Governor of the Central Bank Cleveston Haynes delivered his review of the economy for the year just gone. He was as expected optimistic about prospects for improvement. However, underpinning his optimism was his assumption the rebound of the economy will be based on TOURISM. The blogmaster does not need to expand on what this means.
Review of Barbados Economy in 2021
Governor of the Central Bank Cleveston Haynes delivered his review of the economy for the year just gone. He was as expected optimistic about prospects for improvement. However, underpinning his optimism was his assumption the rebound of the economy will be based on TOURISM. The blogmaster does not need to expand on what this means.
68 responses to “Review of Barbados Economy in 2021”
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“Apart from Caswell and Grenville, there are VERY few ‘men’ left in Barbados”
male privilege is a bit like white privilege
♂ male politicians can go bat shit crazy + circumvent law
♀ female politicians must behave to know their place
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“We need to hear more”
you like a lot of sport?
One of the older manoeuvres known. Watch all the required reports disappear, with a single audit to transfer assets and liabilities. Who knows, the liabilities maybe “bonded” as well.
The beneficiaries will be told, this is to ensure the ongoing well-being of the fund, so they will continue to receive their benefits.
Likely with an injection of cash (or loans).
Matter done.
Widespread appeal and approval…the guvment lookin’ out fah we? -
@NO
Regardless we have no choice but to wait. It is what taxpayers have become good at doing.
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“Barbadians must exercise personal responsibility for virus, says PM” (Barbados Today).
Like Tron, our BU commentators should practice authentic interpretation of our leader’s will. The quote states that it is now up to each individual’s responsibility to protect ourselves from the virus.Our Supreme Leader will soon abolish the nonsensical, xenophobic restrictions on entry except for proof of vaccination. This is the only way to boost tourism.
The leader’s will carries the force of law.
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@David
Do you?
I have observed quite interestingly, changes which have occurred with the ‘virtual’ gatherings in so many areas.
Participants are less constrained by the immediate social constructs, and their perceived potential repercussions.
Comments like ‘you kan do dat’, which often reflects the social consequences, more than the relevance of the suggested action itself. One reason why those in control, have understandable concerns about ‘going virtual’. -
@NO
Very true.
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The tourists are coming!
Guests coming to B’dos ‘in droves’
By Gercine Carter
gercinecarter@nationnews.comHoteliers are projecting a more optimistic outlook on the 2021 to 2022 winter tourism season as hotels across Barbados record high occupancies this month.
It is a picture in contrast to that painted last year amid concerns about expected cancellations due to travel restrictions imposed in Barbados’ major source markets because of the spread of the Delta variant of the coronavirus and, in more recent times, the Omicron variant.
A check with a cross section of hotels yesterday revealed that January occupancies have generally ranged between 70 and 90 per cent and even up to 100 per cent in one case. From the smaller hotels to the larger five-star luxury hotels, the story was the same.
“We have done very well. It has been very positive and our occupancies will probably end up in the high 80s, low 90s,” said Wayne Capaldi, general manager of the 50-room luxury five-star Sandpiper boutique hotel on the West Coast. His observation also applied to sister hotel Coral Reef, which, like the Sandpiper, attracts a large British clientele.
Capaldi said the occupancy levels were not surprising, since both the United Kingdom and Barbados had started to relax “a lot of the protocols” such as the testing requirement on entry into Barbados and the testing requirement on departure from Barbados back to the UK.
“Since that was all dropped, the bookings became very strong,” Capaldi said, adding that February bookings were also “looking very strong”.
Port St Charles Marina is also riding the wave of high occupancies, with general manager Stephen Austin reporting a 90 per cent average in January and “a very promising-looking February”.
“We are doing really well,” Austin said. “Traditionally, after January 10, we normally have a dip but we have not seen that this year. There is a pent-up demand since many of these people have not travelled for two years. Some of them delayed vacation every year since COVID and now are able to come and enjoy what they booked two years ago.”
Austin said the outlook was good, with cricket being a contributing factor.
