Alternate Views: Addressing Professor Justin Robinson’s Position on Barbados’ Debt Problem ( 2005-2022)

Kemar J.D Stuart, Economist and Director Business Development , Finance and Investment Stuart & Perkins Caribbean

In the recent launch of the BERT 2.0 the term lost decade is still a heavily used term in that document that can be reinforced by the unassuming mind in reading a recent article published by Professor Justin Robinson on Thursday 27th October 2022 on the level of government debt in Barbados. Professor Michael Howard, Professor Don Marshall and Economist Carlos Forte offered that Barbados is in a debt trap.

To add facts and context to Dr Robinson’s naked assessment of Barbados’ public debt . The global financial crisis which is categorized as a shock similar to covid hit in 2007-2008 and Barbados’ public finances saw an upsurge of domestic debt. The economic strategy of government at the time relied heavily on local debt from the Central Bank of Barbados via money printing, the NIS , Treasury Bills and debt and interest payments owed to these local Barbadian institutions skyrocketed causing unsustainable fiscal deficits.

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IMF on Barbados’ 2018–19 Sovereign Debt Restructuring

The following is an extract from the Barbados’ 2018–19 Sovereign Debt Restructuring–A Sea Change? uploaded to the IMF website this evening (21/02/2020) – David, Blogmaster


Barbados’ 2018-19 debt restructuring has made an important contribution to restore debt sustainability. It has reduced public debt and put it on a clear downward trajectory. To ensure that it stays on that path, sustained prudent fiscal policy will be required. Debt restructuring can work as a policy response to an exceptional situation—while repeatedly restructuring the same debt is detrimental to market development and access, and to government credibility (see Okwuokei and van Selm 2017: p. 168).

Barbados’ debt restructuring also provides important evidence that rarely used approaches, such as the inclusion of treasury bills and a retrofitted collective action mechanism, can make an important contribution depending on country specifics, and with the support of strong financial and legal advice. The collective action clauses included in Barbados’ Eurobonds were similarly important to avoid holdout creditors.

In an age of climate change, the inclusion of natural disaster clause in the bulk of Barbados’ new public debt instruments is a critical element of the country’s financial resilience. While Barbados appears less vulnerable to natural disasters than other Caribbean states (see IMF 2019b), climate change is likely to increase its vulnerability, and a weather-related event could have a major impact on its economy.

The success of Barbados’ underlying economic reform program BERT also contains important pointers for a successful adjustment effort, including strong ownership and the establishment of a domestic monitoring team with broad participation. Other successful reform efforts in the region, including Jamaica from 2013-2019 and Grenada’s 2014-17 IMF-supported program, also used this approach.


Finally, successful debt restructuring is a balancing act. The right balance between fiscal adjustment and debt restructuring, and between improving public finances while maintaining financial sector stability, needs to be found. Early results from Barbados’ adjustment program are encouraging and indicate that it has been able to find the right balance. However, reducing public debt to prudent levels—the targeted 80 percent of GDP by FY2027/78 and 60 percent by FY2033/34—will require sustained efforts, not only by maintaining a cautious fiscal policy, but also by aggressively exploiting opportunities to increase growth.

Read full report –


Barbados’ 2018–19 Sovereign Debt Restructuring–A Sea Change?

Barbadians Wake Up, Time to Take Back Our Country from Ourselves


Opposition Senator Crystal Drakes – Economist

The blogmaster listened to the contributions of Opposition Senators Caswell Franklyn and  Crystal Drakes yesterday and it caused the blogmaster to pause about the state of the country in 2018.

No surprise that Caswell’s response was pro labour and questioned why public sector workers are being sacrificed by BERT instead of pursuing other options. Caswell also made the point that the BLP made all kinds of unrealistic campaign promises despite the perilous state of the economy. Senator Caswell you negated your argument with your observation.

Senator Crystal Drakes clinically used numbers which her training as an economist influenced to question the decision to default on debt and the validity of revenue projections based on BERT extracting one billion in taxes from the economy by her calculation. Again Senator Drakes although earning points for being articulate failed in her presentation to connect some important dots. What are the underlying issues that caused Barbados to be the third highest indebted country in the world Senator? Has BERT addressed  those underlying concerns?


Caswell Franklyn, Head of Unity Workers Union

A suggestion from the blogmaster to the Prime Minister and her Jong led Communications  Team is to go back to basics with the message. What are the key performance indices we have to turn around and the behaviours at the household and business level that must be modified to trigger real change to sustain a quality of life.




The blogmaster is a fan of the Financial Stability Report 2017 and lifted a few of the graphs that capture the economic performance of Barbados in recent years.

