Central Bank of Barbados Governor Cleviston Haynes delivers the Bank’s review of Barbados’ economic performance in the first nine months of 2020 and takes questions from the media and the live online audience.
Central Bank of Barbados
Central Bank Economic Review Jan-Sept 2020: High Fiscal Cost of Covid 19
Central Bank of Barbados Governor Cleviston Haynes delivers the Bank’s review of Barbados’ economic performance in the first nine months of 2020 and takes questions from the media and the live online audience. Central Bank of Barbados
131 responses to “Central Bank Economic Review Jan-Sept 2020: High Fiscal Cost of Covid 19”
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Gross reserve of $ 2billion in local currency is misleading. A better metric to use is the NON-BORROWED reserve. This is the amount left when you subtract IMF loan and other borrowed funds, used to boost the reserve. A back- of- the- envelope calculation shows our NON-BORROWED reserve is around 40% of the Gross reserve. This is not sustainable going into 2021 given the massive drop in tourism receipt.
Since rich countries are only giving poor countries a break in their debt obligation, what the IMF should have done in the mean time was to increase its allocation of SDR by 100% to all members.
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@ Lorenzo
Man, I have respectfully asked you not to mention my name like that. Do you ever read me saying who are your friends and who like and who doesn’t like you. Please extend to me the simple courtesy of not doing such things.
This is ridiculous. I have no beef with you. You have a right to support the party of your choice. But you’re constantly overstepping your crease. Once more , I ask you to be more respectful . I just had a forty eight hours debate with @Artax. Kindly go and read the back and forth.
Man, Lorenzo take it easy. You are not doing yourself any good with this nonsense. I don’t expect you to care about me buddy, I have children and grandchildren.
Please leave William Skinner out of uour comments unless you are directly referring to something said by me
. I know some may say why Skinner care about wuh Lorenzo say but I know why I have taken this route. Whether you listen or not is us up to you.
Peace.
Peace: -
The IMF, technically, is the bank of last resort for countries. They have the capacity to print SDR, just like how central banks can print their own currencies. Allocating SDRs to especially SIDS, and more boadly, struggling middle -income countries, is a cheaper way ( its basically free reserve) to boost their reserves and stabilised their currencies.They did it during the 2008 financial crisis, today it’s needed more than then.
Something tells me the US government is not in favour of this move. They don’t like the idea of the IMF printing SDRs. However, they don’t mind the federal reserve printing money to back-stop the global financial system. Basically, the fed becoming the bank of last resort for the global financial system, instead of the IMF. Right now the federal reserve is lending US$ in short-term swap deals, to various SPECIAL central banks around the world. Go figure.
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@Blogmaster
I have to ask what is “debt rescheduling”? You saw ‘Medium to Sweet’ Wood admit he didn’t know what debt reprofiling entailed. Or was that debt restructuring? Nuff fancy words which seem to mean different things to different people. The challenge is the larger nations have all been ‘propping up’ their economies. And now the do-do is really hitting the fan. Whichever term is used, it means somebody else has to forego something. The next 8 months will be far more interesting that the prior 8. Hopefully we’ll all live to see them!! -
@NO
Extending the maturities.
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Good post by Artax.
P.S. The party colour issue may seem trivial to most but I wonder why the PDP was allowed to choose a colour already in use and I also wonder why this simple problem has not been fixed. These seemingly insignicant actions do damage a party’s image in the minds of the discerning.
What’s in a colour that one must use it and ride roughshod over the rights of another? And what does this say about one’s respect for the rights of others?
Truly baffling.
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Milluh
You’re citing the TB to justify why the current government should not have hired specialist skills for a debt restructure or to look at economic resilience? Look I done cuz y’all Alices ain’t leaving that hole. Don’t mind all yuh pensions in foreign lands secure and wunna respective governments engaging with consultants to make sure all yuh don’t starve. -
IMF Reaches Staff Level Agreement on the Fourth Review of Barbados’ Economic Program Under the Extended Fund Facility
October 30, 2020
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
IMF team reaches a staff level agreement with the Barbadian authorities on the fourth review of Barbados’ Economic Recovery and Transformation program (BERT) supported by the Extended Fund Facility.
