Barbadians, ALL Together NOW!

…The discussion must turn to how can we run a country on 25% less revenue than planned over the next 2 years. It does not have to come to layoffs either. It can come from improved tax collection, greater efficiency etc. It does not have to be a case of just “sending home people”…

BU Commenter: John A

What has has been weighing on the blogmaster’s mind in recent weeks you ask?

In light of the Covid 19 pandemic most economies in the world have been negatively affected whether service based, commodity driven or combination of the two. The result is that citizens will have to make sacrifices until ‘normalcy’ is achieved. This is particularly true for the most vulnerable people in society – the indigent and sick.

The 500 million dollar projected shortfall in government’s budget as a consequence of the prevailing adverse economic conditions is a reality not many Barbadians have come to grips if one listens to public discussion. Made more acute the country is suffering from economic fatigue after a severe debt restructure and a decade or more of economic wutlessness.

Obviously government has a moral obligation to find ways to keep workers employed. One does not have to be a rocket scientist to appreciate that changes – especially if unplanned – to the tax base will negatively impact revenues therefore compromising government’s financial obligations to pay for public goods and services.

Government’s ability to collect taxes is also affected by a performing private sector. If the private sector contracts for any reason by shutting down businesses or sending home workers, contributions to government’s tax/NIS revenues will adversely impact finances. Covid 19 has created the perfect challenge for all governments including Barbados.

Having mentioned the economic and fiscal hurdles facing the country, it is easy to forget the social challenges that have inevitably resulted to make governing more complex.

The country is currently embroiled in a discussion about the details of how the proposed Barbados Optional Savings Scheme (BOSS) will be implemented. The success of BOSS and other fiscal measures are simply that, short term. If the global economy is lazy to respond to recovery it means SIDs like Barbados will have big problems as it burns cash in hand (reserves) to pay salaries and other unsustainable activities to maintain a reasonable standard of living.  More and more rehashed commentary about how successive governments have built the economy on sand, encourage covert corruption and fuelled a culture of political patronage or a country living above its means will surface. This will make for good political discussion, however, does not make for constructive debate in the unprecedented climate we find ourselves.

The lengthy preamble to the thesis is – as a people are we capable of pivoting from the type of vacuous national discourse we have become accustomed to be replaced by one that is apropos?

A good place to start is to work at disrupting old thought patterns that encourage same old same outcomes. Easier said than done but is must be done if we are to survive as a nation out here in the global rat race.

…Ask not what your country can do for you – ask what you can do for your country…

John F. Kennedy

 

 

136 comments

  • Wily estimates that the government $500M shortfall in revenue is well under estimated, shortfall over the next 18 months is likely to be in the $1.5B range. When revenue falls and state is in a deplorable financial STATE as Barbados is then the options are EXTREMELY LIMITED, reduce salaries, ie reduce civil service and cutback services. Anything less is doomed to fail.

    Liked by 1 person

  • peterlawrencethompson

    We need to face the truth. It is impossible for the government to balance the budget through “… improved tax collection, greater efficiency etc.” These efforts cannot possibly net more than a few million dollars… totally inadequate to close the $500 million shortfall.

    But the government cannot balance the budget through “sending home people” either. That will simply push the economy further into depression because then those families are not spending money in support of their neighbors’ businesses.

    Nor will slashing the size of the cabinet and firing all the consultants make any worthwhile difference. It might make people feel good to spread the pain to those living high on the hog at public expense, but it will accomplish less than 1% of the target for balancing the budget.

    We need to think much more boldly.

    Like

  • peterlawrencethompson

    @Wily CoyoteJune 2, 2020 7:26 AM
    I agree with you that the $500 million annual shortfall is very likely an underestimate, but a strategy to “reduce salaries, ie reduce civil service and cutback services” will be entirely counterproductive because it will force the economy further into depression and thereby dramatically further reduce tax revenue, leaving the deficit virtually unchanged while simultaneously impoverishing many thousands of families.

    Liked by 3 people

  • PLT & Wily are correct…… trying to squeeze more from the ‘middle-class’ workers will do no good….. the government need to find a way to get people spend and get more money in circulation. The more people spend, the more government will collect in taxes. Time to abolish personal income tax, encourage investment in agriculture & renewable energy….

    Liked by 2 people

  • Vincent Codrington

    @ David Bu

    I think you have covered all the bases as to where we are at the moment. The three previous commenters agree. The way forward depends on how quickly we can get the export sectors to produce and export. The GoB measures are attempts to keep things on an even keel until the economy is removed from the lock down phase. Of course that is not entirely within the control of Barbados. Small progressive economies are at the mercy of the international Economic System. and we cannot opt out. It is a datum.

    At the local level we need to make sure there are no leaks in the revenue collection system. John A and I have bee preaching this for months on end.. Their so called digital systems at this point in time are the weak links in revenue collection . Like water and sewage system, VAT collection system,income tax collection system they are leaks. There is no sense adding new pieces of taxes when we are not fixing the old systems.

    Yes . We need all hands on deck provided they do not get into each others’ way. From where I stand they are. They are becoming counter productive. Time to stop spinning top in mud. All activities are not actions. Many are optics. Can we have less of the latter?

    Like

  • peterlawrencethompson

    @ks June 2, 2020 8:00 AM
    If the government abolishes personal income tax that reduces public revenue by $442 million each year. The most that the government recovers in tax is 17.5% of that, or about $77 million. So you see that this does not solve the problem, it just makes it worse.

    Liked by 2 people

  • @Vincent

    Thanks, now to the hard job of informing everyone the enormity of the task at hand ignoring the politics and ignorance.

    Like

  • @PLT

    Wily knows cutbacks and layoffs is a vicious circle, however Barbados is so heavily financially bloated that there is NO SOFT CURE. Country needs a MAJOR FINANCIAL re-adjustment if future economic stability is to be achieved. The socialist model being used over the last generation is not viable and has FAILED BIG-TIME, just took a PANDEMIC to highlight. WORLD changed to a global economic model over the last 30 years, now world is turning to a “MAKE AMERICA GREAT” model which everyone is turning to a self centered and more self controlled. Its unfortunate for Barbados however reallity is going to be PAINFUL. SOME small independent and semi independent countries, Singapore, Cayman Islands etc have a more robust financial economy and will no doubt be able to weather this new reallity. Poorly managed countries like Barbados will likely regress significantly socially and financially.

