Barbados, Slave to Debt

debt
Chris Sinckler, former Minister of Finance

A report in the local press yesterday piqued the curiosity. It detailed former Minister of Finance Chris Sinckler will be working with the region, including Barbados “with the reform of the international debt architecture and issues surrounding vulnerability of small states”. His involvement is as a result of an engagement with former employer Caribbean Policy Development Centre, where he was Executive Coordinator before serving in the Thompson and Stuart administrations.

A quote attributed to Sinckler – “It is critical to see how Barbados and the Caribbean can access money and develop finance on a concessional basis”.

The news item does not interest the blogmaster because Sinckler presided over a very challenging economic period as Minister of Finance and was the face of economic policy in the former administration. His appointment reminded the blogmaster how we have become slaves to debt at the level of the individual and government, technically one and the same.

There is the text book definition what is good and bad debt, we get it. Committing to a debt which helps to develop the individual to be marketable, grow and protect earning capacity, we get it. At the government level, to borrow within serviceable limits to create opportunities for citizens to enjoy quality living, we get it. Notwithstanding the foregoing it has become obvious accumulating debt is the preferred option above revenue generation in the prevailing culture of managing our affairs. According to the 2019 Financial Stability Report household debt increased by over 200% between 1999 to 2019. In the same period government’s struggled to manage the debt to GDP increased from 60% to close to 160% has been copiously documented. 

It is fair to draw a conclusion the majority of households are carrying significant debt- acerbated by a deep haircut by the government in 2018 on some domestic debt compounded by the 18 month pandemic. It is also fair to describe Barbados’ economy as trapped in a vicious debt cycle given its highly leveraged state. The correlation between rising household and government debt must not be ignored. Accumulating debt has become a ‘fashionable’ first option by individuals and government alike.

In a world where debt financing is the preferred option, financial institutions as the owners of burgeoning individual and government debt have grown in importance. Something has got to give. The conspicuous consumption model to which Americans and others in the West have become addicted will not work for Barbados. We simply have no sustainable export earning options available in the short to medium term. Our problem is the exponential debt accumulated in the last 20 years has broken the back of the camel. We have sown the wind and it is time to reap the whirlwind.

As a people we have to demand better from our policymakers. Tired narratives and warm over policies must be unequivocally rejected. As individuals the time has come and gone to take ownership of home affairs by making smart decisions. Getting fat from debt financing is not the recommended way. Unfortunately if we are unable to correct, it will be done for us. In fact it has already started.

The government is you, you are the government.

128 comments

  • @ all
    Nothing drives dynamic pricing like competition. We have not invested wisely in developing new industries to give consumers a broader choice of products.,Massey’s presence has not stopped Popular or other retail outlets from attracting consumers. Harrison’s, Cave Shepherd , and Fogartys never stopped the 5 and Ten or NE Wilson.
    Where are our food scientists ?
    We have an archaic form of doing and developing businesses that has us stuck in a mentality that’s self defeating.
    We have this bogey man condemnation of Massey while forgetting that BS and T opened the door for Massey. Long before that JulieN had exposed the backward thinking of the white traditional business sector.
    It’s the same damn thing with Sandals we cuss them left and right but what did we produce that could have stopped Sandals from being here ? Where was the competition ? How many five star hotels do we have after sixty years of tourism? What are we manufacturing these days ?
    Nothing but crocodile tears…………

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  • NorthernObserver

    @WS
    You too love a little racial commentary?
    What all Barbadian businesses have been challenged with is export, whether it is a business model or a product or service.
    If you seek competition, look at the bakery sector. How many do we have? How many operate beyond the island?
    The rum sector, excluding Foursquare fell into foreign hands. That is because they had trouble exporting, and hence the entity was ‘more valuable’ to those who could export.
    How many of the indigenous ‘offshore finance’ operations exist elsewhere? Meanwhile several of those operating here are subsidiaries of foreign entities.
    Simpson was good at it, the replication of a model elsewhere, and did very well. And despite “advisors” he was a one man show.
    So not sure who the “we” you speak of is, seems to me it is “all ah we”. The Gov job is framework, it is “we” who do the work.