The Government has lowered its primary balance target to minus 1 percent of GDP for FY2020/21 to fight the coronavirus pandemic.
To help finance the emerging fiscal deficit and related balance of payments need, an augmentation of the Extended Fund Facility of about US$66 million is proposed.Washington, DC: At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm conducted a virtual mission between October 26-30, 2020 to discuss implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF).
To summarize the mission’s findings, Mr. van Selm made the following statement:
“Following productive discussions, the IMF team and the Barbadian authorities reached staff-level agreement on the completion of the fourth review under the EFF arrangement. The agreement is subject to approval by the IMF Executive Board, which is expected to consider the review in December. Upon completion of the review, SDR 65 million (69 percent of quota, or about US$90 million) will be made available to Barbados.
“The COVID-19 pandemic has had a major impact on Barbados’ economy, with a double-digit decline in economic activity projected for 2020. Tourism came to a virtual standstill between March and June 2020: airlift declined precipitously, most hotels closed, and occupancy plummeted at facilities that remained open. In early July, the island cautiously started reopening the economy for international tourists, after the authorities effectively halted local transmission of the disease. However, tourism arrivals remain at a fraction of normal levels.
“In this very challenging environment, Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program. International reserves, which reached a low of US$220 million (5-6 weeks of import coverage) at end-May 2018, are now in excess of US$1 billion. All quantitative targets for end-September under the EFF were met. The program target for Net International Reserves was met by a wide margin, as was the target for the Central Bank of Barbados’ Net Domestic Assets (NDA).
“In response to the pandemic, the Government of Barbados is now targeting a primary balance of minus 1 percent of GDP for FY2020/21 (compared to a surplus of 6 percent of GDP envisaged prior to the pandemic, and a surplus of 1 percent of GDP at the time of the third EFF review). The lowered primary balance target accommodates the loss of government revenues stemming from the pandemic and facilitates emergency outlays on health facilities, medical supplies, and income support to the most vulnerable. Staff supports this easing of the fiscal stance and, subject to approval by the IMF Executive Board, proposes an augmentation of the Extended Fund Facility in the amount of SDR 48 million (51 percent of quota, about US$66 million) to help finance the emerging fiscal deficit, bringing total access under the program to SDR 322 million or 341 percent of quota.
“Tabling of a revised central bank law to parliament is expected shortly; this is a critical safeguard for continued macroeconomic stability and will be a prior action for the completion of this EFF review.
“The team would like to thank the authorities and the technical team for their openness and candid discussions.”
IMF Communications DepartmentSource: IMF
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Govt knocked over another consultant
Government has hired another consultant and Opposition Leader Bishop Joseph Atherley is slamming the move.
However, the contracting of the economic consultant for $81 700 over a three-month period was defended by Minister in the Ministry of Economic Affairs and Investment, Marsha Caddle.
The opposing views emerged Tuesday as the House of Assembly debated a $25 million supplementary resolution related to the Barbados Employment and Sustainable Transformation programme.
While Atherley or Caddle did not name the consultant, the resolution stated that $81 700 allocation was “to pay the contract of Dr Justin Ram as economic/technical adviser to the Prime Minister for three months effective November 1, 2020”. Ram is immediate-past director of economics at the Barbados-based Caribbean Development Bank (CDB).
Atherley asked when the hiring consultants would end, including of individuals who were “credible voices who are not afraid to speak in a critical fashion about Government policy and the challenges the country would face”.
“It’s another consultant even though for a brief period. When does it end? When do we come to the place where we say we can’t afford this anymore and perhaps this money could be used otherwise and perhaps this service could be provided by some existing individual or entity? When do we come to that place?” Atherley asked.
Caddle said in response that the new consultant was for a limited period and was intended “to put together certain arguments in some upcoming international engagements that the Ministry of Finance, Economic Affairs and Investment will have”.
