This report out of the Virgin Islands identifies Barbados, Bermuda and The Bahamas in the top 5 most expensive countries to live in the WORLD. Allow the blogmaster to ask a silly question, is this reality reversible?
It is 148 days since the last general election in Barbados. The result returned the Mia Mottley led Barbados Labour Party (BLP) the office in unprecedented manner and forced the DLP to jettison Verla De Peiza as President- replaced by Dr. Ronnie Yearwood who has been in seat for 49 days. Is it too soon some are asking for a coherent policy position to be emanating from George Street?
The saying goes that extraordinary times require extraordinary people, there is no denying we are living in extraordinary times. That said, it is a reasonable expectation by Barbadians to expect those presenting themselves for public office to hit the ground running. The system of democracy- even if a parody of the Westminster system practised by Barbados- requires a strident dissenting voice. In Yearwood’s defence he is president of a private entity and his first obligation is try to infuse a DLP suffering near political coma.
President Dr. Ronnie Yearwood recently made a statement challenging government’s ‘proposed plan’ to tackle cost of living. The blogmaster’s position has always been it is a difficult undertaking for a party in opposition without full grasp of the public purse to offer constructive alternatives. Yearwood is understandably trying to piggyback on issues resonating with the public. On the other side of the issue, Mottley has the task of managing an economy still spluttering from the shock of 2008 global meltdown and the so-called ‘lost decade’ which followed.
BU’s Artax analyzed Yearwood’s recent cost of living recommendations. It was not complimentary.
Yearwood isn’t proposing anything NEW.
From economists, political scientists, members of special interest groups, contributors to social media platforms, former DLP president DePeiza, Lynette Eastmond, Joseph Atherley, Grenville Phillips II, aspiring politicians…… to the ‘average man and woman on the streets,’ criticised the size of Mottley’s Cabinet and the number of consultants, almost immediately after she announced them, following the May 24, 2018 and January 19, 2022 general elections…….and have been calling on her to reduce the number since then.
The 1% levy on persons earning $6,250 per month was also heavily criticised. But, I can’t understand how its removal would help poor people.
Perhaps Yearwood could offer further explanations.From the inception of VAT in 1998, the DLP and BLP while in Opposition, have asked and promised to expand the ‘basket of goods,’ only to reneged on their promises after ‘taking up the reins of government.’
“Remove the excise tax on fuel by 40 cents per litre and to offer relief to pensioners,” has also been previously suggested.
“Calling on Government to bring forward the reverse tax credit of $1300 for people earning below $25,000 per annum,” also requires further explanation, especially when one takes into consideration that the DEMS reduced the reverse tax credit to $650 during the recession.
– Artax
How does he plan to finance $1,300 to be paid to an increase in the number of persons who would become eligible?
Who are the members of DLP’s economic team? Under former president De peiza it was not clear. In the current challenging economic times, compounded by the perilous state of the economy, quality people, quality decisions must form part of a DLP looking to be perceived as competent by an apathetic and cynical electorate, especially in the area of finance.
Some ‘insane’ Barbadians are asking the question again – is the standard of living we have become accustomed tosustainable. Is it sensible for us `a net importer and purchaser of foreign currency to promote and implement policies that guarantee we must BORROW billions in foreign and local dollars to fund the short fall not covered from taxes collected in the case of domestic and foreign earnings?
Many years ago, ironically at the tail end of the last economic boom which Barbados never recovered, former Prime Minister Owen Arthur warned Barbadians about dark clouds on the horizon and the urgent need to make adjustments. To be expected we continued to engage in immature partisan political ranting as the walls of our society cracked are now tumbling around us.
We are a tiny island with zilch natural resources having to depend mainly on the fickle invisible export of tourism to generate foreign exchange to pay for our conspicuous consumption habits. We continue to build oversized homes, purchase fossil burning expensive SUVs, travel to distant lands to fulfil manufactured aspirations , aspire to study at elite universities, select exotic foods from supermarket shelves, the benefits sold to us on foreign cable beamed into our homes 24/7. To any sensible and educated person the dinosauric economic model could not and does not sustain the level of expenditure we have to incur. There is a good reason why Barbados’ economy has been described as open and susceptible to what economists fondly refer to as exogenous shocks.
On top of the obvious challenge of managing a minuscule 6-8 billion dollar economy largely dependent on a fickle tourism product, there is sufficient evidence – see Auditor General Reports outlining a litany of public sector malfeasance (private sector is always complicit) AND corruption to conclude we make a challenging situation more difficult. With revelations coming out of the arrest of former government minister Donville Inniss et al, there is evidence a culture exist that feeds corrupt behaviour. Although not a unique circumstance to Barbados, Barbadians must hold ourselves accountable for the kind of country we want to build for our children.