“It is very optimistic for the rest of the year. People book late for the summer but we do have some business and as time goes on it is getting better and better, so it is very optimistic for the rest of the year.”
The Sun Group Hotels are also doing well.
“We would have averaged about 65 per cent for all the hotels during January. But we lost some bookings with the whole uncertainty about Omicron affecting about 15 per cent of bookings,” managing director Roderick Weatherhead told the Saturday Sun. However, he anticipated occupancies “in the 70s and 80s” going forward as he noted February was looking “better than January”.
“I would definitely mark about 75 per cent occupancy for the hotels – Sugar Cane Club, Savannah and Time Out in the Gap – which range between three and a half- and four-star level hotels.”
The picture is also encouraging for some of the smaller hotels as Barbados Hotel & Tourism Association (BHTA) representative for The Intimate Hotels of Barbados, Mahmood Patel, said reports from members such as Dover Beach and
Infinity-on-The Beach on the South Coast indicated a January that looks “pretty good” and a “fairly goodlooking” February with projected 50 and 60 per cent occupancies. He added that March was also looking good for the small hotels and suggested the positive outlook might be “cricket-driven”.
General manager of Sugar Bay Hotel, Morgan Seale, said things had “improved dramatically” for that hotel and its sister property, Bougainvillea Hotel.
“We have seen the UK removing restrictions. There is increased confidence in travel and we have seen a marked reduction in cancellations.”
As a result, Seale said, both hotels had recorded “solid occupancies between the high 70s and low 80s” despite some cancellations in mid-January. However, he added that people were now rebooking and he was no longer seeing cancellations.Source: Nation
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They must be coming.
Was told the GEL Chair ended the AGM saying Q1 2022 (nov-jan?) was the best in the company’s history.
Given their company mix, only tourist arrivals/ travel could do that, unless they recorded “an extraordinary gain” on the sale of something. -
GEL will welcome improved travel given its interest in catering to aircraft.
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Based on elsewhere, where entities have pandemic adjusted costs, labour inputs and other, any sudden revenue rebound results in higher than previously experienced profits.
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Branker: Private sector lifted by growth forecast
By Colville Mounsey colvillemounsey@nationnews. com
Barbados Chamber of Commerce and Industry (BCCI) president Anthony Branker says members are buoyed by last week’s report of Central Bank Governor Cleviston Haynes that the country is trending towards double-digit economic growth this year.
However, he said Government would have to make some decisions on controlling the COVID-19 pandemic and relaxing travel restrictions for a faster recovery of the bread-andbutter tourism sector to facilitate this growth.
He added other priorities would be measures to address the ease of doing business, and even more pressing, the escalating cost of living linked to supply chain challenges and rising freight cost caused by the pandemic.
“Encouraging signs of growth in the last quarter of 2021 and all signs point to this continuing into the first quarter of 2022, helped by cricket tours as well as a robust real estate market. We agree the growth is fragile however and very susceptible to external shocks such as geopolitical issues with Russia and further lockdowns and travel restrictions,” said Branker.
The BCCI president said his membership was cautiously optimistic of continued recovery and was, therefore, committed to partnering with the public sector to make it happen.
“Critical to fuelling and sustaining our recovery is a focus on protecting and accelerating the pace of recovery in tourism, which is inter-related with control of the pandemic and easing of travel restrictions; dealing with supply chain disruptions and inflation due to escalating freight costs and commodity prices; execution of largescale private sector capital
projects; and continued pace of structural changes to facilitate improvement in ease of doing business.”
In his report last Wednesday, Haynes said he was confident that a strong tourism rebound, including an influx of English cricket fans and expanded construction activity, could drive Barbados towards doubledigit economic growth this year.
However, the economist was not prepared to wager that the economy would grow by the “best-case” forecast scenario of 14.2 per cent, stressing that 2022 outcomes would be heavily influenced by Barbados’ continued vulnerability to external shocks, including the pandemic and high commodity prices.