“The main activities for this relate to determining the most appropriate mechanisms… for the financing of COVID-related debt. Settling how we use vulnerability index, coming up with some recommendations to improve capacity and skills as well as execution rates in the Caribbean, because the Caribbean has an under-execution problem.
“We have the skills and the capacity but sometimes we’re not able to execute at the rate that we would see the rates of development that we would want,” she stated. The minister said the advisor would also assist the Government in deepening its relationships with CARICOM, the Caribbean Development Fund and other governance mechanisms needed to do business in addition to helping it improve access to grant funding and look at facilitating the recommendations of the CARICOM Commission on the economy.
She also said such contracting services would not end because as Barbados steps “fully into the third decade of the 21st century”, it has “to realise that the new structure of work, the way that we engage professional services, is also changing”.
“…We all realise that we have to be able to engage work in new and varied ways and we don’t make apologies for that because we’re not doing it under the cover of darkness; we’re doing it right here in this Chamber,” said the Minister. ( GBM)Source: Nation
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EU official defends blacklisting
Regional Cooperation and Trade Support team leader at the European Union Delegation in Barbados and the Eastern Caribbean, Felipe de la Mota, is fending off strong regional criticism of the EU’s recent blacklisting of jurisdictions.
Speaking at a virtual panel discussion hosted by University of the West Indies and European University Institute yesterday, the EU official argued that there have been a lot of misconceptions surrounding the blacklisting issue which needed to be ironed out. Acknowledging that the timing of the blacklisting was unfortunate, given that it coincided with the COVID-19 pandemic, de la Mota argued that this timeline was set a while ago by the Global Forum.
“The timing for conformity for non-compliant tax jurisdictions was set by the Global Forum itself in April and the EU listing merely reflected that inevitably. It is of course ready to continually assess the progress and take countries off the list when the Global Forum deems it so. So ultimately it is a question of a lot of misconceptions around who is putting together these lists and when and why. COVID of course had nothing to do with it, a bit of unfortunate timing maybe,” he said.
Earlier in the session, head of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES), Dr Don Marshall, accused the EU of an overreach of power with regards to sanctions that would accompany these blacklisting.
“We cannot have global governance institutions treating to the question of our international business sectors in the way they have done in the past. This is not only with regards to the illegally imposed blacklisting on countries that they deem non-compliant certain tax information exchange, but also this business of threatening to impose sanctions. The law does not give the OECD, it does not give the EU that authority; these things need to be addressed,” he said.
Extensive screening
According to the European Commission’s website, the list was the result of an extensive screening of 92 jurisdictions, using internationally “recognised good governance criteria”. The countries that were blacklisted were those that failed to make a high-level commitment to comply with the agreed good governance standards. Many other countries did commit to comply with the listing criteria within a set deadline, usually the end of 2018.
Barbados was required to implement several changes to its tax exchange framework between July 2015 and June 2018 to become fully compliant with the Organisation for Economic Cooperation
and Development’s (OECD) Global Forum-Standard on the exchange of tax information.
Prime Minister Mia Mottley has raised serious concerns about the development and has written to German Chancellor Angela Merkel and European Union president Charles Michel. The Prime Minister suggested that the blacklisting would result in restrictions on the local banking sector.
“They are going to get their banks and their financial institutions to put measures on us. And we say that when they try to do that most of the banks say, ‘But Barbados is too small!’ They don’t even think we are a problem for them because as far as they are concerned, we are a dot on the map. But the dot on the map means they will just say to people, ‘We aren’t banking with you! We aren’t doing business with you!’ And companies that may have been here 50 years, … 100 years, now stand to be affected,” she said during a political rally earlier this month. ( CM)Source: Nation
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I am not sure if it is related, but all the consultants the president hires seem to be men.
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@Blogmaster
Kicking the can down the road….is that really what is being requested? That is what Wood thought too? It is a good angle with which to “open discussions”. Until somebody does the math, and calculates the “interest” on bi-lateral loans. And someone else realises, that down the road, the maturing commitments are such, one has no way to meet them. Then the conversation “shifts”. -
It comes down to capacity to pay does it not?
