It’s the Economy Stupid!

Based on the recent IMF visit “at the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm conducted a staff visit via videoconferencing from February 7-11, 2022” see IMF Press Release– Barbados received a thumbs up. Here is the summary of the report card. The Prime Minister must have called an early general election to map the longest time frame to execute economic policy, unfortunately with the consecutive 30-0 shellacking of the DLP and third parties, it appears to have derailed the plan because of the retreat to the Courts to rule on the constitutionality of the composition of the Senate. Based on the case management exercise that must be gone through, the substantive hearing will probably not get on the way until March 2022. In the meantime parliament will be in abeyance, or it should be.

Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, while expanding critical investments in social protection. All indicative targets for end-December under the EFF were met. International reserves, which reached a low of US$220 million at end-May 2018, increased to US$1.5 billion at the end of 2021. Barbados recorded a small (½ percent of GDP) primary surplus over the first three quarters of FY2021/22, which bodes well for meeting the primary balance target (minus 1 percent of GDP) for the full fiscal year. Preparation of a budget for FY2022/23 is well underway.

IMF Press Release 22/32

The economy should be the focal point of all concerned given the perilous state of affairs made worse by the pandemic. Instead the country is embroiled in another crisis whether created or caused by happenstance. A reminder of that famous James Carver quote – it’s the economy stupid.

136 thoughts on “It’s the Economy Stupid!

  1. Big funding gap for Govt to fill
    By Shawn Cumberbatch
    Government will be relying on $466.1 million in foreign money to help fill an expected $867.6 million gap in its finances during the next financial year.
    The Mia Mottley administration is projecting in its 2022/2023 Estimates of Revenue and Expenditure that its revenue, including tax earnings, will increase by about $254 million in the 12-month period starting April 1 when compared with the current financial year.
    However, with Government budgeting to spend $339.5 million more than it did in 2021/2022, there will be a substantial funding gap to fill.
    The financing details were outlined in the 2022/2023 Estimates which were laid in Parliament ahead of the annual Estimates Debate.
    Based on the document that has to be approved by the House of Assembly and Senate before March 31, Government is anticipating earning total revenue of $2.81 billion next financial year, but it has budgeted to spend an overall $3.68 billion in the same time, leaving a deficit.
    Revenue from taxes
    Most of the revenue expected will be from taxes ($2.59 billion), including $1.07 billion from its main revenue generator value added tax (VAT). If achieved, this would be a $77.2 million increase over last year’s Estimates.
    Outside of VAT, the authorities are banking on earning $966.3 million from income and profits, $248.3 from property taxes, $244.1 million in excise taxes, $$243 million from import duties, $76.1 million from taxes on petroleum products, among others.
    The anticipated increased revenue generation in some areas will, however, be offset by increased spending in some categories.
    In this regard, Government estimates that its day-to-day expenses will be $2.43 billion in the next financial year.
    The outlay to pay its workers ($780.2 million), financing for institutions and individuals ($673.5 million), retiring benefits and allowances ($386 million), and employers congributions ($78 million), will all increase when matched against the 2021/2022 Estimates.
    In addition to these categories known as current expenditure, Government says it will be spending $501 million to service its debts, which would be an $81.7 million increase.
    And as Government seeks to increase economic activity
    this year, it has forecast that it will spend $740.1 million on public projects, a $148 million increase over the allocation for the current financial year.
    Financial hole
    With a major financial hole to fill, Government outlined that most of its funding shortfall would come from overseas – $466.1 million, and $401.5 million from local sources.
    Most of the foreign money will be via $249.2 million in non-project loans – $200 million from the Inter-American Development Bank (IDB), and $49.2 million from the International Monetary Fund.
    This was in addition to $217 million in projecting financing from the EXIM Bank of China ($121 million), IDB ($42.2 million), Latin America Development Bank ($36 million), European Investment Bank ($14 million), and Caribbean Development Bank ($3.7 million).
    Regarding local funding, the domestic financing detailed included $276.5 million categorised as “Other” but which the document did not have details on, and the $125 million Treasury Note that was launched in November last year and for which the Central Bank Government Cleviston Haynes reported a slow response.
    Additionally, based on the Estimates for domestic financing, the Barbados Optional Savings Scheme for public sector workers which was launched in July last year for an 18-month period, will not be continuing after it expires.
    The BOSS programme as documented in the Estimated provided Government with $41.8 million in financing.

    Source: Nation

  2. Estimates of Revenue and Expenditure laid in Parliament

    Article by Barbados Today
    Published on
    February 19, 2022

    Government’s Budget, setting out the Estimates of Expenditure and Revenue for the financial year 2021-2022, was yesterday (Friday, February 18) laid in Parliament, together with a projected forecast for the current financial year 2021-2022. These will form the basis of the Parliamentary Debate to ensue from February 21, on the Appropriation Bill.