Source: Nation -
Earning foreign exchange ‘must top priority list’
By Tony Best
Hit by the damaging effects of the COVID-19 pandemic on its economy but buoyed by the results of a smoothly conducted free and fair election, the newly re-elected Barbados Government should move efficiently in three broad areas that can trigger an economic turnaround.
And those priorities range from boosting foreign exchange earnings and undertaking fiscally stabilising measures that demonstrate competence in governance to creating hundreds, if not thousands of new jobs, led by a confident private sector.
That bit of advice, articulated in an upbeat, can-do spirit came from Winston Cox, a former Governor of Barbados’ Central Bank who told the Sunday Sun during a telephone interview from his home in Canada that Barbados had successfully braved somewhat similar tough economic storms before and can do so again.
“We have always found ways to survive” serious economic challenges, including the “unrelenting hostility” of the Organization for Economic Cooperation and Development OECD, the rich nations’ club in Paris, said Cox, a former member of the executive boards of the World Bank and the Inter-American Development Bank in Washington.
Money laundering
“We have gained substantial (legal) victories in Canadian courts, which underlined the quality of our (offshore financial) regimes. We have also shown an ability to cooperate with United States authorities in preventing money laundering or tracing ill-gotten gains. So, “we have some good points in our favour”.
He said the task ahead would require resolute action in some key areas familiar to the 55-yearold island-nation, which recently transformed itself from a 300-year-old monarchy to a constitutional republic.
“I certainly believe we have to put emphasis on increased foreign exchange earnings, on employment and on fiscal stabilisation,” the economist said a few days after the ruling Barbados Labour Party won all 30 House of Assembly seats in the January 19 General Election.
“A small open economy like Barbados’ can’t survive without earning foreign exchange to pay for the goods and services it needs from the rest of the world,” Cox added, a few days before Cleviston Haynes, the current Central Bank Governor delivered an economic report card, which included a forecast of economic growth in 2022.
As he explained it, “employment is at the centre of maintaining socioeconomic stability,” recognising that effective fiscal management, stabilising the Government’s revenues and expenditures will be a strong indication that the government has the ability to manage effectively its human and financial resources,” he added. “Definitely foreign exchange earnings must be at the top of the table of priorities to be followed by employment and fiscal management,” not necessarily in that order.
Clever things
He added: “Barbados was (once) a sugar economy which (successfully) changed to a tourism economy and later changed being a tourism and an international business services economy,” he said. “There are difficulties today with both of those sectors. In the face of a pandemic which restricted global travel, we have done some clever things such as the Barbados Welcome stamp and visa initiative. But that’s not going to be enough to save the day and we really have to hope that the pandemic subsides and we are able to regain our reputation as a destination which provides a high-quality tourism experience to visitors. We have to find ways and means to boost the quality of that experience. We have people on the ground (in Barbados) who are capable of doing that.”
Cox insisted that much of the country’s future economic success would “depend on what happens
externally” during the next five-year term of the Mottley era.
“Even if there is no uptick in world economic activity, there will still be room for Barbados to move forward. Enough people will be travelling as tourists for the destination to carve out a niche in the travel market and manage its resources and systems carefully to survive,” he said. “Even with the downward revision of the original International Monetary Fund global economic forecasts, there will still be sufficient room for Barbados to survive in the tourism market.”
As for efforts to accelerate the pace of job creation in order to reduce unemployment, Cox thinks the country can weather much of the projected economic storm, provided it was able to revitalise the tourism sector and protect its offshore financial and international business services arena while attracting foreign direct investment.
An important consideration, he said, would be the Government’s ability to show people at home and abroad that Barbados can effectively manage its fiscal affairs, something it began to do in the pre-COVID era.
“If there is a sense that the Government is demonstrating competence in economic management, then the tourism and offshore financial services areas, the domestic private sector would be encouraged to expand investment and generate jobs,” he said. However, “the Government should refrain from being the principal agent of job creation in the years ahead”.
The former Governor gave the Mottley administration good marks for some of its economic measures which were introduced during its initial three and a half years in office but he warned that effective fiscal management must remain a crucial factor in ushering in any future prosperity.
