Policy Performance and Outlook (Part 2)

A follow through to the Policy Performance and Outlook (Part 1) received/posted by Barbados Underground last week. To be honest topics coming from the political opposition and others critical of government policy on the campaign trial so far have not clearly articulated economic alternatives to give hope to an electorate definitely suffering from all types of fatigue, economic, social and the like. With just over week ago is it too much to ask to have a serious conversation about the state of the economy and the viable alternatives that may exist?
Blogmaster

Tax Reforms  

The intended purpose of the 2019 tax reforms was to shift taxation from off of work and income and more towards transactions and wealth in these the measures, the administration implemented: 

0% income taxes on the first 25,000.

Introduced a Compensatory Income Credit for people earning above 25’000 but below 3500. You can see that here

Reinstated the reverse tax credit of $1300 which the Stuart Administration stopped paying between 2016 and 2018, and expanded it to include everyone earning less than 25,000. You can see that here.

Increase Land Tax on properties valued above 450,000 from 0.45% to 0.7%.  

Changed Road tax  to a pay-as-you-use tax on fuel.   

Paying Arrears 

As mentioned in part 1 on assuming office, the administration was faced with approximately $1.9 billion in arrears.  Did they tackle it? What has been the record?  This administration set about to pay down those arrears which were incurred by previous administrations (mostly the Stuart administration).  The administration issued the ‘S’ series bonds in late 2018 to pay off the 1.9 billion dollars in arrears owed to individuals and businesses throughout Barbados over a four year period. As of the last update in November 2021 by Ryan Straughn, the Government had paid $1.4 billion to these people and entities leaving $500 million to be paid by September 2022.  These included people whom the state owed for goods provided, services rendered, UWI for educating Barbadian Students, $250 million in NIS payments for Civil Servants, (I could be wrong but I believe fellow blogger Northern Observer was one of the people owed).

Additionally, I noticed that the administration went to parliament recently to pass the Debt Settlement Arrears Act 2021 which sought to clear an additional $300 million in arrers for land that the State acquired over the years and did not pay people whose lands were acquired, and for people who successfully sued the government or reached a settlement with the State in the past.  This is being done by issuing J series bonds to be paid off in four years. 

Strangely enough this bill stirred some controversy over wording, but the Act clearly states on page 4 that the purpose is to pay off people to whom the government owed money for land compulsorily Acquired before September 2018. In other words, this only applies to people who were owed money for land before this Administration. Read the act here We should have used the passage of this Act to examine the regrettable instances over the last 40 years in which The state has acquired peoples land without compensation, some going 30 years without a cent. This has happened across various administrations. During the Senate debate, Reverend Rogers spoke to this. I recall reading an article in the Nation a couple of years ago about this lady in Christ Church whose land was acquired by the State almost 25 years ago at that time and who had not yet been compensated. I think paying these people over a four year period using the J series bonds is fair, given that you cannot pay the $300 million all at once because of fiscal constraints, and the state should not pick and choose who it will pay and when.  Monthly payments over a four year period is one of the best options, given that a number of these people have not been given a cent for more than two decades with some of them already having passed away. 

However, another option would be to get a separate loan from somewhere to pay these Barbadians. 

Arrival of Covid 

Upon the arrival of Covid-19 the Barbados economy contracted by 17.5%, due to a 95% fall in tourist arrivals, Government revenue fell by $600 million during the first year as well and has only now begun to recover. 
What was the response?  

After the tax reforms of 2019 and before the pandemic hit, the Mottley administration already declared that it will not be implementing any new taxes or increasing any existing ones, up until this point, they have kept this pledge. Therefore upon the arrival of Covid the government let the $600 million loss in tax revenue go without responding with any new revenue measures.    Was this the right call?If you go by most economic theories, yes. According to this Australian Economist. Expansionary fiscal policy is one of the ways that a country with a fixed exchange rate can respond to a deep recession. Luckily, when the pandemic hit the government was already running a 6% primary surplus in order to pay off arrears.  Therefore, the government was in a position to renegotiate the EFF with the IMF for a 1% primary deficit. This allowed the government to go  without imposing any new taxes, avoid deep spending cuts and respond to households and small businesses.  The Government ended up running a overall deficit of 4.5% because it continued to pay back arrears (S series and tax refunds).

The Government came together with companies and people earning over $50,000 a year to set up the Adopt-a-Family programme to give $600 monthly to the most vulnerable households, 5000 of whom accessed this.   The Government also reprofiled the loan payments of Micro Business Client of the Trust Loan Fund and Fund Access.  Banks announced a six-month moratorium on loan repayments.  During the 2021 lockdown, over 5000 micro and small businesses were given $750 each week of the lockdown. This also included vendors and Taxi drivers.  The Government also rolled out the Best Programme Whereby they invested in Preference Shares in Tourism Entities, provided that they rehire at least 60 percent of their workers at atleast 80 percent of their normal salary for up to two years if needed.   Some Capital works projects like the Speightstown Flood Mitigation Project, Constitution River Flood Mitigation Project and Fairchild Street Rehabilitation Project, Speeding up of the Roadworks and Water Augmentation Projects,   Project to renovate derelict Government Buildings. The government increased Health expenditure by hiring more health care officers and constructing a hospital in St Lucy in one month. 

My only criticism is that the Capital Works programme could have been expanded with more public/private partnerships. 

Challenges and Proposals Ahead 

The main Challenges that lie ahead include; tackling the population crisis, dealing with the OECD imposed global minimum tax rate, Lack of Innovation in this economy and forming new trade relationships.

Population Crisis 

Brabados’ population growth rate has been declining since 2010 and reached only 0.1%. In 10-12 years Barbados’ population will start to shrink if something is not done soon to stem this. The Mia Mottley administration put together a population commission to look into this.  I have heard that the commission’s work is done, if that is true, I believe it’s findings should be made public straight away, given that it has serious implications for the NIS pensions. You would recall Ronald Jones iurging Barbadians to “have more babies” and articles like this from Harry Russle in 2012 acknowledged the problem. However, with time running out, telling people to have more children is not and will never be a serious public policy response to this crisis.  Even if the birth rate in Barbados were to tick up slightly this year, it would still not go far enough to solve the problem. Even though it is often a controversial topic (check the USA), immigration reform and policies aimed at getting the diaspora to return, has to be front and center going forward.  If this is not done, people expecting a pension in 25 years time may get none.

Innovation 

That leads me to the next point, In reforming the immigration process, Barbados has to determine the characteristics of young people, including those in the diaspora who want to come here, or return. Emphasis should be placed on encouraging those who can innovate, bring new skills not available in abundance in the country and those who already offer goods and services outside of the island. This can speed up economic diversification. Havard professor Ricardo Haussman has done great work on economic diversification and how it relates to know-how, you can listen to his lectures here and here. Improvements in innovation will also come with comprehensive education reform. Work has already started with the education reform unit, but that needs to be given time to bear fruit.  

Global Minimum Tax rate 

The final nail in the coffin has come, we now have to live with the end of what we once called the “international Business sector”. The OECD announced the imposition of a %15 global minimum tax rate for Multinational Entities. in simple terms this means that if an international business company pays %5 corporate tax in Barbados it will have to pay an additional %10 tax in its jurisdiction of origin. This now means that tax competition is effectively over. You can read more here. In December of 2018 local companies benefited from a reduction in Corporations taxes, not because the government wanted to stimulate the economy but because it was trying to prevent a collapse of the International Business sector.  In 2017 the Stuart Administration made a commitment to the OECD that there will be no difference between international business and domestic business, leaving whoever won the 2018 election a few months to implement it. To be fair, the Stuart administration committed to this to get the OECD off the country’s back, without thinking through the implications.  Now with the global minimum tax rate, the country has to compete for global business on ease of doing business, human capital. and a supportive environment (eg. Central banks regulatory sandbox for digital currency). This Global Minimum tax rate will be fully implemented by 2023 and Barbados will have to transform significantly before this takes effect, (good luck to those responsible).  