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It does. But what is “capacity”? “IF” the payee switches it expenses, it has the capacity. But will it?
So it becomes much deeper than capacity? It is capacity while keeping, or increasing, expenses to serve the ‘social good’.
On a micro level, I have a 4unit rental property. They want ‘breaks’. One smokes 2 packs a day ($500/mth). IF they quit smoking, paying rent would be no issue? Another has a wayward child, who used to live there, but ‘moved out’. My tenant is now paying towards that child’s (19) living expenses. Another ‘lost their job’, but that didn’t stop them from getting a brand new car in May, to replace the 1998 Toyota they had before. They all make choices, which reduces ‘capacity’? Who is to pay for their choices? -
The 66 million drawdown the IMF approved will assist with the capacity building.
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It is added ‘borrowed’ reserves….and its $66M XDR = +/- $90MUS at he current basket valuation. Capacity remains the choices on expenditure any entity paying opts to make.
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@NO
Just playing with you.
The guys seem to be playing for time.
Reminiscent to Stuart government post 2008.
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@ David.
Any time you play for time it cost you money regardless of what pretty words you use. Money will always have a price and the price increases over time. We will play for time and increase our debt service down the road as a result.
Then again. Politics and economics dont mesh well anyhow.
John
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@John A
We have the case study of the Stuart tenure to be reminded of the consequences.
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@ John A October 30, 2020 4:31 PM
You demonstrate some of the rarest type of COMMONSENSE on BU.
You ought to be hired as the primus inter pares consultant to this administration on economic matters instead of the current bevy of academic as*holes.
We are sure you would patriotic enough not to charge more than a ministerial salary per month for your services.
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@Miller
Problem is I wouldn’t last long enough to draw a half month salary. LOL
I am old school where you call it as you see it and it dont depend on party or massaging the facts. Numbers don’t lie that is true, but some like to stress some and leave out some. For instance did the Governor give us the deficit to date as of the end of September against the budgeted numbers in the estimates for the said period?
I going stand here on BU and be an armchair commentator. Thank you for your kind words though. 😁
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@ John A October 30, 2020 5:33 PM
“For instance did the Governor give us the deficit to date as of the end of September against the budgeted numbers in the estimates for the said period?”
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++Neither did he provide any up-to-date statistic on the unemployment situation, unless this is some oversight; whether fudged (as perpetrated by his predecessor) or objectively measured.
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John a
If u would read you will Find the deficit
I did not listen to the gov i just took a quick glance at the Numbers
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I think i saw a graph in unemployment / something to do with claims
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@John2
Why not point John A to the specific page of the report? How does looking at the claim graph address the unemployment number? It must be said that unemployment stats are prepared by the BSS but an economic review of the economy is expected to frontally breakdown/address unemployment.
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@John A
On page 8 under Fiscal Operations mention is made of a small deficit incurred for FY2020.
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This crap about DEBT REFINANCING should read FRENCH POLITICAL GUILLOTINE needs to be rolled out for most small Caribbean poorly managed and corrupt countries in order for the required financial management to be implemented. All the DEBT restructuring would not need discussing if proper managent ant the the wineing and begging would not be required. Carribean lifestyles need to be SIGNIFICANTLY ADJUSTED DOWNWARD to match their GDP abilities.
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@ David.
Yes but it does not speak to a figure in relation to the estimates. So lets say for the period I budgeted a deficit of $50M for the period to September 30th and I actually have a deficit of $200M for the period. I could say I will have a ” small” deficit by year end. Small compared to what the one Sinkyuh ran? Without a baseline to compare it to the statement holds no facts. That is why i say you can mention some figures and not others and it says little.
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On matters like this one, I does want to come here and contribute. But this cockroach knows what is a fowl party. So I am just going to sit and listen to John A. That man keep it simple and straight.
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@John A October 31, 2020 8:37 AM
Come on man. Why are you still expecting specifics. Don’t you realise that using vague language like “small” and ignoring simple baseline comparisons gives ample room to say anything that you want?