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  • @ Mr. Skinner

    Honestly, I completely missed your initial comment about “many entrepreneurs tried to get into live stock feed production,”………….. because “Roberts is an excellent and exciting story of local manufacturing but competing with other LOCALLY PRODUCED PRODUCTS,” immediately caught my attention. And, I responded accordingly.

    Additionally, I NEVER mentioned anything to SUGGEST you “said that other local manufacturers were producing : lard, shortening, cooking oils and that they were competing with Roberts,” either.

    Those items were mentioned in reference to “LOCALLY PRODUCED PRODUCTS.”

    However, I re-read the contribution. My apologies…….. it was just a simple misunderstanding.

    RE: “We have this bogey man condemnation of Massey while forgetting that BS and T opened the door for Massey.”

    Since I was the only person, so far, to any reference to Massy, would you please explain what is meant by, “We have this bogey man condemnation of Massey?”

    Sometimes it seems as though one has to ‘walk on eggshells’ when engaging you in discussion.

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  • @ Artax
    I did not mean you in relation to the bogey man comment about Massey and Sandals. I meant “ we” . I was trying to connect the broader point relating to how we have refused to be more proactive and innovative but when others come in we seem to have problems. Perhaps I should have been clearer.
    Peace.

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  • @ Northern Observer
    A careful reading of what you stated shows that we are actually saying the same thing.

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  • @ NorthernObserver

    I’ll give you an example to illustrate Mr. Skinner’s point about pricing and competition.

    A Guyanese rum named ‘Diamond’ was imported and sold cheaper, giving Foursquare’s ESAF and Old Brigand ‘stiff competition.’

    As you’re aware, some consumers are loyal to a product, while others are more price conscious.

    David Seale responded by ‘resurrecting’ ‘Alleyne Arthur’ and selling it much cheaper than ‘Diamond.’

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  • @ Artax
    “ As you’re aware, some consumers are loyal to a product, while others are more price conscious.“
    This is the point that we keep missing. You will recall that even the vendors outside primary schools engaged in competition and as you correctly stated children determined where they put their loyalty as consumers.
    We have a fear of competition because the economy was built on a colonial retail foundation where the unfair distribution of wealth guaranteed multiple monopolies or monopolistic operations.
    Every Saturday hundreds of puddin’ and souse vendors engage in competition but many have loyal customers. Competition protects the customer, service becomes the watchword and wealth is more equitably distributed. Employment tends to increase in such a dynamic environment. And business models must adopt or die.
    Your point about the rum is excellent in this regard.

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  • @🐇/🐰
    “It may make more sense to catch it if you live in a community with doctors who know how to treat if early. That way you get the real antibodies.”
    1) See Donna’s comment
    2) See Sargeant’s post

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  • If nothing else, Covid has exposed these political FRAUDS across the region for who and what they are, no cushion for the Black populations they beg for votes…no preparations for calamities, NOTHING….

    https://barbadostoday.bb/2021/08/26/poverty-inequality-growing-in-the-region/

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  • John A is a threat to our Supreme Leader. He is interfering with her artfully orchestrated plan to distract the native masses through the Republic Wizardry.

    Therefore, as Supreme Court Jester, I recommend that John A be promoted to Ambassador to New York, Beijing, Brussels or Geneva. So that in future he will have to keep his mouth shut like Mr Cumberbatch. Mr Cumberbatch also used to disturb public order by intelligent contributions on BU and therefore had to be silenced.

    Since I have something to do in Bridgetown, tomorrow anyway, I will immediately present this to the HQ of our Supreme Leader´s movement.

