego trips in private jets and everyone else who cools their butts in front of the air conditioning in the ministry or embassy.

    Like

  • William Skinner

    @ Hal
    Whose problems are these Bajans in these critical or important jobs solving?
    My position remains. We always scampering to some document about Singapore or being the off shore business sector of the Western Hemisphere etc. We inherited a corrupt colonial form of governance that remains corrupt because we are constantly using thieves to catch thieves. You often claim that we need innovation and creativity.
    All I am saying is civil servants who look like me,have a chance to earn more on their hard earn monies if they invest it in BOSS.
    As you have often stated ,all investment carry risks. I am no investment strategist and I long ago abandoned Eurocentric economics philosophies. I simply don’t have time to pontificate on slave models of development.
    Now if the BOSS effort fails or turns out to be corrupt or thievery , we would deal with it then but to pour cold water on it ,simply because it does not image what Singapore or New Zealand does is not on for me.
    So we will have to respectfully agree to disagree as far as BOSS is concerned.

    Like

  • @ William

    You are saying that black civil servants now have a chance of earning money on their savings. I am saying if you think BOSS is the vehicle you are wrong. In fact, you are wrong, wrong, wrong.
    I repeat: the vehicle was aimed at civil servants only, it was only after there was resistance that the idea of extending it to private sector employees was raised. That, I suggest, is populist dishonesty.
    Let us look at the product itself for the umpteenth time: it is of a four-year duration, which is not long enough for any ‘investment’; that is why bond dealers usually talk about ten-year bonds. Anything shorter is aimed at corporate investors (ie pension funds, insurance companies, etc) not small retailers.
    It is a call bond, which means the issuer can call in the bond at any time and renege on the coupon, which is five per cent. You have previously said the five per cent is better than what the banks are offering, and I agree.
    But you have to factor in inflation; will the investment in 2020 be worth the same in real terms in 2024, the maturity date? Even the nominal value will be devalued when you consider the exploitation of consumers, an effective internal devaluation. Then we have the administrative charges. Is government going to absorb those charges, or will that be deducted from the five per cent coupon?
    Then there are other unintended consequences. The payroll deduction will have an impact on people’s savings, thereby removing money from the banks that could be lent to small businesses. Then we have the idea of the central bank creating a secondary market for the bonds. Who are the likely buyers of these bonds?
    I say again, @William this is not only selling snake oil to the public, it is doing so explicitly dishonestly. You have now gone off talking about colonialism, which is a bit of tautology since by definition colonialism is exploitative; slave models, which ended 182 years ago; colonialism ended 54 years ago.
    Then you end by saying if BOSS becomes the victim of thievery or corruption ‘we’ will deal with it. But that is disingenuous. Who is dealing with Donville Inniss? Who is dealing with the bad investments made by NIS in to local corporations? Who is dealing with Clico?
    And you seem to be deliberately interpreting my reference to Singapore and New Zealand as an attempt to impose a foreign model on Barbados.
    I am saying again, and have said on numerous occasions, that our big problem is incompetence – not only political, but through the entire policy process. Those reference were simply to illustrate people who got it right.
    I will end with this allegory: there are two mothers with toddlers, both of whom are screaming for attention. One mother, A, decides the best way to keep little John quiet is to offer him a regular supply of chocolate; in the meantime Mother B, just as fed up with the screaming toddler, offers hers fruit, but the toddler is still not happy because she wants chocolates also.
    Which mother do you think is taking the long-term health of her child and which is taking a short-term decision at the risk of the child’s long-term health?
    BOSS may give people who are not familiar with investments a short-term high, immediate satisfaction, while a well-thought out investment vehicle will give them greater long-term security.
    BOSS is a political scam. It is governmental Madoff-ism. It should be rejected. You are not the only one fooled by the three card trick. Trade union officials have also fallen for it.
    I know your politics are usually on the right side, for some reason you have made a mistake on this clear bogus offer.

    Like

  • @ Hal Austin June 5, 2020 8:41 AM

    The Barbados Dollar is already a currency without any value. In Barbados you pay 1.50 USD for gas, in other parts of the West Indies as low as 0.60 USD.