These central bank reports of have been poor for a long time but there is a wider issue. There is an epidemic of half baked reporting coming out of institutions in Bim. It speaks to a lack of professional rigour and serious disrespect for the public audience.
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@ Dullard
Spot on. An example of this fraudulence is a few weeks ago the BLP announced its membership had increased by 70 per cent. But to this day it has not said from what to what.
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David
AS i said
I just took a quick glanceJohnA
Didnt the estimates Get abandoned/cancelled?
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The estimates were laid in the house and approved as is required. The problem here is simple as it speaks to relevance. Let me explain what i mean.
Suppose you tell me you will spend 100,000 on a house renovation but you spend ” a little bit more ” what is the “bit more” compared to, the cost of the renovation or the cost of the house? So if you over spent by $20,000 say you would of over spent by 20% on the renovation which is sizeable, but if I just say “on the big house i just work on i over spent by a little” and the house is worth $800,000, then the same $20K becomes only 2.5%.
In other words numbers without a base like lacks relevance. So if we say we will run a ” small” deficit, what is it’s numeric value as it relates to what we would have budgeted for the period ending September 30th.
The devil is In the details. Hope this helps to explain my point.
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I usually like these
https://www.barbadosparliament.com/uploads/bill_resolution/63822ff3590aff5a7ca7a79ae8f72ddc.pdf
The current land owner Balmoral, would appear to be the late Gerald Bull of HARP fame, family (Balmoral)
Seems the GAIA has been leasing these lands(?) prior to compulsory acquisition(?).I have seen this name before…..Maria Holder trust….are they now the builder for the MoE
https://www.barbadosparliament.com/uploads/bill_resolution/41f1daf93d0ba5be655bca9e21c5dee3.pdf -
The estimates were approced by cabinet on oct 13th 2020
I knew there was some kind of interyption in the process
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U can Find the estimates deficit there
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page 1
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A “ physical”deficit of only 22 million dollars
Is small compared to Barbados economyA – You are making to much fuss about a “good” thing when you consider our / covid situation
A nothing burger argument IMO
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It is time to implement my STARVE plan. We need a wage cap for employees and a tax reduction for employers. We also need to shift the unemployed to the plantation.
Somebody needs to absorb the costs of COVID19. And that is not international capitalism.
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@2
is that physical deficit number accurate ‘decimally’?
When A’s buddy Sinkyuh presented such numbers we knew with certainty the revenue projections were high AND the expenses were low. Now we have the IMF as watchdogs. I still “think” the revenue could be high, based on experience elsewhere; expenses are “controllable”. The GoB deserves a medal, if the revenue fall off projected is achieved. Then again, if they ‘excuse’ certain revenue generators after the fact, the current numbers do not matter. -
2.54am? somebody changed the clocks early
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With England back in to lockdown, which is likely to continue in to the New Year, what are our tourism strategies? Is there a risk associated with opening the country to tourists from high infected areas?
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You manage risk don’t you? Isn’t that what the protocols are meant to do?
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Why is government giving Caves of Barbados taxpayer money in millions?
Who are the shareholders of that company? If private, then it should not be done. Otherwise, every other player in the tourism industry should get handouts too.
And , no, it is not a loan, it will likely not be paid back, just like all of the other ”loans”.
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Stocks, shares and economic enfranchisement
By Ralph Jemmott
The Brass Tacks programme of Friday October 9, focussed on stock, shares and the compulsory acquirement of minority shares by majority shareholders.
Dr Leroy McClean posed the most critical issue in the discussion. He asked what all the talk about “economic enfranchisement” was about, if local minority investors could so easily and so frequently be bought out by foreign majority shareholders?
Barbadians were blamed for failing to invest when a former Government decided to privatise the Barbados National Bank (BNB) and the Insurance Corporation of Barbados (ICB). Shares were made available to the public but controlling interests were acquired by Trinidadian and Bermudan interests.
In 1991, the late Tony Johnson published a booklet entitled ‘ Toward Economic Democracy: The Role of the Securities Exchange of Barbados.’ In the Preface to that text, Dr Neville Duncan stated that the Barbados Stock Exchange would be a means for “widening of share ownership in an environment of deregulation and privatisation”.
