Shrinkage to Economic Life

Submitted by Steven Kaszab

The Pandemic has thrown the global markets and economic flow into the dumpster. What was, seems to becoming a thing of the past, with corporations amalgamating their manufacturing processes into singular locations. Labor costs, which ruled the day before the pandemic have been set aside allowing logistics, energy and shipping costs to surface as the new economic principle. Therefore many manufacturing plants and their staff are being moved or eliminated. Some examples follow…

De Fehr Furniture is shutting down a Winnipeg, Canada production plant, and more than 200 workers will be looking for work. In a notice posted to its website this week, De Fehr said it will end case goods manufacturing at its facility at 125 Furniture Park this summer. The move will affect 224 employees, the company said.

“The decision to cease operations was the result of severe supply chain disruptions and raw material sourcing challenges over the past two years, combined with balancing the pace of price increases that were passed along to customers,” the May 4 notice reads. De Fehr said the facility will officially close on Aug. 10. 

“This wind down will be carried out in a controlled and orderly manner, and all obligations to suppliers and employees will be honored as we work to complete and fulfill customer orders on hand,” the notice reads. Affected employees will be offered support programs through the changes, the company added.

Nestle has announced its confectionery factory in Newcastle(Barbados) is to shut with the loss of 474 jobs. The global food manufacturer said it was holding talks with employees at the Fawdon plant but the focus was now on closing it in 2023. A spokeswoman said the majority of production currently in the North East would move to Halifax, West Yorkshire.

The GMB and Unite unions condemned the move and said closing “a profit-making factory” was “unacceptable”. The future of the former Rowntree plant had been in doubt since Nestle announced in April that it wanted to end production at the site.

Fawdon has been producing confectionery since 1958 but, according to unions, the manufacture of Fruit Pastilles will switch to the Czech Republic and Toffee Crisps will be made in Poland. In recent years the factory has made other popular brands like Rolo’s, Munchies and Matchmakers.

In a statement, Nestle said: “From the outset we wanted to provide adequate time and space for these discussions and it is only right that they are held directly with our employees and trade unions and not in public.

A feared global economic downturn is forcing corporations to consolidate their operations or eliminate those deemed unnecessary. Shipping and logistic costs must be reduced as much as possible, so facilities located in non central transport hubs will be effected. A move from the Asian Manufacturing Hub to that of Mexico or Brazil has been happening this past decade, but now the momentum is unstoppable. If your head office and primary manufacturing is in the EU, that is where relocation will happen. Manufacturing facilities within economically  isolated area’s like islands will face the danger of closing. Further complications is the fear of global recession, making the maximization of corporate profits the more important.  Yara Trinidad is closing one of its plants also, blaming decreased sales with increased costs in energy. Layoffs to come.