    The 50 Barbados Dollar note is good enough as toilet paper. Not more.

    Like

  • You pay a lower price in the US because of volumes purchased and storage capacity. Please avoid posting nonsense to the blog.

    Like

  • @ Tr on

    You are right. There are a number of myths that Bajans hold on to, including that we are very clever and well-educate; that we are head and shoulders above the other Caribbean islands; that our currency is worth more than the other CARICOM currencies; and the supremacy of our institutions.

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  • @Hal,
    That it is a call bond is the least of worries. That assumes that the principal will actually be paid back.

    How about inflation. The purchasing value of each dollar now will probably decline by a total of twenty percent or more in total over the coming four years. Especially how the distributors and retailers like to ramp up prices every three months.

    It is a pig with lipstick. However, the pig is needed, so they should just call it a pig and cut the nonsense.

    Wasting valuable time on semantics.

    Liked by 2 people

  • @ David June 5, 2020 9:30 AM

    Check your facts. I talked about Great Guyana. One litre of petrol currently costs GYD 135 per litre there. That’s 1.31 BBD.

    Reference: https://www.globalpetrolprices.com/Guyana/gasoline_prices/ (price 145 GYD, outdated).

    I think we should look beyond the Barbadian horizon and compare ourselves with other CARICOM member states. Then you would find that in Barbados many goods and services are twice and three times as expensive. The Barbados dollar is simply worth nothing.

    Like

  • @Tron

    Besides the ability to benefit from forwards/hedging because of small purchases all countries apply taxes based on how they manage the P&L. In the case of Barbados we cannot pretend to support a per capita income and lifestyle we boast and not find the money to pay for it.

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  • Dear David,

    Exactloy, exactly.

    Guyana has no currency peg, so taxes and customs duties are much lower because no currency needs to be “defended”. Nevertheless, the exchange rate to USD, GBP and EUR has been stable for many years since productivity and value of currency are in an equillibrium.

    Already this year the purchasing power in Guyana has reached the level of Barbados and will exceed it by far in the coming years. This will turn the pardigm around: Barbados is the new poorhouse with a bleak future, Greater Guyana the new El Dorado. Therefore, emigration is not a disgrace, but an urgent necessity for many Barbadians. The island is totally overpopulated, we suffer from resource poverty. In Guyana there is space and resources in abundance.

    Fortunately, we have a Prime Minister who is aware of these facts and reacts accordingly. May I point out that our Prime Minister has facilitated the entry of the Guyanese into Barbados. This is also urgently needed so that the Indian masters of the Caribbean can invest their money with us. Only the rest of the island’s population has apparently not yet understood that Barbados now has to take a back seat. Just like Guyana from 1975 to 2019.

    Like

  • @ Crucoe

    Just read what I have said.

    Like

  • William Skinner

    @ Tron
    You said:
    “The island is totally overpopulated, we suffer from resource poverty.”
    Yet, you are lavish in your praise of PM Mottley , who along with Dr. Mascoll, say it is underpopulated.
    Which is it Tron ?

    @ Hal
    At least you are prepared to say that I am correct when I say the BOSS investment is better than what the banks are now offering on savings and other accounts.
    That has been the central part of my argument. You said that this time I am on the “wrong side” side of politics. Mine is not a political position. It remains purely one of investment with a little serving of nationalism.
    The only thing wrong with this plan is Mottley’s bungling of it before Friday Dr. Greenidge settled the waters.

