Active Macroeconomic Policies must be Maintained and Deepened by Caribbean Countries

The following report was distributed by the Economic Survey of Latin America and the Caribbean 2020 – David, Blogmaster

(October 6, 2020) It will be essential to maintain and deepen active macroeconomic policies to achieve recovery and economic and social transformation after the crisis unleashed by the coronavirus pandemic, ECLAC indicated in a report entitled Economic Survey of Latin America and the Caribbean 2020. Main conditioning factors of fiscal and monetary policies in the post-COVID-19 era, released today by its Executive Secretary, Alicia Bárcena, during a virtual press conference.

This new edition of the survey, one of the main annual reports produced by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), presents an analysis of the economic effects caused by the pandemic in each country of the region and offers policy recommendations for addressing them, above all in relation to fiscal and monetary matters, while also highlighting the importance of international cooperation.

“The COVID-19 pandemic is having historic negative effects in economic, productive and social spheres, with lasting consequences and medium-term effects on growth and increased inequality, poverty and unemployment. That is why the process for economic activity (GDP) to return to its pre-crisis levels will be slower than what was observed during the subprime crisis (in 2007-2008),” Alicia Bárcena indicated upon unveiling the document.

According to the report, Latin America and the Caribbean is experiencing its worst economic crisis in a century, with an estimated -9.1% contraction in regional Gross Domestic Product (GDP). As a result, by the end of 2020, the level of GDP per capita will be the same as it was in 2010 – which means that there will have been a 10-year setback, with a sharp increase in inequality and poverty.

In addition, 2.7 million formal businesses are forecast to close in 2020, while unemployment is seen affecting 44 million people (with an increase of 18 million people versus the level seen in 2019, marking the largest surge since the global financial crisis).

Furthermore, poverty is seen reaching the same levels observed in 2005, meaning that it would suffer a 15-year backslide, affecting 231 million people, while extreme poverty is forecast to reach 1990 levels, entailing a 30-year setback and affecting 96 million people.

“In this scenario, active macroeconomic policies will be needed to resume growth and to promote an agenda for structural transformation. Public revenue must be strengthened, conventional and non-conventional expansionary monetary policies must be maintained, and macroprudential regulation must be bolstered along with the regulation of capital flows to preserve macro-financial stability in the short and medium term. International cooperation is fundamental here to expand macroeconomic policy space,” ECLAC’s highest authority explained.

With regard to fiscal policy, the Economic Survey 2020 indicates that countries have made diverse fiscal efforts to mitigate the pandemic’s effects, amounting to 4.1% of GDP on average and accompanied by state credit guarantees of up to 10% of GDP. These fiscal efforts – along with declines in public revenue – have contributed to a bigger fiscal deficit and increased public debt.

In this sense, the document indicates that the challenge is to maintain an active fiscal policy in a context of greater indebtedness. To achieve this, active fiscal policies are needed in a framework of fiscal sustainability that is centered on revenue. Latin America and the Caribbean must increase its tax collection, which is currently 23.1% of GDP on average for the region’s national governments, compared with the 34.3% seen among countries of the Organization for Economic Cooperation and Development (OECD). To do so, States must fight tax evasion and avoidance, which amounts to 6.1% of regional GDP; consolidate individual and corporate income taxes; broaden the scope of taxes on wealth and property; and establish taxes on the digital economy and corrective taxes, such as environmental levies and others related to public health.

“Active fiscal policy must link the short term (emergency) with the medium and long term, to shift the development model towards productive transformation with sustainability and equality,” Alicia Bárcena stated. “Countries must orient public spending towards reactivation and economic transformation, strengthening public investment in sectors that foster employment, gender parity, social inclusion, productive transformation and an egalitarian transition towards environmental sustainability,” she added.