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  • Look.what we have here
    Mia cares

    ‘Embarrassment!’
    DLP, UPP SAY CHINA- BUILT HOUSES A BLOW TO SMALL BUSINESS
    By Marlon Madden
    Two political parties – the Democratic Labour Party (DLP) and the United Progressive Party (UPP) – have accused the Mia Mottley administration of side-lining small business operators by buying houses from China for those residents whose homes were damaged or destroyed by Hurricane Elsa last month.
    The DLP’s spokesman on entrepreneurship and small business, Ryan Walters, described the move as an embarrassment to contractors.
    Importing 150 houses from Beijing was akin to putting a nail in the coffin of the micro, small and medium-sized enterprise (MSME) sector in Barbados, he suggested.
    Walters said: “The Barbados Labour Party administration has given its latest blow to the micro and small businesses sector in the country.
    “Small contractors, artisans and tradesmen are crying out for work, but the Government is going to spend millions of dollars on the importation of 150 houses from China. This is an embarrassment to the hard-working tradesmen and artisans who now find themselves unemployed because of the state of the economy.”
    On Tuesday, Minister of Housing Dr William Duguid announced that Government would buy 150 light gauge steel “emergency” houses to replaces those damaged by Hurricane Elsa.
    He said it would require some $50 million to complete the rebuilds and repairs and to buy houses from China, and pointed out that estimates put the damage by the hurricane and the freak storm that occurred two weeks earlier in the region of $74 million.
    Following assessment of some 1,980 houses in several parishes, it was revealed that a total of 466 houses have to be rebuilt.
    Walters argued that given the state of the economy and the dampened construction sector, it was nothing short of “ridiculous” for the Government to not realise the need to provide the economic activity needed locally by outsourcing the building of the homes to local firms.
    “Construction has dampened simply because new mortgages have slowed since people are grappling with the financial fallout of COVID-19,” he said. “Hotel and tourism build-out has also almost come to a halt and government projects are few and far between.
    Yet, instead of grasping the opportunity to provide employment for many who are at home and find it rather difficult to support their families and themselves, the Government has embarked on one of the most ridiculous initiatives from the Ministry of Housing.
    Why is the Government finding it so difficult to mobilise small contractors, artisans and tradesmen across the constituencies in Barbados?”
    Walters said the DLP was therefore calling on the Mottley administration to rethink the initiative “and get on the ground and mobilise our skilled people so that they can continue to participate in developing Barbados while earning a living for themselves”.
    UPP chairman Wayne Griffith also described the move to get the houses from China as a bad decision, pointing out that Government was simply taking away jobs from local contractors.
    He said: “At a time when over 20,000 citizens are officially unemployed, the decision to reconstruct homes damaged by Hurricane Elsa presents an opportunity to engage local contractors, artisans and labourers in a national effort. Such mobilisation would stimulate the construction sector and, of course, result in job opportunities across the board.
    “The magnitude of this project seems to be beyond the capacity of the Ministry of Housing and other agencies. We are confident that within the private sector there is exceptional talent and skill to be utilised.”
    Urging Government to reconsider its decision, and predicting that the Ministry of Housing will require additional funds, Griffith said seeing the Government divert valuable foreign exchange rather than invest it locally “is unfortunate and goes against national pride and industry”.
    “The United Progressive Party prefers all citizens to be involved in our rebuilding process and an amicable partnership with the people can bring a desired outcome,” he added.
    Minister Duguid did not reveal to Parliament how much the repair or rebuild of the damaged houses would cost if done locally, but in June he said estimates were that it could cost around $1.2 million.
    In defending the decision to look to China for the houses, he told Parliament that getting the required number of houses built in Barbados would simply take too long, adding that only three of the intended six workshops earmarked for building locally were erected and fully functioning.
    He said: “Even with the best will in the world, those workshops can essentially produce only 18 to 20 of those houses in a week.
    It doesn’t mean we can get the houses erected, it means that even with the best will in the world, those workshops can only produce 18 houses a week.
    “So, if we were to do 500 of those houses, that is like 25-26 weeks, just in cuts. So all things being equal, six, seven months down the road and we still would not have been able to meet the requirements for the response; and that is just the rebuilds, it has nothing to do with the repairs.”
    The Housing Minister has not committed to a timeline for when Chinese houses should arrive on island and be erected.
    (marlonmadden@barbadostoday.bb)

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  • @ Tron

    May I humbly suggest a posting in Monaco so I may spy on how a small country less than 1 square mile has become so wealthy. I of course promise not to enjoy any of the pleasures there offers and stay humble for my contract period. I imagine I should be able to get by on $15000 USD a month if I stay out the restaurants and casino! LOL

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  • While the small businesses suffer
    Foreign interest gets the sweets
    Mia cares

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  • incompetent small island manufactured negros are always on the hunt for the next slave master..

    so China don’t have to build them too, which also takes time, not to mention they do not have a good track record for sturdy builds.

