Dr Kevin Greenidge: A Friend or Foe?

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

On the sentimental side, Dr Kevin Greenidge as an ambitious young economist took on a career path and educational training that would have led him to pursue his goal of being elected governor of the central bank of Barbaods. Congratulations to him on achieving his boyhood personal & professional ambition. However, let’s move the conversation past sentiments.

On the Barbados side Dr Kevin Greenidge has been actively involved in providing advice and instruction in respect to the daily management operations of the Central bank of Barbados as just an IMF consultant. The freedom of the central bank to pursue it’s independent agenda has come under scrutiny from the IMF as a need to be more fiscally responsible and free from the government’s budget cycle.

Barbados’ government faces a shortfall in finances, it will not have the use of the central bank’s facilities to bail out the government. Dr. Greenidge’s hallmark will be his role in operating under a new central bank law aimed at cutting the tentacles of the Minister of Finance , cutting his/ her power to hire and fire the governor and allowing the bank to operate on a purely fiscal nature.

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Cleviston Haynes Out, Dr. Kevin Greenidge In

It is official, the appointment of the youthful Kevin Greenidge was officially released yesterday. It ended weeks of speculation by the usual suspects an African was shoo-in to take the post.

The broad definition of the role of a Central Bank according to cbben.Thomson Reuters.com:

◦ Set and implement the monetary, credit, and other financial sector policies
◦ Provide central banking services to the government and financial sector 
◦ Develop the financial sector and enhance confidence therein

It is fair to say in the context of Barbados the Central Bank and previous governors have been slaves to government’s directives with the exception of the widely influential Dr. Courtney Blackman. Who can forget the term popularized by Blackman that the position of Governor of the Central Bank “is a creature of the minister of finance’. 

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Political Parties about Boosting Popularity in a Crisis

… Kevin Greenidge, explained that the “win-win” 18-month programme is designed to repurpose government’s expenditure, in an effort to push capital programmes that do not directly relate to tourism; for example, road works, the Barbados Water Authority’s vineyard project, the refurbishment of schools and the digitization of the public sector…

Source: BGIS

The government launched the Barbados Optional Savings Scheme (BOSS) last week. BOSS is a direct response to the crippling effect the COVID 19 pandemic has had on the global economy. All economies in the world have had to manage the fallout from the unprecedented high unemployment to respond to a man made economic recession triggered to safeguard public health.

The blogmaster has listened to arguments for and against the BOSS and the trend for every issue these days is determined by ones political inclination.

What the COVID 19 pandemic has done to is to create an unknown variable that makes it impossible for policymakers and individual households alike to engage in sensible financial planning and forecasting. However, what is known is that a deep revenue hole has been created in the financial budget for 2020/2021 and there is nobody on the planet who can predict the time it will take for economic activity to climb to pre Covid 19 level. The result is that whether in the USA, UK or Barbados unemployment has spiked.

The blogmaster is no fan of policies that will result to increasing the national debt or printing money. Especially coming after the recent debt restructuring that has had a toll. However, Barbados must execute  policies to boost economic activity to buy time until the global economy to respond. Will BOSS achieve the objective,  time will tell. What are the alternatives to BOSS?

It is easy for political leaders and others in civil society to shout at John Citizen do not do this, do not do that. If one listens to the same crew for alternatives, there is silence.

Service based economies like Barbados are presented with a greater challenge of recovery because there will be a dampened appetite for air and sea travel. It means thousands of workers will be negatively affected for months and years to come, there is no doubt. BOSS should not be seen as a panacea to solving all of our problems, it is meant to be a mitigant, to keep public sector workers employed are redirect circulation of monies in the construction sector. The government has accepted the moral responsibility – for now – to keep public servants employed during the pandemic. Those criticizing that cutting public sector workers salary is illegal, give us the alternative. If it is illegal the law can be amended for the good of all? The private sector has already responded with lay-offs and severing employees. Where does the government derive tax revenues tom pay public servants?