Many in this space lived through the 2007/8 global crisis and the oil crisis of the 70s. It is evident from the experiences of the two episodes we have not learned enough to commit to implementing resilient ‘fit for purpose’ policies. WE have allowed ourselves to buy into the ‘good life’ of consumption fuelled by an economy built on beach ground. Even in the face of the obvious, we have to listen daily to bull pucky discussions designed to take us no where. Unfortunately with the multiplicity of agendas to satisfy, with social media a ready purveyor of the inane the blame culture has taken deep root.
It is 2022, according to establishment analysts were are on the precipice of another global recession, one that should it occur given our fragile open economy will again wreak havoc on the lives of Barbadians, decimating a debt ridden middleclass and moving the poverty line north. Our visionless leaders combined with a level of disengagement from Barbadians – who the blogmaster has always contended ceded entitlements under our democracy to the political class – will have to suffer again for it until we learn to do better. The reference to a people getting governments they deserve has been recorded countless times in this space.
To the immediate matter at hand summarised in the article shared by a BU family member:
https://datawrapper.dwcdn.net/U5xvN/1/Data: Federal Reserve Bank of St. Louis; Chart: Thomas Oide/Axios Visuals
Skyrocketing food prices in the U.S. are changing the way Americans eat and grocery shop — they’re buying more store brands, and less costly meat and produce. Some are now just making do with less.
Why it matters: This is inflation hitting home, contributing to the overall bummed-out mood of the nation.
Driving the news: The cost of “food at home” is up 11.9% from last year, the largest increase since April 1979, according to the scorching hot inflation numbers released Friday. Nearly every category of food the government tracks saw accelerating price growth. The most inflationary categories, as highlighted in a note from JPMorgan on Friday:
Unusual trend: The increases in prices for food at home are outpacing food-away-from-home, which is up *only* 7.4%.
State of play: For a good snapshot of how rising food prices are changing behavior, we checked the most recent Beige Book — where the 12 regional Federal Reserve banks report on economic conditions in their area (h/t Planet Money’s Indicator podcast on this one):
Read full article – https://www.axios.com/2022/06/13/rising-food-prices-are-changing-the-way-we-eat-and-shop
The news cycle has centered upon issues of inflation, cost of living, transportation and housing costs. Are we living far beyond our financial capabilities? Are our expectations too demanding?
The true inflation levels are nearing 8.9-10%, something our governments tried to hide in an effort to bring our attention to levels they wish to achieve nearing 2-3%. Gas has reached levels never seen in our nation. Housing, both rental or owned is out of reach for most citizens. Everything from the food we eat, to what cloths us or entertains us has risen drastically.
Our expectations have brought upon us a feared financial apocalypse, and we need to revise our expectations and life styles if we are to survive and possible prosper.
Energy costs demand that we stop driving gas guzzlers, and move to smaller vehicle’s or perhaps even electric vehicles. Has the time come that an average person cannot afford to drive a sports car or large SUV?
Can we move away from costly food items to local nourishing foods that are less costly. Steak, lobster can be perhaps substituted with poultry, shrimp and pork. Eating healthier while saving on your costs works for me. Purchase intelligently, communicating with the grocer what you want and what your willing to pay. They can be persuaded to compete more effectively.
Housing has been a magnet drawing many of our friends into costly mortgages and excessive debt. Perhaps it is time that we strive for less costly options like renting. In many large urban centers you can find people who have been renting happily for decades. The problem is finding rental units. Is it not time for you to pressure public officials to move their revenue expectations from large housing units towards town homes, well built apartment buildings and large building lofts. If you make it known that that is what is needed, some developer will build them. And when you rent or buy such a unit don’t play the blind bidding game, but strive to pay what the product is truly worth. Make the housing game yours, not the real estate agents and developers.
Even our governments may need to review the public’s expectation, and bring their spending under control. A assessment of what is truly needed vs what the public would like to see.
The time of passive immediate purchasing must end. Your expectations need to mature and evolve, just as you do daily. It can be said we have entered a period of recession, and depending on what the World Economic Czars do about it, can develop into a horrid situation for many of us. Think 2009 but worse and perhaps lasting longer. Yah the horror, the horror.