Surely, the persistent acquisition of locally owned minority shares by majority foreign entities cannot be compatible with anything calling itself “economic enfranchisement”.
One understands the concept of political democracy, one man, one vote.
But there is no such thing as economic democracy in a polity based on the capitalist mode of production. Per capita income does not speak to equity and income distribution levels may be wide or narrow. Wide as in Latin America, or narrow as in Scandinavia.
But would the difference equate to something that could be realistically described as being economically democratic?
A caller to Brass Tacks stated that four times she had purchased shares in local companies only to have them bought over by foreign majority shareholders.
The crux of the matter is that more often than not the foreign entity, having acquired total ownership, later sells its shares to other foreign companies sometimes below the rate trending in the local stock exchange.
In a recent case, shares trending on the Barbados Stock exchange at Bds$3.00 per share were offered at Bds$1.78.
Interestingly Doug Skeete, from the Association of Corporate Shareholders, admitted that majority shareholders do not always take kindly to minority stockholders coming to Annual General Meetings and asking embarrassing questions. He also stated that minority shareholders are too often not privy to the internal workings of companies in which they have only a small interest.
None of these factors would seem to encourage Barbadians to buy shares. Between 1976 and 1986, Prime Minister Tom Adams pursued a policy of what I once termed “economic nationalism”. This was a vision of broader capital and business ownership and increased state ownership of enterprises, what the social democrats used to call, “capturing the commanding heights of the economy”. This was largely reversed by the Owen Arthur regime between 1994 and 2008. Historians will forever debate the wisdom of that reversal.
There is the economic question as to whether Barbados is better served by foreign companies through access to more capital for expansion, better management, better marketing and so on. Then there are those who feel that the country would be better served by the ownership of some kind of National Development Bank and a Government-run Insurance Company.
There is also the emotive issue of a sense of national pride in indigenous ownership, as Dennis Johnson put it, the joy of seeing the name “Barbados” on a building or more significantly the pride of patrimony, of knowing that there are assets that can be passed down to our children and grandchildren.
Arthur would later claim that he wanted to create in Barbados, “a new entrepreneurial culture and a new entrepreneurial class”.
It is difficult to see how this could be achieved if there are massive buyouts of local enterprises which are then managed by foreign elites whose prime interest would be in maximising profits and repatriating much of them to foreign shareholders.
Certainly, corporate profitability should redound significantly to a country’s well-being,
“significantly”…. meaning not simply in terms of providing employment, important as that might be in a country like Barbados where there is a labour surplus.
Beyond the rhetoric, I do not know that there is much evidence of a substantive and broadbased entrepreneurial enterprise. Some days, not a single share is traded on the Barbados Stock Exchange. There was a time when Barbados could boast 30 companies trading on the exchange. Now, there are reported to be only about 18 as many have been delisted.
Buyers lose interest when companies are repeatedly bought out, particularly where there are doubts about the future direction of acquired companies. Most Barbadians are generally speaking, poorly educated in financial matters and recent infelicities like CLICO and the losses on Government Paper have aggravated the natural Barbadian tendency to risk aversion and suspicion of capital accumulation in foreign hands.Source: Nation
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Listen to Ezra, he knows of what he speaks!
Good consultants worth it
By Ezra Alleyne Suddenly everyone, in fact every tweeter (do tweeters twitter?) trumps himself as an expert in the governance of this small, open economy.
That may be a good thing. Many more of us may be taking an interest in how this country works.
It may also be a bad thing in that much fake news information is spat across what is misleadingly called “social media”. This past week, for example, social media addicts were consulting each other on the demerits of political consultants.
While this half-cooked debate was raging here, an independent governance institute in London was cooking up a veritable feast on consultants and remarking on the clear usefulness of professional advisers to ministers, given the developing complexity of governance over several decades. Clearly consultants, (like black lives) matter, even if they are white.
But let me cite a Barbadian example of how the national interests were damaged for about 15 years when consultancy advice was needed. Just bear with me as I develop this point.