32 thoughts on “Shrinkage to Economic Life


    Retailers under pressure to keep shelves stocked
    By Colville Mounsey

    Barbadians may have to start stocking up on their favourite brands of groceries and other household items, as distributors continue to grapple with shortages from global supply chains.
    Chairman of the Retail and Distribution Committee of the Barbados Chamber of Commerce & Industry (BCCI), Tomilson Bynoe, told the Sunday Sun retailers were having trouble filling their shelves with a number of items, including brand-name laundry detergents, paper towels, canned soups and imported produce.
    “At this point, sometimes it is about trading down, so if you can’t get Arm And Hammer liquid detergent but you are satisfied using one of the brands from the regional producers, then that is what customers have been doing. It is a situation that is hard to call because it is a weekly challenge.
    “Produce and fruit coming into the island is also a problem right now. We are ordering but we are only receiving part of the shipment. So, we are having shortages with grapes, oranges, lemons, broccoli and so on because we are having a lot of fulfilment issues,” Bynoe added.
    Barbadians have taken
    to social media in recent times, lamenting the absence and high cost of some of their favourite brands from the supermarket shelves.
    The BCCI spokesman explained that in relation to other products missing from the shelves, shipments were sometimes delayed by about two weeks, creating pent-up demand for certain commodities. He pointed out that when these stocks finally arrive, they fly off the shelves so quickly that a void is again created until the next shipment.
    “We are finding that we are out of stock of items for two or three weeks. It eventually comes in and because the market has been short of it for so long, items that would normally last until the next shipment, suppliers are selling out within two weeks of the product being on island and then you have to wait again.
    “The local suppliers are doing their best to procure products, we are doing our best to stock it when we can get it, but outside of that, the situation is fluid. It is not a case of the sky is falling as the supply chain has been doing its best to manage the situation,” he said.
    Bynoe, who is also a director of A1 Supermarkets, noted that the ongoing war in Ukraine has resulted in certain commodities being priced so high that importers do not want to risk purchasing them only to have them stuck on the shelves because customers cannot afford them.
    “What we are also seeing is the continued increase in pricing through the entire system and obviously the war in Ukraine and price of oil has impacted the cost of plastics for packaging. When you get packaging materials starting to rise, it obviously has an impact on cost to customers. We are also seeing major increases in things like almonds, and it therefore has an impact on by-products. So, we are seeing increases in things such as almond milk and this put
    suppliers in a very ticklish situation.”
    He added: “Certain items have moved so high in price that it does not make sense bringing the item because if you bring it here, you won’t be able to sell it. So sometimes when you don’t see a product on the shelf it’s a combination of a few things – the supply chain may be a bit compromised but also the price is moving so fast upward that suppliers decide that it does not make sense to bring it until we can rationalise the pricing.”

    Source: Nation

  2. Tannis: No blow to productivity with latest Covid wave
    Barbados’ fourth wave of the COVID-19 pandemic, though averaging 500 cases a day in the last week, is not having as telling an impact on productivity in the private sector as the second and third waves.
    Chairman of the Barbados Private Sector Association, Trisha Tannis, said the saving grace this time around was the automated release system from home isolation.
    In January, thousands of people in home isolation were caught up in a backlog for several weeks before being eventually discharged to return to work.
    She told the Sunday Sun that had this been the case this time around, it would have certainly been too much to bear for the business sector, which is already grappling with the rising cost of goods and shipping challenges.
    “We are seeing some disruption in the private sector
    but what is very good this time around are the changes in the protocols that were established by the Ministry of Health and Wellness after the last backlog, which was caused by the inability to issue the release documentation in a timely manner.
    “With the changes now, we are seeing persons getting back to work a lot faster. Therefore, the level of disruption is not as aggressive as it was the last time. We are having a similar spike again but we are able to get persons back out to work and we are able to properly manage our absences because we know when we can expect these persons back on the job,” she said.
    Tannis added that this was an example of the type of management required for the country to achieve growth while battling with the pandemic and other exogenous shocks. (CLM)