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  • @ William

    Plse re-read my explanation for this difference. It is not only to do with local foreign-owned banks, although these crooks are part of the problem. It is fundamentally a global low interest environment in which money is cheap. The people who pay for that are the savers. The real disgrace is that through its reckless defaulting on its debt this government cannot take advantage of this cheap money.
    I say again, BOSS is not an investment. And the real coupon is no more than the banks are paying. I will try to explain again: five per cent interest over four years (it is not clear if the loan is indexed linked), which is not long enough for an investment. BOSS would not stimulate aggregate demand, which is what the economy badly needs post-CoVid, all it does is crowds out money that could be used by small businesses to create new jobs.
    In the meantime these workers, most of whom live pay cheque to pay cheque, face almost weekly increases in their essential consumer goods, like food. The end result is an effective internal devaluation of the currency.
    You say your position is not political, but one of investment. It is a political position, see your references to your Bajan nationalism again. It is true Mottley knows nothing about economics and should keep out of the fight, but Dr Greenidge has not settled any waters, you are swimming in a pond. You are falling for a smooth snake oil salesman. Explain in simple terms the investment thinking behind the policy, apart from taking a shot at the banks.
    I have said on numerous occasions I am a big supporter of compulsory savings, but not this nonsense. Further, if the government really wants to re-distribute wealth, why not an inheritance tax? Has wealth inequality ever formed art of the manifesto of any of the main Barbadian political parties, at any time since 1951?
    The top five per cent in most developed economies earn about 20 per cent of all the nation’s income, 60 per cent of wealth and 72 per cent of financial wealth (excluding property). In other words, the bulk of the wealth held by the rich and powerful is not earned, but inherited over generations. It is this intergenerational transfer that is stifling Barbados.
    I am sure that in a tiny economy such as Barbados, most of the wealth is warehoused on the West Coast and Cattle Wash. If the president is genuinely keen to re-distribute local wealth, she can do worse than start there.
    Finally, there is no dominant model of fiscal policy that would accommodate the bogus idea incorporated in BOSS.
    I am not trying to get you to change your mind. I simply want to explain the reality of the bogus bond and leave it for you and ordinary Barbadians to decide. My intention is simply to inform people so that they make the right decisions.
    By the way, if anyone opts out of the saving plan will that mean job insecurity?

    Like

  • @ William Skinner June 5, 2020 4:27 PM

    Yes and no.

    We must read the statements of our leader Mia Mottley like the Bible. Just as the Christian God once spoke to the Israelites, so our Goddess Bim speaks to us through her messenger, our leader Mia Mottley. What is decisive is not the grammatical wording, but the purpose of her statement, of her vision.

    Our leader does not want to settle additional have-nots and freeloaders on the island. We have enough of those. They would only exacerbate the problem of resource depletion. Instead, our leader wants to bring rich foreigners into the country, who will add their own capital, increase our productivity and provide an influx of foreign currency. In this interpretation, it is a good plan.

    50,000 additional rich expats would solve our financial problems. We would only need a mass resettlement of the impoverished natives on the platinum coast into the interior of the country. I’m thinking here of the native settlements south of Sandy Lane to Wanstead. The poor cannot enjoy the Caribbean flair anyway.

    Like

  • BOSS PRAISED

    CDB director sees it as win-win for Govt and workers

    By Colville Mounsey

    Director of Economics at the Caribbean Development Bank, Dr Justin Ram, has given Government’s proposed Barbados Optional Savings Scheme (BOSS) his stamp of approval.

    He said it comes at a time when the region should be moving towards giving their citizens a greater stake in the respective economies.

    Speaking yesterday at a webinar organised by the UWI Cave Hill Campus School of Business, Ram said BOSS which was a win-win situation for the Government, which needed the fiscal space, as well as for public workers who have been presented with a viable investment instrument.

    “It is a good start because it gives public sector workers an opportunity to save and earn a higher rate of return, while at the same time, the Government can utilise those additional resources to invest back into major capital works. The goodthing about it is that it allows the secondary trading of those bonds. So, even if a private

    citizen or even an institution, wants to buy these bonds off of the public sector worker, they can do that.”

    Step further

    However, he said Government should go a step further by giving bond holders the option of converting their investment instruments into equity stake in lucrative state enterprises such as the ports of entry.

    “These types of bonds should go a step further and perhaps have a conversion clause whereby over time you can convert the bond into an equity stake. So, let’s say, for example, the resources were used to improve the port or the airport in Barbados, then maybe that average individual could have a small equity stake in the airport and profits of the airport are now feeding back to the citizens of Barbados. I think this is something that we have to consider going forward,” he said.