Trade Policy 

Barbados will need to change and expand its Trade and foreing policy to grow the economy.  The country has to continue the work started in Africa but must also seek to stand out in becoming  the place from which high end goods and services are provided to most of Latin America and the Caribbean. Cooperation with African countries is already starting to open up opportunities for some local enterprises but that has to be broadened. By the way, Barbados Based Bitt Inc facilitated the launch of the eNiara Africa’s first digital currency and it has averaged more than 20.000 downloads per day since October.  We also need a better trade relationship with Guyana, this I feel has huge potential and is long overdue.  

Fiscal Policy 

The good news is that the debt to GDP ratio will almost certainly fall this year barring some calamitous event.   That is because the GDP portion of the ratio will increase due to higher economic growth this year.  This growth is just a reversal of losses experienced when the economy contracted by 17.5 percent in 2020.  This fall in the debt to GDP ratio in 2022 should not be mistaken as Barbados being on some path to glory however, there is still a long way to go and a number of challenges to come as I mentioned before. The next administration should focus on infrastructure spending while avoiding  the mistake of increasing current spending.  Let the growth this year take care of most of the recovery in Government revenue which has already begun.  If you manage not to mess this up, it can go some way in helping you to face the challenges ahead.  In a small open economy. Sound fiscal policy helps to anchor all stability.  

103 thoughts on “Policy Performance and Outlook (Part 2)


  1. The blogmaster scanned the main daily newspaper (Nation) this morning and there was not a single article/column addressing the perilously economic conditions. All the news reported was taken from the campaigns with mediocre offering.


  2. An issue not being discussed is the need for sophisticated investments instruments to be offered to the public. We live in a market where a savings account with some government paper thrown it is considered to best approach for average Joe. It is not.

    We cannot progress as a society if there is little hope to adequately secure our financial future.


  3. Day 9 – CURIOSITY

    Today we continue to build a strong base for which we can explore, release tension, and boost stamina… and faith.

    Get ready to say hello to your abs and your glutes, while giving your brain a nutritious boost.

    This is a fun practice!

    Get curious

    Pay attention
    Adriene stands on her mat in tree pose with her right foot resting on her inner thigh of her left leg and her arms stretched up toward the sky. Her eyes are closed and she has a soft smile on her face.

    Notice how your relationship with your breath changes with each day.

    Dig in.

    Stay curious.

    Find What Feels Good.

    Since I was more than a child
    trying on a thousand faces
    I have wanted one thing: to know
    simply as I know my name
    at any given moment, where I stand.

    Double Monologue, by Adrienne Rich, (1960)


  4. “An issue not being discussed is the need for sophisticated investments instruments to be offered to the public.”

    Bajans should invest in Weed 🌿 Industry 🌿 for 🌿 Growth and maxi maxi maximum return on investment now that Government of Barbados is willing to sanction the use of thereof as sanctioned by the original creator of the universe up above down below and all around you

    If you are willing and obedient, you will eat the good things of the land;
    Hebrew: God said, “See, I give you every seed-bearing plant that is upon all the earth, and every tree that has seed-bearing fruit; they shall be yours for food. These will be food for vou. …


  5. Inquiring minds want to know what are Targums
    And God said on the Bubbling Telephone Chalice to the Holy Trinity of I and I and I aka Me, Myself and I
    an ancient Aramaic paraphrase or interpretation of the Hebrew Bible, of a type made from about the 1st century AD when Hebrew was ceasing to be a spoken language.

    Genesis 1.29

    Hebrew: God said, “See, I give you every seed-bearing plant that is upon all the earth, and every tree that has seed-bearing fruit; they shall be yours for food.

    Greek: And God said, “Behold, I have given you every seed-bearing grass, which is on the earth, to produce seed, and every tree, which has in itself the fruit of the seed that it has produced–it will be food for you–

    Old Latin: God also said, “See, I have given you every seedbearing plant bearing its seed over all the earth, and every tree that has seedbearing fruit. These will be food for vou.

    Vulgate: And God said, Behold, I have given you every herb bearing seed, which is upon the face of all the earth, and every tree, in the which is the fruit of a tree yielding seed: to you it shall be for food.

    Peshitta: And God said, Look I now give to you all the herb which propagates by seed over the face of the whole earth and each tree in which there. the fruit of the tree whose seed shall be food for you.

    Targums:

    Onkelos: And the Lord said, "Here, I have given you every plant whose seed can be sown which is upon the face of all the earth, and every tree which has the fruit whose seed can be sown, for you it shall be to eat.
    
    Neophyti: And the Glory of the Lord said: "Behold, I have given you all the herbs that produce seed that are on the face of all the earth and every tree that has fruit in it--seedbearing tree--I have given them to you for food.
    

  6. … B R E A K I N G… N E W S… ON BU
    Inquiring minds with High Energy provide remedy for the agony in the body of Barbajan minds who suffer from low energy

    Vibrate On
    A Wicked Vibration

    Energization Exercises of Paramhansa Yogananda at a Slower Pace with Melody of Ananda Worldwide


  7. “The intended purpose of the 2019 tax reforms was to shift taxation from off of work and income and more towards transactions and wealth in these the measures, the administration implemented: 0% income taxes on the first 25,000.”

    @ David

    “0% income taxes on the first $25,000” was implemented before 2019.


  8. Dem could start with providing a secondary market for all the J bonds dem issuing.

    No economy can pick up with a bunch of non negotiable government paper floating round that is of no use to the holders today.


    • When will we hear the output from the committee that included Sinckler? What initiatives are in the pipeline to wean over dependence on tourism and Offshore. The current model is unsustainable. Citizens need to ask relevant questions and avoid being sucked into the same old same old vortex of the political rhetoric.

      Sensible people must conclude based on what is in the public domain and alternatives being proffered, the current trajectory will not change.


  9. Still waiting to hear:
    What are the issues.
    Why was an election called.
    Where is this divided country.
    What are these humongous decisions that have to be made.


  10. @David
    When will we hear the output from the committee that included Sinckler?
    ++++++++++++++++++
    How dare you mention Sinckler’s name in the midst of an Election campaign? Last time we heard his name before a plebiscite he was a pariah, a dead man walking according to everyone who wore a red shirt, a view confirmed by his constituents who sent him packing in favour of the charismatic Neil Rowe. Now he is like Lazarus risen from the dead anointed with Holy Oil and willing to share his vast knowledge of all things financial and economic.

    BTW wuh happen to de house in St. George?



  11. “Still waiting to hear:
    What are the issues.
    Why was an election called.
    Where is this divided country.
    What are these humongous decisions that have to be made.”

    2 common phrases that sound clever that mean less that can be used to sound wise like an owl than you really are are

    “It is what it is”
    “Inquiring minds want to know”

    True Inquiring Minds …
    are not lazy repeating questions rhetorically themselves
    ponder by meditating not using their minds
    but still their mind by concentrating on their breath

    Here are some breathing practices


  12. Only the opposition and BAMP are to blame for the economic misery. They specifically work against the government’s vaccination campaign, talk about “freedom of choice”, do not want tourists to enter Barbados without a 14-day quarantine and much more. Now we have the mess: an economic slump of almost 20 per cent, crime and despair among the masses.

    In other words, they want to destroy the economy and drive black people into unemployment.

    Time for the opposition and BAMP to apologise for these economic and social crimes!


  13. @David

    Government will need to agree with a local bank to honour the paper and then settle with the bank. No employee should have to suffer while acting as a state bank for a government.


  14. The Article forgot to add:
    Expanded the black hole in the NIS. We have now crossed the event horizon and will reach the singularity earlier than predicted.
    The NIS truly behaves like a black hole, no light/information (audited reports) is emitted from it, yet it can absorb an infinite amount of energy (real and printed money and toilet paper IOUs)


    • NIS is a pet peeve of this blog. It has been used as the ATM of both administrations. As a people we ignored it and we have begun to reap the results.


  15. @ John A January 10, 2022 11:43 AM

    You should face reality. We have been broke since the failed issue of our government bonds in 2013. In 2013, we had the CS loan with IMF conditions as the third IMF program. This was followed by many more downgrades. 2018 the fourth IMF program. After that Corona, problems remaining. The debt level is again as high as in Sinckler’s best days without any prospect for substantial economic growth.