    Source: Nation

  3. Economic change at crossroads
    By Ralph Jemmott Most Barbadians today share certain common concerns. We are genuinely concerned about the future of the interconnected and dystopian world in which we live. We face the threat of growing indebtedness, rising cost of living, possible food shortages, supply chain issues, possible threats to our democracy in a de facto one party state.
    It is important that we restore bi-partisan balance to the House of Assembly. Then there is the fear of social anomie or normlessness that results from prolonged economic decline. Then hanging over all of us are the universal threats from climate change, the persistent COVID-19 plague with all its variants and the unimaginable threat of a nuclear war arising out of the Russia/Ukraine crisis with all those horrible images splashed across our televisions screens.
    Seeking improvements
    Not surprisingly we want to see things change and conditions improve. We fall back on a plethora of what I call ‘Re’ words. We want to reform, rethink, retool, reboot, reset and yes re-imaging a new path because in the catchphrase, ‘it can’t be business as usual.’ We speak of ‘transformation,’ but it is unlikely that one can transform a situation if one is not prepared to examine it critically and in depth. Cliches and platitudes about ‘the kind of people that we are’ will not suffice. In Barbados beyond the chatter, few things seem to really change.
    Barbadian society appears to suffer from an inability or reluctance to nurture the healthy analytically discursive dialogue that might lead to real ‘transformation’. Analysis is viewed as criticism aimed at one person or another or one political group or another.
    In both the public and private sectors there is evidence of declining efficiency.
    Call a public office and no one answers the phone. Call a private business and one is told to press this or that number or hold for the operator. No one answers. You call back the operator and apparently there is no operator or at least no one answers. How do we expect to compete in an increasingly competitive global market?
    Areas of concern
    Maybe we need to accept the stark reality that in the context of global capitalism we are not in much of a position to fundamentally change anything. Government cannot work outside of the context of the global capitalist order. It is a question of managing the hand we’ve been dealt with the greatest possible competence.
    One of the areas that should concern us is the performance of the Civil Service. A call has been made for an increase in
    emoluments to that entity. A counter argument has also been made that any increase in pay to the civil establishment should be met by an increase in productivity. Given increasing evidence in the cost of living we would all appreciate an increase in pay but such a raise, not matched by evident productivity outcomes, would at this time lead to further imbalance in Government finances.
    The International Monetary Fund (IMF) with which we entered an agreement will be watching the direction of the island’s economy. We went to the IMF, the IMF didn’t come to us and that body remains the lender of choice, given Barbados limited access to the lending market. Difficult as it may prove workers in the public service may have to hold strain. Politicians must not promise things they cannot deliver just to gain popularity in a system where their eyes are always on the next election no matter how far off.
    We cannot keep borrowing to keep up appearances.
    Ultimately the economic future of Barbados will depend on its ability to earn foreign exchange to pay for the life-style and standard of living we all crave.
    For all the talk about putting our eggs in the proverbial single basket, tourism in which we have a comparative advantage is still our best bet.
    Nothing on the horizon offers the same promise. I am reliably informed that given the 15 per cent constraint on international business, the off-shore sector is unlikely to expand much in the short-term.
    There is much talk about a return to manufacturing but in the United States the manufacturing sector has declined. Some of the great United States manufacturing plants have become part of the American ‘rust-belt’. How is it possible that we can compete in manufacturing in the global marketplace? We must obviously do what we can as a country and a region to be relatively self-sufficient in food production. That is a given.
    It is also a given that we need to reduce our reliance on costly fossil fuel imports.
    The Central Bank of Barbados recently reported that in 2021 fuel import cost stood at $601 million, in 2022 it was $510 million and for the first quarter of 2022, it reached a whopping $320.6 million. We face some real problems. Let us talk less and do more.
    Ralph Jemmott is a retired educator and social commentator.

    Source: Nation

  4. Compared to what will be our ACTUAL reality shortly, everything outlined above is relatively inconsequential and minute.,

    What we are experiencing is the ABSOLUTE PERFECT STORM of Global scope in the making… and the REAL biggie is only now unfolding.
    (Of course those who LISTEN to Bushie will have been well prepared for this) The World’s ‘financial backbone’ since Bretton Woods is about to collapse with unprecedented consequences for EVERYTHING that we have come to accept as normal.

    The recent prophet ‘Robert Nesta’ reminded us that “he who diggers a well, shall fall in it…” and the well that the USA encouraged NATO to dig for Russia (and the rest of the ‘non-first world’ peoples) is about to swallow the US dollar….The world’s fiat currency.

    Imagine the $3 Billion in ‘savings’ held by Bajan in our foreign-owned banks, suddenly being worth less than the equivalent weight in toilet paper….

    Imagine the proceeds of Simpson’s sell-out of SOL and Simpson Motors (built on the backs of Black labour) to foreign interest …collectively being worth less than a second hand Swift.

    Imagine having to exchange your house for a week of meals…. or starve…

    Of course this is all explained in great detail, for example in Isaiah 5, but most of us will want to wait for the live action…..
    It won’t e long now.