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  • I do believe that more of an explanation should be given as to why we need to purchase these houses.

    I am ASSUMING there is a good reason.

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  • I too must wait and see.

    My silly statement: I wonder if sometimes we fail to think as a nation. We may have gotten a good deal on these houses, but did we sit and weigh the pros and cons of importing versus building locally.

    It is difficult to understand the reason given the high unemployment in Barbados.

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  • My thoughts exactly
    Barbados today Editorial

    It felt like a moment of déjà vu when we heard the complaints of frustrated residents and business owners who were affected by flooding on Highway 1 last Friday.

    It was only two weeks prior that Government officials were boasting of the completion of Phase 1 of the Highway 1 road rehabilitation project. On national radio, some praised the work done while others voiced their dissatisfaction with the resurfacing of the road.
    But, just weeks later, not months or years, heavy rains fell and the road was not only badly flooded but there was damage done to it as well. The irony is that one of the main objectives of the massive road repair project was to “mitigate flooding” on the West Coast.

    Unfortunately, this happened before.

    Only last year, after a section of the Ronald Mapp Highway (Highway 2A) was paved, there was heavy rainfall and the road was severely damaged. It was also mere weeks prior that the contractors, Infra, had paved the road at White Hall, St Peter when they had to do it all over again.

    How are our contractors getting it so wrong? Is it our engineers that are getting it wrong? How are these miscalculations happening when undertaking these milliondollar projects? Something is wrong and taxpayers need answers.

    It is happening too often. A similar thing happened back in January 2019, when the Pleasant Hall, St Peter stretch of the Charles Duncan O’Neale Highway was unevenly surfaced and also had to be redone.

    But what makes the mishaps on both Highway 1 and the Ronald Mapp Highway so egregious, is the fact that both roads constitute the main arteries to the north of the island. So, last Friday and on Monday this week, after heavy rain days, traversing to and from the north proved to be a nightmare.

    While the newly-paved Highway 1 was flooded and in some cases impassable, there was massive flooding on the Ronald Mapp Highway as well.

    Sadly, those hoping to get any reprieve by using the Old Nine Road heading up to Sandy Lane Golf Club, St James, were denied that privilege as well. Actually, a car stalled while trying to wade through those waters.

    On the Ronald Mapp Highway, motorists were forced to skilfully manoeuvre through high floodwaters at Arch Hall, St Thomas; St Thomas Parish Church; just before Portvale Sugar Cane Factory, St James; Westmoreland, St James; and Upper Carlton, St James.

    For many, it was a battle. Added to that, traffic was crawling in both directions.

    So, what alternative do they have? When will people travelling to and from the north be able to do so unimpeded on a rainy day? These are reasonable questions, given the fact that the Highway 1 project alone is costing taxpayers $15.2 million.

    We were heartened, but still contrite, when Minister in the Ministry of Transport, Works and Water Resources Charles Griffith. along with deputy chief technical officer Philip Tudor and Deputy Chief Technical Officer, Design, Jason Bowen, fielded calls on VOB’s Down to Brass Tacks call-in programme on Wednesday.

    There were many calls from irate and frustrated road users who criticised the road works and demanded better. Maybe the rain was a blessing in disguise since it showed up the quality of work done.

    It was revealed that the five contractors who were involved in the project were instructed to rectify the flaws. The contractors named were: Infra, Jose Y Jose, Arthur Construction, C.O. Williams Construction and Ajax Construction. Government gave the assurance that the work would be done at no extra cost. As it should be.

    There is now talk of raising the manhole covers and doing repairs to several entrance roads leading onto the highway.
    We stated in a previous editorial, while commenting on the damage done at White Hall, St Peter, that contractors cannot be allowed to get away with shoddy work, especially when millions of taxpayers’ dollars are being spent.

    We still hold this view, but we take it further. We want to know what will be done to ensure that these mishaps, which now seem to be common practice, will not occur in the future, at least not with this frequency.