    We had it in our hands around the year 2000 to make Barbados a deregulated, liberal tax haven. Instead, we went the way of Cuba, with lazy workers, marauding unions, excessive taxes, overregulation and foodstamps around the clock. Just look at the election campaign. The population is crying out to be patronised. Just like little children. If there is somehow dirt on the street, people don’t take care of it themselves, but call politicians for help. Simply laughable.

    With such mentality, there is no future for this island as an independent state. We therefore need a strong leader to break this mentality and reshape the people.


  16. Breaking News on Davies Blog..

    Cyprus Finds Covid-19 Infections That Combine Delta and Omicron
    By Georgios Georgiou +Follow
    January 8, 2022, 10:10 AM EST

    A strain of Covid-19 that combines delta and omicron was found in Cyprus, according to Leondios Kostrikis, professor of biological sciences at the University of Cyprus and head of the Laboratory of Biotechnology and Molecular Virology.

    “There are currently omicron and delta co-infections and we found this strain that is a combination of these two,” Kostrikis said in an interview with Sigma TV Friday. The discovery was named “deltacron” due to the identification of omicron-like genetic signatures within the delta genomes, he said.

    “We will see in the future if this strain is more pathological or more contagious or if it will prevail” over delta and omicron, he said. But his personal view is that this strain will also be displaced by the highly contagious omicron variant.

    Castrate this too….


  17. “An issue not being discussed is the need for sophisticated investments instruments to be offered to the public.”

    Inquiring Minds “would like” “to know” which specific type of “instrument” you had in “mind”

    as a skilled and experienced business analyst and subject matter expert in accounting and financial services collateral wealth management asset transfers fund accounting income reporting and investment banking..

    are not all instruments sophisticated no
    from stocks and shares in slavery sold in the shitty city of iniquity for collateral wealth management in global capitalism

    to foreign exchange crypto currency
    to futures derivatives MBS ABS CDO
    to Fixed Income Bonds
    to Accrued Interest
    to funds pensions
    in primary and secondary markets

    but, speaking of sophisticated investments instruments
    could one of you chaps tell me the bookies odds on 2022 election outcome in Barbados for each party to gain an overall majority
    I am feeling a bit reckless and would like to gamble $1 on a BLP win

    I bet you a dollar
    love tickles like magic


    https://www.youtube.com/watch?v=Ao_bT-izPWA


  18. The DLP ent nuffin.

    Looka the Reverent Joe.

    Even de sheep in Barbados coming out to hear de Reverent speak on de pasture.

    Don’t sound like he like dis Welcome Stamp dooflicky much.


  19. I remain confused.
    Was there ONE arrears package of $1.9B or TWO packages?
    Did both the S and J series Bonds go to settling the same package of arrears?
    No mention of the IMF?


  20. Worries in the Dance

    Ghetto People dem feeling it hard them feeling it hard

    Lincoln Granulated Sugar Booga Minott Dubplate Mix


  21. @John
    It wasn’t the Welcome Stamp itself, which had the Bishop up in arms. That Barbados was “opening it’s arms” to non-traditional family units.


  22. @John
    Sound like protestors to me. Can you tell us which party?

    If you listen at 1:57, you may hear some clucking…😀


  23. Atherly better stay away from Canada with his anti LGBTQ2S views. lol

    Having beneitted from a party led by MAM and supported by Wickham me now attack the political hands that used to feed him.

    Seems hypocritical to me.


  24. The bees are buzzing all over the dlp camp after 6 pm
    The Dlp is doing a good job of exposing their lack of economic performance
    Word on the Street
    The rich got richer
    The poor told to hold strain
    Tek dat Mia


  25. “The bees are buzzing all over the dlp camp after 6 pm”

    Like flies on shit

    Now here’s a proper anthem

    for an election in the Caribbean

    Better Must Come

    Better Must Come / Delroy Wilson
    Yeah, yeah, yeah

    I’ve been trying a long, long time still I didn’t make it
    Everything I try to do seem to go wrong
    It seems I have done something wrong
    But they’re trying to keep me down

    Who God bless, no one curse
    Thank God I’m not the worst

    Better must come one day
    Better must come, they can’t conquer me
    Better must come, yeah

    I’ve been trying a long, long time
    But I can’t make it
    No one to give me a helping hand
    They only tryin’ to keep me down

    Who God bless, no one curse
    Thank God I’m not the worst
    Oh, my people get a seat
    They’re trying to take advantage of me

    Better must come, better must come, yeah
    Better must come one day
    Better must come, yeah, yeah, yeah, yeah, yeah

    I’ve been trying a long, long time still I can’t make it
    Everything I try to do seem to go wrong
    It seems I have done something wrong
    But they’re trying to keep me down

    Who God bless, no one curse
    Thank God I’m not the worst

    Better must come one day
    Better must come, they can’t conquer me
    Better must come one day, better must come
    Oh, better must come one day, better must come

    Better must come one day, better must come
    Better must, ooh


  26. David,

    I am a simple country girl who, though she understands enough about economics and finance to be able to follow, does not pretend to have the answers to the complex contortions of the financial market kind.

    My solutions are more simple and require an attitude adjustment. I am yet to see a leader who is trusted enough to lead us in that direction, or a credible leader who can inspire a new mindset among the majority.

    So… it is business as usual until we bust!

    Nuh lotta long talk!


    • @Donna

      Sadly we have not seen that charismatic person to lead the transformation we want, it is still too transactional.


  27. Imagine the leader of the third party choice is fully focussed on excluding a significant percentage of Barbadians from equal rights.

    How will this fix the pickle we are in? Or to turn the question around, how does recognising homosexuals as human beings with equal rights hinder our prosperity?

    Was it homosexuality that got us here?

    So our economic policy would be to change back “Creator” to “God” in the Constitution, reject civil unions between homosexuals and ban Peter Wickham from the airwaves.

    Steupse!


    • If Barbados is not a theocracy then the sensible objective is to to nurture an inclusive society to be able to maximize our talent and at the same time demonstrate tolerance from above. It does not mean we will agree with positions taken by individuals in the collective but we have to find a way to coexist until such time the creator cometh.


  28. Excellent post. Difficult to weigh competing policies where the opposition parties have failed or refused to put their policy prescriptions on the table. The game changer is obviously the pandemic. The construction boom which this administration hopes will drive economic activity is a good bet, but not enough by itself. The winter tourist season is clearly much better than last year. But the twin challeges of the pandemic and crime now loom large. PM Motley has done well with limited resources.


  29. @ac
    You go girl
    “The Dlp is doing a good job of exposing their lack of economic performance
    Word on the Street
    The rich got richer
    The poor told to hold strain”
    Imagine (more on that later), in 3.5 years this B guvment, has tried to roll back the huge economic gains of prior years
    They sought to pay taxpayer refunds, ‘on hold’ for many years. After all these are all rich people. Skin de ass.
    They sought to repay NIS premiums for public employees (more rich people) which had been withheld to fund Central Govt (poor people?). To besides they brek the NIS so why give them money so they can pay pensions, severance and benefits to rich people.
    The (bad word) ijits called in the IMF. A 4 letter word to any D supporter. All they needed to do is print $US? Or print nuff more $BDD and change the pegged rate.
    Then they sought to pay Barbadian companies (more rich people) who had long outstanding payables. Instead of ignoring them, they don’t need the money?
    A 5% raise? That is something? Do like the D’s, not one RH increase. Make the rich pay. See now the nurses instead of knowing their place want more.
    Imagine we could return to former economic growth. Skin the RH rich, return the D’s. They IMF can’t tell we what to do.
    You go girl. Spot on.


  30. @ David

    The bank does not have to honour it based on the value of the bond. They can do it based on a guaranteed tax credit for the value of the bonds redeemed. In other words government has a choice either pay the secondary market holder or have them deduct the value from taxes owed to the state by said holder. So the bank say would have a guaranteed tax credit to the value of bonds redeemed and when they hit that value redemption would stop based on the taxes they paid last year. So we got 5 banks and each bank does the same thing to their tax paid threshold based on their last audited financial year. Done wid dat!


  31. @ David

    It’s doable let’s see if government will think outside the box. Lol

    Truth is based on the opposition approach so far I wouldn’t be too worried if I was Mia.