For instance, Cox cited the Government’s agreement with the IMF for “getting the financial” train back on track and singled out the administration’s surprising ability to get foreign and domestic lenders to make concessions on the servicing and repayment of loans and for maintaining a measure of effective control of the country’s fiscal management.
“The Government made a heroic effort that brought the fiscal position under control,” he said.
But he wants to see even greater efficiency in the collection of Government revenue.
“Fiscal management is going to be the real test,” he warned.Source: Nation
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@ DavidJanuary 29, 2022 8:02 AM
Our government’s strategy of putting all its eggs in one basket is clearly working. Contrary to what our BU commentators believe, diversification of the economy would not even be possible due to the lack of capital and the isolated location in nowhere.
I look forward to the tourism industry soon surpassing its record earnings from the winter of 2018/19 so that our natives can all go back to toiling on the hotel plantations.
I wouldn’t be surprised if new hotel towers in prime locations were soon growing into the sky. A word of advice to our honourable government: reintroduce the labour penalty. In view of the rampant crime, our government could use this new type of education to have the hotels built almost for free for our beloved international investors. This works very well in Dubai and Qatar.
Supreme Leader command, Hyatt and Four Season will follow!
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Govt bond picks up
US$530 million instrument doing well overseas
by SHAWN CUMBERBATCH shawncumberbatch@nationnews.com
A US$530 MILLION Barbadosissued bond is performing well internationally, but if Government is thinking about issuing new United States-dollar securities overseas it will likely have to woo foreign investors with a more attractive offer.
That is the assessment of Nathalie Marshik, managing director, emerging markets, at Stifel Financial Corp., a longstanding global wealth management and investment banking firm in the US.
She was reflecting on Central Bank Governor Cleviston Haynes’ statement last Wednesday that local investors were responding slowly to Government’s $125 million treasury note, the first such offer since the 2018 domestic debt restructuring.
When Government hammered out a debt exchange agreement with holders of US dollar-denominated debt in 2019, it resulted in the issuance of a restructured US$530 million bond to investors.
The terms of the bond included a 6.5 per cent per annum coupon payable semi-annually. After a fiveyear grace period, there will be equal semi-annual repayments of the principal amount from April 2025 to final maturity on October 1, 2029.
Information from Bloomberg Finance showed that on Friday, the Barbados 2029 bond was trading at 99.75 cents on the dollar, having reached a high of 102.87 cents on the dollar on March 22 last year.
Marshik said the Barbados 2029 bond was the only US dollar one now available to overseas investors, but “it is not very liquid because it is very well held by real money managers”.
‘Quite good’
She explained that the bond’s performance “has been quite good” considering the recent market volatility resulting from the US Federal Reserve’s decision to reduce its monthly purchases of bonds – a process known as tapering – and interest rate hikes expected in March.
“I charted the repayment schedule and it’s a very manageable schedule for the [Barbados] Government,” she said in reference to the Barbados 2029 bond payments.
Marshik said the Mia Amor Mottley administration “probably” could issue a new US dollar bond, but her view was for Government “to keep focusing on cheap multilateral financing right now”.
She added that given how Barbadian investors
have not fully regained their appetite for Government paper, any such offer would need to pay a more attractive interest rate than the Barbados 2029 bond.
“The performance under the [Barbados economic reform] programme has been good but the international markets would catch up quickly to the fact the Government has struggled to issue locally and would probably require a pickup from existing 6.5 per cent yields,” Marshik said.
In its last Barbados country report issued in November, another international investment firm, England-based EMFI Securities Limited, advised clients to hold onto their Barbados 2029 bonds.
“Since June, the credit has been moving laterally around 101 cents on the dollar with no major variations. Its yield held relatively steady at 6.15 per cent, 13 basis points down from the previous month (6.28 per cent),” it said.
EMFI said despite what it saw as some “alarming indicators” related to the economy, Barbados’ net foreign reserves were enough to cover 2022 debt payments.
“Consequently, we maintain our hold rating,” the firm added.
When the $125 million treasury note was issued in November, Haynes said the bond “represents the first step towards restoring normality to the domestic capital market while creating greater balance between new domestic and external funding”.