  5. Capitalism FAIL
    Shrinkage of economic life is a misnomer in a zero sum game where winners and losers are equal
    Rich get richer poor get poorer and the little that the poor man has is taken away do you hear what I say
    Wealth inequality was no issue when it was along lines of racial inequality like crack cocaine in 80s
    but when it crosses over into white neighbourhoods there is weeping and wailing and gnashing of teeth
    Whites were deluded when they thought they were stakeholders bosses and assets of white companies
    when they were liabilities and and dispensable as toilet paper to be used dumped in the pile of shit when old and unemployable

  6. @ Bush Tea who wrote ” It won’t be long now.”

    How long is ” long ” ? months ? Years ?

  7. Wuh Loss!!
    Wunnuh cannot stop reporting what everybody knows already? Is this another effort to raise the level of anxiety in this beloved country of Barbados? I am going to petition the GoB to raise a tax on all items that are used to spread malicious and mischievous news. Furthermore any publisher that cannot produce evidence to support his assertions will be deemed a liar in whom there is no truth for life.

  8. @ Hants
    “How long is ” long ” ? months ? Years ?”
    Excellent question. One that has been asked, and answered, eons ago according to Matthew 24:3
    The answer given back then should be instructive.

    Bushie likes this particular part of the answer given back then… (Verse 24… translated into Bajan of course 🙂 )
    …In those times, wicked Shiite men (like Fauci and Gates?) will perform great tricks of deception, such as would deceive the WHOLE WORLD – and even to trick God’s chosen people – IF THAT WAS POSSIBLE!!!
    You can pick some sense from that…

    @ Hantsie boy…
    Bushie suggest that you don’t make too many major plans for 2023….. besides basic survival….
    Better yet, …come home…. LOL.. cause..
    It a go dread ina Babylon.

  9. It looks as if RJ’s article would have been well suited to post under WS’s mirror image post.
    This is part of what he sees
    ‘Call a public office and no one answers the phone. Call a private business and one is told to press this or that number or hold for the operator. No one answers. You call back the operator and apparently there is no operator or at least no one answers.’

    Are we still punching above our weight?

  10. This bothers me.
    from CM’s article
    “At this point, sometimes it is about trading down, so if you can’t get Arm And Hammer liquid detergent but you are satisfied using one of the brands from the regional producers, then that is what customers have been doing. It is a situation that is hard to call because it is a weekly challenge.”

    I have always bought the cheapest detergent for I do not believe in the magical powers often described in ads. Hopefully, regional producers will get a good nibble and firm grip on the regional market.

  11. “The World’s ‘financial backbone’ since Bretton Woods is about to collapse with unprecedented consequences for EVERYTHING that we have come to accept as normal.”

    they did not want to listen to you, they love disrespectful sellout LIARS, their heroes…..

    warning yall again to stay very FAR AWAY from house negros, political pimps and fowls…..give them a VERY WIDE BERTH…they are triggered to spread more and more poison to keep Black Afrikan people in a LOCK and FIXED position for centuries to come, unable to be masters of their destiny, forever under criminals….chase them from too close around you or just monitor their every word and moves…

  12. Aunty goes to Washington with the “Gold Standard” of Caribbean financial experts: Mottley/ Sinclair/ Persaud/ Mascoll.. Highest taxes in the Caribbean?
    61-0 tek dat!
    Cost of living higher than NYC (without the infrastucture or economy).
    61-0 tek dat.!
    Looks like Bajans got the govt they deserve!

  13. Well, I have decided to plant quinoa this summer along with my winter squash and potatoes. I will add to my canned veggies and I should be good. Going to buy more canning jars before there is a run on them. Went to the allotment and water the garlics and asparagus today. I should start reaping asparagus on Tuesday.

  14. This is the time to plant your own food…reap your own food, no excuse, there are indoor tents and all the tools available..if you don’t do outdoor growing….plenty choices, no reason to listen to lying politicians or depend on them for anything.

  15. Jonny B GoodMay 8, 2022 3:34 PM

    Aunty goes to Washington with the “Gold Standard” of Caribbean financial experts: Mottley/ Sinclair/ Persaud/ Mascoll..