To expand policy space, ECLAC proposes better distributing global liquidity through international cooperation. In this area, multilateral credit institutions must be capitalized to expand their financing capacity and liquidity, both at the current juncture as well as with a longer view. Also, cooperation between central banks should be institutionalized to sustain expansionary monetary policies as well as those aimed at preserving macro-financial stability, and the global and regional financial safety net must be expanded to counteract the negative effects of volatility in financial flows at times of systemic crisis.

In this vein, the Fund to Alleviate COVID-19 Economics (FACE) initiative – presented recently by the government of Costa Rica – is an example of an international cooperation mechanism to improve the distribution of global liquidity so that it reaches developing countries.

The report also stresses that debt relief and restructuring for countries with vulnerabilities and a heavy burden of interest payments is necessary for expanding policy space. Currently, middle-income countries account for 96% of all developing countries’ debt (excluding China and India), which means that it is urgently necessary for the international financial community to expand liquidity conditions to address financing needs on a global level.

“Providing debt relief on interest payments would increase the availability of resources for development,” Alicia Bárcena emphasized. “In this area, there is an imperative need for debt relief in the Caribbean. ECLAC has advocated for financial support so that vulnerable economies in the Caribbean can generate resilience through an initiative to reduce their debt and the creation of a Caribbean Resilience Fund.”

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50 thoughts on “Active Macroeconomic Policies must be Maintained and Deepened by Caribbean Countries

  1. IMF predicts big rebound next year


    THE INTERNATIONAL MONETARY FUND (IMF) sees a big economic rebound in Barbados’ future, as the country fights off the recession triggered by the COVID-19 pandemic.
    Like the World Bank did last week, the IMF yesterday forecast that Barbados’ gross domestic product will contract by 11.6 per cent this year, having earlier this year said it expected a 7.6 per cent decline.
    But the international financial institution also said it expected the country to climb out of recession and register 7.4 per cent economic growth in 2021.
    With thousands of Barbadians still jobless, the IMF also said it saw unemployment being 14.9 per cent by the end of December, while consumer prices would increase by 2.9 per cent.
    This information was released yesterday in the organisation’s latest World Economic Outlook titled A Long And Difficult Ascent.
    The IMF’s 2021 economic growth prediction for Barbados is above the 3.6 per cent GDP increase average forecast for Latin America and the Caribbean, and the 3.9 per cent for the smaller Caribbean grouping.
    Barbados’ growth prediction is higher than most of its fellow CARICOM member states – Antigua and Barbuda (4.7 per cent), The Bahamas (4.6 per cent), Dominica (3.3 per cent), Grenada (three per cent), Guyana (8.1 per cent), Jamaica (3.6 per cent), St Kitts and Nevis (eight per cent), St Lucia (7.2 per cent), St Vincent and the Grenadines (3.7 per cent), and Trinidad and Tobago (2.6 per cent).
    Barbadians will learn how the economy performed in the first three-quarters of the year, and the immediate outlook, when Central Bank Governor Cleviston Haynes holds his third quarter press conference next Wednesday.
    More details on what the IMF projects for this region are expected soon when the Western Hemisphere Economic Outlook is released, but the rebound for Barbados and other tourismdependent economies was predicated partly on a slightly better than expected world economic performance.
    Tourism hope
    There was also hope that the vital tourism industry would improve heading into 2021 and that the pandemic’s effects would ease.
    Yesterday, the IMF’s chief economist Gita Gopinath said while challenges remained, there were signs
    the global economy was on the comeback trail.
    This was even though she reiterated that 2020 remained the worst crisis since the Great Depression of the 1930s.
    “As a result of eased lockdowns and the rapid deployment of policy support at an unprecedented scale by central banks and governments around the world, the global economy is coming back from the depths of its collapse in the first half of this year,” she reported.
    “We continue to project a deep recession in 2020. Global [economic decline] is projected to be 4.4 per cent, an upward revision of 0.8 per cent compared to our June update.
    “This upgrade owes to somewhat less dire outcomes in the second quarter, as well as signs of a stronger recovery in the third quarter, offset partly by downgrades in some emerging and developing economies. In 2021 growth is projected to rebound to 5.2 per cent, 0.2 per cent below our June projection,” she added. Gopinath also cautioned that “there remains tremendous uncertainty around the outlook with both downside and upside risks”. “The virus is resurging with localised lockdowns being reinstituted. If this worsens and prospects for treatments and vaccines deteriorate, the toll on economic activity would be severe, and likely amplified by severe financial market turmoil,” she noted.
    “Growing restrictions on trade and investment and rising geopolitical uncertainty could harm the recovery. On the upside, faster and more widespread availability of tests, treatments, vaccines, and additional policy stimulus can significantly improve outcomes.”

