Tag Archives: International Monetary Fund

It’s the Economy Stupid!

Posted on by
136

Based on the recent IMF visit “at the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm conducted a staff visit via videoconferencing from February 7-11, 2022” see IMF Press Release– Barbados received a thumbs up. Here is the summary of the report card. The Prime Minister must have called an early general election to map the longest time frame to execute economic policy, unfortunately with the consecutive 30-0 shellacking of the DLP and third parties, it appears to have derailed the plan because of the retreat to the Courts to rule on the constitutionality of the composition of the Senate. Based on the case management exercise that must be gone through, the substantive hearing will probably not get on the way until March 2022. In the meantime parliament will be in abeyance, or it should be.

Barbados continues to make good progress in implementing its ambitious and comprehensive economic reform program, while expanding critical investments in social protection. All indicative targets for end-December under the EFF were met. International reserves, which reached a low of US$220 million at end-May 2018, increased to US$1.5 billion at the end of 2021. Barbados recorded a small (½ percent of GDP) primary surplus over the first three quarters of FY2021/22, which bodes well for meeting the primary balance target (minus 1 percent of GDP) for the full fiscal year. Preparation of a budget for FY2022/23 is well underway.

IMF Press Release 22/32

The economy should be the focal point of all concerned given the perilous state of affairs made worse by the pandemic. Instead the country is embroiled in another crisis whether created or caused by happenstance. A reminder of that famous James Carver quote – it’s the economy stupid.

IMF Staff Concludes Visit Post BERT

Posted on by
138

The following IMF report was re;eased today – Barbados Underground

December 7, 2018

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board meeting.

  • Barbados has made an excellent start in implementing its ambitious and comprehensive economic reform program.
  • The rapid completion of the domestic part of the public debt restructuring has been very helpful in reducing uncertainty.
  • The government has engaged in intensive discussions with the social partnership to build public support for its economic reform program.

At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm visited Bridgetown from December 4-7, to discuss implementation of Barbados’ Economic Recovery and Transformation (BERT) plan, supported by the IMF under the Extended Fund Facility (EFF). At the end of the visit, Mr. van Selm made the following statement:

“Barbados has made an excellent start in implementing its ambitious and comprehensive economic reform program. The country’s international reserves, which reached a low of US$220 million (5-6 weeks of import coverage) at end-May 2018, have more than doubled since then, amounting to more than US$500 million in early December. This has helped to rebuild confidence in the country’s macroeconomic framework.

“A comprehensive debt restructuring was announced on June 1, 2018. After intensive discussions, an exchange offer for domestic debt (Barbados dollar-denominated) was launched in early September. On October 15, the government announced reaching agreement with an overwhelming majority of domestic creditors, with support of all commercial banks, general and life insurers, the National Insurance Scheme, the Central Bank of Barbados, and smaller creditors. The domestic debt exchange operation was finalized on November 19. The rapid completion of the domestic part of the debt restructuring has been very helpful in reducing economic uncertainty, and the terms agreed with creditors will help put public debt on a clear downward trajectory. A much-reduced government interest bill will help create much-needed fiscal space for increased social spending and investment in infrastructure.

“Progress being made by the authorities in furthering good-faith discussions with external creditors is welcome. Continuing open dialogue and sharing of information will remain important in concluding an orderly debt restructuring process; completion of the external debt restructuring would help further reduce uncertainty.

“The government reported a primary surplus of 2½ percent of (annual) GDP in the first six months of FY2018/19 (April-September 2018). In October, the authorities launched a program to improve efficiency and reduce the public wage bill by laying off and retraining workers in the central government and public entities. This should help create a leaner, more efficient public sector, geared towards facilitating private sector-led growth. It should also help reduce central government transfers to state-owned enterprises, from a level that had become unsustainably high. In November, the authorities announced plans to modify the corporate income tax (CIT) framework, seeking to unify rates that apply to the international business sector and local enterprises. There are some risks to this reform, including making corporate income tax revenues more dependent on maintaining international competitiveness.