  32. Plea to parties

    Level with electorate on IMF, urges economist
    by SHAWN CUMBERBATCH
    shawncumberbatch@nationnews.com

    BARBADOS’ GENERAL ELECTION CAMPAIGN is taking place in the shadow of International Monetary Fund (IMF) recommendations on fiscal policy that could threaten manifesto promises and efforts to diversify and grow the economy.
    Professor Don Marshall, director of the Sir Arthur Lewis Institute of Social and Economic Studies, University of the West Indies, Cave Hill Campus, sounded that warning yesterday.
    With Barbados’ four-year IMF Extended Fund Facility arrangement due to expire on September 30, he said all political parties contesting the January 19 poll needed to tell the electorate if they intended to accept the IMF’s latest advice or extend its mandate.
    The political economist voiced concern that the financial institution’s most recent country report on Barbados was prescribing the pursuit of a six per cent fiscal surplus within Government’s next three financial years, a shake-up of public sector pensions, and more financial and operational reductions at state-owned enterprises.
    Marshall told the DAILY NATION the Barbados Labour Party, Democratic Labour Party and others seeking office should state their positions on the IMF’s “startling conclusion that going forward Barbados, in three short financial years, has to pursue an ambitious primary surplus programme”.
    “And that is to say that it must be able to move from a situation where we have operated at one per cent deficit to get up to six per cent by the end of financial year 2024/2025. Right now we are finishing up the 2021/2022 financial. By March we will be finished with that, and from April going forward they will want us to try to begin to strive for six per cent surplus,” he said.
    “We have never in our history, outside of when we entered the programme with the Fund in 2018, pursued these primary surplus targets of six per cent.
    “The economy and society had to squeeze to get to that fiscal surplus target of six per cent before the pandemic. It meant sending home 1 500 workers, and besides retrenchment it meant finding ways to attract greater revenue and so on. So we saw these tax increases on water and different things,” he added. Marshall cautioned that with the economy now needing diversification after being hammered by COVID-19, policy space was needed “to pursue an industrial policy where you can try to incentivise the growth of other sectors of the economy”. “If you are in an IMF programme of the kind described, where you cannot exercise certain kinds of fiscal policies to give growth to new sectors, how then do you diversify your economy coming out of the pandemic?” he asked Marshall asserted that politicians “glibly” talking about economic diversification on the campaign trail, and the BLP’s new manifesto pledges “bears no relationship to the report coming out of the IMF”.
    “They want the statutory enterprises to be streamlined and they are calling for cuts in pensions. I and Barbadians need to know from the Government of the day and the opposing parties in the election if these are the tough decisions that are facing us, what
    then is the plan by the various parties seeking office?” he asked Marshall said if the political parties did not give the electorate a clear position on the IMF and related issues, the country risked ending up “like Greece and some of those countries in the European Union that had marches all over the place because they went to the electorate with one set of manifestos that bore no relationship to what the IMF wanted”.
    “And as a result, when they negotiated with the Fund and came back with a slew of programmes, the people said, ‘This is not what we understood voting you into power was about’,” he said.
    His advice to candidates now seeking office was to forget the “childish stuff” on the political platforms and focus on the “real substance”.
    “I have been asked repeatedly who I think will win the election and I tell them I think the IMF will get all 30 seats. Why do I say that? Because none of the parties want to really talk to the people. They want to engage the people on whether or not taking a tax off water or taking a tax off land will matter.
    “I think I have followed one election campaign too many and this one is particularly disappointing in terms of real engagement of the issues,” Marshall added.


    Source: Nation


  33. Major tourism plan in works

    BARBADOS’ TOURISM SECTOR is in for major innovations, says Minister of Tourism and International Transport Lisa Cummins.
    Speaking on Sunday night during the Barbados Labour Party’s (BLP)
    Mega Manifesto meeting, she said the establishment of tourism villages across the island; introduction of a new deal to ensure tourism workers benefit from training, upskilling and the opportunity to have their children cared for at their workplaces; as well as a new aviation hub aimed at creating jobs, formed part of the BLP’s plans for the industry.
    Cummins said that young people would become the accelerators and youth innovators in the Ministry of Tourism as they help to steer the sector as consultants. She also said Government would be marrying the tourism sector with that of the creative industry, while building an entire framework to provide new opportunities for farmers.
    Cummins told her listeners, many of whom gathered at Lower Estate, St George, for the meeting, which was streamed live: “One of the first things this administration will do if elected, on January 20, is we will implement tourism villages that bring tourism off the coastlines and into communities of Barbados. Every village in this country will be mapped under a BLP administration to have tourism community villages and vending opportunities for kiosks to be established.”
    She said these villages will create jobs for many, and communities left in poor conditions by the former administration will be rebuilt.
    “We as a BLP intend to introduce a new deal for tourism workers to ensure they are able to benefit from training, upskilling and the provision of their most basic needs – support and care for their children in their workplaces. Wherever
    possible, we intend to make sure that people feel as though they have a vested stake in the tourism sector.”
    Of the aviation hub, Cummins said: “We want to bring ships and planes right here to Barbados, and in so doing, we want to create jobs in flight maintenance and operations, jobs in cargo and jobs in flight schools. We want to be able to offer all that to Barbadians. Barbados must never be afraid to lead, and to lead in aviation.”
    The minister said airlift was close to 89.7 per cent of what it was in 2019, with a total of 10 000 visitors set to visit each month of the current winter season. She added this was a stark contrast from the 7 000 visitors for the period January to August 2021.
    (CH)

    Source: Nation


  34. Private sector outlines priorities

    THE PRIVATE SECTOR has a to-do list it wants completed this year, including an effort to grow the economy in a way that reduces the country’s “overreliance” on tourism.
    Barbados Private Sector Association (BPSA) chairman Trisha Tannis also said the business community was keen to see unemployment reduced, and for the authorities to come up with solutions to the global corporate tax threat.
    “I think we really do wish for Barbados to return to a state of sustained prosperity,” she said recently. “We do know that 2022 will herald the end of the International Monetary Fund Extended Fund Facility programme and with that then we will have to look at how the BERT [Barbados Economic Recovery and Transformation] programme then will be addressed to accommodate the existential realities that COVID-19 has brought upon us, knowing full well that the BERT programme was conceived in a context that did not contemplate a pandemic.
    “And therefore, we do need to come back to regroup on that plan, given what has happened to the economy as a result of the pandemic, and chart a path forward that the country is well aware of and is transparent, and we all are aligned with the goals and objectives,” she added.
    Tannis said the private sector also wanted unemployment to fall but noted this was linked to “the economic growth and prosperity that we want to pursue”. Regarding economic diversification, she said: “We would also like to see more of a start towards a serious diversification of our economy.
    “We have seen how vulnerable the economy is, with its over-reliance on tourism, and whilst we know that is [a] sector that we have to incubate and to nurture until it recovers fully, we do think that we really need not be found in this position again where we are over-reliant on one sector.”
    Tannis said Barbados also had to “come to the table in terms of real solutions against the threat of the minimum global tax because that is a potential threat
    to our international business sector and that sector contributes the lion’s share of corporate taxes to the Treasury.
    “And therefore, any threat to that sector is a huge concern to the private sector and we do have a bit of time. I think the deadline for implementation is 2023 but obviously in 2022 we would want that we are crystalising essentially our plan of approach or plan of attack,” she said.
    Tannis said this was important “to protect our economy from what could be a fairly significant sustained threat, probably even more significant than COVID-19, quite frankly, because of the sheer reach of that global initiative”.
    The BPSA head also wanted an end to violence in Barbados, including gun violence, in addition to a more efficient justice system. “We would like for our judicial system to be highly responsive and completely reengineered so that we have quick justice because we know that justice delayed is justice denied.” ( SC) (From this week’s BARBADOS BUSINESS AUTHORITY.)