    Source: Nation

  2. Will someone with access to Hansard plse publish Owen Arthur’s speech on the reply to the Budget in which he said Barbados should de-couple from the Greenback and peg to a basket of currencies. I have not read the original.
    At the time, a well respected Barbadian emailed me to draw it to my attention. I won’t say what he said at the time.

  3. This is made for interesting reading.

    ”Barbados’ debt levels likely to rise by year-end

    The World Bank is painting a dim picture of the Barbados economy for 2020, with a forecast that the economy would shrink about 11.6 per cent.

    In its semiannual report of Latin America and the Caribbean region, the World Bank said “a steep decline in growth is projected for 2020 due to the COVID-19 pandemic”.

    The document – the Cost of Staying Healthy – was released late Friday.

    The Washington-based financial institution said the fallout in the tourism sector and disruptions to local production were expected to depress growth, resulting in a third consecutive year of recession.

    “The fiscal and external accounts are expected to deteriorate substantially,” it added.

    “High levels of public debt limit space for counter-cyclical fiscal policy to lift growth and reduce poverty. Downside risks are very high considering the country’s heavy tourism dependency and vulnerability to shocks from economic and natural disasters,” it said.

    The World Bank is predicting that Barbados’ debt levels could rise to 133.6 per cent at the end of this year before going back down to about 124 per cent next year.

  4. We in for a rough time, in spite of the gallons of Kool aid MIA AMOR MOTTLEY dishing out.

    ”Barbados told not to expect debt relief”

    A top official of the World Bank has poured cold water on any hopes of Barbados getting debt relief from lending partners.

    World Bank Chief Economist for Latin America and the Caribbean Martin Rama said countries in the Caribbean should not count on getting any debt relief and should therefore look seriously at other alternatives of effectively managing and growing their economies.

    He was speaking with journalists from the English-speaking Caribbean, on Friday, when aspects of the World Bank’s semi-annual report, The Cost of Staying Healthy were discussed.”

  5. A lot of academic and bureaucratic fluff. 🎯 tossing.
    Sooner or later they will crank up the printing machines.

  6. Wuh Loss !! I wonder what is surprising about these projections. I suppose they are more acceptable when they are penned by commenters from “over and away”. Lol!! We tend to forget the data is generated and collated locally.

  7. Wait since when the IMF or anyone else for that matter can speak to a rebound in the economy when not even the WHO is able to predict the rate of future covid infections and it’s impact on the global economy?

    The rebound of our local economy will depend on 2 things. 1 is how will the rate of future infections behave over the next 3 months and 2. How quickly can we diversify our economy so it is not as dependant on tourism? be it to agriculture or alternative energy.

    Ask any hotelier and he will tell you he had a few bookings in the first quarter but is now receiving cancellations daily. Especially out of the UK and Europe. Forget the USA THEIR new cases will blow up in November as a result of all the mass rallies and no mask wearing so they out the picture.

    Book smart forecast versus street smart reality. We are in for a rough 1st quarter compared to last year especailly in light of the fact the covid effect didn’t hit us to the end of the winter season last year.

    • @John A

      If the rebound is uncertain for the reasons you cited is this not why we use the forecast model using assumptions which may have to be revised?