    Ram said should the Government follow his suggestion, it would have the fiscal space for financing without having to repay the principle, as it would be converted to equity in moneymaking state assets.

    Added benefit

    He pointed out that this had the added benefit of ensuring that citizens were equally vested in the success of the state assets, as they were part-owners of the entities.

    Ram noted that the latter was critical to survival in the context of the COVID-19 pandemic, as citizens must play a major role in the thrust to diversify the economy.

    “This does two good things. It gives people a larger equity stake in their economy and at the same time because it is no longer debt since it has been converted from debt into equity, it is wiped from the Government’s books. So, you allow people to utilise their resources in investment, Government gets to do what it needs to do but it does not have to pay that money back because that person has an equity stake in an asset.

    “If you have an equity stake in an asset, you are going to ensure that it performs well. So, again, I say that it is a real win-win, and this is the next step Government needs to take with these bonds, good for individuals and good for the Government as well.”

    Source: Nation newspaper

    Like

  • William Skinner

    @ Hal
    @ David
    It’s amazing that in one breath we talk about a “ new norm” and then we see nothing positive when one is attempted. I not at all surprised that BOSS will be found to be attractive by some. We are into political pepper pot , where we dash everything into one pot and spice it up with a whole lot of unconnected argument.
    Pray tell me what does Donville zinnias’ predicament and or dishonesty , has to do with BOSS.
    I respect Hal’s tenacity and his obvious nationalism ( I don’t call his fervent nationalism politics. I know of him better than that) but mine apparently , in his view is political.
    I will repeat : It is PM Mottley who caused the bungling of BOSS. I have never thought that coming up with acronyms constitutes public policy. We gone from a PM who talked too little to one who talks too much. Simple as that!
    We may say that the PM has good communication skills but like any other skill it should be used wisely and in proper timing. No need to “ hog” the show.

    Like

  • William Skinner

    Should be Inniss

    Like

  • @ William

    What I called nationalism is your rejection of non Caribbean idea (ie Singapore and New Zealand). That is to my mind nationalism. The mention of Donville Inniss is because you stated that if BOSS became the victim of thievery it will be sorted out then, I asked if like Donville Inniss. We do not have a history of sorting out illegal or alleged illegal acts by well-connected people ie Clico.
    I have said on numerous occasions that the president is not as bright as her fans say, has no time for details, and substitutes long, repetitious, hand-flaring talking as policy. In our political environment, this works; but in some societies she would be ran out of town. But, as one BU regular would say, to be fair to her, she did not confuse BOSS; the very idea is rubbish. You fell for the snake oil sales patter.
    I am still waiting for you to tell me why it is so good, including your suggestion it is a good investment. I ask again, if she cares, why not an inheritance tax? If she cares about the future of the nation, why does Barbados spend less than 5 per cent of GDP on education, a subject you care about? If she and her Cabinet really care, why then don’t they give up their salaries for the duration of CoVid?
    We need new ideas and new policies, but not BOSS.

    Like

  • (Quote):
    However, he said Government should go a step further by giving bond holders the option of converting their investment instruments into equity stake in lucrative state enterprises such as the ports of entry.(Unquote).
    ++++++++++++++++++++++++++++++++++++++++++++

    There is absolutely nothing novel about that “proposal”!

    Wasn’t such a proposal made under the previous administration to offer workers at the GAIA and Port ownership stakes in those entities?

    Weren’t CBC and the TB along with other commercially-operated State-owned entities under active consideration for similar ‘divestment’ treatment with workers given priority to claim a ‘Privatized’ interest?

    The current administration is quite au fait with the IMF-designed ‘proposal’ to privatize both the BWA and SSA. So why not let the ‘BOSS’ be key to unlocking some of the resources for the workers to ‘invest’ in these commercially-viable entities?

    Both these administrations are just full of political hot air laced with the filth of sheer incompetence.

    Getting rid of those political pig troughs of corruption at the statutory bodies would be like the political class shooting itself in the foot.

    Would there then be any justification for such large Cabinets and the inexhaustible list of consultants, advisers, tsars and other hangers-on aka political pimps and flies?