“Barbados has also made good progress towards meeting end-December 2018 structural benchmarks under the EFF. In October, a regulatory sandbox for fintech start-ups was created to allow them to try out new technologies in a well-defined and controlled space. Legislation to facilitate a more efficient process for providing construction permits is underway, as is legislation to support a more efficient budget process, and stronger oversight of SOEs.

“Following IMF Executive Board approval of the EFF on October 1, 2018, both the Caribbean Development Bank and the Inter-American Development Bank approved policy-based loans. These operations, worth US$75 million and U$100 million respectively (a combined 3½ percent of GDP), will help finance the government, rebuild reserves, and support the reform process with policy advice.

“The government has engaged in intensive consultations with the Social Partnership to build public support for its economic reform program. In October, a BERT Monitoring Committee was set up, and tasked to report to the Social Partnership and the public. Strong ownership and broad societal support bode well for successful program implementation and helping Barbados to achieve better living standards for all its citizens.

“The team would like to take this opportunity to thank Barbados’ authorities and the technical team for their openness and candid discussions.”

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Randa Elnagar
Phone: +1 202 623-7100Email: MEDIA@IMF.org

Barbados – More About Pig-food Than Paideia

Posted on by
36
Submitted by Pachamama

The Black-African trained, philosopher, Plato concluded that Greek education was only ‘fit for pigs’. Another Greek, Socrates, also educated in Kemet, considered paideia, or deep education, as singularly worthwhile. Both Plato and Socrates were educated for decades at the feet of Black-African scholars. From the Pre-Dynastic Period to the 30th Dynasty, these were the inventors of the foundations of all knowledge. For example, the first script known to man, the Medu Netcher.

Modern Barbados represents the pigpen of a Greek miseducation as circuitously routed through the Sumerians, Phoenicians, Romans and Anglo-Saxons, with diversions. So Greek education has become Western education and the stench emanating from its pigpen is now making it impossible for average people to survive, throughout the world.

Any independent observer of world affairs cannot avoid certain fundamental conclusions. These must include the reality that western civilization, if it ever was, is at its nadir. There is indeed an emerging ‘consensus’ that any development beyond this point could only be in the areas of inter-planetary industrialization, 5-G technologies, cyber security, artificial intelligence (AI) etc. All undergird by a vicious, rapacious, financialization of economy as manifested recently by Courts Barbados Ltd establishing a financial arm. Most corporations of any substance now have either a bank, a shadow bank, a hedge fund and/or a finance company to engage in what Sambbo, Ptah, deemed to be ungodly – making money from money. Up to 95% of corporate profits are now coming from investments in financial instruments. Bricks and mortar entities are now, more and more, used in mobilization. Mottley should be aware that crypto-currencies represent a bubble which will be the first to see deep reversals, as has happened already, and they should be avoided at all cost. Also, we see no measurement in her BERT of the galloping de-dollarization movement throughout the world. Since MAM seems to believe herself as the darling of the IMF maybe she should demand to repay them in Barbados dollars.

But for Owen Seymour Arthur (OSA) to suggest a development model of the kind he misled this country with for 14 years borders on treason. For Hilary McDonald Beckles and the UWI, which is the preeminent industrial producer of pig food, according to Plato, to sanctify Arthur’s work with a professorship is worthy of the ultimate fate. Nobody, including OSA or anybody else at the UWI, can explain to the peoples of this region the workings of a financialized economy, yet professorships can be awarded. The elites of our region have never failed to find the flimsiest justifications for their useless existences. Who is not a professor, is a doctor, a legend, a knight, a dame, a QC, a blog master, or some pig shiite! Titles and entitlements are the names of their games; all are useless claims to fame for elite forces on all sides.