    She may not return given what happened with Bernard Fahie and his plan to name names!!

  16. Yep we are in for a tough summer season for sure. Couple that to the high cost of items including fuel and we undoubtedly will see higher levels of inflation in the 3rd and 4th quarter.

  17. “COVID-19 predicted to impact pensions and NIS earnings, says actuary

    Barbadians should brace for a reduction in future pension benefits due to protracted unemployment, while National Insurance Scheme (NIS) operators can expect reduced income from investments in the short to mediumterm, given the impact of the COVID-19 pandemic.
    Those predictions have come from independent consulting actuary Judy Veira who also warned that self-employed individuals across the Caribbean should take their payment of NIS contributions more seriously.
    “Of course, you are going to have some reduction in future pension benefits because of the loss of contribution weeks whilst unemployed. I think there should be, I would expect hopefully, an increased appreciation for NIS benefits and possibly an increase in compliance,” said Veira.
    “I would like to think, certainly even among the selfemployed, they realise ‘I really should be contributing to the NIS and contributing on a consistent basis because you never know I may need short-term sickness benefit’. You may never know there is another pandemic, maybe this may encourage others to step up and be active contributors to their respective NIS schemes.”
    Veira made the comments during a recent webinar hosted by the social security subcommittee of the Caribbean Actuarial Association (CAA), under the theme Social Security Around the Region and the Response to COVID-19: What lies Ahead? Veira, president-elect of the CAA, explained that national security schemes should expect a reduction in contributions due to several factors, including the loss of jobs among the expat workforce and the reduction in new employment.
    “Also, the temporary unemployment benefits may have reduced the sustainability of some national insurance scheme funds. Time will tell,” she said.
    The actuary said she did not expect the cash flow as a result of the COVID-19 pandemic to materially impact the long-term financial stability of regional security schemes.
    “Certainly in the short to medium-term, I think they can all expect lower investment income. I think they would have some concern in terms of their investment. A lot of them are heavily invested in government bonds and now these governments are under a lot of financial pressure due to the pandemic . . . so will those governments possibly default or delay in their bond payment? Because these national insurance schemes are invested in these government bonds, there are some credit risk to them too,” she explained.
    Veira pointed out that in the case of Barbados, which paid out some $155 million to satisfy over 35,000 unemployment benefit claims in 2020, there will need to be a review of that fund to ensure its sustainability.
    “[They] will need to take a step back and look at ‘did we prepare ourselves sufficiently and ensure our contribution rate is still at an acceptable level, is it consistent with the benefits being offered, do we need to make any changes?” she said.
    Veira said if schemes were planning to reduce benefits, increase contribution rates or make any other changes to their schemes, they may have to do so sooner rather than later.
    “Whatever reforms these schemes had pre-COVID-19 are still going to have to do it and they may also have to do it a little bit more aggressively and hasten it a little bit more to offset any short-term consequences of the pandemic,” she warned.
    “So, it does beg the question in the end, will these national insurance schemes have to give more in-depth consideration to one-off significant events such as the pandemic, volcanic eruptions that [affected] St Vincent and Barbados, hurricanes and other natural disasters when assessing our long-term financial sustainability?”
    Veira also raised the question of whether social security schemes should give greater consideration to how much they support governments.
    She encouraged countries that did not have a permanent unemployment benefit fund to implement such a system.
    The actuary also urged operators of the security schemes to carry out a careful assessment to determine what areas needed to be strengthened in an effort to better prepare for future events and to know how the past two years might have impacted on projected cash flows.
    “Because of the protracted period of unemployment that was experienced in the past two years, there is going to be lower than expected contribution income. The pandemic has also exposed the financial vulnerability of self-employed persons, they were just darn lucky that a lot of these national insurance schemes and governments [stepped in],” Veira said. (MM)”