  8. Wait I forget to ask a question.

    What is the local deficit and revenue shortfall as of September 30th 2020 against the estimates we voted on this year?

    We hit $400M year to date yet in deficit?

    Can’t get nobody to answer this at all at all no matter how I try!

  9. @ Northern

    Practically ever major country printing like demons. UK, USA much of Europe. Not sure about Canada as i haven’t seen recent figures for them.

    Besides I hear Mr Sikyuh and the big brain committee come up with a plan called BANDIT! It stand for BREK ANOTHER NEW DEFICIT IN THEM! Lol

    Anyhow I still waiting for the deficit figure as of September and a tax schedule for we tail to show how we going fiance it. I already advise the dog to expect cut backs in pet food. He could drop a few pounds anyhow ( like the owner).

  10. @ Hal

    Had red peppers with lunch. Lol

    Seriously though we really need to discuss this matter in a way that can be easily understood. I mean yes rattle off all the numbers but stop and explain to people the reality.

    We know our arrivals in the first quarter of 2021 has to be down on the 2020 first quarter. After all dem didn’t have covid last year and we were open to the end of March fully. So that can not be argued over. Good so if the first quarter is the best quarter and we know we going be down there big-time, where de tail any recovery next year coming from? Plus what you recovering on in 2021 in the 2nd quarter, an economy that was in lockdown
    For the comparative period in 2020? Lord if you can’t do that we really doomed. Lol

    My point is yes we can play with figures, but it will not mean anything to the 40,000 unemployed. If you want to compare in real terms then compare 2021 to 2019 not 2020 where the place was lock down for 4 months. Lord even a shop keeper like me will do better open in the 2nd quarter of this year than last year when the one door was pull in and the lights turn off.

    Again I say book smart isn’t street smart. To the taxi that lost his car to the bank or any of the 40,000 jobless that home, making nonesence statements mean nothing.

    So again I ask will somebody please tell us how you plan to run the country on 30% less revenue than budgeted in the estimates and how do you plan to bring our expenses closer to our reduced income? Or will we go on and is and run up a massive deficit by year end? What is de plan?

    Left out the fancy footwork and empty statements and answer that.

    I hereby now step down off my soap box!

  11. @ David.

    Not at all, let me tell you the problem with forecast numbers based on previous performance.

    Suppose I was closed last Sunday from mid day, but i will be opened this Sunday all day. I can forecast that I expect an increase in sales this Sunday of 20% over last Sunday and my statement would be correct. The problem is if I closed last Sunday half day what value does my statement have in real terms? It has absolutely none.

    It’s like us looking back at yesterday if the rained poured and saying today traffic was better, without taking into the discussion that today was sunny. So it’s a matter of content versus context in the statement. Not that the statement is wrong but as the young people say ” wunna ain’t really saying nutting.”

  12. @John A

    Your have enormous stamina. Our leaders are not interested as long as they get their cut and the people who suffer most do not care as long as they get corned beef and biscuits.

  13. More fun listening to Kirk talking shyte about jetties. Maybe they can put one in SGN? He has a “quote”, why doesn’t he direct us to the public tender call, and give us the three low bids at the time of the public opening of all bids?