    This situation is not REALITY TV, and there are going to be lifetime lossers.

    Like

  • peterlawrencethompson

    Vincent Codrington June 2, 2020 8:08 AM
    Barbados has only three export sectors of scale: tourism, international financial services, and rum. We do not currently export anything else in sufficient scale to make a difference.

    Tourism is currently dead and will remain so until the global COVID-19 public health crisis is behind us. Even afterward it will be severely impaired because all of our source markets will be in a deep economic depression. The OECD is determined to sabotage our international financial services sector with bogus money laundering accusations or some other nonsense, so that sector will not grow. Rum exports need 3 to 15 years to mature in the barrel, so while long term prospects look god, you cannot ramp up exports immediately; the rum you distil today is not ready for export until several years have passed.

    So it is impossible to “get the export sectors to produce and export” quickly.

    We need to think much more boldly.

    Like

  • Vincent Codrington

    @ Tron

    In anticipation of your singing the Litany of the Oversized Public Service could you assist by adding the variation of re-calibration of the Public Service by removing departments and state corporations whose sell by date expired two decades ago?

    Like

  • peterlawrencethompson

    @Wily Coyote
    I completely agree that our “Country needs a MAJOR FINANCIAL re-adjustment if future economic stability is to be achieved.” However, an unbiased look at various countries around the world clearly show that it is the capitalist “model being used over the last generation is not viable and has FAILED BIG-TIME…” Compare the effect of the pandemic in China to the effect in the USA. I don’t like the systems in either of those countries, but it is very clear that China is weathering this public health and economic crisis much better than the USA is.

    Liked by 2 people

  • Vincent Codrington

    @ PLT

    The economy of Barbados has been my life time occupation. I have stated that historically and in the long-term Barbados cannot be a viable and progressive Society and Economy by opting out of Globalization. That is a given. We have not only to resuscitate existing exports of goods and services we have to redefine these and look for new emerging goods and services to sell to the rest of the world. So existing products and services cannot preclude the search for other emerging export goods and services. Self sufficiency, except for strategic purposes , is a non starter.

    Liked by 1 person

  • peterlawrencethompson

    @Vincent Codrington June 2, 2020 8:38 AM
    I agree completely! Particularly that “We have not only to resuscitate existing exports of goods and services we have to redefine these and look for new emerging goods and services to sell to the rest of the world.”

    New emerging goods and services are not going to come onstream instantaneously, but our short term crisis requires an instantaneous response.

    So that leaves us with deciding how to redefine existing goods and services. How are we going to redefine tourism, international financial services or rum to make an impact this fiscal year??

    We need to think much more boldly.

    Like

  • PLT,

    “We need to think much more boldly”

    give us your thoughts

    Liked by 1 person

  • I really hope people stop and give thought to the depth of our situation before going down the party faithful route on this topic.

    As the guys above have stated the approach here needs to be carefully thought out, as the wrong move could cause a serious recession. I just want to simply lay out the wicket we are batting on as I see it.

    If we increase taxation now we will make the recession worst.

    If we do nothing we will run a massive deficit by March 2021.

    If we layoff more people we risk greater recession and social hardship.

    If we print too much money we create fiscal inbalance.

    If we burn through our borrowed reserves without FX coming in from tourism we are back where Sinkyuh left us.

    If we leave our collection agencies as is, we lose a large percentage of the little we will collect and as usual we the taxpayers will be asked to find the rest.

    So the question is how do we restructure an inefficient collection system, while trying to move the economy away from being so tourism dependant, at the same time on 25% less revenue than budgeted? Also remember there is no time for a blue paper and a green paper on this as every month the deficit is growing. So the standard timeframe government takes to make a decision will not work here either. The old saying ” Time is Money” was never truer than today!

    Liked by 2 people

  • Vincent Codrington

    @ David BU at 8 :20 AM

    I do not know how we are going to get rid of politics and ignorance. Is there not a symbiotic relationship between the two.? They thrive when they exist together. Perhaps we need to send either politics or ignorance to the guillotine. I prefer to send ignorance. Pachamama prefers to send politics.and or politicians thereto. Make your choice.

    Like

  • Vincent Codrington

    @ PLT
    You are doing too much bold thinking. All tstakeholders need to do bold thinking. It is their business to do so. It is not the sole task of the GoB. If one is an entrepreneur, GoB cannot be saddled with the task of developing entrepreneurs and come up with ideas for the entrepreneur to make a profit. The systems are in place. Let the Private Sector do their job of redesigning the Post COVID -19 business sectors.

    Let me reiterate. The GoB tactic at this point in time is simply a temporary holding situation which allows the private sector to re-calibrate. Going forward the government has to shed this role.

    Like

  • We are glad to see that others are coming to our long held conclusion that capitalism can go no further, is dead.
    Like a lone voice making these arguments for decades it is good to have company here.
    What people fail to learn from their histories is that systems reach their natural limits.
    So the orientation of small countries has to be nibble enough to be first to transition.
    That will be the only way to survive.
    These ideas about the death of capitalism were introduced to the leading lights at the uwi 2 decades ago but that leadership was so embroiled in the economics of neoliberalism, putting a graduate in every house, was more important than giving the region a critical response.

    Liked by 1 person

  • Vincent Codrington

    @ David BU
    I hope you understand the correct way of getting rid of politics and ignorance. No assistance to the private sector in building white elephants( no pun intended). No assistance in tax avoidance and evasion by establishing a user friendly , efficient and effective computerize system to collect taxes. GoB leading in front and by example in the tax and user costs collection processes.

    Liked by 1 person

  • Vincent
    Can we select both. LOL

    Like

  • peterlawrencethompson

    I agree @Vincent, that all “stakeholders need to do bold thinking. It is their business to do so. It is not the sole task of the GoB.” However, part of our problem is that our private sector is, to a great extent, moribund and parasitic. It has one of the worst records for innovation anywhere on the globe. I’m not simply whining and pointing fingers; I am a tiny part of that dysfunctional private sector so this is self criticism.

    We (and by that I mean the totality of the Barbadian community) need to think more boldly.