    Revised Fiscal Balance 2021-2022

    On the cash basis current revenue of $2,625.2 million is expected, of which $2,477.3 million is tax revenue and $142.2 million is non-tax revenue and grant income. Total expenditure is projected to be $3,494.5 million, of which $2,827.7 million is current expenditure, exclusive of amortization, and $290.7 million is capital expenditure. The revised deficit of $493.2 million, on the IFI basis, represents 4.9% of GDP at market prices. The primary deficit for the financial year 2021-2022 is estimated to be $93.4 million or 1.0 % of GDP on the cash basis.

    Overview 2022-2023

    It is estimated that Government’s total expenditure for the financial year 2022-2023, on the accrual basis, will be $3,735.6 million. When converted to the cash basis, total expenditure is $3,680.6 million, an increase of $186.1 million or 5.3% over the revised figure for 2021-2022. Of the amount approved for the 2022-2023 financial year, $2,996.9 million represents current expenditure and $738.7 million represents capital expenditure and amortisation.

    Expenditure on goods and services is expected to increase by $76.0 million over the revised figure for 2021-2022 to $522.0 million. Current transfers are projected to decrease by $63.0 million or 5.6% to $1,059.6 million.

    The repayment of principal and interest on Government’s debt is expected to account for $981.5 million compared to the revised projection of $775.9 million.

    On the accrual basis, current revenue for the next fiscal year is projected at $3,206.6 million. On the cash basis current revenue is projected at $2,813.3 million, an increase of 7.2% over the revised revenue of $2,625.2 million for the financial year ending March 2022.

    When amortization of $480.5 million is taken into account, a deficit of $386.6 million on the cash basis is expected, representing 3.3% of GDP.

    The primary balance is projected to be a surplus of $114.3 million or 1.0% on the cash basis and $426.0 million on the accrual basis.

    The Estimates for the 2022-2023 fiscal year include provision for the following activities:

    (i) A current subvention of $125.0 million is being provided to the Queen Elizabeth Hospital for its operations in addition to the $7.99 million for management of Covid-19;

    (ii) Invest Barbados has been allocated the sum of $7.5 million to carry out its operations;

    (iii) $6.0 million has been provided for the IDB Road Rehabilitation Programme;

    (iv) $2 million has been provided for the Scotland District Road and Rehabilitation Project to be funded by the Chinese;

    (v) $7.6 million has been provided for the CAF Road Rehabilitation Project;

    (vi) An amount of $10.0 million has been provided for Programme Management – Covid-19;

    (vii) $11.7 million has been provided to carry out capital works at Secondary Schools;

    (viii) $7.5 million has been provided to the Primary Education Domestic programme;

    (ix) An amount of $30 million has been allocated to the Barbados Water Authority to upgrade its reservoirs and the water distribution network.

    Source: Barbados Today

  3. The Saudis have arrived! Saudi Arabia is a nation led by a despotic royal family. Their treatment of Africans is despicable. They have exported terrorism throughout the continent of Africa. Is the GOB cognisant of the movement called Wahhabism and its significance? The nation state called Yemen, in the hall of Africa, is being bombarded and destroyed by the UAE and Saudi Arabia.

    We in London are familiar with Middle Easterners, particularly those from the Gulf states. During our summer period, a fair number of their citizens will migrate to the capital city with all their gadgets and commit mayhem in London for several weeks or months.

    These wealthy pious Muslims will bring with them a lot of money. Who will benefit from their arrival? The brothels and whorehouses; and self employed prostitutes will make enough money to retire early. The middle men in the drug’s trade will profit handsomely. Our visitors have a penchant for the white powder. The real estate agents and the established business community will also benefit greatly.

    When the useless and naive Minister Cummins talks about sustainability and tourism don’t be fooled. She will not reveal to you the real dangers to our young girls, young boys and the vulnerable should we see an influx of Gulf visitors. Think of Maxwell and Epstein but on a far larger scale.

    It is very sad how so many BU bloggers appears to overlook these serious developments. They prefer to focus their limited attention span on Waru with their sarcasm and mean spirited mentality. The imminent arrival of Gulf visitors who would love nothing better then to spend time in a beautiful location where there are no codes of mores. Our Gulf friends like a moth to a light will be drawn to an island where they can indulge in all their fancies without any consequences. Barbados is on path to becoming the Bangkok and Amsterdam of the Caribbean. A case of history repeating itself?

  4. If Minister Cummins is serious in promoting tourism to our Gulf “friends” she should use the Westworld trailer. LOL!!!

  5. “Tabling opportunities for collaboration, Senator Cummins stated that “Barbados has considerable experience refining and perfecting our tourism and service industries while maintaining our unique qualities. We see this wealth of knowledge as an invaluable resource for KSA as they build out their tourism sector.”