Do you have a grandma, grandpa who lived through the Great Depression? There is a source of inspiration and advice you can tape. Make things last longer, learn how to repair, reuse and recycle. As long as your car works, use it, and conserve gas by not wasting your fuel. Manage your time, expenses and expectations that would make your elders proud. Vacation locally, and don’t go to the airport to travel far away, it is a place of stagnation, stress and anger, especially Toronto International Airport 🙁
“Well done, is better than well said. The more I expect, the more unhappy I am going to be”(Ben Franklin). The stress you are all feeling, going to work for pay, while paying more to go there, and your payroll remains the same. This is a feeling that will be with you a long time unfortunately. We are not going forward financially, but rather hopefully remaining where we previously were, only to fall into debt and despair. Two feet forward, three feet back.
The only way you can change your predicament, is by changing your ways. Expect less, but expect better. Look for quality over quantity and revise your expectations.
It is no surprise the ineffectual debate about reducing the cost of living has resurfaced. As usual the country is beguiled by the usual talking heads whose commentary is crafted to fulfil political interest and reaffirm traditional economic theories.
However you ‘slice and dice’ the challenge facing Barbados to significantly reduce the cost of living, it cannot change the fact Barbados is a net importer of commodities. For those who will interject that tourism as a service generates significant revenue inflow, it is an industry with significant foreign ownership which dilutes earnings making its way onshore.
A significant slice of Barbados’ import bill is oil and food totalling north of 40% by the blogmaster’s estimation. It does not require complex reasoning to understand that a significant increase in oil price and food will increase cost of living in Barbados. The disruption to global supply chains as a result of the pandemic quickly followed by the ongoing conflict between Russia and Ukraine (responsible for producing a significant share of the world’s agricultural products used as inputs in food products) means Barbados as a net importer will continue to import inflation.
With the cost of living on the jump trade unions in Barbados have signalled labour expects a favourable response to an increase in wages. Pensioners and other vulnerable groups have also been crying out as the economic climate becomes more severe. ‘Heavy is the head that wears the crown’ – with cries emanating from all quarters what will the Mottley government do to deliver comfort to citizens in most need? Without being insensitive to the plight of suffering Barbadians there is so much protection a broke heavily indebted government can offer. The longer external shocks persist ‘crapo smoke [we] pipe’.
The blogmaster – unlike some here – is not qualified to recommend to the leadership of the country the best approaches to take to manage an open economy during crisis after crisis. What can be said however is the importance of our leadership rallying the country around ‘fit for purpose’ national objectives. Truth be told, can many Barbadians say we have made significant adjustments to our lifestyle to effectively respond to the increasing adverse economic environment?
The blogmaster continues to be amazed at the bustling activity at fast food and fine dining restaurants. The number of vehicles zipping up and down the highways as byways 24/7 given the astronomical gas and diesel prices at the pump. The one that peeves the blogmaster no end is an aversion many Barbadians have to suffer discomfort in vehicles by leaving air conditioning units turned off. There are many initiatives individuals can undertake to help themselves and those who can afford it, do it as a means to help others.
The foregoing is not meant to excuse government from leading by example and doing all that it practical to execute fit for purpose policies. These are challenging times and a government with an unprecedented large Cabinet is expected to over achieve regardless of the challenges. To whom much is given much is expected.
First they gave a non-impactful salary increase.
Then they raised taxes and rates in every place possible.
Then they kept gas prices high despite world conditions.
Of course they watch silently as retailers raise their prices left right and center.
Then they restructured government bonds that found bondholders getting less and taking longer to do so, maybe even dying in the process.
Then they decreased corporation taxes, propped up Pinnacle Feeds, Abeds and God knows who else.
Of course we can’t forget the big huge contracts without tender to the small few persons.
Now they have passed a bill which means that any Government obligations can now be paid with bonds that will take 3 1/2 years with no interest at all…hopefully. Clearly just a glorified IOU.
AND on top of that they will also institute a National Credit Bureau that will record all the debts and obligations which were in arrears specifically BECAUSE the government wouldn’t pay me what they owed me in good time in the first place.
But of course, the millions HAD to be spent to move to a Republic without public education and buy in.
And of course the billions HAD to be borrowed so foreign reserves can look good.
And of course the consultants, new foreign embassies with full staff and silent ministers HAD to be kept in place.
And a budget to help the “poor man” understand what is really going on HAD to be postponed indefinitely.
Really can’t wait to see what comes next.
My oh my how they care.