Commercial bank spreads - 2017

This graph is interesting given the accusations levelled at banks and exorbitant fees being charged. 1)Interest income on loans dipped a ‘little’ since 2012. 2)The interest spread moved UP since 2015 which coincides with central bank’s decision to not set a minimum rate on savings deposits. 3) Interest expense on deposits dropped to 0%.


credit card transaction - 2017

A central bank report confirmed that Barbadians racked up 347 million in debt up to 2017. This graph supports the spectacular rise in debt from 2008 which correlates with the value of credit card transactions in both the personal and business sectors.

credit cards issued - 2017

A picture is worth a thousand words who said? See the spike in credit cards issued from 2015!

currency in circulation - 2017

The upward trend of currency in circulation rose from 2005 to coincide with the cooling off of the global economic boom cycle and continued more aggressively in the post 2008 period to covers the start of the global recession in 2007/8.

International Reserves - 2017

It is worth mentioning the former government inherited 1.8 billion or 20 weeks of import cover in foreign reserves and when they were booted from office the reserves had dwindled to 6 weeks and about 400 million dollars.

net interest margin - 2017

This graph is interest for a number of reasons. Will allow the BU intelligentsia to share why this is the case.

total credit card debt % of toal loans

Another interest graph when we plunk a trendline on it. What can we say about household behaviour in Barbados from 2007?

public debt

See what happens when the printing press doesn’t switch off?

The adage a picture is worth a thousand words holds true.

The Grenville Phillips Column–Living Debt-free

Grenville Phillips II, Leader of Solutions Barbados

It has become fashionable to judge persons in the past for not doing enough to stop injustices during their lifetimes.  For example, if persons did not own slaves, then we may deem them complicit because they either did business with those who had slaves, or did not speak against it forcefully enough.

Jesus warned us about judging others, noting that we will be judged as severely as we judged others.  In various countries around the world, there is: sex slavery, genocide, persecution of Christians, and a host of other unconscionable injustices.  At this moment, someone is being mercilessly tortured for their political or religious beliefs and they are desperate for relief.

Fortunately, we live in an age where we can facilitate the relief of all persecuted groups.  As a sovereign nation, we can bring their plight to regional and international groups of which we are members.  As members of professional and social groups we can put the issue on the agendas to see how we can make a difference.  As individuals, we can pray.

There is one group who has suffered more than any other.  In some countries, they are subjugated in times of peace, and raped at will in times of conflict.  They are our sisters.  The justification for their subjugation is normally religious, and the justification for their rape is normally the reward of conquest.

It has also become fashionable to blame Christianity for the subjugation of women, despite the evidence that countries with a foundation of Christianity are generally where women enjoy similar freedoms as men.  However, to mention such inconvenient truths is also unfashionable.  It is useful to be reminded of the Biblical perspective.

God gave the first man and woman the responsibility of managing the Earth that He created.  They were to do this by first managing a small business as a team.  The man was initially responsible for using the available resources to complete tasks, while the woman provided strategic advice to advance the work effectively and economically.

God was their coach and friend who instructed them not to get into debt.  However, rather than manage the business in a sustainable manner, they were enticed to take out an unsustainable loan which neither they nor generations of their offspring could repay.

Being spiritually in-debt was a stressful existence for both men and women, and it resulted in women being subjugated.  The woman’s subservient role was codified in national laws and customs, which were strictly enforced for thousands of years.  Fortunately, Jesus paid the debts of all men and women so that they could live spiritually debt-free lives.

This was very good news for both men and women.  Men could benefit from a woman’s strategic advice by providing an environment where she can thrive, and women could escape a life of subjugation and operate as true partners.

Tragically, many people seemed afraid to experience the liberty of debt-free living, and preferred instead the false security that their in-debt experience seemed to provide.  So how is this Biblical perspective relevant to us today?

History has shown that irresponsible men prefer women to be spiritually in-debt in-order to maintain control over them.  When such men get into places of authority, they seem to think that they are entitled to concubines.

There is simply no good reason for any woman to choose the stresses associated with spiritually in-debt dependence, when a liberating debt-free existence is freely available to her.  Barbados needs spiritually debt-free women to play national roles at this critical time.  It is important to note that such women comprise approximately one half of Solutions Barbados candidates.

Grenville Phillips II is a Chartered Structural Engineer and the founder of Solutions Barbados.  He can be reached at

Canadian Banks Looking Elsewhere to Sustain Profits|Can the Credit Unions Do the Job?

The local credit union has 150,000+ members.