    Al-Khateeb affirmed Senator Cummins’ position, adding that “We will be more than happy to be your partner. We will learn from each other.” (BTMI)

  6. where there is no vision
    the BBs will suffer….

    If it has not been grasped by now that we are under a curse of VISIONLESS leadership, especially since the DLP clowns entertained Froon, then perhaps we deserve to become playthings AGAIN… this time of wealthy and heartless Saudis..
    Perhaps the Minister of labour can also explore exporting some of our unemployed graduates to serve the royal kingdom…

    Having said that however, Bushie is fully aware that 500 years of BRUTAL slavery, (where ANY sign of ROYAL LINEAGE would have been exterminated on the gallows or worse,) MUST of necessity leave us with (what the Bible calls) REMNANTS of the true people that we should be…

    But shiite man!!
    Have we learnt NOTHING?
    You mean at EVERY turn we must be seeking to return to the very WORST of the humiliating mendicancy and pitifulness?

    If we have learnt NOTHING from the last 500 years, then it is no wonder the Bible says that because we insist on being so DUMB, God will cause women and children to become our leaders, and the rest will be history.

    It is both frightening and inspiring, how accurate this old book has shown itself to be…

  7. The visit from the Saudis is a stain to our country. We should definitely not be fraternising with these appalling monsters or be sending our graduates to serve royalty in their Kingdom.

    Surely our leaders must be aware of the atrocities being committed on a daily basis against Kenyan and Ethiopian nationals employed as domestic servants. Rape, murder, entrapment, wages being withheld, the kafala system (legalised slavery), and the rest are used against these people as a form of humiliation and power.

    We in the UK remember the sexual abuse and the murder of a black servant in London committed by the grandson of Saudi Arabia’s King Abdullah.

    The life of a black person means nothing to these savages. Why the hell is the clueless Minister entertaining them!

  8. The arrival of our “friends” from Saudi Arabia has yet to raise a comment apart from Bush Tea and Waru. How bizarre! Is there nobody within the BU family who takes an interest in geopolitics? Are we unaware or simply disinterested as to what is happening outside Barbados. Our largest industry is reliant on foreign visitors. Should we not inform ourselves of citizens from certain maligned countries who may bring hazards and risks to our society. Is our nature so fickle that we cannot see the moral injustice of entertaining a despotic nation such as Saudi Arabia.

    Educate and inform yourselves.

  9. Just for the record, Saudi Arabia, has recently divested some of it’s oil interests in order to diversify its economy. The same country amongst others in the Middle East have taken out leases on agricultural land in mother Africa in order to grow food for its own people. Why the interest in Barbados?

  10. Why the interest ?

    Look off Dubai and the answer lies there. We have relatively shallow water and a protected western coast.

  11. TLSN,
    There is nothing worse than little upstart countries, barely able to keep a water supply to citizens and still disposing of sewage into the sea, going on the world stage talking ‘big’ and pontificating a lotta shiite …in a world chock full of heartless predators.
    This is a recipe for trouble….

    Ego trips about fancy speeches and natural oratorical skills are no substitutes for modest competence and steady progress in social development.
    The ability to BORROW money is no sign of strength, indeed, it is a sign of WEAKNESS and mendicancy. STRENGTH is demonstrated by the ability to assist others, and to provide POSITIVE mentorship for those not as fortunate.

    This Saudi interest is likely only the tip of the iceberg… there are hundreds of demonic billionaires out there – looking for easy targets who are willing to sell their souls, …and their people, for a few million dollars (which are probably in need of laundering anyway….)

    Just the recent episode with Jamal Khashoggi would have inclined Bushie to AVOID these Saudis …PERIOD!!
    But when mendicants smell $$$$, all reason goes to the wind….. especially mendicants of the female variety….

    The road to Hell is paved with ‘good’ intentions…. but when you ‘arrive’ it is a much different story.

  12. TLSNFebruary 21, 2022 4:44 AM

    The arrival of our “friends” from Saudi Arabia has yet to raise a comment apart from Bush Tea and Waru. How bizarre! Is there nobody within the BU family who takes an interest in geopolitics? Are we unaware or simply disinterested as to what is happening outside Barbados.

    Wait, because people ain’t say nothing bout Saudi Arabia means that they ain’t interested in geopolitics or what is going on outside Barbados?
    Who give you the authority to always assume what people thinking or not thinking and then talk bout it as if you know it to be true?

    You got to stop that stupidness and CONCENTRATE ON YOURSELF.

  13. Saudis visit another nice photo of for Mia
    Bottom.line self interest equals a smile a chuckle and rubbing of the shoulders with billionaires nothing more nothing else
    To belive that this visit would amount to some kind of economic boost for Barbados is like expecting snow to fall in Barbados
    But then again bajans belive any Mia tells them

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