    Source: Nation


  35. 2 163 Welcome Stamp bids approved last year

    BY THE END OF LAST YEAR, Barbados’ 12-month Welcome Stamp Programme had received 3 257 applications, of which 2 163 were approved.
    The statistics were compiled by the Barbados Tourism Marketing Inc., with data received from the Barbados Immigration Department.
    The top five leading countries whose citizens are seeking entry under the programme are the United States, United Kingdom, Canada, Nigeria and India.
    From the applications received, 65 per cent were from individuals and 35 per cent from families. A further breakdown of the stats revealed that 62 per cent of applicants were male.
    Those applying under the programme have occupations in fields such as technology and communication, marketing; finance, manufacturing, education and training, law, distribution and logistics, and public administration.
    The Welcome Stamp Programme was introduced in July 2020 by Prime Minister Mia Amor Mottley. In July 2021, the Senate passed the Remote Employment Amendment Bill,
    2021, which allowed for the extension of the existing legislation governing the Welcome Stamp. ( BGIS)

    Source: Nation


  36. Breadfruit blues

    Exporters suffering losses because of British ban
    by SHERIA BRATHWAITE
    sheriabrathwaite@nationnews.com
    TWO MAJOR PLAYERS in the export sector are being prohibited from trading goods to the United Kingdom, causing them losses of between $20 000 and $30 000 each per month.
    The owner of Holder’s Food & Exports, Shawn Holder, who has been exporting mainly breadfruits and avocados to Canada, the United States and the United Kingdom for close to 20 years, said the prohibition started three years ago.
    “We are not able to get cargo (breadfruits) transported to England. British Airways stopped carrying cargo from here about three years or so. Back then they [the cargo agent for that airline] said the scanner system was down. We understand the scanner has been back up and running, yet they still have the prohibition. Up to last week when I checked back with them, they said they are only moving human remains and animals,” he told the DAILY NATION.
    Holder said the cargo agent for British Airways was GCG Ground Services (Barbados).
    He added that the UK was the island’s biggest market and now he was operating at only 50 per cent.
    “Virgin Atlantic stopped taking our produce from last July and the agent [Skyline Cargo Ltd] did not give us any particular reason why they stopped or when they would start back. So right now I’m just doing a flight here and there to the other markets. Between those two markets I’m supplying between 1 500 and 2 000 kilogrammes per week, whereas with the UK I could supply about 3 500 kilogrammes, which is about three flights per week.”
    Holder, whose business is based in Little Diamond, St Elizabeth Village, St Joseph, said he could not understand why exporters here were being treated this way, especially after his UK clientele told him they were still getting goods from other Caribbean islands.
    “We just want a concrete explanation as to why this is happening. We are in contact with the agents and no one can give us any substantial reasoning.”
    Holder said that he contacted the Ministry of Agriculture on the matter but did not receive any update.
    However, a source connected to the ministry said Virgin Atlantic was having manpower challenges, adding there was a breach in customs procedures in the UK and, as a result, the British government implemented a series of fines.
    Holder’s business has eight staffers and the prohibition, he said, was impacting his ability to run it effectively and maintain loan commitments properly. It also affected those who benefit from his business venture such as the breadfruit tree owners, pickers and freighters.
    Yellow meat breadfruit from Barbados in particular is in high demand in the UK. It is mainly eaten roasted.
    Erasmus Alfred, whose business, E& C Marketing, based in Grazettes, St Michael, is facing the same challenge and operating at the same capacity as Holder’s, said he had recently gained two new
    clients in the UK and he hoped to supply their needs soon.
    He said Barbados’ breadfruits were in demand in most other Caribbean countries because the quality and size were a cut above the rest.
    He said roasted breadfruit was a delicacy for members of the diaspora and many other nationalities.
    Alfred has been in the business for 13 years and has five employees.
    Both businessmen source breadfruit across the island. They pay about $1 for each breadfruit.
    An official at Grantley Adams International Airport confirmed that there had been a prohibition on produce from Barbados to the UK since last year but no reason had been given for it.
    When contacted, Minister in the Ministry of Foreign Affairs and Foreign Trade Sandra Husbands said she was not aware of the situation, adding that only breaches of trade laws were usually reported to that ministry.
    However, she added that she would investigate as she knew of the breakthroughs the breadfruit trade sector had made over the years.
    Chief executive officer of the Barbados Investment and Development Corporation, Mark Hill, also promised to look into the matter.

    Source: Nation


  37. The following was received vi “Quick Note to Blogmaster“.

    When the pandemic hit the government was already running a 6% primary surplus in order to pay off arrears. Therefore, the government was in a position to renegotiate the EFF with the IMF for a 1% primary deficit. This allowed the government to go without imposing any new taxes, avoid deep spending cuts and respond to households and small businesses. The Government ended up running a overall deficit of 4.5% because it continued to pay back arrears (S series and tax refunds). THIS WAS DUE TO THE initiatives of the previous administration; who the present government said had done nothing while in office. The opposition (now) and the DLp should be throwing this in their face.


  38. Thank you, Dr. Don Marshall! Damn childish, crappy misogyny, puerile promises of saving citizens a few dollars in land tax and sewage tax from the Duoploy and may I add, homophobia and “getting rid of God gaslighting from the third party alliance.

    Nothing of substance at all, at all!

    Puerile, poorakey pompesetting and pissparading pon de political platform to produce a poorakey parliament!

    Pleasing only to the bird brained.

    Embarrassing, depressing and insulting to people with even half of a human brain.


  39. A property value of four hundred thousand dollars in Barbados doespecially not make a person rich. The proposal that will see land owners exempted from property tax on the first four hundred dollars of value expands the population targeted by already established policy and is targeted at the middle class, working class. The rich will still be billed for their share of property tax.


  40. “I’ve been worried about this “get rid of God thing.” How does one get rid of God?”

    These folks are primarily Old School Christians
    who are against thoughts and interpretations outside their religion
    which may be just an understanding of other religions and practices
    about nature of God structure of Universe nature of souls
    redemption the light of God and your true self etc esoteric thinking


  41. Cuhdear,

    That’s why I called it gaslighting. The government is not trying to get rid of God.

    But government should not be about imposing God on citizens who don’t want Him. God gives us a choice. Neither should the majority be allowed to choose a religion for the minority. Religion should be a personal choice not a national choice.

    God judges each of us individually, doesn’t He?

    The Old Testament mindset is the cause for all this nonsense.


  42. 1 national stadium Is derelict , we cannot find money to fix it
    The Good news:
    We will build 15 minimum stadiums.


  43. @ Donna
    Agreed ! A Pure BS election.
    I want to hear from all the clowns on BU who got here parading that all of our economic woes were about to disappear because we were so damn “ brilliant “ at negotiating some “ quick deal “ with the IMF. I told them that the IMF has been in Jamaica for forty two years and to go and visit Jamaica and see what has happened with all the IMF help.
    But, I think Professor Marshall probably also reads BU and see how people are cussed and ridiculed by party hacks, encouraged by some who ought to know better, for speaking the truth.
    This must be the foolish season;
    1 National Stadium in a state of physical embarrassment but we are going to get 15 mini stadiums.
    These Duopoly apologists are shameless.
    There are no campaign issues; there is some invisible division in the country and nobody can say why an election was called.


    • @William

      You are aware the pandemic compromised the recovery effort?

      Can you tell us how much 15 mini stadia cost compared to a 1 state of the art stadium?

      Asking on behalf of the clowns.


  44. @ David
    I made my comments about the IMF pre COVID.
    Ask the government about the costs of 15 stadia. I don’t know. Just thought we should have repaired the National Stadium first.
    BTW, how is your suggestion that we export our ability to get fast loans from the IMF going?
    Peace.


  45. @ David
    You are attempting to blame COVID for everything. None of these two parties has been able to restructure the economy or reform education. All COVID has done is show them up and now they don’t have a clue as to how to go forward. You ought to know this is our third trip to the IMF and nothing was changed.
    What about Arthur’s great plan to restructure the economy ?
    The only problem you have is that you can’t get up this morning and find anything positive in the how the collective Duopoly is running or promising to run the country. All you are learning now is that there are some on this blog who actually think for themselves and ignore arch apologists.
    In the meantime the IMF is telling us pensions are too high.!International Murder Fund.
    Be careful my brother.
    Still waiting to hear how your plan to export how to get quick IMF loans is going.
    Peace.


    • @William

      Not for everything, the reality as you know is Barbados economy is over reliant on tourism and offshore. The pandemic has now dealt the country a shitty hand. We can agree successive governments brought us to the point, BUT, the reality is that pandemic continues to be a challenge given the inability of the country to sustain revenues.

      We have to deal with the now given covid and also the future how to restructure how we operate.

      In other words we have to avoid conflating the arguments.