    What measures will be taken or what will be implemented so that this can be nipped in the bud?` We are concerned that if this is not dealt with, it may soon become the norm. Are our citizens asking too much? We say no. They expect better and better is what they should be afforded at all times, whether it is road repairs, education or healthcare.

    Over the years, it seems that we have been reluctant to hold people to account, especially where contractor and hirer sup at the same table. But there are certain situations that require more than platitudes and articulate excuses. We have highlighted flooding but, lest we forget, shoddy roadworks can also cost lives. And that is an entirely different ball game.

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  • Also them Chinese match boxes have been founded to be build with material which have been said to contain toxins

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  • Don’t know how many times the UNEDUCATED in the haunted house parliament has to be told that BLACK/AFRICAN people BUILT POWERFUL CIVILIZATIONS thousands of years BEFORE other groups appeared on our earth and we are STILL VERY CAPABLE…

    don’t they bother to sit and think that is the reason why they themselves CHASE US DOWN to STEAL our creativity…to prance around, show off and model for minority thieves and parasites.

    we are the ORIGINAL CREATORS….you yoked agents are nothing..

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  • btw…i knew that interview with the BBC presenter would return to BITE Mia…just had to wait for it.

    she is also SUDANESE so is well acquainted with AFRICAN HISTORY unlike the westernized house negros..

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  • Although it is hard to find what comprise the wood and chemical of these assembled Chinese houses
    There is evidence to suggest that China has built prefabricated toxic homes for displaced Tibetans with standard protein foaming agents made from animal proteins out of horn blood bones of cows pigs and other remainders of animal carcasses
    Also what all must bear in mind is that China can make laws for its own environment standards and not have to hold to the standards of many other nations
    Barbados govt before touting and applause these houses should do a complete scientific environmental procedure on these houses testing to see if the quality of them are up to environmental standards
    Cheap thing no good

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  • https://barbadostoday.bb/2021/08/27/imf-says-barbados-economy-remains-severely-depressed/

    the economy must remain depressed when the majority population are SUPPRESSED and OPPRESSED and not allowed free enterprise to utilize their skills and talents to generate upward mobility….the island need REAL LEADERSHIP…..and am not talking about the other half of DBLP tag team..REAL LEADERS..and the slave society system ABOLISHED..

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  • A severely depressed economy having leadership like beggars with cup.in hand believing that borrowed money is akin to having a bird in the hand
    IMF report only applause govt paying debt but cannot unfold a reasonable rationale on govt ability to create a growth plan on repaying the debt
    As it stands now the reserves is all govt can boast about Meanwhile the local economy staggers and household debt Increase and govt spending reaches another all time high
    Putting this all together equals a doomsday scenario steering all in the face

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  • Need for meaningful talks on change
    By John Beale