  14. IMF prediction ‘too generous’

    by COLVILLE MOUNSEY ECONOMIST Jeremy Stephen says the International Monetary Fund (IMF) may have been overly generous in its prediction that the Barbados economy will grow by 7.4 per cent next year.
    He said while the economic outlook, which resulted from the COVID-19 pandemic, was likely to result in V-shaped slide and recovery, he did not foresee the recovery being as sharp as the IMF predicted. In fact, the former University of the West Indies finance and banking lecturer is warning of the possibility of a second dip before the final upward trajectory of economic growth.
    “I think that there will be a V-shaped recovery, but certainly not as sharp as they are predicting. Some economists are even predicting a W-shaped, which means that you are looking at secondary dip after a little recovery before you get that sharp incline. The W-shaped is more the worst-case scenario, but I believe that we are going to be tepid going into 2022 and then we are going to get that sharp rise,” Stephen told the DAILY NATION yesterday.
    The IMF said it expected Barbados to climb out of recession and register 7.4 per cent economic growth in 2021.
    The information was released on Tuesday in the organisation’s latest World Economic Outlook titled: A Long And Difficult Ascent.
    The Fund’s 2021 economic growth prediction for Barbados was above the 3.6 per cent GDP increase average forecast for Latin America and the Caribbean, and the 3.9 per cent for the smaller Caribbean grouping.
    Barbados’ growth prediction was higher than most of its fellow CARICOM member states – Antigua and Barbuda (4.7 per cent), The Bahamas (4.6 per cent), Dominica (3.3 per cent), Grenada (three per cent), Guyana (8.1 per cent), Jamaica (3.6 per cent), St Kitts and Nevis (eight per cent), St Lucia (7.2 per cent), St Vincent and the Grenadines (3.7 per cent), and Trinidad and Tobago (2.6 per cent).
    However, Stephen contended that in order for Barbados to see this type of sharp growth, too many things would need to first perfectly align in what was still a very uncertain global economy.
    “I don’t believe that there would be a 7.4 per cent growth because there are several things that you can’t bank on in this environment. It is still to be seen if tourism will rebound as quickly as they are expecting it to happen. They may not have assumed that the United Kingdom would have gone back into lockdown because they are going through a second wave in the winter season.
    “There is also an expected high mortgage default rate coming into the next year. When you couple this with the fact that jobs are going to be hard to come by in the next year or so, I don’t see those types of returns initially,” he said.
    The former president of the Barbados Economic
    Society argued that should the tourism sector not rebound as people were hoping, given the uncertainties of vaccine development, the remaining growth engines were simply not large enough to propel the economy to such heights.
    “I don’t think the Welcome Stamp programme is going to amount to significant returns. It certainly will not replace the 500 000 people that you normally get with tourist arrivals,” he said, adding while there was likely to be some growth, it would be modest.

  15. David

    It is amazing the level of advice given to Caribbean, South, countries.

    At a time when the people behind the scenes in Western capitals are starting to accept that Western of White systems can go no further.

    Yet we are being told about following more useless prescriptions which have never worked for us and never will. Never designed to make us better.

    Is the recent economic failure of the Mugabe regime not a signpost that we are at the beginning of the end, at least.

    • @Pacha

      A dichotomous argument if ever there was one. The so-called development countries create the world of globalization with all the rules etc, they they engage in practices that forced a self induced economic coma, then they say do not look for assistance from the countiand agencies controlled by said countries for assistance.

      Go figure!


  16. @David
    The Dullard is surprised that you still put so much confidence in the numbers coming from the likes of the IMF. ECLAC and the like.
    I thought by now you would’ve realized that these institutions possess no greater insight than any keen observer.

    This latest IMF report on Bim is just speculative nonsense.

    • @Dullard

      That is not a nice way of phrasing the issue. Here are the entities we are in bed with, the players we owe many millions and who by condition deliver technical assistance. It is important to share the analytics they use to informed positions. The rest will be up to us.


  17. @ David

    Yes I read Jeremy’s comments and agree with him that the forecast is generous to say the least. I say that for all the reasons I listed above as well.

    We also have to factor in the 40,000 unemployed. If they were receiving benefits last year and by the 2nd quarter next year they are not, then their spending power must be removed from the equation.

    I know in the short term they are going to get $400 a week I heard, but this government can not afford to do that for more than 2 months or so maximum. If they try to do more than that they will deplete what ever the source is of the funds, whether it be the NIS who we know is also now under immense strain or any other goverment entity.

    They are many factors missing from that forecast based on our domestic reality for me to feel any level of comfort with it.