Two articles in the Canadian Globe and Mail newspaper caught the eye of those who are not fixated on navel gazing on the shitty affair ‘unfurling’ on the South Coast.  The obvious question is what does it mean? Clearly CIBC- and we include the other Canadian banks operating in Barbados- are concerned about the current and future state of regional economies and have taken decisions to mitigate risk driven by concerns by shareholders whose concern is always to create share value and to satisfy the forecast of the financial analysts.

Some suggest there are indigenous financial intuitions that can fill the void if the Canadian banks were to withdraw from the Caribbean, the credit union unions come quickly to mind. Some question if the credit union movement in Barbados is ready to operate at the level required to deliver a best in class service in a global market fraught with regulation. We are not questioning if the cooperative model can deliver financial services to participants, a look at the balance sheets of the leading credit unions in Barbados suggest there is work to be done to ensure key acid ratios are met.

The Canadian Globe and Mail articles highlight the level of debt which Barbados has accumulated  and the volatility of oil price that has negatively impacted Trinidad’s economy. These are two of the key markets in the English speaking Caribbean that have undergirded the stability of the regional economy in the post oil-crisis period of the 70s. The trivializing of credit rating downgrades and an inability by regional governments to address structural fault lines in our economies that are known by the policymakers must not instil confidence in the boardrooms in Toronto and elsewhere.

The reality is that replacing international institutions with indigenous ones will not address the underlying factors at the root of failing and poorly performing regional economies. The lack of interest by Canadian financial intuitions is symptomatic of a lack of leadership with the result, conspicuous consumption behaviour driven mainly by the globalization construct. Just look at Barbados to confirm the ease with which we- through our representative the government and private sector- have sold our best companies to non Bajan interest. What assets and symbols do we have left to define who we are as a people? How will our children define success in the context of nurturing Bajan esprit de corps?

The BU household has written voluminously for 10 years about the need to remove the weeds from the lawn. The weeds have sprouted to bush. ALL of the regional economies are now heavily indebted nations with decaying infrastructure and limited fiscal space to drive development. Our politicians who ‘lead’ in the model of government we practice continue to rollout policy directives that pander to feathering popularity and satisfying those behind the curtains with the money to finance political campaigns. The people can be characterized as ‘sheep’ in the process.

History is the teacher to portend how this will play out- Crash, Burn, Rise!

Here are the Canadian Globe and Mail articles.

  • CIBC aims to double share of profits from U.S. operations
  • CIBC mulls offering Caribbean subsidiary on U.S. stock markets Subscriber content

The footnote to this submission is that in Barbados we pride ourselves on being an educated people yet we have demonstrated a lack of ability to manage home grown institutions and to leverage the investment in education to separate Barbados from the rest. Why bother to invest in education if this is the result?

Future Generation of Barbadians Will Have to Repay Billions in DEBT

Minister of Finance Chris Sinckler

Minister of Finance Chris Sinckler

In piloting the amendment to the Local Loans Act in Parliament this week, Minister of Finance Chris Sinckler said it was a reality of governing small countries with resource constraints that Government would at times be unable to meet commitments for demands, provision of goods and services and the orderly management of the country based on the resources it brings in from taxes and impositions. “So it is a necessary requirement that facilities be put in place to allow for borrowing for various purposes, – “In this case, this is entirely domestic”Barbados Today

It is an old public relations ploy –use the noise in the market to minimize the impact of a negative message.

BU will leave the deep dive analysis and the implications of government raising the debt ceiling under the Domestic Loans Act by $1 billion to $7.5 billion to the economists. However, it is fair to conclude if government sees the need to increase its capacity in 2016 to carry MORE debt a fair conclusion to make is that we have a problem.  Do you need a reminder that Barbados is already ‘sinking’ under the weight of existing debt, one our children will have to repay? Also worrying is the fact Barbadians have not seen value for the debt accumulated in a relatively short period. No wonder the private sector is alarmed.

In the United States and other developed countries the public feels comfortable knowing there are independent sources with a commitment to critique public policy. Whether it comes from university academics, think thanks, journalists et al, there is no shortage of alternative analyses from where the citizenry is able to be adequately informed in those countries. In Barbados critical and independent analysis on financial issues is sorely lacking. The problem exist although the country has benefited from a heavy investment in education under successive governments.

We accept the discussion about Barbados debt profile must be contextualized under domestic and foreign. Some pundits have shared the view that the raising of the domestic debt ceiling is a response to the IMF thumbs down to government borrowing from the central bank read printing of money. We should not forget the ‘’deal’’ the central bank made with commercial banks to reduce the minimum interest rate to be able to manipulate demand for Government Savings Bonds. This sleight of  hand move has largely gone unreported by the media and local pundits – Wild Coot the exception. It has been reported the move has yielded 100 million in bond sales so far.