And Plato’s pig food has not seeped, it has flooded, the new Barbados Labour Party government of Mia Amor Mottley (MAM), with its, all-powerful, one-party, statist regime, masquerading as democracy. On a point of full disclosure, we must admit that Mottley has brought a distinctively different texture of ‘leadership’ to government. We are afraid however that the early signs seem to indicate that there was no real ‘Mottley revolution’ as Hilary McDonald Beckles self-servingly mouthed days after her resounding electoral victory. What we witnessed was no more than the pig food of political marketing as made infamous by Edward Bernays, Lippmann and their Joseph Goebbels. More worrying is Mottley’s insistence that a team of ‘economic advisors’ led by a Kevin Greenidge, an agent of the Atlanticists, Clyde Mascoll, a man too well-rooted in theories which have delivered antidevelopment to the South and Avinash Persaud, a real-real false ‘professor’, are to be the ‘corporate undertakers’ for Barbados. It is a team which has not a clue about the workings of a degenerative capitalist system or the financialization of economy as an end-stage manifestation. A team which has the temerity to advise the hapless people of Barbados that a BERT plan could bring deliverance, in the medium-term, while failing to adequately measure the impending deep corrections within leading economies which will be worse than 2008 by orders of magnitude, as we have long predicted, and as others are only now starting to say will occur before the end of 2019. Why has a guillotine not been appropriately erected, as an instrument for radical transformation? For the “T’ in BERT is for tinkering! How is it possible to have transformation without the long-denied land appropriation? How could the merchants of pig food, with a straight face, continue to insist that the debt owed our ancestors is to be put at their (his) disposal but never is there a demand for land appropriation? The elites in Barbados are all kef and kin. There are no differences between Beckles, Arthur, Cow Williams, Bizzy Williams, Charles Herbert and Joseph Atherley. They are all the same swine seeking pig food from the public’s purse.

The so-called Leader of the Opposition, Joseph Atherley, is a mature idiot who has tricked the people of Barbados for a higher level of pig food. He obviously sees nothing improper with him being a politically gluttonous pig. But it seems to give his typology of Bajan a kind of perverse self-importance in wanting to pass a law that could limit bloggers from saying that he is a complete ass (whole). It tells you about the eminence of ignorance pervading the parliament of Barbados, a poor-rakey parliament still, according to OSA. Does he not know that it is impossible to so exert pressure on speech in an Internet age, unless you are Google? What could be more disgraceful than he pretending to lead an opposition to a regime to which he is a long-standing member? Indeed, the Mottley victory may well hasten the end of duopoly politics in Barbados. Bajans might have well leaped from the frying pan into the fire. Joseph Atherley provides the quintessential proof of deep crisis within elite forces in Barbados and elsewhere. We should all work to hasten their total demise, by any means necessary. Let’s carry these pigs to market!

The Grenville Phillips Column – We Are Sunk

Posted on by
58

The DLP administration made itself offensive to the voting public with their arrogance and excessive taxes. They also alarmed investors by attracting downgrades due primarily to their printing of money to an unsustainable level.

The BLP administration has increased taxes far beyond what the DLP administration levied. They also brought us to the point of economic ruin by defaulting on foreign debts, which resulted in a downgrade more severe than any downgrade under the last administration.

With the International Monetary Fund (IMF) being our lender of last resort, there was an urgency in setting economic targets with which the IMF would agree. The Barbados Economic Recovery Team (BERT) developed a plan to meet these targets, but after they have offended both foreign and local lenders, if we do not meet these targets, the consequences for all of us will be dire.

BERT is trying to meet these targets through severe austerity methods, including: increasing taxes, laying off public workers, and breaking contractual agreements with local investors. However, there are proven non-austerity methods that can meet these targets, which Solutions Barbados published over 3 years ago.

At the recently held Nation Talkback event, panellist Shane Lowe of the Barbados Economics Society noted that it would be foolish not to evaluate all opportunities. In response to my question at that event, Dr Kevin Greenidge admitted that BERT did not examine any of the non-austerity economic plans when developing their plan.

I asked whether BERT will finally examine Solutions Barbados’ non-austerity plan now that the urgency in getting an IMF agreement had passed. Dr Greenidge indicated that they would not. The reason given was that he believed that all solutions must include public suffering. He is, of course, entirely wrong.

BERT refused to examine the non-austerity plans, not for reasons of urgency, but because they stubbornly embraced a questionable academic economic philosophy. They appear to be so blinded by their academic theories, that they are even willing to violate one of Prime Minister Mottley’s first post-election promises that all ideas must contend.