    David Comissiong says “a Bajan head of state is long overdue and we should all welcome and support it”. However, the Barbados Prime Minister, as Head of Government is, our de facto Head of State with more power than the president of the United States.
    The proposed change to a republic on November 30, 2021, appears to be a fait accompli, given the strong and insistent style of our Prime Minister who, with all seats but one in the House of Assembly and control of the Senate, can ensure the constitutional change is made, whatever dissent there may be.
    Therefore, what is important now is to seize the opportunity to make meaningful and needed constitutional change that will address the overall development of our nation. The Queen, since 1966, has been our ceremonial/symbolic head of state. During that time, she has never exercised any power over Barbados and always agreed to the requests of the Government of the day. The removal of the ceremonial head of state will not have any impact on the decisions, affecting our economic or social development. In the language of businessmen, it basically has no impact on our “bottom line”.
    Very difficult
    Some Bajans argue that any symbols to our colonial past must be removed as confirmation that, as a country, we are free and totally independent. This idea of being “independent” is frequently employed by politicians to rally people on external issues; but it is very difficult, if not impossible, for a small and under-resourced country, such as Barbados, to be truly independent in an interdependent world. The presence of the Queen, as a symbolic head of state, does not make us any more or less “independent” by one cent.
    Dependence on aid, geopolitical interests of more powerful governments and pressure that is applied through economic and financial sanctions (these days, euphemistically called “recommendations”), ensure that we can only exercise the powers of independence at home.
    We have no capacity – outside of what we are allowed – to be independent in the global community. We may claim to be “friends of all and satellites of none”, but that is simply a rhetorical statement. It sounds nice, but when the pressure is applied with threats to our financial services and tourism sectors or by blocking soft loans and access to external financing, we succumb. That has happened from [Errol] Barrow to [Mia Amor] Mottley, with no exceptions in between.
    The issue before us should not be whether we become a republic but rather ‘What type of republic?’ There are different kinds of republics, but there has not been any meaningful discussion with the citizens of Barbados about the kind of republic we should choose, or the benefits of each type.
    Comissiong states that the Government “has confirmed that they wish our country to go through an extensive people-based “National Constitution”, in which we will examine all aspects of our governance structure, with a view to producing a new and much more comprehensive type of Constitution”. Moreover, he said that Prime Minister Mottley has confirmed that the “national consultative process will commence in December of this year (2021)”. Mottley, in her most recent national address, indicated that the process will be completed in 12 to 15 months.
    If that is true, why not postpone the move to a republic for 18 months and deal with the important issues upfront? Significantly, Comissiong fails to address the issue that the biggest constitutional change would have occurred with no consultation whatsoever.
    The famous philosopher Cicero in 64 BC wrote in his book How To Win An Election that there are times when a politician must make promises even though he knows that he will fail to keep or deliver most of them. Comissiong may have blind faith in the Government of Barbados but faith, like hope, is not a guarantee.
    Serious issues
    When Barbados is turned into a republic in November, the many serious issues facing the country will receive no meaningful “national consultation”, and therefore, what results from it will not implement the real changes Barbados needs. If the Government cannot or will not pass legislation for an integrity bill with teeth, it is hard to envisage that it will make constitutional changes. The Government had the votes to pass the Integrity Bill, but four Government senators mysteriously or conveniently were absent so that they did not have sufficient votes.
    Our respected historian Sir Woodville Marshall, who supports a republican form of government, said that “it is a time for public education”. He also said that “it is not entirely logical to get the Barbados Head of State before you change the Constitution. In other words, you should invert the process”.
    Many issues need to be fully discussed regarding a republican form of government, including the following: 1. What type of republic should Bajans select?
    2. Should the head of state be elected by the people for a fixed term or be “selected” by an electoral college of Parliament?
    3. Should the President be the executive head of Government or ceremonial like the Queen?
    4. Should there be limitations on the terms of office of an executive President?
    5. If we have a non-executive President, should there be limitations on prime ministerial terms?
    6. Should there be more parliamentary oversight and compulsory accountability of the office of Prime Minister?
    7. Do we need a Senate when it has no power to reject Government spending and borrowing, and if its members do not comply with instructions, they can simply be removed and replaced by more compliant people?
    8. Why is it necessary to have a non-executive, ceremonial head of state? Is it not an opportunity to eliminate this position? It would save a great deal of money.
    9. Will the public sector be held more accountable, especially as civil servants salaries are over $1 billion annually?
    10. How can we enshrine in the Constitution that transparent action must be taken on reports of the Auditor General on pain of removal from office of the Minister of Finance and ministry officials?
    The people of this country ought not to be treated like mindless children and corralled into a decision in which they have no say. Let’s have a republic if we, the people, want it and show that we want it by our votes in a referendum, but, at the same time, let us debate and agree on the kind of republic we want and the depth of reform of the governmental system to make it more accountable and transparent.
    Collective power
    Politicians are interested in being elected and re-elected, and that means they have to secure the majority votes of the people. Barbadians should use the politicians’ ambitions to ensure the nation is not pushed into constitutional change that will produce less accountability by the Government.
    We also have the collective power to insist on it. The only chance Barbados has of getting any meaningful changes implemented is to have them done before the official move to a republic. By then, the politicians don’t need us. They would already have foisted their will on the nation.
    John Beale is a former Barbados Ambassador to the United States and the Organisation of American States for seven and a half years, appointed by the Democratic Labour Party and a former Barbados Honorary Consul to Brazil for ten years appointed by the Barbados Labour Party. He has never joined any political party.


    Source: Nation

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