    Like

  • (Quote):
    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. (Unquote).
    ++++++++++++++++++++++++++++++++++++++++++++++

    We have to agree with Hal A, our UK correspondent’s position (as outlined on a different blog) regarding the above ‘seemingly confusing’ remark.

    How can the government not have a “financial problem” when the money used to finance the operations of statutory agencies like the BTMI and GAIA has literally dried up since the bottom fell out of the tourism and travel markets?

    What is going to literally and ‘fiscally’ replace the hotel room levies, VAT and the Airport user fees? The figurative printing press stored in the vault in Church Village?

    Can we expect the SSA and BWA operations to be scaled back because the ‘collections’ from those recently imposed Garbage and Sewage ‘contributions’ have taken a big hit not only from the hotels and other rented accommodation catering to visitors but also from domestic households reeling under the excessive financial st(r)ain of Covid-19.

    Liked by 1 person

  • peterlawrencethompson

    @Vincent
    “The GoB tactic at this point in time is simply a temporary holding situation which allows the private sector to re-calibrate. Going forward the government has to shed this role.”
    ++++++++++++++++++
    You know deep in your heart that this will never work. This crisis is much too profound. Unless Barbados has a solid economic foundation of consumer spending, the only re-calibration that will emerge from the Barbados private sector is capital flight.

    Barbados has a modest domestic market, so we have built our economy on importing consumers (tourists) to amplify our economy. Now that the tourists have gone, you cannot expect local capital to stick around to service a domestic market that has shrunk dramatically and shows no signs of growth. I know we will try to staunch that bleeding with currency export control rules, but you know full well that our talented lawyers and accountants will find ways over, through, under, and beside such controls.

    We all need to think more boldly.

    Like

  • Vincent Codrington

    @ PLT at 9:10 AM

    I am in general agreement with you. There are some notable exceptions to parasitism in the Private Sector. Those who re-calibrate in the changing economic environment survive and make profits. Those that play politics and are parasitic disappear from the business landscape.

    @ Miller
    The after- shock of the COVID -19 pandemic is temporary. . The length of “temporary” depends on how Barbados responds and how business friendly the reopened international markets are.

    Like

  • de pedantic Dribbler

    @PLT, if one theorizes about capitalism in the strict political/governance terms that often are shouted around then your remark sounds correct… Otherwise as written it really doesn’t gel with reality.

    When u said “However, an unbiased look at various countries around the world clearly show that it is the capitalist “model being used over the last generation is not viable and has FAILED BIG-TIME…” that caused a head shake of “OK, capitalism has its flaws*”.

    And then you said ‘[c]ompare the effect of the pandemic in China to the effect in the USA. […] it is very clear that China is weathering this public health and economic crisis much better than the USA is”.

    Are you saying that a non-capitalist regime has done better than the premier capitalist regime based on their economic models or that an ordered dictatorial, communist regime has done better than a democractic, open one?

    It certainly CANNOT be the former reasoning!

    The success of the PANDEMIC in China is due to the ability to MANDATE citizens’ actions without any of the push back seen in the US lock-down protests …. It is due to the ability to suppress dissent and counter-narratives forcefully without oversight of legal sanction.

    China was and is as devastated economically as the US…

    Evidence does not support the view that ANY style of economic activity has weathered this pandemic well… as they all were essentially shuttered.

    The problems in the US were made terribly worst due to leadership and some difficult demographic issues not principally or primarily because of their wanton capitalism.

    Liked by 2 people

  • Vincent Codrington

    @ PLT
    All crises that were visited upon Barbados since 1627 were profound. We overcame them then,and we will now.
    We have the experience and the capability to survive this one as well. We need to continue to make sensible decisions. I know that in a few cases we have made knee jerk decisions that cost groups are the sectors that are paying for these ill considered decisions.

    Like

  • peterlawrencethompson

    @Greene
    “What is going to literally and ‘fiscally’ replace the hotel room levies, VAT and the Airport user fees?”
    ++++++++++++++++++++++=
    Bold thinking… specifically thinking to replace hundreds of thousands of short term tourists with tens of thousands of long term high salary tech professional residents from the same source markets who work from home in Barbados at their American or European jobs. The occupy the much of the same tourism infrastructure of apartment hotels, AirBnB accommodation, villas, and condos of which we currently have a huge non performing supply. They patronize the restaurants, rent vehicles, buy gasoline, purchase groceries, hire gardeners, cooks and cleaners… You see it’s much more fun to work from home from a villa in Barbados than be cooped up in a COVID plague ridden apartment in New York or London.

    I’m working with Invest Barbados (pro bono for now) to see how quickly we can operationalize the idea.

    Liked by 2 people

  • Vincent Codrington

    That auto-correct gobble-de gook should read “knee jerk decisions impacted negatively the middle and lower income groups.”

    Like

  • Vincent Codrington

    @ PLT
    Would not this group have the potential to introduce the second and third wave of COVID into the country. If they are really working why should a room in Barbados be better than one in Toronto. Work is work regardless of the geographical location.

    Like

  • We are discussing the country’s economic situation but appear to be overly focused on the GoB’s finances. The government is only one of the claimants on the Barbadian economy. It seems to me that if we are going to discuss the economy, we need to consider all those who make a claim on it, including the government, the workers and the local and foreign owners of capital and debt. We will also need to confront the issue of the purpose of the economy. Since politics is the condensed expression of economic interests, it will be impossible to avoid a political discussion. The country’s current economic predicament is the outcome of previous political decisions. The issue then is what kind of politcs and economy can a small oppressed country like Barbados build in the future. It’s obvious to me that continuing the old political and economic system we inherited from slavery and colonialism is not an option as it now stands before us as a naked failure.

    Liked by 2 people

  • peterlawrencethompson

    @Vincent
    When we require them to be tested and proven COVID negative within 2 weeks before boarding their flight here, then we test them again immediately upon landing. They will not object because they are coming to live here for years, not weeks.

    Like

  • peterlawrencethompson

    @Vincent
    It is the short term tourists who pose a risk to introduce the second and third wave of COVID into Barbados because they will not put up with much inconvenience for just a 2 week vacation. Furthermore we need 500,000 short term tourists to sustain our tourism industry, while 20,000 long term high income residents can provide us with the same level of foreign exchange earnings at much, much lower epidemiological risk.