  46. “The pandemic has now dealt the country a shitty hand.
    .. the reality is that pandemic continues to be a challenge..
    .. We have to deal with the now given covid and also the future”

    We should also be weary wary and mindful of feeding the Knox Trolls


  47. @ David January 11, 2022 4:13 AM
    (Quote):
    “They want the statutory enterprises to be streamlined and they are calling for cuts in pensions. I and Barbadians need to know from the Government of the day and the opposing parties in the election if these are the tough decisions that are facing us, what then is the plan by the various parties seeking office?”
    (Unquote).
    +++++++++++++++++++++++++++++++++++++++++++++

    Blogmaster, it seems that Doctor Don (aka The Cement Man, Jr) has read the IMF tea leaves and has foreseen the same ‘challenges’ ahead of Barbados as the miller has been ‘preaching about.

    Doc Marshall’s view clearly underwrites the ‘real’ reason behind the call for snap elections after the IMF brought down the hammer heavily on those ‘draft’ Estimates for the GoB’s F/Y 2022-23.

    The medicine which the IMF doctors will be administering this year will be twice as bitter as it would have been if the prescription issued in December 2013 had been followed.

    Neither an individual nor a country, on the brink of insolvency, can borrow itself out of long-term debt. Sacrifices and hard work in order to earn money are the only way out.


  48. “Neither an individual nor a country, on the brink of insolvency, can borrow itself out of long-term debt. Sacrifices and hard work in order to earn money are the only way out.”

    Money is about movement and growth for sharks when you stop moving you die

    $10 million $20 million debt does not matter if you can manage to service debt

    Debt Management is harder as you are swimming underwater for years without breathing


  49. @Skinner, the Blogmaster is being bluntly correct at 10:46 …. no one disputes your base argument of the ‘duopoly’ but you surely can’t seriously suggest that MANY folks are not keenly aware nor have been shouting about the woes of being in the tentacles of the IMF for YEARS now (in and off BU).

    @David, has cited Marla Dukharan often in these pages and she noted otherwise back last year that “Barbados who went to the IMF in 2018, is now enduring a deep economic contraction, but is on a positive economic trajectory after what she described as “the steepest debt restructuring known to man”.

    That trajectory can no longer be considered as truly positive based on the harsh IMF prescriptions.

    That type of nasty medicine is the one thing that stands out as a warning from economists over the long many, years about entering IMF protocols.

    Those who want to be aware… surely are @Skinner.
    The ‘arch apologists’ will always be among us because that’s just a reality of life!


  50. @MillerJanuary 11, 2022 11:17 AM

    Cutting pensions and streamlining SOEs to bring our lazy laggards into line.

    Just what I demand since March 2020. However, “currency reform” and sacking 15,000 public servants is still on the table …


  51. @David, I am a bit perplexed by these statements as reported in the Nation:

    “When contacted, Minister in the Ministry of Foreign Affairs and Foreign Trade Sandra Husbands said she was not aware of the situation, adding that only breaches of trade laws were usually reported to that ministry. However, she added that she would investigate as she knew of the breakthroughs the breadfruit trade sector had made over the years.
    Chief executive officer of the Barbados Investment and Development Corporation, Mark Hill, also promised to look into the matter”

    How could a GAIA official be aware of the prohibition and NOT the Minister or the BIDC…

    How do our Govt officials allow such nonsensical statements to be made!

    Years ago when Bdos was in the ‘orchid’ business and all that high end stuff I can’t perceive that a minister would be UNAWARE of a major breakdown affecting that business.

    Not saying that any quick fix would be forthcoming because the Minister knows but I am just completely discombobulated that the Minister was clueless of such an significant change in trade operationas.

    That the media didn’t call her out on that is instructive!🙈


    • @Dee Word

      The goal by political candidates during a campaign is to pour water on sparks to prevent a blaze.


  52. @ David January 11, 2022 12:21 PM

    The structural adjustment measures the IMF is about to impose on Barbados are not new to the table.

    The unfunded pension issue goes way back; even during the Arthur administration.
    Even the Stuart administration had these adjustments high on its ‘To-do-Urgently’ list.
    You are certainly quite familiar with that Statement issued by the then Minister of Finance in December 2013.
    The current PM is simply regurgitating (in guarded language) what was proposed in that same statement of intent.

    The challenge faced by the GoB, despite the LARGE gang of consultants, is one of Implementation.

    The IMF, therefore, has decided to play the role of the Enforcer since it is calling all the shots while it holds Barbados over a barrel of forex.


  53. @ Miller January 11, 2022 1:03 PM

    Unfortunately, our democracy has not stood the test of time. Politicians are afraid to implement necessary reforms because they are unpopular with the lazy, naïve masses. I refer here first and foremost to the vaccinations against Corona. Although vaccination is effective, large sections of the black masses are afraid to be vaccinated because they fear medicine more than their white masters.

    Therefore, we do not have a problem of knowledge, but a problem of implementation. Even a thousand advisors would be of no use.

    Basically, we only need one powerful ruler to optimise pensions, reform the currency and free up civil servants for the slave market in Saudi Arabia with a stroke of the pen by emergency decree.


  54. @DPD
    How could a GAIA official be aware of the prohibition and NOT the Minister or the BIDC
    +++++++
    Seems to be the thing around here, the Most Honourable Minister of Health wasn’t aware of the attempted vaccine procurement either

    Where does the buck stop?


  55. Most people I talk to are wondering about the election timing this early into the Gov’ts mandate and I can only guess that the IMF prescription for what ails Bim must be pretty bitter medicine to swallow, so bitter that the PM opted to seal down her majority ahead of schedule because the mood of the electorate after the IMF fix is revealed will be far different 12-18 months hence.

    I am not steeped in economics and my knowledge of Finance is as shallow as the water at Miami Beach but one of the items that I think will be sacrificed on the altar of the IMF is free tertiary education. The DLP was in the process of eliminating it and restoring it was a major plank in the of the BLP in the last campaign.

    As the late calypsonian used to say “I maybe wrong and I often am” but vamos a ver.


    • @Sargeant

      It can’t be a secret, IMF is up for renewal- so we or do we not? There is also pandemic related issues.


  56. “Neither an individual nor a country, on the brink of insolvency, can borrow itself out of long-term debt. Sacrifices and hard work in order to earn money are the only way out.”

    they thought springing a snap election and a little sleight of hand would fool the masses, bad strategy…..let’s see how much skimming takes place now when the only thing left to skim is IMF loans….can’t pull another vaccine scam to rob the treasury tens of millions…the years ahead are going to be very lean, the people better prepare.


  57. It is politically more palatable to have across the board changes, than ones which target.
    Yet failure to remove dead branches/ trees means you are watering non-productive entities.
    Where this PM struggles with people management and inclusive delegation, she has no such shortcomings when it comes to making decisions, being in front of a camera nor analysis of alternatives.


  58. “His advice to candidates now seeking office was to forget the “childish stuff” on the political platforms and focus on the “real substance”.
    Professor Don Marshall, director of the Sir Arthur Lewis Institute of Social and Economic Studies, University of the West Indies, Cave Hill Campus,

    The link below is remarkable. It dates back from 2017 and corroborates Professor Marshall’s deep seated fears. This approaching election will represent a land mark in Barbados’ history. The equivalent of the nuclear bomb is about to be unleashed on an unsuspecting nation. I fear for their natives; they will be consumed in the maelstrom. Out of the ashes we will witness a new Barbados more diverse, dynamic, fluid in its sexual preferences, neo Liberal, with zero interest in the island’s tragic history.

    https://m.youtube.com/watch?v=IifuJ6QPT88

    @ David,
    D-Day is fast approaching in Barbados. Please try to limit the posting from individuals who appear only interested in baiting others in order to distract Bajans from the harsh realities of what is due to hit them post election.


  59. @ WURA @ TLSN
    There will be no progressive change. The poorest will be asked to carry any burden. The rich have not yet touched all the money they saved from the mammoth tax breaks they were given; the corporate elites will continue to live as accustomed; state agencies will continue to cut back their services.
    Irrespective of who wins this sham of an election , we will be exposed to the same narrow partisan nonsense in all media; we will return here in five years or before and have the same bogus apologies.
    Garbage in garbage out.
    Some of us will continue to highlight the exploitation and marginalization of those who are the most vulnerable and be told that we are “ throwing shade”.
    But, this happens all over the world.