For the record, the non-austerity approaches of lowering taxes, effectively addressing corruption and properly managing public services are proven revenue generators. Barbados reduced taxes under the Arthur administration, Singapore properly managed their public services, and Switzerland effectively addressed corruption. All three benefitted economically without the need for austerity. Yet, because a small group of economists have tightly embraced severe austerity-based economic theories normally used by the IMF, which have failed so many countries in the past, most Barbadians are destined to needlessly suffer.

The media are unquestioningly parroting BERT’s misinformation that severe austerity is absolutely necessary and the only solution. They also appear to restrict any fair analysis of the current administration on their platforms.

The Prime Minister acknowledged the dire economic situation that she faced upon entering office. To her credit, her directive that all ideas must contend was a wise and responsible approach. With limited time available and with a general election that saw the emergence of several new ideas, it was important that all ideas be considered and rigorously scrutinised prior to their implementation – including BERT’s.

Since BERT appears to be allowed to behave restrained, and without any meaningful scrutiny from the media, then we are truly sunk. Our media need to be reminded that an unquestioning support of one political party normally facilitates the rise of dictators – who normally target a free press once they consolidate power. They should be guided by Albert Einstein’s relevant observation: “Unthinking respect for authority is the greatest enemy of truth.”

 

Grenville Phillips II is a Chartered Structural Engineer and President of Solutions Barbados. He can be reached at NextParty246@gmail.com

IMF and Barbados Reaches Staff-Level Agreement

Posted on by
227

It is done!

It is up to Barbadians to continue to demand wage hikes, wallow in consumption behaviour and engage in the petty politics of the day. It seems the pragmatic approach is to embrace the government’s mantra read many hands make light work. Mia 100 day government has made some questionable decisions – the size of Cabinet as one example, although some  understand the political motive behind the decision.

It is crunch time people.

David, blogmaster

 

IMF Reaches Staff-Level Agreement with Barbados on an Economic Program under the Extended Fund Facility

September 7, 2018

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.
  • Staff envisages that the IMF’s Executive Board would consider the proposed arrangement under the EFF by early October.
  • The Barbados’s Economic Recovery and Transformation Plan aims to restore macroeconomic stability and put the economy on a path of strong, sustainable and inclusive growth, while safeguarding the resilience of the financial sector.
  • The cornerstone of the program is a strong front-loaded fiscal adjustment focused on curbing current expenditure, while maintaining space for bolstering social safety nets and infrastructure spending.

At the request of the Government of Barbados, an International Monetary Fund (IMF) team led by Bert van Selm visited Bridgetown from August 30 to September 7, for discussions on possible IMF financial support for the Government of Barbados’s Economic Recovery and Transformation plan. At the end of the visit, Mr. van Selm made the following statement:

“I am pleased to announce that, in support of the Barbadian authorities’ economic reform program, the IMF team and the government of Barbados have reached staff-level agreement on a 48-months Extended Fund Facility, with access of SDR 208 million (equivalent to 220 percent of quota, or about US$290 million). If approved by the IMF Executive Board, SDR 35 million (about US$49 million) would be immediately available. Staff envisages that the IMF’s Executive Board would consider the proposed arrangement under the EFF by early October.

“In the last decade, the Barbadian economy has been caught in a cycle of low growth, widening fiscal deficits and increasing debt. International reserves have dwindled to US$240 million, well below reserve adequacy levels, while central government debt has become unsustainable.

“The new government that took office in May 2018 is rapidly developing plans to address the current vulnerabilities, in close consultation with its social partners. The Barbados’s Economic Recovery and Transformation Plan aims to restore macroeconomic stability and put the economy on a path of strong, sustainable and inclusive growth, while safeguarding the resilience of the financial sector. The authorities’ fiscal consolidation program, in conjunction with the announced debt restructuring, would place debt on a clear downward trajectory. The strategy of accelerating growth focuses on attracting new investment in areas such as renewable energy, creative and artistic industries, education and health services, agro-industries, research, the international business sector, and tourism.

