Barbados on December 7th will be heading into another IMF program named BERT 2.0. The PM of Barbados said in a recent press conference that next 2023 will be hard for all of us.
Barbadians are in a serious economic pit as the global economy is set to run into turmoil and price inflation will push the cost of living /goods& services to higher as the festive holiday season kicks in.
Minister of Industry Davidson Ishmael recently recommended Bajan consumers to buy local as , as far back at October 2018, government placed VAT on online transactions to encourage local shopping. With NSRL removed local prices were supposed to drop instead they increased. While patriotic by Minister Ishmael the high cost of living in Barbados has been eroding paychecks and savings as people are shopping according to what’s affordable to their pockets.
In July, Prime Minister Mia Mottley announced a Social Partners Food Prices Compact that would result in a reduction of prices on 47 items for a six-month period In September 2022 government minister Kirk Humphrey admitted that the Prime Minister’s compact has failed to provide an ease to consumers from price increases because businesses did not stick to the prices protocol that was agreed to with the private sector and government. The continued onslaught of price increases in Barbados was further highlighted by the Barbados Consumer Empowerment Network on Dec 2022 and with Christmas around the corner price gouging will be worse.
The Mottley government has collected the highest levels of tax revenue ever in the history of Barbados as a result of high prices. Since the pandemic the governor of the central bank said in publications that government has reaped significant revenues from what he termed an inflation dividend therefore tax payers should expect no tax relief. Before the 2018 debt restructuring government had the ability to raise money by attracting investment locally. The absence of this traditional money led to government using the taxation route to raise these funds instead hence the garbage and sewage tax, gas tax, land taxes , levies and fees . Unfortunately citizens should expect taxes increases as a condition of BERT 2.0 set to replenish the $1B hole on the central bank’s balance sheet , repair the NIS $1B debt hole. All attempts to raise money locally by government did not meet the intended targets for e.g BOSS , BOSS 2.0 nor the central bank 120 M bond offerings.
This inability to raise capital locally is very problematic and serious attention should be paid to it as money is needed to get projects such as Hyatt moving. The continued stalling of Hyatt should be questioned as Developer Mark Maloney said in November 2019 that details of this investment potential would be shared by the financial institution arranging the funding even as he and his team await Town Planning permission to start building. Since then Town & Country went under serious changes internally, A new planning and development act 2019 was passed , A planning & Development amendment bill was also passed , a new director of planning and development was appointed.
Further evidence of how problematic the situation is that in March 2020 PM Mia Mottley said that following meetings with the International Monetary Fund (IMF) over the next two weeks, she was hoping to get a “relaxation” on the targets under the four-year Barbados Economic Recovery and Transformation programme, and a stand-by “precautionary” financing facility. This, she said, would allow her 22-month-old administration to “move quicker” on other capital projects that would have otherwise not been accommodated. Back in November last year, Prime Minister Mia Mottley during the official opening of the Golden Square Freedom Park suggested that the construction of the proposed Hyatt Centric Resort could commence early in 2022.
To solidify my point of the seriousness of situation at play , In September 2022 Senior Minister in the Pm’s office William Duguid announced that work will start soon on the Hyatt he said: “I understand that the Hyatt had some setbacks with its financing but they are soon about to start the construction of the Hyatt.”
The inability of government to gain investment on the local market is severely impacting government’s ability to ease taxes despite having a surplus of revenue earned mostly by said taxes ,also it does not provide government with the incentive to intervene by shielding consumers from price increases. As taxation is charged as a percentage of price common knowledge would say that higher prices in stores and supermarkets gives the tax collector a higher rate of return.
In the face of a certain 2023 world recession Barbadian households will be paying an FTC & light & power agreed price increase in electricity bills , the privatization of the BWA and increase in water bills , the leasing out of GAIA airport for 40 years , demolition of non-contributory pension and an increase in NIS contribution rates ,job losses in government and further price increases in the supermarkets and government services. The income of the middle /low income earners is dwindling and the debt restructuring has caused market failure in local investment markets & repair of the trust with local investors is essential to providing an ease in the cost of Bajan living
The king of all monsters is the continuation of expenditure cuts in Barbados’ IMF program and by extension cuts in money to all government ministries , the pension reform, as currently happening in Uruguay are workers protest against government for increasing pension age from 60-65, Barbados’ pension age may go to 72. the downsizing and privatization of many government operations include Urban & Rural, CBC & Transport board and an end to covid expenses ,cutting of the adopt a family $600 program and ash program expenses which indeed will feature lay offs.