Barbadians must become more active in discussions about the state of the economy. How can we leverage the free education we have received to distil the issues devoid of political claptrap? Why do we feel comfortable hearing the government’s position followed by the counter by the Opposition and vice versa? Are we not capable of generating alternative views to help to inform a dispassionate assessment and conclusion?

The two questions Barbadians have to ask and answer:-

  1. Are government policies helping to grow our foreign exchange revenue?
  2. Are government policies helping to strengthen our local infrastructure and the ability to meet financial commitments in a timely manner?

Barbadians should keep a wary eye on a soaring US dollar and the price of a barrel of oil. Savings from low oil price has been a lifeline for the Barbados economy by reflecting positively on forex reserves. A strong US dollar might negatively impact tourist demand in key tourist markets like the UK and Canada. A recent Bloomberg report  – Barbados Leads Bond Rout as Dollar Peg Means Pricier Sunbathing highlights how exogenous factors will continue to impact our small open economy. How will Barbados respond to the new normal? Enlightening leadership is required.

Debt and Development

Submitted by Looking Glass

Are we sinking under the burden of debt?

Are we sinking under the burden of debt?

The limited possibility of substantial National Debt reduction (the total remains a secret) can be gleaned from the following: There is a direct correlation between public and private debt in a society whose mental set permits profuse consumption, “unencumbered” government spending and borrowing; moreso when the total Black Net Worth today borders on ancient history. Our total net worth is insufficient to finance government spending, new investment and job creation. Inevitably the national debt increases, and so too the sale of public and private assets.

Countries, like companies, have to compete in order to produce the most value at the least cost possible. Where the marginal cost of government is “non-competitive” loss of real and human capital obtains. The latter includes the brain drain and atrophy of the mind. Positive national development is unlikely to occur even if the debt burden is substantially alleviated. With domestic food production in decline and wages and prices out of sync, selling profitable assets and privatisation rather than generating new assets and wealth is unlikely to be positively dynamic.

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Notes From a Native Son – Imposing Prices and Incomes Controls as a Fiscal Tool

Hal Austin

Barbadians are feasting in the last chance saloon on a bloated Titanic, too inebriated with massive debt and an artificial ‘developed’ lifestyle to notice the vessel is fatally holed. As Martin Weale, a member of the Bank of England Monetary Policy Committee, has said, it is deleveraging now or passing on a punitive debt to future generations. But, as yet, it does not seem as if policymakers are even aware of the extent of the Barbadian problem; no one is prepared to tell the emperor he is naked.

It is quite clear to anyone with a searching eye that Barbadian consumers are having a tough time. Prices are going up by leaps and bounds, private employers are resisting any calls for increases in wages and are in fact making people redundant. In fact as they make more and more people redundant, government is hopelessly trying to bridge that gap by giving pay rises to the public sector, which, in the long term, is socially divisive.

There is not the slightest sign of any fiscal discipline, and it is not clear what monetary responsibilities, apart from holding on to ‘returnees’ pensions for an extra week and being cheer-leader in chief for the almost religious, but misleading, dogma of foreign reserves. In the meantime, a number of professional and academic economists and policymakers are giving intellectual cover to the government by trying, vainly, to explain away the incredibly high inflation as just imported food and energy prices which will ‘pass through’. The theory is right, but the reality is totally different. Commodity prices can in fact pass through and have very little medium-term impact on real inflation.

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Borrowing, Borrowing, Borrowing, Debt, Debt, Debt

Submitted by Charles Cadogan

In a recent issue of Barbados Today I read where Barbados is borrowing BDS6.5 million from China.  But the most interesting thing was the suggestion of learning Chinese as a second language.  How is all this money going to be repaid? What if Barbados defaults on the loan? Some of the changes that are being made in Barbados, for instance the Pier Head Project, is this for the good of all Barbadians or for a select few and outsiders?

In the last year reading the Barbados Today  I have seen where  quite a number of large sums of money has been borrowed from China and a few others. In my humble opinion China isn’t going to give any money to any country in the world unless it’s beneficial to them in some form or fashion.  Right here up North China has their foot in the door because of huge loans owed by the USA.  The Chinese are shrewd business people who are in it to win.  Barbados be careful who you keep borrowing from to do all the different projects you deem more important than better housing for the LITTLE MAN, and a few other things that need addressing to make the LITTLE MAN in Barbados live much better than he’s presently doing.

Don’t keep borrowing to do what you are calling improving Barbados and not paying attention at what cost it will come to in the long run.  PLEASE make sure that Barbados continues to belong to BARBADIANS and not some other foreign government. Don’t keep borrowing and end up over your head in debt when you are no longer in office.

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