    Like

  • We also need to discuss how we are going to deal in the short to medium term with a shortfall in FX. will we finally stop talking about it and actually make a major push with Agriculture and alternative energy? If we can agree a USD saved is a USD earned, can we not also work on that as a matter of urgency? That will do 2 things promote employment and reduce the demand for scarce FX. Remember most of the FX we brag about having today is in fact borrowed money that has to be repaid.

    Like

  • peterlawrencethompson

    @John A
    Bringing in tens of thousands of high income permanent residents is squarely aimed at dealing with our FX shortfall in the short and medium term.

    Like

  • Vincent Codrington

    @ John A at 10:36 AM
    Why should there be a shortfall in FX? If there is no import s of goods and services what are you using the FX for?. If it is for food you will have your tipping point for the consumption of local agriculture production . Of course that depends on the rainfall.Demand will generate its supply.

    Like

  • This is a robust discission let’s hope it is not polluted by those who are afraid of conjuring a new world in our image.

    Those so tethered to the past that the future can only be located within a book of lies.

    Those who are steadfast in a belief that any discussion of a way forward challenges their capitalist sense of being

    Like

  • @ PLT

    I agree with you in importing long stay visitors or short term residents however we view them. We need to get a Stable source of FX ONE way or another.

    Like

  • @ Vincent

    Last figure I heard was our food import bill was over 400M and our fuel import was well over that. If we say between the 2 it’s a billion dollars, we got to grown nuff food quick and put up plenty solar panels to put a dent in that.

    We will still have a good size net demand for FX even if we do out best. Not saying we can’t dent it though. The problem is every month we waste pussy footing the greater the deficit is growing.

    Like

  • peterlawrencethompson

    @John A
    The think is we need to market and configure our product appropriately… faster wifi and proerly configured workspaces in apartment hotels is now important; limbo dancers and cocktail parties are not. All inclusives play a much diminished role, while front desk Fedex & DHL services are needed.

    Like

  • Vincent Codrington

    @ Pachamama at 10:54 AM

    Whether we are afraid or not, a” new world” will emerge post COVID -19
    It may not be what we imagine. But why should it? I am happy that it will be one that my children and grandchildren will navigate as easily as I navigate/d the post WW2 world.

    We must not lose sight of the notion that there are” many books of lies” that help us to limp through our perception of the world. It is a human condition.

    Let the discussion go forward and the challenges multiply.

    Like

  • peterlawrencethompson

    Even if we succeed in attracting tens of thousands of high income long term residents to solve our FX problem, we will still have profound economic dislocation to deal with. These long term residents will not provide as many service jobs as our old mass market tourism industry did, and many of our neighbors depended on those jobs to feed their families.

    Our problems lie deeper than our FX reserves. We are still not thinking boldly or deeply enough.

    Like

  • There needs to be a mindset change.

    Improve tax collection. Yes, tax collection leaks are likely enormous. Do you really think all shops, vendors, skilled workers pay their fair share of taxes?

    Likely not, the wink wink nudge nudge still applies.

    But each wink is a kick in the groin of the country’s financial state.

    So yes, proper audits of all business and penalty on not disclosing income.

    But I think that we have spoken about here already, years ago.

    Improve forex retention. Bajans have got to stop buying unnecessary foreign goods.

    Spending on local manufacture is critical. The carpenter, seamstress, shoemaker, that is how to build the economy.

    Cut duties on manufacturing equipment. Whether a large unit or small.

    Provide incentives for all homes to go solar.

    Expand areas that ate taxable – Legalise marijuana but put Vat on sales. To sell marijuana a vendor MUST Vat register or face a compulsory time in jail of two years. Make it an easy choice by making the penalty for non registration tough.

    Those are really the main points – improve tax collection, increase areas that are taxable, reduce imports and increase local production across all areas.

    Someone above mentioned Cayman Islands as an example. Bad example.

    Cayman Islands is the epitomy of an offshore island. Plenty brass plate operations. No real substance just tax avoidance.

    Those days are finished. Cayman will soon face the problems that all small islands face.

    Liked by 2 people

  • @John A

    Is there room to more aggressively rollout alternative energy programs without destabilizing EMERA? There is cost savings to be had?

    >

    Like

  • peterlawrencethompson

    @DavidJune 2, 2020 12:00 PM
    Yes, there is absolutely “room to more aggressively rollout alternative energy programs without destabilizing EMERA”… it simply means that we need to make investors put money into battery storage capacity as fast as they invest in photovoltaic generation capacity.

    Like

  • peterlawrencethompson

    The question that John a posed was “how can we run a country on 25% less revenue than planned?” but that is just a symptom of the problem… we need to get at the root. The root of the problem is that the Barbados economy is too damaged and anemic to generate the public revenue required to sustain the public employment and services we have. If we cut public employment and services we further damage the anemic economy and fail to fix the public revenue shortfall.

    The only choice we have is to find ways to strengthen the economy. We need to restructure Barbados. We need to think more boldly.

    We need to restructure Barbados so that no citizen is destitute, public revenues are sufficient to meet public expenditures, public services use technology to dramatically improve efficiency, and efficient public sector purchases of goods and services are completely free of corruption.

    Liked by 2 people

  • peterlawrencethompson

    We need to consider Universal Basic Income for all Barbadian citizens over the age of 18.

    Like

  • @Crusoe

    “No real substance just tax avoidance.
    Those days are finished. Cayman will soon face the problems that all small islands face.”

    Agree with the above statement, however Cayman present fiscal position puts them head and shoulders above Barbados in the SURVIVAL realm. PLT is still promoting an offshore financial system for Barbados, however the PRESENT world regulators are gradually shutting down these unregulated jurisdictions, ie: Barbados recent BLACKLISTING by EU. However if world countries turn their economies INWARD like “make America great” then those countries that offer FINANCIAL sheltering will once again move to the forefront. The question woul be can Barbados ever compete in this highly competitive jurisdiction.

    Barbados at the moment needs to look INWARD to become self sufficient in food production to ward off starvation. The next major initiative should be to guarantee a reliable supply of potable water. If and when food and water are assured then Barbados can decide what the next priorities will be, shelter, economics, etc.

    Liked by 1 person

  • It boggles the mind as to why would a country like Barbados boasting about its adequate store or reserves of forex (most of it achieved through loans) would want to continue to draw on further lines of the IMF loan-shark financial cocaine.