    Like

  • @William Skinner June 6, 2020 9:13 AM

    “It is PM Mottley who caused the bungling of BOSS. I have never thought that coming up with acronyms constitutes public policy. We gone from a PM who talked too little to one who talks too much. Simple as that!”
    +++++++++++++++++++++++++++++++++++

    I was not aware that the definition of bungling included receiving high praise from the CDB as well as wholesale buy-in from the unions.

    Like

  • William Skinner

    Mr Kothdiwala
    I admire you from a very safe distance. You may not be aware but everybody on BU knows my position.

    I also said:

    “We may say that the PM has good communication skills but like any other skill it should be used wisely and in proper timing. No need to “ hog” the show.“

    I was the very first on BU to endorse BOSS.

    Find another tree to bark up.

    Have a very nice weekend , Sir.

    Liked by 1 person

  • @ William Skinner June 6, 2020 12:54 PM

    So you have received a nip to your ankles from the red whippersnapper called Jack Russell the Koochie Kid?

    From the outset you have been rather supportive of the BOSS programme; even if surprisingly so because of its Duopoly deodorant.

    But just utter a word that is perceived as even constructively critical of his Majesty the MAM and you can bet your last Bajan dollar the Queen Bee corgi called Koochie Kid would be chomping at the bit to cut your political throat.

    If only the little fella with the girly red cheeks knew the ‘real’ history of the BDLP duopoly he would turn ‘black’ in the face.

    Someone ought to put the inexperienced Lilliputian back in his wind-up box marked: For political ‘red’ ass-licking purposes only.

    BTW, your backing of the BOSS has some merit to it. But it ought to extend to areas of further economic enfranchisement of the workers.

    How about considering the investment opportunities to take over part-ownership of the BWA?

    At least we wouldn’t have to endure in the future any Duopoly-backed wholesale financial raping of that vital utility which was once a profitable and well-managed jewel of a gem in the Bajan Crown of national assets.

    Like

  • @Miller

    What is the objective of giving birth to BOSS as championed by Sr. Greenidge?

    Like

  • @ David June 6, 2020 1:38 PM

    To defer liabilities!

    Instead of crediting cash why not credit BOSS bonds payable?

    A simple cash flow management technique for any large entity whose cash inflows have been severely affected!

    Similar to what Sinckler did with the printing of money under the advice of the now estranged Guv of the CB.

    A strategy the same ex-Guv now finds totally abhorrent and now recommends the ‘restructuring’ and eventual downsizing of the public sector to deal with its unaffordable payroll burden.

    Isn’t the fallout from the strategy the reason for the IMF intervention?

    Let the future take care of itself!

    Like

  • BTW, Blogmaster, just to put a little salt in the wound of the long-in-thetooth promise of good and efficient governance.

    What has become of the millions of the US$ in loans secured from both the IADB and CDB last year which were earmarked for improving the policy framework towards the restructuring of the same public sector?

    Besides topping up the country’s foreign reserves what has taken place in terms of deliverables?

    Barbados cannot compete in a post-Covid environment- both regionally and globally- unless it gets rid of the deadweight which both the Robinson report and the Delisle Worrell musings have identified and highlighted as the major stumbling block to doing business in Bim.

    How else to make the resources-poor country fit for the extremely competitive tourism future unless the public sector is reconfigured to make it fit for purpose and affordability?

    Like

  • @ Khaleel Kothdiwala June 6, 2020 10:41 AM

    The truth is that the outspoken senator, the unions and the rest of the opposition have used blackmail tactics to put pressure on the government.

    Of course, the government also knows that the state sector would have to be massively downsized. But it is not doing so because it fears a violent revolt by the opposition and criminal acts of sabotage.

    Like

  • William Skinner

    @ Miller
    I , from a distance , welcome the new voice . We must always encourage our young citizens, to be involved.
    Yes there are some possibilities to extend such innovations as BOSS to other dimensions ; we have to wait and see.
    As always , I suggest you keep on punching because you know that the old talk about patriotism and so on would come once you don’t humbly and quickly eat all that is put before you.
    Just ignore them. They will never move from their parties’ positions. I have elected to just let them climb higher and higher and most Bajans know what happens when that is done.
    Think about Barbados not them.
    Peace.