Government has not indicated if it intends to issue new US dollar bonds to raise capital via overseas investors.
“One anticipates that over the medium term there will be other instruments that will come on the market. Therefore, persons would be able to make their decisions as to whether they want to acquire them,” Haynes said when the treasury note was announced.
“We have to get the pricing right, we have to get the maturities right, but only time will tell whether or not we have returned to a true state of normalcy.”Source: Nation
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@ David January 31, 2022 5:28 AM
Our government should introduce compulsory exchange into USD government bonds for USD accounts of our natives on the island.
Without permanent debt accumulation and further debt cuts, we cannot maintain the illusion of prosperity for the naïve masses.
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Marshall not for fiscal rule
GOVERNMENT’S PLANNED introduction of a fiscal rule in Parliament, and its expected return to a fiscal target of six per cent of gross domestic product, have been taken to task by political economist Professor Don Marshall.
“We are going to Parliament to impose a fiscal rule that will speak to a fiscal target of six per cent and sustaining that target over time. It binds this current Government and the next Government,” said the director of the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) at the University of the West Indies, Cave Hill.
He stressed that certain fiscal rules can be harmful to Caribbean economies “The world is running deficits and if it is to experience a sustainable post-pandemic future, the Caribbean has to be allowed the policy space to run deficits of two per cent. I can’t see how we in 2022 begin to embark on a reversal towards fiscal surplus. You don’t diversify your economy without deficit spending. It is ahistorical and asocial to expect the Caribbean to do that,” Marshall said.
“The most harm that can be done to these economies is to have fiscal rules implemented. Just to get a fiscal surplus of six per cent, we had to lay off 1 500 workers, streamline several statutory corporations. You are not going to get the transformation of our types of societies which is based largely on tourism and international banking. You are not growing out other sectors with fiscal surpluses of six per cent. It just won’t happen. You don’t have the firepower to do it.”
The senior researcher was speaking yesterday during SALISES’ Research For Development online forum.
In 2018, the Mia Amor Mottley administration embarked on the Barbados Economic Recovery and Transformation (BERT) programme facilitated by the International Monetary Fund. It led to various cost-cutting measures, including hundreds of public sector layoffs.
Target achieved
Before the COVID-19 pandemic, the Government achieved its primary surplus target of six per cent of gross domestic product (GDP)
in financial year 2019/20. However, the COVID-19 pandemic caused a drastic decline in tax revenues and the target was adjusted to minus one per cent of GDP for the 2020-2021 financial year.
While noting the measures in the BERT programme, Marshall said a considerable amount of transformation was required, and more needed to be done to build out industries.
“One of the downsides of merchantdominated capitalist societies is the innate belief in the superiority of foreign goods over local ones, and because you are so much into import trading and valuing entrepreneurial products from outside.
“We have to pursue a greater capital accumulation and to industrialise. That is critical for the transformation of the region. With that would come a culture of innovation, a culture that embraces inventiveness,” he added. (TG)Source: Nation
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CDB: Don’t expect double-digit growth
Stories by SHAWN CUMBERBATCH
shawncumberbatch@nationnews.com
THE CARIBBEAN DEVELOPMENT BANK (CDB) expects the Barbados economy to expand this year, but it does not think the expansion will be in the double digits predicted by the Central Bank.
Ian Durant, director of the Barbados-based financial institution’s economics department, said yesterday that with the country’s gross domestic product having expanded by an estimated 1.4 per cent in 2021, the CDB’s forecast was for 7.6 per cent economic growth this year.
The economist told the MIDWEEK NATION that while last year’s growth was a positive, and this year’s outlook would continue the improvement, the reality was that Barbados’ economy was still below the level of economic activity achieved in 2019.
Durant also said in the interview following the CDB’s annual news conference that “in real terms Barbados didn’t get back to the level of real economic activity that existed in 2008 prior to the global financial meltdown”.