    Why should it lick its chops in great expectation of receiving any US $49 mill in BoP support in the coming weeks?

    Why take something which you claim you don’t need if it is going to push the country further into the foreign debt trap by compromising the chances of ever properly servicing the recently restructured old debt?

    Liked by 2 people

  • If you are to think bold, why is the health of emera important.
    A bold rethinking should mean turning every building into a power producer.
    Giving emera a monopoly is capitalist thinking. The way of the past.

    Liked by 1 person

  • @PLT

    UNIVERSAL BASIC INCOME
    Great idea, maybe we can use our imaginary surplus FX to fund such an initiative. Peter these kind of humanitarian and socilistic views are basically what got Barbados to its present situation. Nothings FREE, SOMEONE HAS TO PAY. PRESENTLY THOSE PAYING ARE GETTING FED UP WITH THOSE LIMING, WHINING and BEGGING.

    Liked by 1 person

  • peterlawrencethompson

    @Wily Coyote June 2, 2020 12:32 PM
    “PLT is still promoting an offshore financial system for Barbados…”
    ++++++++++++++++++
    Nothing could be further from the truth. You misunderstand what I am suggesting. I am suggesting recruiting neighbors, not bank accounts. I want people who live among us, raise their families here, send their kids to our kids birthday parties, and hang out with us for souse on a Saturday.

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  • We need to restructure Barbados so that no citizen is destitute, public revenues are sufficient to meet public expenditures, public services use technology to dramatically improve efficiency, and efficient public sector purchases of goods and services are completely free of corruption.
    #####
    And achieving that will require political action by those who would benefit from such a change. Those who benefit from the status quo will oppose it. 1816 and 1937 here we come again.

    Like

  • @Pacha

    To destabilize Emera will disrupt a stable grid important for doing business.

    @Peter

    We have to refashion the taste for goods and services which reduces conspicuous consumption or webgo nowhere fast.

    Like

  • @ Wily Coyote

    Peter these kind of humanitarian and socilistic views are basically what got Barbados to its present situation. Nothings FREE, SOMEONE HAS TO PAY. PRESENTLY THOSE PAYING ARE GETTING FED UP WITH THOSE LIMING, WHINING and BEGGING.

    #######

    It’s important that we understand our history because then we would better understand the state of our country. What you call humanitarian and socialistic views, by which I think you’re referring to the embryonic social welfare provision that exists in the country, were a necessary requirement to stabilise a society that had already exploded in 1937 and in which after 300 years of capitalism, 200 under slavery and 100 under colonial apartheid, the mass of Bajans were in destitution and poverty. Any idea that Bajans can be forced back down to that level is to play with fire.

    Nothing has ever been free, not the profits of the business owners and moneylenders, the wages and salaries of the workers or the revenues of the government. They all come out of the wealth created by the labour of workers in Barbados. The issue then is what happens to this wealth. Is it to be handed over to the rich who can fritter it away as they like while others go destitute or is it to be used for the well being of all? That’s the choice our country faces. There is no alternative to restructuring Barbados so that the well being of its citizens is the purpose of the economy and of a new and genuinely democratic political system.

    Liked by 1 person

  • One possible opportunity is healthcare tourism, matching the meducal universties. Provide quality healthcare to US etc citizens, which are very expensive. This could be a good earner of forex.

    Like

  • @PLT
    “How are we going to redefine tourism, ‘international financial services’ or rum to make an impact this fiscal year??

    I noted that INTERNATIONAL FINANCIAL SERVICES were included as one of your three suggested revenue generation sources. What are you suggesting here other than sheltering/hiding etc. like previous Barbados registration of of Trust accounts which is now basically shut down.

    Like

  • peterlawrencethompson

    @Wily Coyote June 2, 2020 1:24 PM
    Ahhh, now I understand where what I wrote was confusing. My apologies.

    My list was of our historical FX sources. My idea was to redefine tourism to ignore the short stay mass tourism market and concentrate on the new work from home live in Barbados market. I have no suggestions as yet for either international financial services or rum.

    Like

  • @PLT 7:26am
    Amen!!

    Like

  • Seems most agree we need to be more efficient at Tax Collection……. as PLT suggested…let’s be “bold”….. firstly, 10X times the number of BRA outlets so we don’t have to line-up in the hot sun & rain; eliminate some of the archaic ‘rules’ making it difficult to pay your taxes; ramp-up the website bandwidth so we are not staring at a static webpage waiting to proceed to the next step; and so on…. just my little contribution.

    Liked by 2 people

  • Happy to see no one is talking about canned pigeon peas, yams and breadfruits.🤣🤣

    Like

  • @TEE WHITE

    I agree with your philosophy, the only BIG QUESTION is how do you propose to accomplish this with HIGH DEBT LEVELS, NO GDP and limited cash flow.

    Like

  • @ David.

    Don’t look at the emera situation that way. Put things in place so emera can also be part of the solar expansion drive. They got generators to replace soon, put things in place so the replacement comes from solar and not fossil fuel. In other words include them and not fight against them.

    Look at what Florida Light has done over the last ten years and encourage them to mirror it. It’s all about putting in place a state plan that includes all.

    Liked by 2 people

  • Barbados and most of the other Caribbean islands will be recolonised, not by a Country, but a corporation. The same way desperate politicians sold the island out to a small fry like Butch during a “minor” crisis, what do you think happens if Mark Zuckerberg, or Elon Musk asks for the St. Lucy to build a campus or a mini city of a future for testing AI controlled cars, drones and whatever else they can think of.
    What happens when the Maloneys, Williams and Bjerkhams meet with the PM and tell her they have a way out that will bring 10,000 construction jobs over 10 years, and continuous employment for thousands, it just requires giving a parish or two to a corporation and giving them complete sovereignty over the area for 99 years.

    Like

  • Let me summarize your discussion: There is no path without pain. Any austerity measures will only exacerbate the recession in the short term. Like a drug addict, our society is dependent on state transfers and employment with the state.

    We should therefore think long-term: the opportunity is more favourable than ever for “currency consolidation” and “optimisation” of the public sector.

    To cushion the impact of hardship, I suggest:

    First, a government-sponsored emigration program; emigrants must transfer money back to the island for 5 years. In return, an immigration program for rich foreigners (citizenship by investment) with tax exemption for the first five years and after that a flat rate for all incomes of 15 percent. Condition: At least $10 million investment in the first five years.