    Like

  • BOSS is least painful option for Govt

    Former Governor of the Central Bank, Winston Cox, weighing in

    By Tony Best After COVID-19 and the economic nightmare the pandemic has unleashed, BOSS (Barbados Optional Savings Scheme) is the “least painful option” in Mia Mottley’s fiscal toolbox.

    That’s how Winston Cox, a former Governor of the Central Bank, described the BOSS, a plan designed by the Administration to cut its monthly wages bill, reduce the widening fiscal deficit and help finance its capital spending plans.

    “Broadly speaking, I think BOSS is a good idea and it is the least painful option available to the Government at this time,” said Cox. “But the challenge for the administration if it is going to market its initiative successfully is to secure the support of public servants who only recently had to accept a haircut,” meaning a reduction in the amount of money the Government owed them as investors but was unable to repay them as investors after it inherited a country that was in dire financial straight with a mountain of debt to service.

    “The difficulty for the Administration is going to be its marketing campaign to secure support for BOSS,” said Cox, who later became a member of the executive board of the Inter-American Development Bank in Washington D.C.

    Haircut

    “The Government will be asked by its employees: “look, you asked us a few months ago to take (an investment) haircut, now you are requesting support for a new (financial) instrument which you are putting on the market? Effectively, though, what the administration is trying to do is to convince investors (public workers) that what happened in the recent past when people purchased Government paper would not happen in the case of this new instrument.”

    In other words, the Mottley team of financial advisers must assure public workers that they would not “lose any part of their investment” this time around.

    The Government may have already moved in that direction by recently issuing a statement which explained that “the objectives of BOSS are to create approximately $100 million fiscal spacefor capital spending, protect public sector employment and adhere to the principle of burden sharing, being our brother or sister’s keeper by allowing investment to facilitate the creation of more jobs”.

    As explained by the

    Government Information Service,BOSS “is a four-year bond with a five per cent interest rate per annum, payable semi-annually, with the principal being paid four years from the date of the bond. There will be no withholding tax on the interest earned and the bond is fully tradeable”.

    Investment option

    Cox, a University of the West Indies and European-trained economist, who was a member of the World Bank’s executive board, took issue with Verla De Peiza, leader of the Democratic Labour Party, when she characterised the BOSS plan as a public service pay cut disguised by a cute phrase.

    “It’s not a pay cut. It is an investment option” that pays interest on its employees’ money.

    “That’s what it is. It is better than borrowing from the Central Bank through the printing of money. Barbadians know what that policy (by the previousgovernment) got us. I hope BOSS would be supported by the civil servants, by the community. But the challenge for the Government is going to be to convince individuals that they would not suffer any loss. There are some mechanisms the current Government can and must put in place to reinforce its guarantee” toinvestors that they wouldn’t suffer any losses, principal or interest.

    Tougher options

    Should BOSS fail to secure civil servants’ approval, he warned Barbados would face even tougher options, such as layoffs in the public sector; borrowing money from the Central Bank; and reductions in social services.

    Obviously, “there are no pleasant alternatives available” as it suffers a dramatic fall in revenue, said Cox.

    The former bank governor said the plan could be viewed as “distributing the burden” on Barbadians as a result of the pandemic.

    If confronted with a similar problem, Cox said he was sure the private sector would deal with it in a direct and painful way, that is, laying off workers.

    “If asked by civil servants at home which option the Government should pursue,my advice would be to take the most pleasant of the unpleasant options. That would be to accept BOSS. We are dealing with tough choices,” he added.

    Muddying the waters

    Muddying the economic waters, he said, was the absence of a quick turn-around in the fortunes of the tourism industry and the lack of bright and early prospects for an upsurge in foreign direct investment.

    “I have not heard anyone talking about an early rebound of international tourism. The same thing applies to foreign direct investment (FDI). Even here in Canada, I have not heard any indication of increases in FDI,” he lamented.

    The economist added: “When you aren’t responsible for making decisions about a country’s opportunities and when you do not have responsibility for the consequences of your decisions, you can make decision in a loud voice”.