Back in 2019, I wrote a series of articles on KFC in the Caribbean. Today, I am following it up with a look at Little Caesars in the Caribbean, and in particular, a price comparison of one of their menu staples (and a personal favourite of mine), the Little Caesars Hot-N-Ready Large Pepperoni pizza.
Before I do that, a few words on my research methodology. Firstly, I defined the Caribbean as member and associate member states of CARICOM. Secondly, using Google, I searched for CARICOM countries with Little Caesars locations (and websites). Thirdly, the prices are the final price paid by customers (including tax). Finally, I included the price of a large pepperoni pizza in the USA for comparison. The USA price was obtained from the Real Menu Prices website. All local prices were checked and converted to USD, on November 21. Currency conversion was done via the Xe Currency Converter website.
Source: Fair Trading Commission (FTC)
Amid the din of post-Christmas activity the FTC posted a notice requesting technical assistance to support a rate review in the second quarter 2019. A worst case scenario for Barbadian consumers to consider is that the BL&P will be granted the increase.
One does not require deep dive analysis to gauge the state of mind of Barbadian consumers, we are a citizenry suffering from economic fatigue. The blogmaster is of the view the fatigue state of mind of the electorate largely resulted in the 30 zip defeat of the Democratic Labour Party (DLP) in the last general election.
Electricity is a significant input cost in the production process. To our credit we have been developing alternative energy sources, however, it is still at a nascent stage. An increase in electricity rates will have a significant impact on the Barbados Water Authority (BWA) cost to pump and distribute water. The upside is that it may speed up the implementation of alternative power sources by that utility company.
There can be no argument that an increase in the electricity rate will drive the cost of living upwards. The business sector continues to be affected by the removal of the road tax and imposition of the fuel tax.
It makes no sense for Barbados to be boasting about generating energy from alternative sources and at the same time consumers are asked to suffer an increase in electricity rates.
Every once in a while we are treated to a masterful display of “watch muh while I pull a rabbit out of my hat.” Our political culture and climate is no different. A peep at the mistress payslip after her much heralded 5% increase with only 5 months back pay that she hasn’t gotten yet reminded me of that phrase “the Lord giveth and the Lord taketh away”. Let’s examine it for a second.
Salary increase
Public workers got 5% or an average of $140 – $400. BUT account for $45 increase in water, $56 average increase for a health levy and an average increase of $60-$70 in gas and one can see how that 5% disappears. Oh, and God help those with assessable income over 75,000. Apparently they are now taking home on average $90-$300 LESS this month AFTER the increase due to the increase in income tax. Someone said belly full but hungry? Watch muh.
Road Tax removal
Sweet we said. No more $450 or $900 road tax. BUT, 40c on every litre has revealed itself as an average monthly increase of $76 for a basic commuter. Think about the taxi operators, PSV operators, freighters, truckers, dumpers, transporters, retailers, bread and food vendors etc. etc and you can see that much more is being paid. Sure $450 at one time is alot, but I guess we can afford $800-$900 or more spread out over 12 months. Can’t we? Watch muh.
SSA off books
So, expenses for the SSA are no longer under transfers in the annual budget. Poof! Disappearing expenditure. BUT, they now collect from every household ($45) regardless of water usage (or not usage). Presto, every householder now pays for their own garbage collection regardless of frequency. $45 for 7 collections a week or $45 for 1 collection a week or $45 for non collections a week. Watch muh.
Foreign exchange stabilisation
The quarterly report was great. Foreign exchange stabilised. But hold a minute. We stopped repaying debts didn’t we? Well there ya go. To every householder that owes FastCash, Axcel, the Credit Union, Courts, Standards, Massy or God forbid the Government of Barbados, just follow the leader. Stop paying and renegotiate! Watch muh.
South Coast Sewage Fix
Priceless. Move the sewage from the road….pump it in the swamp….release it in the sea….close the beach……then blame the wells for not working. Watch muh
Reduced prices
Of course the removal of NSRL resulted in reduced prices, didn’t it? BUT, any good business man MUST pass on his increased transportation cost (fuel levy), increased water costs (50% of standard bill), increase in corporation tax (up to 30%), the employer contribution to the health levy (1.5% of each employee’s salary) and the compensation for profit margins (i.e. keep muh profits the same or higher no matter what). Of course we all know who these corporate level increases are passed on to! yes! We!!! Watch muh.
Increased tourism income
Without detail Barbados is perhaps the 2nd most expensive destination in the Caribbean. But, we have increased costs on virtually every aspect of tourism endeavour. I guess if 5% fewer visitors come but pay 10% more to get and stay here we can claim tourism is doing better. I guess. Watch muh.