“Snoring”
(from “Insecure, Season 5” soundtrack)
Feel like I been running in place
Toes on the gas, no brakes (No brakes)
Bullshit calling, I’m ignoring (Yeah, yeah, yeah)
Been that nigga, they been snoring
Taking risks, I got a lot at stake (At Stake)
I don’t see no need to play it safe (Ah)
Bullshit calling, I’m ignoring (Yeah, yeah, yeah)
Been that nigga, they been snoring
Snoring, been that nigga, they been-
Eyes on the prize, keep it going (Going)
Full speed, I ain’t ever slowing (Never slowing)
Stress on me, but I never show it
Never show it (Yeah, yeah)
Pressure makes diamonds
I been looking for the silver lining
These days it’s getting hard to find it
But someday it’ll fall into alignment, yeah
Keep it ten toes, that’s just how it goes
I ain’t looking backwards, only moving forward
Give me patience, I’m talking to the Lord
Feel like I been running in place
Toes on the gas, no brakes (No brakes)
Bullshit calling, I’m ignoring
Been that nigga, they been snoring (Snoring)
Taking risks, I got a lot at stake (At Stake)
I don’t see no need to play it safe (Ah)
Bullshit calling, I’m ignoring (I’m ignoring)
Been that nigga, they been snoring
I minding my business. I have no Pm. I am not interested in Bs or Ds. All I need the good Lord will provide. Trust in the Lord and lean not to thine own understanding. In all thy ways, acknowledge him, and he shall direct thy paths.😇🙏🏿
bs
It seems increasing prices and rising cost of living is a problem for many.
https://www.cnn.com/travel/article/world-most-expensive-cities-economist-2022/index.html
Unsure I read the suggestions/proposals for “putting Barbados first”?
While making the IMF the ‘bad bogey man’ or ‘king of all monsters’ has been central to the DLP playbook for years, the alternative, emptying the cash reserves of the NIS and CBB, didn’t work out very well?
Political parties and the CBB, are well advised to alter their ‘forever habit’ of forecasting private sector investment. They have minimal control, short of ‘giving them money’. And usually end up with egg on their face.
And so the author knows, the Hyatt Centric was altered to Hyatt Ziva eons ago, hence the footprint change which required the Rams land. Ziva is ‘all inclusive’. By 2023 it could be Caption by Hyatt, Zilara or another brand completely. It en build yet?
Any proposals or just criticism?
The ‘food compact’ failed. Are you proposing price controls? Should the GoB become the sole importer of certain ‘essentials’ and then mandate the private sector to acquire from them? Should we ban the importation of certain items to reduce choice and force consumers to lower cost substitutes?
‘Ridiculous!’:
https://barbadostoday.bb/2022/12/03/ridiculous/
@David
The so-called ‘social compact’ was to limit ‘mark ups’ to 12-15% on 44 items?
The list of items includes:
Whole chicken, chopped mix chicken, stew chick and chicken backs
Pork hind legs, stewed pork, knuckles and hocks,
Beef stew,
Breakfast oats,
Sliced ham [VAT to be removed],
Milo [VAT to be removed],
Drinking chocolate,
Eggs,
Evaporated milk,
Baby food milk,
2% milk,
New Zealand cheddar cheese,
Soya bean or sunflower cooking oil,
Rice,
Macaroni
Eclipse biscuits/Soda singles and multipack biscuits,
Salt bread,
White sandwich bread [only certain bakeries], Wholewheat bread
Oranges,
Apples,
Sardines,
Tuna [oil and water],
Corned beef,
Split peas [tinned and fresh]
Pigeon peas [tinned and fresh],
Blackeyed peas,
Flour,
Sunflower Margarine
Black tea,
Cream of wheat,
Cornflakes,
Peanut butter,
Chowmein,
Ramen,
Honey,
Pigtails
Toilet soap,
Toilet paper,
Sanitary napkins,
Baby diapers,
Single toothbrushes,
Toothpaste,
Roll-on deodorant,
Bleach
It’s a bit of an odd list, in that some are brands, some country of origin, some product categories? Sanitary napkins but not tampons? Roll-on deodorant but not sticks nor spray? Cornflakes but no other prepared cereal? Macaroni but no other pasta?
From the outset, the BPSA and BCCI said it could only apply to “their members”.
Hence wouldn’t the professional act be, the BCEN to show a baseline price in July when the compact began, and then a weekly or monthly price thereafter from ‘member entities’ on the 44 items?