    • @John A

      The 40k occurred in the full national shutdown period. One has to assume many returned to work since. Not suggesting the unemployment number is not still high.


  18. @David

    Fair enough, you adopt the diplomatic approach. But not me…

    These guys have no monopoly on analytics and insight. At best, they often adopt assumptions which are devoid of context; at worst they get it totally wrong. The question is whether we can do better with our local institutions like BSS, CBoB, Min of Fnance, etc. History shows that we can’t.

    Perhaps you are right!

    • @Dullard

      We can do better. There is always opportunity to improve. Clearly our model needs to be tweaked given the changing landscape.


  19. @ Dullard

    Plse read Olivier Blanchard, former chief economist at the IMF, who was forced to apologise for bogus theories. He was an exception to accept he got it wrong on the Washington Consensus.
    We must never stop challenging received wisdoms.

  20. I am happy to read that the BU household is waking up to the realities of the economic situation. The most important is that change is inevitable and that we have to develop techniques to leverage the opportunities made available by those changes. There are no templates as to what constitute effective policies. One is either wise or unwise.
    @ Donna.
    Barbadian policy makers do not have to follow the policies designed for the Developed Countries. We need to focus on what is useful and beneficial for us. We all have 52 ounces of brains and equal opportunity to develop appropriate economic strategies.

  21. @John A 3:12
    Not an economist and not going to any at being one.

    I think your referencing of a baseline is an important fact. 7.4 relative to what.

    Could the 7.4 also reflect that our economy suffered worse than others? If we were at 80% then 7.4 would bring us to 86. On the other hand a man at 87 then a one percent increase takes him to 88. Can we look at the numbers that way?

  22. @DavidOctober 15, 2020 6:59 AM
    You need to realize these ‘developed’ countries are equally lost. If we go back to the local default/restructure, you may recall the video where Lee Buchheit spoke to the difference between the financial (and other factors) and the political factors at play. What we saw in the first 9 months of 2020 was a full dress rehearsal. Now, the real show begins. @Pacha must be ‘licking his lips’… lol

  23. @ David

    I would say that the 40,000 is still with us. The tourism sector has not returned and the private sector has been laying off quietly for weeks. The economy is not any better than it was 3 months ago and contraction is continuing.

    Remember we too are talking about the 40,000 being the official figure. The unofficial count could be 10000 higher.

  24. @ Theo

    The problem here is that the comparison figures may be right but the question is are they relevant?

    What I mean is this. If we say we are expecting an increase is the comparison relevant? So anyone could say I expect a 30% increase in the second quarter this year and be correct, as the second quarter in last year the island was closed. It’s not that the numbers may be wrong it’s more the relevance of the comparison.

    Personally I feel a fairer comparison would be 2021 to 2019, in other words 2 periods where 12 months of trade are recorded uninterrupted. We have to be real here if we want to see how far off we are to getting the economy back to where we can reemploy the 40,000.

  25. I would hope you know that I was being facetious.

    I have a healthy respect for my own brain.

    I do believe black people are fully human, you know.

  26. @ David Bu
    Uncertainty always abounds.It is just that some periods are more stable than others, The elements that destabilize , for the most part, have their origins in man, who not understanding the system, engage in inappropriate actions.

  27. I’m an economic hitman!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    But that won’t stop some from talking shiiiiiit.

  28. Regardless of what MIA AMOR MOTTLEY Govt. tell Barbadians, we are are in for a rough time as we go forward.

    Nothing the GOVT. do will soften the impact on citizens pocket books. Poverty rates will skyrocket and there will be much gnashing of teeth of Barbadians.

    ”Coronavirus pandemic to blow $28 TRILLION hole in global economy

    This year’s output figures will be reminiscent of the 1930’s Great Depression, according to the International Monetary Fund (IMF). It said that the world is at risk of significantly lowered investment, trade and job numbers.
    The IMF’s economic expert, Gita Gopinath, said this week that “the cumulative loss in output relative to the pre-pandemic projected path is projected to grow from $11 trillion over 2020-21 to $28 trillion over 2020-25…this represents a severe setback to the improvement in average living standards across all country groups.”