    “But my position is that you have a 50 per cent chance of being right when you make a decision but you have a 100 per cent chance of being wrong when you don’t’ make any decisions.” “If I were a civil servant in Barbados at this time, I would ask if I would like to see either myself or my colleague unemployed or should I participate in the BOSS. It would be BOSS. That’s how I see it.”

    on the Barbados Optional Savings Scheme (BOSS). (FP)

    ‘It is better than borrowing from the Central Bank through the printing of money. Barbadians know what that policy (by the previous government) got us.’

    Source: Nation newspaper

    Like

  • In other words: BOSS will not solve the main problem, namely the overburdening of public finances and the economy with human overhead in the public sector.

    Barbados is totally overpopulated. That is why OSA has doubled the civil service and crammed it with people, many of whom can barely read and write and only want pay instead of hard work.

    We therefore need a population exchange: emigration of lazy indigenous civil servants and immigration of rich foreigners who are willing to work.

    Like

  • In other words BOSS is a short term measure to bridge the time period between now and when (if) the economy recovers to some reasonable level. If it does not other measures will have to be taken. Economic planning and forecasting in a covid period is risky business.

    Like

  • Now we already have two former heads of the Central Bank who are addressing the problem very clearly. So the fact remains that the civil service is the nation’s biggest problem because it is strangling all economic growth.

    Of course, nothing will happen, because the civil servants as a group of voters are far too powerful. That is the logic of the ballot box. I do not, however, want to keep on hearing the mendacious whining that Barbados, as the new poorhouse of the Caribbean, is falling further and further behind in financial terms.

    Just look at the outspoken Senator’s hypocrisy. On the one hand he plays the man of honour who saves Barbados from an alleged Mottley dictatorship. On the other hand, he sabotages every reasonable cut in civil servants’ salaries through his criticism, even though he knows full well that this is absolutely necessary for survival.

    Like

  • @ David June 7, 2020 10:30 AM

    Are you implying that the long promised restructuring of the public sector to make ‘performance-ready’ for the 21st century digitized world of business has been taken off the table for the time being, at least?

    So what is happening to the proceeds from the loans taken out in 2018/2019 to ‘recalibrate’ the public sector to make it fit for the future with or without Covid?

    Like

  • @Miller

    In the current covid climate the government will leverage the Stuart policy of keeping public workers employed. It is a large bloc of votes. We must hope and prayer it does not end with the same devastating result.

    Like

  • In need of clarification:

    BOSS has received:
    Near unanimous support from the NUPW’s General Council
    92% support of rank and file in attendance at the BSTU’s meeting on the matter
    High praise from an independent CDB economist
    Commendation from a well-respected and internationally-renowned economist and our own former Governor of the CB

    That represents the facts thus far?

    Like

  • @Khaleel

    Take note, Ram is a former economist working with the CDB.

    Like

  • @David

    Indeed, as well as an internationally-respected economist, with both academic pre-eminence and consultancy experience with the ILO, UN and WBG. Clearly eminently qualified to speak to the matter.

    Like

  • @ Miller June 7, 2020 10:51 AM

    The civil service cannot be reformed. We have there 1 percent top-performers, 9 percent good people, 20 percent hangers-on, 50 percent lazy sleepers, 10 percent saboteurs and 10 percent brain-dead.

    Like

  • The only solution is a population exchange of indigenous civil servants and financially strong expats who are willing to perform. There are enough banana plantations in Costa Rica and enough gold mines in Guyana. They always need manpower. Our prime minister could loan her officers there.

    Like

  • Tron
    June 8, 2020 3:05 AM

    That is a joke, apart from being totally colonial minded. Expats can do a better job? No, most come to Barbados for a sit down, lunch chat and golf course job, while their people do all the work. Not to mention, some do not know their xxs from their elbow.

    But I agree on the migration point, Any Barbadians with a modicum of brain and willing to work need run, not walk, overseas to do better for themselves. US may be out now, with the white supremacists in power, but Canada, UK and the EU are good opportunities.

    Like

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