    Secondly, no layoffs in the public sector, but a 10-year recruitment freeze in combination with early retirement (compulsory) at 55.

    Thirdly, a reduction in pensions for former politicians and civil servants of the S grades. OSA, for example, does not need a high pension, he is supposed to become CEO of LIAT. Or is this information no longer up-to-date?

    Fourthly, a one-time “patriotic” capital levy for Barbados taxpayers with net assets in excess of USD 1 million, amounting to 10 percent of their assets. In return, all those who pay at least 1 million extra will receive the honorary title “Sir”. Whoever pays at least 10 million will be declared a national hero, from 100 million on there will be a portrait on a banknote. Isn’t that an incentive?

    Liked by 1 person

  • Remember too that emera buys their fuel from government who then has to look for hard currency to buy the said fuel on the open market. If we can reduce the demand for fossil base fuel we all win. Emera goes ahead with large scale alternative plans, which We guarantee them the same ROI percentage wise on. The only people that lose out here are the oil suppliers.

    The move must be all-inclusive for it to work, we can’t go at it half way like we did in the past. I invite those that haven’t seen it yet to drive up shophill opposite BRC and see the solar farm Bizzy is doing. It can be built in months and put online.

    Like

  • @Redguard
    better yet ….why not let them build an island (a la Altman)…… and a separate one with a Quarantine Hospital….medical tourism!!

    Like

  • @ks that island idea was a non-starter, Altman copying from the Arabs, plus he wanted government to foot the bill the build them and let him reap the majority of the profits in sales

    Like

  • @John A

    Like your approach about creating a win win plan with Emera. In the past one got the impression EMERA principals led the discussion. What is Wilfred doing?

    >

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  • It would also be conceivable to set up a special economic zone, without customs duties, taxes and with the US dollar as trading currency. In China this works splendidly. Tech companies that love the tropical flair could settle in Barbados. So from the office directly to the beach.

    If I remember correctly, Chris Sinckler also wanted to introduce this, at least in a slimmed-down version.

    Like

  • peterlawrencethompson

    @Wily Coyote June 2, 2020 12:39 PM
    Let’s do the arithmetic and think UBI through, OK?

    So let us first make sure that no Barbadian citizen is destitute, OK. The most recent data that I can dig up on poverty is from the 2016 IDB research https://publications.iadb.org/en/barbados-survey-living-conditions-2016. It showed that:
    • 3.65% of Barbadians existed below the extreme poverty line of $297.28 per month per person
    • 13.83% additional Barbadians existed below the non-extreme poverty line = extreme poverty line + basic non-food consumption valued at $642.52 per month per person
    • 11.05% additional Barbadians were at risk of poverty because they had less than $803.15 per month per person
    So 28.53% of Barbadians live in poverty or at risk of poverty.

    The adult population of Barbados amounts to about 228,000 people, about 79% of our all Barbadians. If we institute UBI of $225/week we can lift the entire population out of poverty. We will of course tax it all back from those earning a decent salary, so the cost will be about $225 x 52 x 228,000 x 28.53% = $761 million.

    Now all this gets spent in the local economy, so 17.5% of that immediately returns to public revenue as VAT. That is $133 million. So now we need to find $628 million. The UBI also replaces everything that the government spends in unemployment, non-contributory pensions, and welfare. I’m not sure how much that is, but we currently spend $381 million on grants to individuals. So let’s guess that the duplication accounts for $228 million. Now we have to find $400 million.

    We then shut down the welfare department. The savings are just chicken feed.

    Then we cancel the $200 million we were going to throw at the tourism sector for painting and renovating their hotels… they can get commercial loans at great rates for that purpose. Now we have to find $200 million.

    We take the final $200 million from the government scheme to subsidize home ownership for those earning $1,000/week or more.

    There you go. It can be done. We just require the political will.

    The $761 million injection of spending power to the most vulnerable in society will act as powerful economic stimulus… much more powerful that the governments current $2 billion over 2 years plan. This is because UBI will be immediately spent on locally produced necessities of life: sweet potatoes, chicken parts, mangoes, etc. Hardly any of it will be frittered away on imports.

    You probably have not even guessed my ulterior motive. This will bring everyone into the formal economy, because no Bajan can resist a freeness. Everyone will have to get an account at a Credit Union or Bank because there will be no lining up at post offices wasting time and money; it will all be electronically deposited into people’s accounts.

    Like

  • @ David.

    The way I would look at Emera is the same as any other company. They want a return on their investment and that’s it. All we need to do is put in place the framework to guide them towards alternative energy as opposed to diesel generation. Once the incentives are there they will take that road. They are in the business of providing electricity and not drilling for oil. It’s all a matter of discussing with them our wishes and offering them the correct encouragement. As I said inclusion as opposed to opposition. I am sure this whole covid thing has opened their eyes as well.

    It also means they can offer a more predictable electricity rate to the public as they will not have to worry about oil price fluctuations globally.

    Like

  • PoorPeacefulandPolite

    The answer to the economic and social decline we are going to be facing inevitably, will be migration. Since the 1840 there have been several waves of it not only to North American and Canada but also to other countries in the region and South America. My grandfather migrated to Guyana to prospect for gold in the North West District. Others family ancestors went to Cuba and Panama after the collapse of the day’s single industry. Public servants and young people should take these days to pivot and find alternative skills into which to diversify and keep afloat. Wherever you end up resting your head – that place is Barbados !! Barbadans are vakued people wherever they go.

    Like

  • @ PLT @3.10

    What you are proposing is workable and the net amount you will need to look for would even be less than you think. The add on of vat from the project and the ability of those involved to consume, will drive the vat receipts higher. The worker for instance who now has a pick at say $1800 a month goes into the supermarket and buys, treats the girlfriend to a night out. This is where the informal economy now contributes more than many expect when there is liquidity. The fish vendor, the food van etc, all those unmeasureable forces now come into play to bolster the economy.

    Liked by 1 person

  • “Wily estimates that the government $500M shortfall in revenue is well under estimated, shortfall over the next 18 months is likely to be in the $1.5B range.”

    that is how mathematics work without any deviation….

    the 1 Billion written off for VAT thieves..

    the 500,000 written off for another bunch or same thieves, family and friends….=1.5 Billion dollars…

    that will always be a shortfall…defici…t and there is no way to recoup or recover especially with a bunch of parasites sucking on everything that is still left behind which is not much by today’s environment…and no other useful industries in sight..