“The authorities’ reform program, and the important commitment of IMF resources that it entails, is a vote of confidence in Barbados’ Economic Recovery and Transformation Plan. The cornerstone of the program is a strong front-loaded fiscal adjustment focused on curbing current expenditure, while maintaining space for bolstering social safety nets and infrastructure spending. In this context, the measures to reduce government expenditures announced in late August are a critical and important first step. These measures aim to improve the efficiency and effectiveness of public services and reduce government transfers to state-owned enterprises by reviewing user fees; exploring options for mergers; and strengthening oversight. The measures should help reach a primary surplus target of 6 percent of GDP in 2019/20.

“The fiscal adjustment will be complemented by a comprehensive debt restructuring, aimed at securing meaningful debt reduction, reducing financing needs, and restoring debt sustainability. Barbados’ central government debt will be put on a clear downward path towards a target of 60 percent of GDP by 2033, from an estimated 157 percent of GDP at present. Progress being made by the authorities in furthering good-faith discussions with domestic and external creditors is welcome. Continuing open dialogue and sharing information will remain important in concluding an orderly debt restructuring process.

“The success of Barbados’ program will require an extraordinary effort and resolve on the part of the authorities and other segments of society, as well as broad international support. While the initial implementation period will be challenging, Barbados will emerge stronger and more dynamic from the program, and it will be better poised to generate growth and job creation for the people of Barbados.

“The team would like to take this opportunity to thank Barbados’ authorities and the technical team for their openness and candid discussions.”

IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Randa Elnagar
Phone: +1 202 623-7100Email: MEDIA@IMF.org

Smoke and Mirrors

Posted on by
203
Submitted by Observing

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 George Brathwaite Column – Efficiency Without Job Cuts: Mia and the IMF

Posted on by
7

“Representative democracy is a messy means of translating collective desires into optimal levels of government service provision; the absence of referenda and direct forms of balloting for specific goods and services leads to an oversupply of government.” – (Howard A. Frank).

Forthright discussions on the state of Barbados’ economy, including criticisms on how it is being handled in contradistinction to how it was handled over the last (lost) decade, ought to be encouraged. The fact is, multiple views can prove useful in a small developing nation characterised by structural deficiencies, immense vulnerability to natural and man-made hazards, and the tendency for a population to resist change. Given the overwhelming mandate that has been given to Prime Minister Mia Mottley and the governing Barbados Labour Party (BLP) administration, Barbados can ill-afford the luxury of uncritical adventurism at this time or in the immediate years to come.

Against that backdrop, the new Prime Minister has set in motion a pattern of governance that encourages ‘information sharing’ from government to the people and vice versa. Certainly, and as noted in other global jurisdictions, “information sharing is about unlocking the many islands of information stores across government and to discover the value of that information … help ensure that information is available to the right people at the right time – providing governments at all levels with improved capacity to save lives, improve lives and to better protect the community.” With the new BLP government wanting to meet the expectations of its people, the expansion of national awareness by putting relevant information into the public domain for feedback – whether positive or negative is a welcomed path. People, as the key stakeholder in any construction of good governance, will demand that the information flow continues and is accurate.

Barbadians will surely insist that the Mottley-led administration legitimates the exercise of information sharing. This avenue is possible through legislation, and specifically through a Freedom of Information Act. The upside of an Act facilitating information sharing can somewhat equate to satisfaction for the public; it also shields the executive arm of government from allegations of unnecessary secrecy, stealth, hidden agendas and claims of maladministration. Against the numerous calls for transparency and accountability in government, coupled with fulfilling another manifesto pledge, the legislative formality coupled with the present actions of a communicative administration will likely gain favourable respect across political boundaries. Indeed, the early evidence from the current administration is a confidence booster, and it helps to rebuild the trust that had been badly dented between the governing and the governed during the period after 2010.