It would be negligent of the blogmaster not to take the opportunity to express concern about the financial state of the National Insurance Fund. The noise created by the pandemic has served to mask many of the problems the island had been battling. The inability of successive NIS Boards and governments to make public audited financial statements should be of equal concern by several of the budding political parties and traditional media. Do we know if the fund is able to live up to its tagline? Why should politicians on a whim and a fancy make decisions to grab NIS funds- our social security monies- to construct unnecessary buildings; fire station, lend to private projects; Four Seasons by avoiding rigorous qualification.

For as long as BU has had a presence in the Barbados space there has been a view echoed by the BU intelligentsia that Barbados is a country living above its pay grade. The blogmaster has to express disappointment that leaders in our tiny society have not been bold enough to address the issue of the need to recalibrate our unsustainable lifestyle. Politicians seem stuck in the mode of boosting popularity at the expense of what is in the national interest.




The Grenville Phillips Column – Violating the Prime Directive

Dr Michael Howard’s many questions were recently answered by the Barbados Economic Recovery Team (BERT) economist, Dr Greenidge.  Hopefully he can answer our single question.

Let me first state that BERT’s austerity-based solution will likely work.  The austerity is supposed to be very severe, for as long as it needs to be until it works, which is expected to be many years.

The severity and duration of the foreseen suffering of the Barbadian public was the only reason why we designed a non-austerity alternative.  When we tried to share it with the last administration, we were promised that the only way it would be heard is if we entered the political trench.  We naively believed the promise, entered the trench, but were never allowed an opportunity to be heard.

To our knowledge, two other entities independently designed non-austerity plans, resulting in three non-austerity plans on the proverbial table.  But Solutions Barbados was the only entity that entered the political trench.

We now have a new administration and a new promise by a new Prime Minister.  Her first directive was that all ideas should contend.  Therefore, our question is: why has BERT not allowed a review of any of the non-austerity plans?  If it was an oversight, then since Dr Greenidge seems to be the BERT spokesperson, can he spare 2 hours to meet with us to assess our plan?  If he is too busy, then can he authorise a non-partisan accountant and/or economist or a panel of them to review our plan?  If it was not an oversight, then why is BERT violating that prime directive?

I am fully aware that Dr Greenidge’s traditional training would not likely have included non-austerity methods, much a surgeon’s would not likely have included alternative natural methods.  Therefore, let me suggest an analogy to hopefully spark his interest in what he may not know.

Let’s say that there are two main approaches to treating cancer.  The traditional more popular surgery, drugs and radiation (chemotherapy) which traumatises the body, and the alternative-health natural remedies mainly consisting of herbs, diet and exercise, which do not traumatise the body.

The traditional medical practitioners have convinced the Government that theirs is the only way to treat cancer, despite the proven success of alternative-health methods.  Therefore, traditional practitioners receive all of the national health budget and prestige, and are viewed as credible.

Traditional medical practitioners are not normally trained in alternative health methods.  However, rather than learn about them to improve patient-care, many use their prestige to irresponsibly ridicule what they do not understand, and dismissively reject alternative-health practitioners as persons on the fringe.

When we were facing economic ruin, the traditionalists recommended the only thing that they understood, namely, traumatic austerity.  Others designed alternative non-austerity non-traumatic solutions.  Dr Greenidge is urged to resist the temptation to be close-minded on this critical matter.

Since I may not get another shot at this, let me try to reason with him.  This may be a hard task since he may still be euphoric that an agreement appears to have been reached with the IMF, and he has the support of the private sector and unions, who are trying to convince us that the austerity that we are about to experience in exchange for an IMF agreement is unavoidable.

He should be aware that IMF personnel also agreed with our non-austerity plan, but they thought that it contained a fatal flaw.  They said that it depended on the unions’ support, and based on the unions’ adversarial relationship with the DLP administration, they thought that the unions would never agree.  However, we met with the NUPW, BWU and CTUSAB, and all three agreed to participate.  Therefore, the IMF’s singular concern was effectively resolved.  Mr Greenidge, please allow both ideas to contend – for the public good.

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