    Source: Barbados Today

    • “Gov’t and IMF review Extended Fund Facility

      A visiting International Monetary Fund (IMF) team here this week for the Seventh Extended Fund Facility (EFF) Review has been assured that despite battling economic fallout from COVID- 19, Government had achieved several macroeconomic benchmarks.
      Minister in the Ministry of Finance and Economic Affairs, Ryan Straughn, along with other Government officials, met with the IMF team on Monday to provide an update on the island’s performance.
      The IMF’s EFF supports the Barbados Economic Recovery Transformation (BERT) programme which was implemented by the Government in 2018 to generate economic growth and restore debt and fiscal sustainability over a three-phase, five-year period.
      Acknowledging that adjustments had to be made to the EFF due to the COVID-19 pandemic, Minister Straughn insisted that Government was still “very committed to seeing the reform efforts through”.
      “We have responded to a number of social pressures which have eased somewhat, but we still need to continue some aspects of social spending until all of the population can see an ease in their living circumstances,” he pointed out.
      Based on the agreed targets on both sides, Straughn said that as the pandemic and the crisis in Ukraine rage on, the execution of the Government’s capital works programme and private sector investments coming on stream will provide a much needed boost to the economy.
      “The Prime Minister is a very strong advocate, as you know, with respect to finding a different trajectory to the debt that has accumulated specifically for COVID-19. We continue to make those arguments with all the multilateral institutions. We believe that in order for us to be able to respond to climate adaptations and other issues, you will need to ensure that the appropriate fiscal space is available so as not to inhibit the normal development trajectory of the country,” Minister Straughn insisted.
      Cognisant that the challenges had become greater since entering the programme, he added: “As we exit the programme now, obviously we have to recognise that we are in a different space and, therefore, I think that as we seek to respond to our own climate adaptation needs, that we are able to look at a suite of potential financial options in order to allow not just Barbados, but certainly the rest of the region to fully recover from the threat of COVID- 19.”
      The IMF’s Mission Chief for Barbados, Bert van Selm used the opportunity to inform the meeting of the proposed visit of the Managing Director of the IMF next month to give Barbados’ assessment, instead of issuing a press release at the end of this visit.
      “So, first, we will do the seventh review and then of course we have a very important step in between; we now have this visit of the Managing Director that is planned for mid-June and that is, of course, a great opportunity to sort of highlight and celebrate the success of four years of economic reforms….
      “For the Managing Director to come here to Barbados and use her weight to bring that message, saying that everything is fine, has much more impact.”
      Van Selm noted that with the global increases, especially in fuel prices, there would be discussions on the macro framework and what other policies would be put in place to shield the populace.
      While on island this week, the IMF Mission Chief will receive updates on Barbados’ renewable energy thrust; and engage in talks with the Government and the private sector on a range of issues, including renewable energy, the financial sector and the National Insurance Scheme (NIS).
      On Friday, Prime Minister Mia Mottley is expected to participate in a wrap-up meeting. ( BT/BGIS)”

      Source: Barbados Today

  18. LOL @ David
    One has tp wonder if these ‘experts’ bother to look around the world at the NUMEROUS examples of what happens to brass bowls who follow the path that we have adopted in Barbados.
    Take Sri Lanka as an example…
    Shiite man!!
    Future reduced pensions are the very LEAST of their worries.
    What makes us different?

    • @Bush Tea

      We are following a path to nowhere. We borrowing to satisfy and unsustainable lifestyle of unbridled consumer consumption.

  19. @ David
    Bushie could understand back in the days of OSA, when we were ‘punching above our weight’ (ie swimming in deep waters) that some people could be misled into thinking that such shiite was sustainable. This is why Bushie had a whacker back then, to attack that kind of idiocy.
    But how the HELL can anyone in 2022, NOT see that we are in duck’s gut…?
    …and if we see that, what does it take to NOT undertake a SERIOUS review of all that we have taken for granted…?

    Only sheep and topsies ( ‘bowls of brass’) have the capacity to continue taking abuse in the form of repeated piss, and of being fattened and led to the slaughterhouse in broad daylight….
    Even pigs would squeal, fight, and do dixie…..