Public input for privatisation and divestment
It’s always good to ask what people think and then do what you planned to any how. It’s even better when you have a survey monkey and a few New Unified Puppets Working with ya. Watch muh.
Less than 4000
Words, semantics, numbers, statistics. Po-ta-to, pota-to, To-ma-to, Toma-to. No more than 4000 workers will go home. Too bad for the 3,999 that are shaking in their boots. I could be wrong but this sounds like deja-vu
Anyhow, I was told to watch muh, so I will keep watching….and genuinely hoping it all works out. After all, um is all uh we!
Namaste!
The news that Barbadians will have to pay more for a ham in 2017 has generated heated conversation in Barbadians- the land of ‘porkmouts’. The baking of a ham on Christmas eve night is part of a rich tradition practiced by all households. Now that the NSRL has taken full effect Barbadians will have to be smart about the household budget. Is it worth it for those with limited discretionary income to buy ham reported to be selling at $12.00 per pound? Does it matter if there is ham on the table in the Yuletide season?
The bigger issue for BU is the lack of a vision by the leadership of the country to ensure we import less, integrate local agriculture production in the hospitality sector, encourage a consumption behaviour that aligns with the national interest, adherence to a healthy regimen and so on.
CUSTOMS & EXCISE BADGE
A member of the business community was having a candid conversation with a Customs officer. The businessman told the officer “time is money I have instructed my broker to do whatever customs require. If the customs officers wants to up my values or change the tariff number so that I have to pay more duty, I am not wasting my time quarrelling with them. I will pay whatever they want me to pay. That additional cost is passed on to the consumer. My bottom line will not be affected. That man in Enforcement or the one in Outdoor they can do as they like “. We are all consumers; the price of items can erode our purchasing power. There is no special price for Customs workers.
The way Customs does business is critical to the survival of some small businesses. The big businesses may be able to pass on the cost. With the small business increased cost could cause the business to close down. In these hard economic times one must take into consideration the commercial realities and our societal duty to assist the national efforts to keep people employed. With people out of work, there is a greater threat to the society. Crime and violence will increase. Our tourism industry can be crushed by the ravages of crime and violence.
By Baba Elombe Mottley
All across the English speaking Caribbean, there is an ominous movement of sorts, a movement of low frequency rumblings without patterns, without form, not like the rhythms of bumbatuk or soca or the one drop of reggae or mento that we are accustomed to.
The essence of all of these known rhythms is that they link us to a past of chattel servitude where there was little choice for self fulfillment. In time these rhythms. isolated as they were in tenantries and yards and the dancehall, fortified our resolve towards freedom and independence.
Over the last 40 to 50 years, we built indigenous institutions in every sphere, oblivious to the rumblings that were moving across the region. We dismantled the psychological prison of plantation inheritance, killed off the skills we developed to feed and clothe ourselves while we were taught to assemble products that we never used. We set a precedent by bribing investors that our labour was cheap and responsive to training and we told ourselves we could depend on these jobs.
Clyde Mascoll, promises the BLP will relieve taxes on the middleclass if elected
Things in Barbados today are like living in a boiling cauldron. It is hot hot and getting hotter. The people of this once ‘amiable and smiling faces’ land, have changed their outward appearances over-night and are real vex. When last you been to the supermarket or joined a paying queue,or the utility companies line? You don’t dare say “good morning ” nowadays and expect a mannerly reply. People are feeling the burn deep inside and manifesting their bile outwardly.
Visited the gas station lately and observed? See the long dreary faces as consumers accept their plights. Gasoline is almost a necessity like food and the providers know it. The prices go up and seldom down, but the mean price of this commodity is always up. One often wonders how come this is so, as the price of crude had in the past, plummeted, and remain that way for awhile. It leaves drivers with ‘nothing’… but to accept a sense of hopelessness.
Chris Sinckler, Minister of Finance, Economic Affairs
Rookie Minister of Finance Chris Sinckler has delivered his first budget and admittedly it was at a difficult time. BU does not have the expertise to apply the required analysis to determine if it was a’ ‘good’ budget or not. Seems oxymoronic for people to be labeling an austere budget as good anyway.
Since delivering the budget Sinckler has had to to clarify or reverse a few of the financial measures which he announced. It is not unprecedented that a Minister of Finance would have to ‘tweak’ his budget but one senses that the impact of this budget has not been adequately assessed or anticipated.
As an example the following note was received from a BU family member.