In 1965, the offshore industry in the Caribbean was being born. The Cayman Islands passed an International Business Companies Act that year and Barbados followed suit that same year. International tax planning allied to the concept of offshore capital was the new financial industry.
Barbados had more developed infrastructural facilities than the Cayman Islands and was even then a more conducive environment for such business to be carried on.
However, between 1965 and 1979, the offshore banking industry flourished in the Caymans and The Bahamas. Barbados scarcely got any business. By 1966, Barbados was independent, sugar was less profitable as an export crop, no new offshore banks were even registered here. International business companies were very few and far between.
In 1976, there was a sea change. Tom Adams had become Prime Minister but even when in Opposition, he began discussing with his colleagues (I was one, Johnny Cheltenham was another) a replacement industry to make up the loss of the foreign-exchange earning sugar crop. I pushed for the offshore sector.
By 1979, as Prime Minister, Adams was further advised on how he might usefully enact a promise written into page 26 of the 1976 manifesto, that offshore sector legislation would be passed. The Offshore Banking Act was passed in 1979, the International Business Companies Act amended . . . and the rest is history which I intend to write about at length soon!
We lost ten years. That was the first lost decade. The timely appointment of an expert consultant learned in international tax law would have solved the problem between 1965 and 1979.
Professional advice
We were charging individuals income tax on their earnings, and the Caymans did not charge personal income taxes. So managers who
would live on the islands of Barbados or Caymans might, other things being equal, opt for the Caymans.
Fortunately, the Barbados Labour Party (BLP) was exposed to relevant local and external professional advice!
Properly advised in the main by local expertise and confirmed by external consultants, the BLP shifted the marketing focus and offered investors something the Caymans did not have. That was our anti-double tax treaty network.
Incidentally, the story of the sterling work of the committee set up and chaired by Sir Richard Cheltenham on his own initiative to renegotiate the
USA Barbados Double Taxation Treaty in 1984 demands attention. We were spectacularly successful in that venture!
Now that we have a cadre of local experts, we still less count the value of their advice. Take the Organisation for Economic Cooperation and Development (OECD) request for convergence of the tax rates on local and offshore companies.
The out-of-the-box thinking which suggested that we reduce the tax rates of the local companies to a common platform with the offshore companies has been viciously criticised as giving tax breaks to the local corporate sector, because we reduced the local tax rate from 35 per cent to five.
Unwise or otherwise, critics failed to see that the Mottley administration had doubled the offshore rate to five per cent to save the offshore industry from the blacklisting clutches of the OECD. The result is that the increased earnings from the offshore financial sector has softened the severe impact of COVID-19 on domestic tax collections. It has helped us to contain the deficit.
The choice of relevant consultants over the years has enhanced the policies of the BLP.Ezra Alleyne is an attorney at law and a former Deputy Speaker of the House of Assembly.
Source: Nation
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Why would a country smaller than the size of a shoe box need so many consultants
What does that say about the level of education and its people
Can the constant seeking of overseas consultants by Mia be a signal that she thinks barbados educational system produces idiots who are not worthy of making the best decisions for the country
Anyone who can find a defense as reason to which an application of rationale is supply has rocks in their head for brains
Can anyone in good reason not see how the wrong message is being sent to a populace who boast of pride
Furthermore the millions being spent on consultants has yet to produce benefits to the barbadian household -
At the ‘unhealthy risk’ of being accused of stalking you and persecuted thereafter, I am politely ‘asking’ you to explain your November 1, 2020 6:24 AM contribution.
I agree that Barbados does not need so many consultants and we are yet to be told of the benefits that would justify the millions of dollars being paid to them.
However, could you please ‘tell’ the forum how many of ‘government’s’ consultants are foreign and provide evidence to substantiate your claim that Mottley is constantly seeking them overseas?
If the majority of consultants are Barbadians, how does that reflect negatively on the island’s level of education and its people?
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Sorry bro
I fall into the class of idiots
“so many ” in my way of thinking can be “one ” too many when the financial resources are applied
Hope my answer suffice
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