    • @Bush Tea

      Maybe it can be explained that the majority are followers and can be led/manipulated with right messaging. Targeted messaging is supported by a sophisticated technology which feeds on human weaknesses. Think Cambridge Analyatica as one example.

  20. Bajans making ‘solid’ investments

    SOME BARBADIANS are sustaining, and in some cases increasing, their investments in financial assets despite an erosion of their spending power by rising food and energy prices.
    Fortress Fund Managers, a Barbadian firm which manages more than $800 million in assets across 12 mutual funds, reported this yesterday while detailing a “solid” 3.6 per cent quarter of returns across its diversified holdings in shares and bonds at home and abroad.
    The company’s investment director Roger Cave and chief investment officer Peter Arender also said during an online quarterly media briefing that while current short-term volatility, including high inflation, was making news headlines, the growing Barbados economy was good news, as were the current prices for investors with a longterm view. Arender said the “magic formula” to financial security remained “spend a lot less than you earn, invest the rest sensibly for the long-term but have a short-term buffer of money that you can tap into if you need it.
    “The role that we play with our clients is we are the long-term money. We are not the short-term money, so we have continued through this time to see the steady saving from our investors. [That’s] whether it’s monthly savings or . . . some people if they want to get fancy and saying, ‘Wow, things are on sale so now is a time to buy even more than normal’.
    “And it strikes us as a very heart-warming response because over the years we have just observed that financial assets must be the only things in the world that people want less of when they go on sale . . . . So we are always gratified when we see people who are responding to the lower prices rationally, which is buying because lower prices naturally means higher expected returns in the future, all things being equal,” he said.
    Arender added: “So we are seeing still steady interest. The yields on bank accounts remain very low so people are naturally looking for alternatives and the long-term value proposition for investing in good high quality assets for many, many years remains just as important and necessary as it was a year ago, five years ago, ten years ago and as we expect, it will be five or ten years from now.”
    Cave said that while high inflation and increased United States interest rates meant that in the short-term the financial market “can continue to be a bit bumpy”, Fortress was “still positive looking down the road”.
    “We had a solid . . . quarter where we were up 3.6 per cent and over the last year 16 per cent versus what’s happened in many other parts of the world where some of the declines have been quite significant,” he said. “I think there are two factors there. We are value investors and the value parts of the market have held in better than . . . the technology shares. The other thing is that parts of the Caribbean have done . . . very well. Guyana is one example where we have some exposure there and our holdings there have done very well in the last couple of months.
    “Similarly for Trinidad; some of our holdings there have done well in the quarter as well because higher energy prices are going to be good for Trinidad.”
    Cave also said that in the case of tourismled economies like Barbados and Jamaica, “we have had a very strong recovery”. (SC)

    Source: Nation

  21. ‘Not realistic’

    Economist, BPSA head react to pay hike call
    ECONOMIST Jeremy Stephen is warning that a salary increase for public officers to cope with the rising cost of living is “simply not realistic”.
    At the same time, chairman of the Barbados Private Sector Association, Trisha Tannis, has cautioned that were a similar wage increase demand be made of the private sector, it would likely lead to hyper-inflation and loss of jobs.
    Both were panellists during a virtual discussion yesterday held by the Barbados Employers’ Confederation as part of its 62nd annual general meeting.
    Stephen echoed the recent sentiments of Central Bank Governor Cleviston Haynes, as well as Government’s senior economic advisor Dr Kevin Greenidge, who said any increase in wages must be matched by a rise in productivity.
    “You don’t have those mechanisms in place that would support a wage increase. Frankly, Government does not have the capacity, being over-extended in supporting the economy through COVID and being debt-ridden before that. The only other way is for massive investments to come from businesspersons outside because it is not part of local business culture to take large risks right after such major disruption . . . . This belief that wages have to go up is warranted but it is not realistic,” said Stephen.
    The former University of the West Indies Cave Hill banking and finance lecturer added: “I don’t think that most persons in the population really understand how wage incentives work. On the side of labour, wages are obviously deserved, but on the side of capital or employers, wages are a measure of productivity . . . . In a situation where COVID has retarded any economic growth for the last two years, even though the Central Bank has said that recent growth has brought us back to 2020 levels, there is no evidence this growth has filtered through.”
    Tannis said any demand for wage hikes in the private sector was likely to do more harm than good and compound the very
    issue that the wage increase is intended to alleviate.
    “If all you do is compound increases to address the cost of living, then those increases can themselves lead to further inflation if not tied to increased output, productivity or more efficient output. If the increases themselves do not make space for themselves or are not self-funding, then essentially we have hyper-inflation and we are compounding the cost of doing business in Barbados.
    “Essentially what will happen is that we will have market crashes in some sectors because prices will have to normalise at some point. Sadly, in those circumstances, we see jobs being lost because of a reset, right-sizing or whatever term we choose to use,” said Tannis.
    For her, the solution rests in removing redundancies and creating greater efficiencies within the local value chain.
    “We have a very import-driven cost and there is a tremendous amount of opportunity to work on productivity and efficiency on the local value chain. This is the conversation that we need to have because we can’t afford salary increases and we increase import costs. The only thing we can do to ease the valve is to look at the things we have control of,” she said. (CLM)