    Barbados population will not grow if the people are intelligent and realize they are being used and set up to feed and create wealth for parasites and not for themselves and their current and future generations…

    “Others family ancestors went to Cuba and Panama after the collapse of the day’s single industry. ”

    one would think the as*holes of parliament would have learned something from that, but no post early 20th century they are still FORCING THEIR PEOPLE TO BE DEPENDENT and don’t have a jot of intelligence to even lead themselves…..but they know only too well how to stuff their fat guts with everything….and as for that shaving off 100+ million dollars off of civil servants salarie’s …i guess annually…that would be going mostly to them and their fellow parasites..

    Liked by 1 person

  • @Peter

    What you have tabled looks good for a working session to kick of things. What will have to be also addressed is how to rid ourselves of the power structures of the ‘establishment’ that will resist to protect self interest.

    Liked by 1 person

  • “What happens when the Maloneys, Williams and Bjerkhams meet with the PM and tell her they have a way out that will bring 10,000 construction jobs over 10 years, and continuous employment for thousands, it just requires giving a parish or two to a corporation and giving them complete sovereignty over the area for 99 years.”

    that would be solely to rob the treasury and pension fund and she is so stupid and lacking in intelligence…she would allow it, because she is just as small time and backward as them and have no care for her own people living or dead.

    Like

  • I consider UBI to be the devil’s work. In my view, unemployment among former employees is nothing more than the unwillingness or inability to try their hand at the market as entrepreneurs. If we were to introduce UBI, even more people would be resting on the social hammock than is already the case.

    We need not more, but much less welfare state to promote independent thinking and free entrepreneurship. 95 percent of all Barbadians think economically in the categories of socialism and socially in the categories of the Taliban. This is why there is no progress with new forms of tourism and social liberation of minorities persecuted by the majority society.

    Metaphorically speaking, we do not need social amphetamines in these difficult times, but rather treatment of the masses with the social electroshock device, so that they take the initiative for a self-determined life, instead of just eking out a living as dependent civil servants and employees as in the past.

    Many here on BU complain about the white businessmen and yet at the same time want to keep the black masses in the bondage of the welfare state and dependent wage labour in order to control them. That is no small contradiction.

    Liked by 1 person

  • What ever happened to the idea of allowing Bajans to buy items Duty Free provided they use FX???
    When in possession of FX, we do not spend it locally…. most prefer to hop on a plane and fly to PR, Miami, etc. … and buy!
    Kill that ‘incentive’!

    Like

  • peterlawrencethompson

    Tron June 2, 2020 3:52 PM
    There are so many young people I meet who would be able to study coding or start a small business if they had a means of bare survival while they did so. UBI would be that means of survival while they built their capacity to achieve great things. Success depends on the ability to take risks… that is why the rich White boys and girls are so often more successful as entrepreneurs, because they have the support to take risks without starving when things don’t work out; they just try again.

    Like

  • peterlawrencethompson

    @Tron June 2, 2020 3:52 PM
    If you think $225 a week gets you “resting on the social hammock” you are very much mistaken. All it does is stave off death for another week.

    Like

  • Well if those house negros think they have seen something, wait until about 800,000 of the 1.6 Billion population of the African descended gets going WORLDWIDE….small island shitehounds will then be put firmly in their places…

    “When the Target starts burning down, the Black liberal will fight harder to put it out than its owners. But as Malcolm X said: “You had another Negro out in the field. The house Negro was in the minority. The masses – the field Negroes were the masses. They were in the majority. When the master got sick, they prayed that he’d die. If his house caught on fire, they’d pray for a wind to come along and fan the breeze.”

    They gave you the platform, but there are more of us than there are of you. The greatest trick you ever pulled off was to make it seem that it was you who represented the majority of Black people and it were those radically against colonial policing who were few and far between. Now you see us in our thousands. Stop crying.”

    Like

  • We must be careful that migration does not set back black progress. Some of the folks I see here are frightening.

    Liked by 1 person

  • @ peterlawrencethompson June 2, 2020 4:02 PM

    If you want to introduce large-scale monetary gifts with the earmarking as risk capital for business start-ups, I’m right behind you. However, we should not then distribute the money with a watering can, but give it to the young generation in a targeted manner.

    Like

  • @ TheOGazerts June 2, 2020 4:37 PM

    There is a country in South America, just 800 kilometres away, where milk and honey flow. The most talented people from North America and the Caribbean are already there, in El Dorado. Emigration is not a threat, but a promise.

    Like

  • All together now, they only opened for one week for elections and that was enough to jump from 0 to over 30 cases of plague..

    “Fertus Boerenveen
    Yesterday at 12:54 PM
    CALL!!!!

    Hereby I would like to ask the Surinamese in the Netherlands to support their family and friends in the fight against this virus. It has struck again and Suriname has to be flat. Just putting aside all business disputes and take this seriously. We don’t want Brazilian scenes in Suriname. That’s why now take all precautions to integrate this virus. You know the rules of game.
    We do this together.”

    Like

  • Let’s cut to the chase. I suggest that Barbados offer itself for sale to Canada. Or China. Or Germany.

    That way we don’t have to earn our way in the world or think too hard or make tough decisions. That’s seems to be what we want right?

    Liked by 1 person

  • peterlawrencethompson

    @Tron June 2, 2020 5:02 PM
    I am very experienced in entrepreneurship development and I can help any young entrepreneur improve their chance of success considerably. What I cannot do is predict which of them will be successful; for that you need clairvoyance, not expertise. The mistake that you are making is exactly the one that socialist administrations have been making for over a century with state enterprises. Even the best venture capitalists in Silicon Valley cannot predict with any accuracy which ones of their investments will succeed and which ones will fail. They simply try hard to help a whole bunch of entrepreneurs and some of them succeed.

    Liked by 1 person

  • PLT,

    Such a large scale boost for young entrepreneurs is indeed very useful. Failure is an experience, not a failure.
    So far, we have seen young entrepreneurs in Barbados mainly in the drug trade. That must change. In future I want to see black Williams brothers and a black Baloney ripping off white politicians in Barbados 😉

    Liked by 1 person

  • @TRON

    I’m going for the “portrait on a banknote” always enjoyed Monopoly Money, by the way is $100M Guyana acceptable.