It can’t be that difficult?
https://barbadostoday.bb/2022/12/03/pm-mottley-among-financial-times-25-most-influential-women-of-2022/
Countries in our region will feel the inflation worst than those say in the USA. The reason is that we must freight these goods out of the same US market, then place our duty of roughly 20% on them followed by our VAT of 17.5%. All of which are calulated on the landed cost here inclusive of freight charges from the USA. Add to this the fact that the Bridgetown port is one of the more expensive ones in the region to ship through and one can get a feel for where that leaves us.
Another loan, looks like @NorthernObserver is correct.
Source: Nation
David,
Am I on the list of those who can mash up but cyah build back?
Still here and reading the blog but sometimes one has nothing to say that one hasn’t already said.
I seldom offer my solutions here because they all have to do with changing mindsets. Most of you guys seem not to be interested or even believe that it can be done.
But when has a serious attempt been made?
Bad habits are not changed by occasional speeches, lectures or remark-dropping.
@Donna
It is a general comment referring to our prevailing and pervading culture. BU simply reflects at a micro level who we are as a people.
There is a time lag for enlightened thinking on Bu
first people will read someone else’s intelligent thoughts
then they will pretend they didn’t notice the original
then they will think about it
then they will adopt and disguise the idea and pretend it is their own
David is an alien collecting good brains to put in his suitcase
This here riddim make you dance and sing
Everybody rocking
Rub a Dub playing
The people them dip
Now play the Dubwise excursion version
silently whispering the lyrics in your mind
letting the sound vibration ripple resonate
in your mind body throughout all chakras
energetically spiritually consciously heartically
Roots Radics
David,
Not my culture to blow up anything unless it needed to be blown up. And my mind is always awash with ideas to build up.
But what I have discovered is that people want to jump in with some quick fix to a problem. They don’t want to start at the very beginning, which I have long said on BU, is “a very good place to start”.
Anyone who has been programmed needs to go through a process of deprogramming.
@JohnA
You have explained how a 50¢ (cost) can of apple juice from NA ends up costing $8
in a retail store in Bim.
Yet, this is an import story, which hasn’t changed.
The GoB attempted to temporarily stem price increases on 44 items.
Recall, the BCEN was formed at approx the same time as the announcement on duty/VAT temporary changes on 44 items. Mid July ’22.
The claim made by BCEN
“The price of goods and services has increased, while a few large players remain in control of the market”
The latter is true
The former may also be true, yet, the list only covered 44 goods? Not a service was on that list?
The GoB was attempting to stem temporarily increases on a few commonly bought goods.
If the consumer chooses to buy steak, coffee, herbal teas, whole milk or anything NOT on the list, expect increases.
So under the banner of “consumer advocy” and without concrete examples, we read this
“The group is asking Barbadian shoppers to put their October and November receipts with names and contact details in the collection box”
WTRH?
A repeat of the computer test? A name and contact details?
Maybe I’m off base, but this has a strong odour.
@NO
The pricing in the compact was based on stock in hand not so? The BCCI was clear to point out pricing may change based on the cost of stock to replenish. We need some credible sources to unravel this to remove the political moves. One would have hoped the ministry of commerce was equipped to do this job.
The
@David
Given it’s immediacy one would think so. The old ‘duty drawback’ regimen known to DF sellers?
The 👿 is always in the details.
That would also stop me ordering a year’s worth of corned beef to benefit from no duty.
How eager I would be to participate, would depend on the current state of GoB payments.
Wouldn’t want them to get ‘misplaced’ like the tax refunds 😜 And I don’t want any J-Bond either 😂
@ NO
Yes the problem is that based on the high cost of doing business here no retailer can operated on a 10 or 15% markup indefinately. The kind of sales at this margin required to generate a break even point would mean an increase in sales roungly of 150%. Just do the maths and you will see this.
Plus remember government is asking the retailer to operate on a 15% markup, yet their fees when compunded on importation say of a 20 foot container comes to over 40%! Yep add the 20% duty the 17.5% vat and the handling fees at port and you over 40% of the landed cost to Barbados.
Yep we expensive as tail!
SAY IT AIN’T SO.