Focus turns to the vexing and recurring problematic of achieving efficiency and effectiveness in Barbados’ public service. Barbados’ public service has been in the limelight mostly for the wrong reasons. Most persons are aware that the International Monetary Fund (IMF) has had missions in Barbados on the invitation of PM Mottley to see how best and in what ways the Fund can help in the Critical Mission as presented by the Mottley-led team. After its last visit, the IMF reported that despite “significant progress has been made” by the Government of less than two months, the next phase of fixes will require “reducing expenditures – notably by improving the efficiency and effectiveness of public services, reducing government transfers to state-owned enterprises by reviewing user fees, exploring options for mergers, and providing stronger oversight.”

Undoubtedly, the workings of and the decisions made on the public service will continue to affect the daily lives of all Barbadians in one way or another. At this moment, one is compelled to ask: how does Barbados go about fixing problems regarding the size, cost, efficiency, and productivity levels of its public service? Of course, this is without having to do harm to thousands badly needing to maintain their employment. Before his elevation to be the Governor of the Central Bank of Barbados, Mr Cleviston Haynes stated that: “The public sector budget currently exceeds $3 billion, prompting some to question whether we are getting value for money and whether services are being delivered efficiently.” Thus, another chasm in the prevailing circumstances would be: how best can the very concept of information sharing assist in the processes leading to an optimal public sector/service which will also usher in drastic improvements in the delivery of services?

Certainly, with the high debt and fiscal drag that has derailed the many efforts for economic growth, the Mia Mottley administration is challenged to be innovative, nimble, and to overcome the internal pressures to improve public sector performance and at the same time contain expenditure growth. On the face of it, there are factors such as Barbados’ ageing populations and increasing health care and pension costs that will add to the budgetary burdens. After all, the country is weighted down by the high levels of taxation and they are demanding that the Government be made more accountable for the things being done with taxpayers’ money. So that while encouragement can be given to those near retirement in the service to take an immediate package, one must still consider the financial costs and any skill deficits that could obtain.

It may matter that Barbados was not in the best position for empirically evaluating the work being done in the public service. The latest Auditor General Report indicates that a lack of ‘adequate resources’ and ‘operational autonomy’ have hampered the Auditor from performing the duties of the office. If anything, successive Auditor General Reports would concretise the number of abnormalities, wastage, and inadequate reporting that have taken root in Government Ministries, Departments, and in statutory bodies. Barbados must develop ways and means for enhancing the capacity of the public to demand and monitor the performances of its main and statutory departments.

Moreover, the problems of measuring and quantifying the benefits of services to the public must be able to withstand scrutiny with timeliness in reporting. Clearly, for there to be significant improvement of public service accountability, PM Mottley must reinforce the dilemma that Barbados now faces to those under her charge so that they would not go down the same disastrous road as previous administrations. The current Leader of the Opposition will of necessity have to isolate personal sentiments from the compulsion to act in the best interests of those without legitimate voice and presence.

Beyond the manner of occupying a place in parliament, the BLP administration must fast-track its emphasis on broadening and utilising electronic government (e-government). This e-government refers to government’s use of technology, particularly web-based internet applications to enhance the access to and delivery of government information and service to citizens, business partners, employees, other agencies, and government entities. In Antigua and Barbuda for example, e-government has had the effect of contributing to several cost and time savings thus being more conducive to the ease of doing business. More generally, the maximising of e-government increases the potential to help build better relationships between the government and the public by making interactions with citizens smoother, easier, and more efficient. Indeed, government agencies report using electronic commerce to improve core business operations and deliver information and services faster, cheaper, and to wider groups of customers. Quite naturally, ongoing training and retooling for efficiency within the public service would compliment the adjustments and reforms. So that instead of searching to find persons to join the unemployment roll, emphasis would be on matching skills and acumen to the public services to be delivered.

Barbados is challenged on reducing expenditures but with the application of political will and decisiveness, win-win situations can be achieved. It is even more meaningful that the current administration persists in information sharing so that the private sector and the trade unions are part of key decision-making bodies. The ‘social partnership’ must play a formative role in the solutions to existing problems in the public sector. Providing stronger oversight, as has been called for by the IMF, will be PM Mottley’s best held ‘wild card’ and should likely ease tensions going forward with the restructuring and reforms that must happen if Barbados is to become the best that it can be.