  60. @ Miller

    You sir have hit the nail on the head as to why elections are being held in the middle of an Omnicrom outbreak, with nearly 2 years to go and no threat from any real opposition party present.

    The facts are the moratorium on debt payment is coming to an end and loans will become serviceable in later 2022. While the IMF may have be lenient based on covid to this point, payday has to come. We have a growing deficit and a serious cash flow problem that must be addressed. It will be done by increased taxation and some belt tightening hopefully by the state. Truth is that although taxation will be increased, I don’t see where it will come from in terms of the Bajans pockets. Basically many are still unemployed or under employed, tourism is still under pressure and businesses are still under performing. So where will it come from and who will pay?

    Well I believe the PM will move corporation tax to 15% under the excuse that there is a global move to a single tax rate. As for the rest I am sure we will hear around June after all the politicking is over. One thing for sure is that it will not be pleasant even though it will be necessary.


  61. Hope the IMF isn’t meddling.

    Higher growth prospects for 2022

    by SHAWN CUMBERBATCH
    shawncumberbatch@nationnews.com
    THREE FINANCIAL INSTITUTIONS which have funded Government through the COVID-19 pandemic are predicting an upsurge in economic growth for Barbados this year.
    However, these prospects could be derailed by key risks, including the continuing health crisis, high global prices, debt problems and natural disasters, the International Monetary Fund (IMF), World Bank and Inter-American Development Bank (IDB) cautioned.
    While the IDB is predicting the economy will grow by 10.1 per cent, the IMF and World Bank both forecast Barbados’ gross domestic product will expand by 8.5 per cent over the next 12 months.
    Gradual recovery
    These forecasts are in line with the Central Bank’s most recent outlook of 2022 growth “ranging between seven and nine per cent”.
    The IMF’s Barbados mission headed by Bert van Selm said in its latest staff report that Barbados’ economy “is expected to gradually recover over the medium term”.
    They predicted modest growth of 1.6 per cent in 2021 “due to lower than projected tourist arrivals”.
    The team saw Barbados’ tourist arrivals gradually recovering in the last quarter of 2021, adding that “over the medium term, tourist arrivals are expected to return to normal levels around 2024”.
    Structural reforms and strategic public investment were “expected to return growth to its medium-term average of about two per cent”.
    “Risks to the outlook remain high and tilted to the downside. The key risk to Barbados is a further deepening and lengthening of the COVID-19 crisis, with a recovery in the tourism sector depending on how quickly key source markets, including the United States, the United Kingdom and Canada, can restore normalcy,” the IMF staff said.
    “Global food and fuel price increases could put additional upward pressure on inflation, given that Barbados is highly dependent on imports for these commodities. Barbados’ limited financial integration into global financial markets implies that risks stemming from possible changes in US monetary policy are limited. Barbados’ increasing exposure to climate change risks could also have a dampening impact on economic activity.”
    In its latest Global Economic Prospects report released yesterday, the World Bank estimated that Barbados’ economy would have grown by 3.3 per cent last year before rising to 8.5 per cent this year and falling to 4.8 per cent next year.
    World Bank officials said economic growth in most Caribbean countries “is projected to accelerate in 2022, on account of the expected timing of the recovery in international tourist arrivals”.
    Like the IMF, it pointed to risks confronting the economic prospects of Barbados and its neighbours.
    Must be controlled
    “The outlook is subject to several downside risks. These include spikes in COVID-19 cases, financing and debt-related stress, and disruptions from extreme weather events and natural disasters,” the World Bank said.
    “The durability of economic recovery in Latin America and the Caribbean, as elsewhere, depends on the control of the pandemic. COVID-19 outbreaks, including those triggered by new variants of the virus, remain a downside risk even in countries with high vaccination rates.
    “A sudden deterioration of investor sentiment, especially in an environment of elevated inflation and high Government debt, could trigger debt servicing challenges and bouts of capital outflows. Economic disruptions related to extreme weather, partly related to climate change, and other natural disasters pose a significant risk not only for the regional growth outlook, but also for the lives and livelihoods of people living in the region,” the bank added.
    The IDB also predicted growth but flagged some challenges in its latest Caribbean Quarterly Economic Bulletin published yesterday.
    Economics consultant Ariel McCaskie and country economist for Barbados Cloe Ortiz de Mendivil said Barbados’ overall economic growth in 2021 was expected to be 1.6 per cent before rising to 10.1 per cent this year.
    However, they added: “The economy of Barbados faces several growth and development challenges. The country’s development progress has been hindered by its vulnerability to natural disasters, weak business climate, lack of economic diversification and high dependency on imports.
    “Its geography leaves the country exposed to natural disasters such as tropical storms and hurricanes, droughts and deterioration of infrastructure.”

    Source: Nation


  62. @ William Skinner,
    Is Barbados witnessing in Mia a rebirth of the cult leader, Jim Jones. Who can forget this character who brought death to over 80 of his followers in nearby “Jonestown” Guyana. The number of deaths would have been greater but for the resistance of some of his members who refused to die in vain for a cause they no longer believed.

    There are echoes of this under the charismatic leader of Mia who appears to turning her party into more of a cult and less of a political edifice.

    She whitewashed the opposition at the last General election. Not content with this feat she has now asked the good people of Barbados to align themselves under one party with her at the helm.

    Mia has formed a pact with the IMF and other lenders who will bring misery, penury and certain death to Barbados majority black population.

    Should she succeed in the forthcoming election, the Jonestown massacre could well be seen as an outlier of what is achieveable when a charismatic leader weaves a spell on a people who give up their right to think for themselves.

    May God help Barbados.


  63. Central Bank more upbeat

    by SHAWN CUMBERBATCH
    shawncumberbatch@nationnews.com
    BARBADOS’ ECONOMIC OUTLOOK has been upgraded as the country battles a new COVID-19 wave and prepares for next Wednesday’s General Election.
    The Central Bank now believes that the economy will weather Omicron and other highly contagious variants of the virus to grow by 14.2 per cent this year, thereby reclaiming the near $2 billion in output lost during the pandemic, and that 11 000 more Barbadians will find employment, with the pre-COVID-19 labour market predicted to return by year-end.
    The more upbeat forecast is detailed in Government’s inaugural Pre-election Economic And Fiscal Update Report, which the Public Finance Management Act of 2019 mandates has to be published no later than five working days after the Nomination Day preceding a General Election.
    Noting that these outcomes were hinged on factors including the speed of the global economic recovery, and the effective execution of planned medium to largescale investment projects, the Ministry of Finance also said revenue was expected to improve marginally, while expenditure was on course to increase slightly by the end of the financial year on March 31.
    Prime Minister Mia Amor Mottley, as Minister of Finance, Economic Affairs and Investment, and Director of Finance and Economic Affairs Ian Carrington, signed off on the 22-page report dated January 10, 2022.
    The Central Bank previously forecast that the economy would grow by one to two per cent last year and from seven to nine per cent this year. The 2021 growth rate is now expected to be 1.6 per cent while 2022’s forecast was upgraded to 14.2 per cent.
    Job increase
    The bank’s updated numbers also showed Barbados was expected to have a $10.7 billion economy this year, up from 2021’s projected $9.27 billion, 2020’s $8.95 billion and higher than 2019’s $10.59 billion.
    Employment is predicted to increase from 120 000 at the end of December last year, to 131 000 this year.
    “Even with the fear of highly contagious variants of COVID-19, partial data from several countries with high infection rates suggests that the virus can be managed without the wholesale closure of key sectors such as travel, due to the efficacy of vaccines in preventing mass hospitalisations,” the preelection report outlined.
    “It is thus anticipated that if the easing of travel restrictions is sustained within our main source markets, the United States and the United Kingdom, this should result in a winter season recovery, to match pre-pandemic levels by the 2023/2024 winter tourist season.”
    The document said current forecasts “anticipate a continued recovery in demand for leisure travel which, when coupled with the likely return of sporting, culinary and cultural events – including the
    upcoming English cricket tour – should lead to arrivals of around 78 per cent of pre-pandemic levels during 2022 and a return to pre-crisis levels by the 2023 winter season”.
    The Ministry of Finance said agriculture and manufacturing also showed signs of improvement in the second half of 2021.
    “With the surge in global supply chain disruptions, these sectors were the first to augment local demand, thus easing international supply challenges with an increase output in root crops in the case of agriculture and sanitising products in the manufacturing sector. Together, these sectors contributed to nine per cent of domestic economic output,” said the report.
    “The non-traded sectors of the economy also contributed to the recovery in 2021, as demand was boosted by the easing in restrictions and curfews, which allowed for the recovery in the retail trade and services sector.
    Mortgage demand
    “The construction of various multi-purpose commercial health, tourism and retail centres is expected to provide impetus to construction activity over the near term,” it added.
    The report explained that “while private sector demand for mortgages appears likely to remain modest in light of financial institutions’ conservative lending stance and the persistent softness in employment conditions, construction output is also expected to be aided by ongoing rebuilding efforts necessitated by the passage of Hurricane Elsa, yielding an expected increase on average of six per cent over the next year”.
    The Ministry of Finance also expects that domestic employment trends will continue to normalise, but added: “While improved, these metrics are likely to remain below those of 2019 and therefore further improvements in the tourism and other services-related sectors are required to accelerate job gains.”
    The report said that over the medium-term Barbados is expected to reach its projected growth once economic expectations materialise, “with the island returning to a long-term growth path of around two to 2.5 per cent”.
    While the September 2021 Fiscal framework had a 2021/2022 financial revenue projection of $2.60 billion, this was revised up in the pre-election report to $2.62 billion on account of an expected $24 million increase in tax revenues.
    The revised estimate for expenditure is $3.13 billion, up from the Fiscal Frameworks’ $3.02 billion forecast.