  29. As the economy continues to worsen
    Brazen criminals are on the increase
    A video circulating on media shows the future of a barbados where criminality active would increase and having a govt who have all but thrown its hands in the air not knowing on to tackle crime and violence
    Also the story of a farmer losing over thirty thousand dollars of food and livestock along with video cameras tells the plight of a country heading downward into the cesspool of ongoing criminality activity

  30. Blessing circle ‘a curse’
    Shun pyramid schemes, FTC advises Bajans
    By Carlos Atwell
    Authorities are warning Barbadians about being tempted into joining the wave of “get rich quick” pyramid schemes across the Caribbean, involving thousands of dollars.
    The schemes come under various names and types and one of the latest is the “blessing circle” in which participants are promised megabucks once they get others to join.
    Making the rounds
    The Fair Trading Commission (FTC), in tracking the scheme, is warning Barbadians to stay away, as multiple schemes are making the rounds. “A pyramid scheme is where people sign up for an investment and have to bring more people in and then they will get a return on that investment but it is more than likely you will lose it. You need people to invest, so what happens when there aren’t any new people? Only the ones at the top will get paid. We’ve been looking at the best ways to communicate to consumers as to why they shouldn’t get involved,” said director of consumer protection at the FTC, Dava Leslie-Ward yesterday.
    She said they were keeping an eye on pyramid, Ponzi and work-from-home schemes, which are prohibited by legislation.
    “We are planning a ‘scam week’ from November 9 to 13 where, every day we highlight different scams and the relevant legislation on social media. In these difficult times, we do not want people to take up their dollars and place them in these schemes as they can end up with nothing,” she said.
    Leslie-Ward said according to the Consumer Protection Act, anyone guilty of organising a pyramid scheme could be fined $10 000 or spend two years in prison. A company can be fined up to $100 000 and the company directors, if involved, can be fined $25 000 and/or two years in prison.
    She said there was no official investigation as yet but they would work with the police should it get to that point.
    A man, who requested anonymity, said he had friends who were asked to start with $100.
    “Then you got to get two more people involved and then they have to get two more people. In the first instance, your turn would get you $800 but you have to give back $500. Next turn, you get $4 000 and give back $1 000, then next it’s $8 000 you get and give back $1 000,” he said.
    The man said the numbers “looked sweet” but he was sceptical.
    Lost money
    “You don’t know who is at the head of the circle or how many people are in it. In the event that you put in your money and the two people you get do not put in any money, your money burn and you only have a few days to get those people too.
    “I know ‘nuff’ people that tie up in it and I know someone who lost money too. I think it’s a scam and people need to keep out of it. The money sounds sweet but it is who at the top that getting rich from all the money people putting in,” he said, adding he had heard of one scheme beginning at $2 000.
    In a social media post, the writer said it was how those with money made more.
    “Well, it will crash if [you] can’t keep finding two [people] to join . . . [but] this is how the rich [people] staying rich. Poor [people] got [to get] included to reap the sweetness, [they] just have to be honest. This thing is trending now in Barbados [and] the banks are discouraging [you] from doing it because guess what? No one will need to borrow a loan from them,” they said, while naming some prominent people as being involved in such schemes.
    Reports from Trinidad and Tobago and the British Virgin Islands are also warning against the worrying trend. In particular, a TNT Guardian report said 1 272 people were scammed after a blessing circle crashed. In this case, the group was called “Blessing Overflow,” where members were asked to pay TT $700 to join with the promise that they would receive over TT $18 000 in “blessings” though the payout was dependent on recruiting new members to “invest”.
    However, a message from the group administrator, named “Cazim”, informed the members they had lost all their money.

    Source: Nation

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