(Dr George C. Brathwaite is a part-time lecturer at the University of the West Indies, Cave Hill Campus, and a political consultant.   Email: brathwaitegc@gmail.com).

IMF Watch

Posted on by
207

It is the time of the year Barbadians and the other islands in the region prepare for the hurricane season. Last weekend the country was placed on Hurricane Watch with the passing of Beryl across the region. We breathed a collective sigh of relief at Beryl’s uneventful passing,  however, there is anxiety brewing among others who are aware the IMF team visiting Barbados continue to conduct interviews with key actors in Barbados to inform talks about the type of IMF program we will have to enter to apply a tourniquet  to a hemorrhaging economy.

As the blogmaster moves around Barbados there is the query whether Barbadians are aware of the perilous state the economy is functioning. It seems there is a perception in some quarters that having rejected the failed policies of the former Democratic Labour Party (DLP)  of which the Barbados Labour Party (BLP) was the beneficiary by default on 24 May 2018 – unfortunately the third parties were unable to gain traction for reasons ventilated in this forum – the BLP as if by magic will be able to top up the foreign reserves from the crisis level it hovers, eliminate the need to operate the current account in deficit and by extension pay down the high level of debt. The blogmaster suspects the skills of Director of Communications Charles Jong will be required soon to assuage the fears of Barbadians when IMF policy prescription is implemented.

There should be no doubt that given the state of the economy delicate decisions have to be taken to reduce the level of expenditure by the government and at the same time allocate spend to target areas of potential growth while protecting the vulnerable. It will call for tip toe precision in decision making. Clearly the time has come to put Barbados first as a country and park the frivolous political snarking. Whether we like it or not the Barbados brand was besmirched in recent years by achieving junk credit rating status with the final puncture Barbadians having to join a world audience to witness raw sewage gushing on a street located in our tourist resort area of the South Coast.

The blogmaster anticipates institutional investors holding government paper will be asked to make a sacrifice to the national cause to rescue and rebuild (BLP’s election tag line). The delayed rationalization of several state owned entities will be implemented. The last government allowed political considerations to stall this initiative when clearly transfers and subsidies as an expense item had to be urgently addressed.

One other item which should be addressed is the rising pension expense of government. The blogmaster recognizes this is an area that requires a high level of expertise to sensibly tackle and will defer to the IMF team et al to address with the local parties concern responsible. Where is Walter when we need him? Not Maloney!

The blogmaster will not forgive the former Governor of the Central Bank for allowing the commercial banks to twist his arm by deregulating the minimum savings rate as a quid pro quo arrangement for dumping government savings bonds on a financially illiterate public hungry for a reasonable rate of return on investment.  Daily we hear the ignorance being perpetuated for Barbadians to invest in Carilend, or deposit money with the credit unions. A simple question to clarify. If tomorrow 50% of deposits held with banks was transferred to the credit union balance sheet what will be the impact? Will their interest expense line item go up or down if they maintain current level of interest paid to members? Are credit unions able to lend for big ticket items like a mortgage to compare with other financial institutions? How does Carilend work? Who regulates Carilend? And no the blogmaster has no beef with Carilend or credit unions.

A fool and their money are soon parted.

Wild Coot has been a voice crying in the wilderness or so it seems.

 

Mia Mottley Government and the Goose

Posted on by
323
Submitted by The Mahogany Coconut Group

The Mahogany Coconut Group (MCG), joins with all Barbadians in wishing the newly elected Barbados Labour Party government, all the best as it takes over from the badly beaten Democratic Labour Party, whose ten years stay at the wicket, is best described as anemic and unsuccessful. The former prime minister, Mr. Freundel Stuart displayed not only poor leadership skills but bad manners by scarcely having any meaningful dialogue with the public. He chose mainly to address constituency branches of his party.

The public therefore gave Stuart and his miserable group the severe beating it deserved by giving the then opposition Barbados Labour Party under the leadership of Ms. Mia Mottley, all thirty parliamentary seats. The Democratic Labour Party will have to find a way to make itself once again relevant to the political process.