    Source: Nation


  64. Latin America and the Caribbean’s Growth Will Slow to 2.1% in 2022 amid Significant Asymmetries between Developed and Emerging Countries

    In its annual report Preliminary Overview of the Economies 2021, ECLAC emphasizes that 2022 will be a year of major challenges for growth, job creation and tackling the pandemic’s social toll.

    (January 12, 2022) The Latin America and Caribbean region will see its pace of growth decelerate in 2022 to 2.1%, after reaching 6.2% on average last year, according to new projections released today by ECLAC. This slowdown takes place in a context of significant asymmetries between developed, emerging and developing countries with regard to the capacity to implement fiscal, social, monetary, and health and vaccination policies for a sustainable recovery from the crisis unleashed by the COVID-19 pandemic.

    This is according to the annual report by the Economic Commission for Latin America and the Caribbean (ECLAC) entitled Preliminary Overview of the Economies of Latin America and the Caribbean 2021, which was unveiled today during a virtual press conference held from Mexico City by the United Nations organization’s Executive Secretary, Alicia Bárcena.

    The document indicates that the region is facing a very complex 2022: uncertainty regarding the pandemic’s ongoing evolution, a sharp deceleration in growth, continued low investment and productivity and a slow recovery in employment, the persistence of the social effects prompted by the crisis, reduced fiscal space, increased inflationary pressures and financial imbalances.

    The expected slowdown in the region in 2022, combined with the problems of low investment and productivity, poverty and inequality, calls for growth and employment creation to be central elements of public policymaking while at the same time addressing inflationary pressures,” Alicia Bárcena stated.

    According to ECLAC, the 2.1% average growth foreseen for this year reflects great heterogeneity among countries and subregions: the Caribbean will grow 6.1% (excluding Guyana) and Central America will grow 4.5%, while South America will expand by 1.4%. Meanwhile, in 2021, the region experienced higher-than-expected growth, averaging 6.2% due to the low baseline established in 2020, to greater mobility and to a favorable external context.

    According to the Preliminary Overview 2021, estimates point to advanced economies growing by 4.2% in 2022, being the only ones to resume the growth trajectory foreseen before the pandemic over the course of this year. Emerging economies, meanwhile, are seen growing 5.1% in 2022, but they will only resume the growth trajectory forecast before the pandemic in 2025. In 2021, 11 countries in Latin America and the Caribbean managed to regain the GDP levels seen prior to the crisis. In 2022, another three countries will join them, accounting for a total of 14 countries of the 33 that make up the region.

    It is of central importance that the combination of monetary and fiscal policies prioritizes growth stimulation as well as inflation containment, ECLAC adds. This entails the need for coordinated fiscal and monetary policies and the use of all available instruments to adequately prioritize the challenges of growth with monetary-financial stability.

    In terms of the labor market, employment recovered at a slower pace than economic activity last year: 30% of the jobs lost in 2020 had not been recuperated by 2021. Furthermore, the inequality between men and women was accentuated, reflecting the larger care burden on women and less dynamism in the sectors in which female employment is concentrated, such as services. In 2022, ECLAC projects an 11.5% unemployment rate for women – slightly below the 11.8% recorded in 2021, but still well above the 9.5% existing before the pandemic in 2019 – while unemployment among men is forecast at 8.0% this year, nearly identical to that of 2021 (8.1%) and still far above the 6.8% seen in 2019.

    The report also addresses one of the most worrisome economic issues today at a regional and global level: the rise in the price of products and services. In 2021, inflationary pressures were observed in the majority of the region’s countries, led by price increases in food and energy (inflation reached 7.1% on average by November, excluding Argentina, Haiti, Suriname and Venezuela), and these pressures are expected to continue in 2022. Countries’ central banks anticipate that inflation levels will remain above the target range established, although they will tend to converge towards the end of 2022 or early 2023. Once again, the price of energy and food in international markets, along with the evolution of the exchange rate, will be critical to determining future price dynamics.

    ECLAC underlines that inflation is a multicausal phenomenon, which means that monetary authorities should continue utilizing the full range of instruments (monetary, foreign exchange, and macroprudential) that they have, beyond the interest rate, to confront inflationary pressures without hindering the impetus for recuperating growth and employment and attaining sustainable, inclusive and more equal growth, the document indicates.

    In addition, the United Nations organization emphasizes that it is crucial to increase tax collection levels and to improve the tax structure to give fiscal sustainability to a growing trajectory of expenditure demands. The challenges foreseen in 2022 – including lower economic growth, the risks of higher interest rates, currency depreciations and the possible weakening of sovereign credit ratings – make fiscal policy management more complex. That is why a strategic vision for public spending is required that would link short-term demands with long-term investments and contribute to closing social gaps. In addition, fiscal space must be expanded by eliminating tax evasion (which amounts to $325 billion U.S. dollars, or 6.1% of regional GDP), consolidating income taxes on individuals and corporations, extending the scope of taxes on assets and property, establishing taxes on the digital economy, environmental levies and others related to public health problems, and progressively revising and updating royalties for the exploitation of non-renewable resources.

    In another area, financing for development is also key for supporting policy spaces and investment. It is necessary to expand and redistribute liquidity from developed countries to developing countries; strengthen development banks; reform the international debt architecture; provide countries with a set of innovative instruments aimed at increasing debt repayment capacity and avoiding over-indebtedness; and integrate liquidity and debt reduction measures into a resilience strategy geared towards building a better future.

    More information:


  65. @ TLSN January 13, 2022 1:56 AM
    (Quote):
    Whoever developed the manifesto below must have been on medication. David you continue to play Devil’s advocate. This is no time to be playing the fool.
    (Unquote).
    ++++++++++++++++++++++++++++++++++++++++++++++++

    TLSN, it reads more like another reincarnation of the Old Covenant of Hope between Tron’s Supreme Being and Her subjects in the land of the pending despair.

    We can only wish that the politicians would simply stick to doing things within their pay-grade of competencies and the country’s financial resources like rectifying the justice system, improvement in the public sector delivery of services funded by the poor taxpayers and keeping the globally-announced pledge of protecting the environment from further degradation and despoiling.

    How about coming up with a proposal to get the thousands of derelict and abandoned vehicles from littering the roads and scaring empty lots which only provide safe and cosy homes for the breeding of vectors to spread diseases while projecting a most ghastly sight for visitors to the island to judge the hygiene habits of the country and its people?

  66. Pingback: A Sober Mid Year Review of the Economy RequiredBarbados Underground

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