He said it was critical for Barbados to continue to implement “what appears to be a pretty robust infrastructure programme that is intended to improve competitiveness and also to continue to implement improvements in the institutional framework”.
“The Barbados economy grew by 1.4 per cent last year, according to estimates, and we are anticipating further growth of about 7.6 per cent for 2022. That growth is predicated on the performance of the tourism sector as well as some construction activity,” Durant said.
“It’s good that the country is recovering from the impacts of the pandemic. Basically you are seeing a return of tourism and, of course, the Government seems to be undertaking some priority projects to make sure that the competitiveness of the economy is improved.”
He added: “But I think what we need to bear in mind, just to indicate how urgent the need is for improvements in competitiveness, [is] that growth does not put Barbados in real terms at where it was in 2019.
“So you still have a deficit in terms of the real level of economic activity in 2019 versus 2022 even with 7.6 per cent on top of 1.4 per cent. And even then again in real terms Barbados didn’t get back to the level of real economic activity that existed in 2008 prior to the global financial meltdown.
So what you have [is] a situation where even though there is growth [you] are pretty much not where you were in 2008.”
His assessment was that Barbados needed to “make up for that in terms of delivering on the aspirations of people with respect to incomes and so on”.
He said Government’s infrastructure programme and institutional improvements would “help the economy to improve its competitiveness and by improving competitiveness, then you increase the chances or you provide the environment within which other export sectors can emerge”.
“Let’s face it: in order to compete globally the costs that a producer faces in Barbados must be comparable with those faced by a potential competitor in another country,” Durant said.
“So it’s very critical if you are going to exploit the entrepreneurial skills of residents in Barbados and [harness] their talents, you basically are going to have to ensure that the playing field compares favourably with the playing field in other countries.”
The 7.6 per cent growth the CDB has predicted for Barbados, while not as high as the Central Bank’s, is among the highest among the bank’s 19 borrowing member countries. Guyana (47.5 per cent) and St Lucia (8.1 per cent), are the only countries forecast to grow more.
The CDB’s overall projection is that the regional economy will grow by 9.1 per cent this year.
Durant told the news conference, which was held under the theme Priorities For Growth And Development, that the region needed to reduce its vulnerabilities by becoming more resilient in its social, economic, environmental, and institutional dimensions.Source: Nation
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$200b to finance ecosystem in region
A $200 BILLION financing ecosystem is to be mobilised among a series of five initiatives intended to sustainably rescue, recover and reposition the development of Barbados and its other 18 borrowing member countries.
The initiative was outlined yesterday by Caribbean Development Bank (CDB) president Dr Gene Leon. He told the bank’s annual news conference that with the COVID-19 pandemic having “debilitated our region”, countries had “not merely to recover lost ground or to close the distance to achieving the sustainable development goals”, they also had to “fundamentally alter the development path so that our societies can be placed on a higher and more sustainable welfare path in the future”.
Leon proposed that this be done by fostering learning and health networks, driving economic diversification through embracing innovation, mainstreaming climate adaptation and sustainable energy, improving governance and reducing the implementation capacity deficit, and developing an innovative financing eco-system that distinguishes financing for rescue, financing for recovery, and financing for repositioning.
On the latter, he explained: “It is a financing ecosystem to the extent that we are saying that if we are to mobilise adequate finance we need to have instruments but we need to also have a regulatory system and we need to have the appropriate market infrastructure and conditions.” He saw the need for up to $200 billion to achieve the five areas outlined.
We have to be able to draw in funds from many sources, both donors, public, philanthropists
and private sector as a means of beginning to make that dent in mobilising the extent of finance that we do need for the next…decade”.
“Financing for rescue needs to be highly flexible and targeted for meeting liquidity needs arising from emergencies, especially natural hazards, be sufficient, have minimum conditionalities and with automatic triggering for fast-paced disbursement,” he said.
“Possible instruments include the CDB’s emergency policy-based loans, the Caribbean Catastrophe Risk Insurance Facility, insurance-linked securities such as catastrophe bonds and rapid disbursing credit and investment facilities such as provided by the International Monetary Fund.”Source: Nation
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