We also congratulate, Ms. Mia Mottley on becoming the first female prime minister of Barbados. We know Ms. Mottley as a seasoned politician. She has gone through the hottest fires and has emerged as one made of the finest steel; we will now await her performance as a leader

The MCG having closely followed the election of May 24th, 2018, must sadly conclude, that both parties have determined that the real cure of the country’s economic ailments are to be found in the IMF’s medicine chest. Hence as expected the country will be heading straight to the International Monetary Fund, for some very bitter medicine. Fifty years after Independence, and with literally thousands of University of the West Indies (UWI) graduates occupying our Caribbean landscape, we still cannot get our economies functioning at any progressive level.

Barbados, to all intents and purposes, is a one sector economy, depending almost exclusively on the tourism industry to keep its growth in any proper shape. Over the last ten years the government of the Democratic Labour Party failed to devise any sustainable economic policy.

Ms. Mottley has been given a warm welcome by all the major players, including the Social Partnership, which includes trade unions, business organizations and other interest groups. While we wish the new Barbados government all the best, we fear that once the IMF gets its predatory claws into the affairs of the country, escape may prove difficult, if not impossible.

Ms. Mottley has already delivered a mini-budget, which was nothing more than an instrument to raise taxes and deliver some promises made by her party during the elections. These included reinstating payment for university education and an increase to old age pensioners.

However, citizens are waiting to see what kind of restructuring program the country will enter under the IMF. Any underperformance of the tourism industry will be disastrous to the island’s economy. The great irony of Ms. Mottley’s mini budget, is the fact that it attempts to extract money from the very tourists, who it is inviting to assist with the country’s current predicament.

We can only hope that she does not kill the goose that lays the golden egg.

Mini Budget Day in Barbados

Posted on by
298

To the observer of the Barbados space post 2018 General Election, there has been non stop activity generated by the newly installed government of Barbados since taking the reins. There is an air of expectancy about what the Prime Minister will convey to citizens.

The unprecedented decision by the government to trigger a selective default has committed Barbadians to travel an uncharted path.

Many Barbadians although discomfited by the state of affairs that will for a long time prevent any reference to Barbados being a model country for others to emulate, appreciate that affirmative action must be taken.

The Barbados brand has received a huge dent!

 

 

 

Filtering Truth From Fact About The Performance Of The Barbados Economy

Posted on by
126

Governor of the Central Bank Dr. Delisle Worrell

The International Monetary Fund (IMF) recently released a statement on the Barbados economy which has caused some Barbadians to sigh with relief. Central Bank Governor Delisle Worrell was also also full of glad tiding in April when he forecast the economy to grow 2% during his Review of Barbados’ Economy for the First Three Months of 2011. Why is BU not as optimistic?

Is it not ironic suggesting growth for an economy which relies heavily on that of the United States? The US legislature is currently debating whether to raise its debt ceiling to 16 trillion dollars!   Following close behind the US is the UK government  who has committed to cut 600,000 government workers over a three year period. How can we be so confident about growth when the two main markets we rely on for inflows of tourist, foreign direct investment and remittances continue to struggle? What growth the US has managed to achieve in the last year is what the economists refer to as jobless growth.

Given the prevailing economic uncertainty one might have reasonably expected our intellectual cadre of professors at Cave Hill,  to have come to the assistance of ordinary Barbadians, and provide an unbiased and reasoned interventions to demystify the economic gobbledygook we are being fed. No such luck. Instead what we have had to ‘processed’ is an attack on the credibility of the information presented by the Central Bank of Barbados in its periodic updates  to the nation. The Central Bank of Barbados has always held the respect of both sides of the political spectrum in Barbados. This is our first recollection of any Governor of the Central Bank attracting the kind of attack delivered with the fierceness as we are witnessing from former Prime Minister and Leader of the Opposition Owen Arthur and former Central Banker, economist and Arthur’ s right hand man Clyde Mascoll. They have both vehemently dismissed the view posited by Governor Worrell that the economy has grown.

Continue reading →