    Source: Nation

  22. July discussions on another IMF deal

    Prime Minister Mia Amor Mottley says by July, Government will begin talks on whether Barbados will enter a second programme with the International Monetary Fund (IMF), as the four-year Extended Fund Facility (EFF) will end in September.
    Speaking during a press conference at Ilaro Court yesterday, which was held at the conclusion of the seventh and final review of the Barbados Economic Recovery and Transformation (BERT) Programme under the EFF, Mottley said her administration will be weighing all the pros and cons.
    She pointed out that Barbados’ experience with the IMF over the last three-plus years had been markedly different from the depiction of the lending agency in years gone by. The Prime Minister praised the IMF for being amenable to the social concerns of Barbadians as the country navigated a series of shocks while at the same time undergoing a structural adjustment programme.
    “As to what we do when it comes to the end of this programme . . . on September 30, those are the discussions we will start once this mission’s report passes the IMF Executive Board in June. Come July we will start discussing whether we will have a successor programme. If so, we have to determine what type of successor programme we will undertake,” said Mottley.
    “Will we go it on our own? Is it right to go on your own when interest rates are rising globally, or do you stay in the comfort of concessional interest rates by having a programme and working closely with the other regional development financial institutions? We have to consider our vulnerability to climate and given the fact that COVID, though reduced, is still very much with us.”
    Also present was head of the IMF team Bert van Selm, who praised Government for keeping on track with an ambitious programme under trying circumstances brought on by a series of exogenous shocks. The latest review is subject to approval by the IMF Executive Board next month and once given the thumbs up, a further US$23 million (BDS$46 million) will be made available to Barbados.
    “In this very challenging environment Barbados continues to make very good progress
    in implementing its ambitious and comprehensive economic reform programme. The qualitative targets for December 2021 to the end of March 2022 have been met. International reserves, which reached a low of around US220 million in May of 2018, are now at a comfortable level of US$1.5 billion,” said van Selm.
    “Government undertook the initiative to facilitate renewable energy projects, doctored initiatives for fiscal rule while the Customs Department took steps to facilitate greater trade facilitation and risk management . . . . For the fiscal year that is now ongoing, the authorities are targeting a primary surplus of one per cent of GDP (gross domestic product) with revenue projections premised on a continued projection in tourism.”
    However, responding to a question from the Saturday Sun about the Government’s ability to maintain a one per cent surplus at a time when the country was going through a major hike in cost of living, Mottley said adjustments could be made if deemed necessary to ease the pain.
    “We are going to have to find some ways to ease the pressure on people. We have started it already with measures that I announced in the Budget. This Government has always seen people and heard people. If that means that there are implications for additional expenditure or foregoing revenue, then that would obviously impact on any intentions of running the surplus that we want to run.”

    Source: Nation

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