    Like

  • Correction: Failure is an experience, not a shortcoming.

    Liked by 1 person

  • Vincent Codrington

    @ John A
    The answer to your burning question which is repeated at the top of this moot is to re-prioritize the items on the to do list. If your revenue is cut by 25% cut expenditure by 25 % . That is commonsense and good economics. There is too much fat,more than 25%, in the current budget . Fortunately the financial process of the state is not stationary. There is a process called the multiplier effect which, if managed well, creates other sources of tax revenue. Was the Estimates stressed tested by the compilers ? Budgeting is not just simple book keeping.

    Like

  • Vincent Codrington

    @ Pachamama

    You must be disappointed in your hope that a different approach to perceiving economic management through a new lens is still very far into the futur,. Do not be guided by what you read on Bu. Things are moving the way they should.

    Like

  • @PLT

    Your proposal has MERIT, especially if taken out of the Barbadian Context. Like David said “rid ourselves of the power structures of the ‘establishment’ that will resist to protect self interest”. Tron also has a good point that “more people would be resting on the social hammock”. Your proposal has one FLAW that jumps out at me immediately, Most BAJAN”s are on the lookout for FREEBEES, HANDOUTS and not too interested in being entrepreneurs but more interested where and when is the next fete. Making this proposal in GERMANY would definitely result in a WIN WIN as Germans are born with a drive to succeed.

    The majority of the Barbados population is decedent from Indentured white Servants and African Slaves and have generally been guided(controlled) and looked after(feed and clothed) by a MASTER. Many years under this sub-servant master servant culture has apparently breed most entrepreneurship out.of their DNA. Most of colonial Masters made their fortunes off the colony and backs of this populace then retired back to the mother land, wherever whichever. These colonial masters dangled INDEPENDENCE in-front of some BLACK individuals and like a trout they jumped and took the bait. The ability to run a country comes from more than an INVITE to individuals that did not have training and skill levels to organize and run a country. Based on the last 20 years or so these individuals, governments, in power appear to still be lacking in training and skills. This is referenced by the fact the country on four separate occasions has had to get financial assistance and “guidance” from the IMF in 45 years of independence, note the “guidance” term in quotes.

    Davids quote keeps coming to mind, SAME OLD SAME OLD. Wily takes this quote to mean, IF WE DONE IT THIS WAY YESTERDAY THEN WE SHOULD DO IT THIS TOMORROW also. If someone, possibly you, can come with a means to change the Bajan mindset from what presently exists, then there is a possibility for a NEW ENTREPRENEURIAL BARBADOS which would no doubt succeeded.

    Liked by 1 person

  • peterlawrencethompson

    @ Vincent
    I’m counting on you to point out ALL the flaws in my hypothetical UBI scheme.

    Like

  • @ Vincent

    I believe the government knows what has to be done. The question is will they bell the cat or pull a Chris and kick the can down the road? Belling the cat is going to be an uncomfortable proposition for those involved.

    Liked by 1 person

  • @JohnA

    The CAT IS SACRED and will never be belled, understand a consultant has been hired to get the printing presses in operational order.

    Like

  • @PLT

    You often adopt positions, sometimes in a confused and unclear way, with such fervour that it is clear your natural calling is as an evangelical priest. The drive for a universal basic income, not surprisingly, is one called for by both the far right and far left. Political ideologies go round and round in circles.
    The idea has its appeal: a level of income that provides a basic decent standard of living without the humiliation of means-testing. But there is a huge debate most of which you seem to ignore or not to be aware of.
    We had a similar debate in the UK some years ago when Sir Steve Webb was pensions minister. It was about the contributory pension, and Sir Steve proposed a 30-year contributory period for a full state pension entitlement.
    In theory, generous and fine. But, let us assume that someone leaves university at age 25, makes a 30 year contribution, taking them to age 55, then retires on a state pension and lives to the age of 85..
    Let us also assume a young man or woman left school at age 16 and has to make a 30 contribution to become eligible for a full state pension, taking them to age 46. But the state retirement age is not 46, nor 55; it is in most states between 65 and 70. So, the working class guy will have to continue working for a further 21 years to reach age 67, whereas the university graduate will only have to work a further 12 years..
    During that period, s/he will still be making contributions to the state pension scheme (unless there is a special dispensation as in the UK at age 65). Do you see the unfairness of a universal basic income idea? How will you resolve that paradox?
    There are no easy answers. I do not want to drag on the issue. But I will separate out welfare and a retirement income. I will discuss it at another time.

    Like

  • @ Wily Coyote June 2, 2020 7:00 PM

    Yes, it is about freeing people from their dependence on employers and social benefits. For Marxists, economic dependence is the second slavery. We need more entrepreneurship. In this respect PLT is working in the right direction.

    For the rest, most societies share the transformation problems you describe. The abolition of serfdom ran parallel to the liberation of slaves. This is no accident. The former serfs did not become independent peasants, but rural proletarians and then industrial proletarians. In economic terms they were thus almost as dependent as they were during the ancien régime. The history of the freed slaves was very similar.

    The after-effects are still being felt in Europe today. In areas with particularly strong serfdom before 1800, there is still less free entrepreneurship today. That too should give us food for thought for Barbados, since exceptions confirm the rule, as is well known. We would have to explain, for example, why the entrepreneurial quota in Jamaica is much higher than in Barbados, although conditions there are very similar.

    Liked by 2 people

  • peterlawrencethompson

    But Hal, Universal Basic Income is not a contributory pension. It is not dependent on making any contributions whatsoever. I proposed no means test for UBI; it goes to every single body, even C. O. Williams, but for middle and higher income levels it gets completely taxed back.

    So the unfairness of different contribution levels never enters the picture.

    You may or may not know that the non contributory pension that every Barbadian is entitled to whether or not they ever made a contribution to the NIS, is currently the same $225/week.

    Like

  • peterlawrencethompson

    @Hal,
    I’d be an utter failure as an evangelical priest because I have absolutely nothing to say unless I have factual data to work with. Priests, particularly evangelicals, work with nothing except mythology and imagination.

    Like

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