Barbados is sick. So says chief executive officer of Supreme Counselling for Personal Development Shawn Clarke, who argues that it is time Barbadians stop burying their heads in the sand about this affliction and deal with the issue.
https://barbadostoday.bb/2022/12/04/barbadians-told-to-be-accountable/
No Way To Treat A Lady
Demographically Bu needs more women and also more younger people (under 50)
Not the Way / Gregory Isaacs
Go and tell her you’re sorry
You ain’t too big to apologize, no
If you care that much about her
You gotta treat my sister nice, yeah
I heard you kick her in the bum even though she’s still your baby
But that’s not the way to treat a lady
If she is wrong try show her the right
No need to quarrel, no need to make a fight
Beca’ the daughters take a little longer
To sight up the Father, yeah
I said the daughters take a little longer
To do the works of Jah Jah
Never let her go astray, yeah
Try show her the right way, yeah
I heard you kick her in the bum even though she’s still your baby
But that’s not the way to treat your lady
If she is wrong try show her the right
No need to quarrel, no need to make a fight
Beca’ the daughters take a little longer
To sight up the Father, yeah
I said the daughters take a little longer
To do the works of Jah Jah
Never let her go astray, yeah
Try show her the right way, yeah
She’s your sister
So don’t mistreat her
I said the daughters take a little longer
Daughters take a little longer
She’ll learn one day
Never let her go astray, yeah
She’s your sister
So don’t mistreat her, no
She’ll learn one day
Is the Barbados Central Bank also stockpiling gold along with the debt?
https://www.economist.com/finance-and-economics/2022/12/01/why-central-banks-are-stockpiling-gold
The report in The Economist did not mention Barbados Central Bank, the Blogmaster asked if our central bank was also stockpiling.
@NO
I drafted a reply to your point of information but did not post it.
🙂 I had started to believe NCCI statement that BCEN claim of increasing prices was “Ridiculous”.
I was surprise when you informed me that the price increase was real. I took it to mean that
Mia Mottley’s Mysterious and Magnificent Monetary Manipulations and Machinations
were unsuccessful in halting price increases.
I am now reading that our Central Bank may be stockpiling gold. 🙂
You cannot make this stuff up.
@TheO
You seem to be taking a very broad interpretation?
The GoRoB (for you ❤️) deal with BCCI members was on 44 items.
Hence the intent was to halt/delay the inflationary effects on those items ONLY.
All else was ‘normal market conditions’.
I don’t know about NJ, but my regional govt has done nothing to intervene in food prices.
@TheOGazerts,
Another Kolij man has died. Condolences to the family of Wendell Callender.
https://www.nationnews.com/2022/12/04/former-mp-wendell-callender-passes/
Brasstacks
It seems growing dollar debt is also a problem.
‘Huge, Missing and Growing:’ $65 Trillion in Dollar Debt Sparks Concern
https://www.bloomberg.com/news/articles/2022-12-05/-missing-65-trillion-in-derivatives-dollar-debt-sparks-concern
@ NO
The gold issue is amusing for sure! So we are allegedly using borrowed FX to buy gold to hedge inflation. So how will that be booked pray tell?
@JohnA
The accounting is quite simple.
It only gets complicated if they are buying derivates, and then hedging that too.
Buying assets with borrowed money is what drives the 🌎.
@ NO
M point was buying gold in USD when you are tied to the USD in our case is pointless in todays world to fight inflation. The bulk of our inflation is imported in one way or another. Plus we have to pay the inflation cost in USD. To therefore take a chunk of liquid reserves out to park them in gold, when that can not be accessed to work the economy in our case is pointless.
Yes big countries with surpluses like Russia, or those who can just print more money like the USA, i can understand, but with the bulk of our reserves being borrowed money and us running a sizable deficit, one cant help but ask why take actual currency out of circulation to buy a “sleeping commodity” like gold?
To each their own I suppose.
@ No
Also remember gold was trading in January 2022 at $1827usd and in December of 2022 so far its at $1769. So with inflation cooling now the flavour for gold should soften.
Of course that is assuming Putin dont catch a vapse and fire a nuke at his neighbour!
@JohnA
It was NOT stated the CBB WAS acquiring gold as a hedge?
But you could examine their “Statement of Condition” over time ‘for amusement’.
Source: Nation
Source: Nation
@David
That is good news for sure on attempts to secure food security.
@John A
Yes but we heard it all before? Guyana was targeted to be the breadbasket of the Caribbean?
Also in the one hand we welcome Cuba’s assistance but our young people qualifying as doctors and dentists in Cuba have to jump hurdles to qualify to practice in Barbados.
A contradiction if there was one.
LoL…you should check with CF about ‘welcoming Cuba’s assistance’.?
https://barbadosunderground.net/wp-content/uploads/2022/12/Basket-of-goods-1024×677.png
Source: Nation
Reports out of the US is the Feds will increase interest again next week. Barbados does not operate in a fish bowl.
Source: Nation