The old people have a saying, one should not place all your eggs in one basket which translates to, “one should not concentrate all efforts and resources in one area as one could lose everything“.
From the inception of Barbados Underground some members of the family have been crying for Barbados to unlink the parity of the Barbados dollar from the United States dollar (USD). On the other hand former Governor of the Central Bank DeLisle Worrell is known to be a strident advocate for Barbados adopting dollarisation. Some international financial pundits however have been forecasting that geopolitical events in recent years- mainly the emergence of BRICS and the protracted dispute between Russia and the Ukraine- will see the United States continuing to lose the confidence of large countries that have historically accepted the USD as the world’s reserve currency.
As the world becomes more and more polarised on almost every issue, it makes sense for small island developing states with ‘open economies’ like Barbados, to engage in monetary policy to efficiently manage currency volatility. The blogmaster will admit this is a complex matter with disadvantages and advantages to be debated. What cannot be refuted is that it needs to become a national conversation given global events referenced.
It the Global Finance communication last month it was reported China “offloaded close to $50 billion in US Treasuries in the first quarter and had reduced its holdings by more than $100 billion in the year through to March 2023. The revelations come as China and the US are locked in an increasingly tense stand-off involving trade and China’s intentions toward Taiwan“. The report further stated, “Belgium, which is often referenced as a proxy custodian for China’s debt holdings, reportedly disposed of more than $20 billion of Treasuries in the same period”. Countries like Barbados with our currencies coupled to the greenback cannot afford to ignore what is trending in the international currency and investment market.
What cannot be refuted is that the global financial system is currently in transition, Barbados must follow global trends and draw from its knowledge capital to make the best decisions to sustain a quality existence for Barbadians now and in times to come. The blogmaster is an unapologetic advocate of pragmatic leadership – see problem, fix problem to achieve goals set. There is no place in today’s fast pace world for vacillating on the many and complex issues confronting small countries. We must nurture a problem solving culture or suffer the result of dithering while we burn.
Prime Minister Mia Mottley has emerged as a spokesperson for the Global South on the need to overhaul the global financial system. Some continue to be critical of Mottley because she is perceived to be aligned to the Washington Consensus – a paradox – which ensures the International Monetary Fund (IMF) and World Bank play prominent roles in the stabilisation of our economies. The time has come and possibly gone for Mottley and like minded leaders in the Global South to pivot more aggressively in advocating for reform to the international financial system AND in our domestic space.
The blogmaster invites you to join the discussion.