Barbados Government Peering Down The Economic Barrel

Prime Minister of Barbados David Thompson

Long before the global financial crisis stunned the world, the BU family had expressed concern about the need to restructure the Barbados economy. Many blogs were posted which discussed the need to rollout alternative energy initiatives, to examine the system of education which was and is not producing graduates with the skill-sets to make Barbados competitive in the global economy, make our civil service more efficient by holding it more accountable, the need for Barbadians to participate more fully in our democracy, pressure our lawmakers to make laws which encourage ethical behaviour among many other concerns.

The prevailing global crisis has exposed the underbelly of our small and open economy, more so the false sense of security which the boom period created. We accept that the pressure of external shocks will always rock our boat, but that knowledge should have informed strategies and policies which demanded we provided for the barren times. Even with our debt to GDP ratio alarmingly high, reducing foreign reserves, rising unemployment our politicians and people continue to debate the issues along party lines.

Tomorrow we understand a public and private sector consultation on economic and related matters will take place at the Lloyd Erskine Sandiford Centre from 9AM to 5PM (to be broadcast live on CBC TV). The government’s Medium-Term Fiscal Strategy (MTFS) will no doubt be placed under scrutiny. Up to now there has been heavy debate on whether Prime Minister Thompson’s wait and see conservative approach is the correct one. The Prime Minister has been very reluctant to support more aggressive stimuli initiatives because of our high level of importation which would place pressure on our foreign reserves.

LawPro Lawyers Ask For Surprising Adjournment In Nelson Barbados Matter: The Secretive World Of Peter Andrew Allard – Part III

Peter Allard, the chairman and owner of Graeme Hall Nature Sanctuary

BU has dubbed this story; the one the Barbados media is scared to touch and that includes Patrick Hoyos’ Broad Street Journal who reported on this story in the early day. Even if we agree with some BU family members that this is a family squabble, the indignity which Barbados and many of its citizens have had to respond to should cause our local media to report on what has mushroomed to an international event. The fact that Peter Allard, the chairman and owner of Graeme Hall Nature Sanctuary is involved is another reason for Barbadians to ask some questions. Allard we have learned has filed a case to a Canadian Body responsible for environmental matters citing that Barbados has reneged on certain environmental responsibilities

BU recognizes that the complexities of this case may not be palatable to some and we have tried on this particular blog to list what we hope are more reasonably sized nuggets of information to more easily process. BU has advocated ADR in the past but resignedly have accepted the time has now passed for what would have been a more sensible and less costly solution.

Earthquakes In Haiti and Chile Beg The Question: Can We Mitigate Against Natural Disasters?

Click Image (Google Earth)

This morning (EST) the world was again startled by the news that Chile was rocked by an earthquake which according to reports was measured at 8.8 on the Richter Scale (a top 10 earthquake). To be expected in the period immediately after the earthquake there is a lot of confusion as the world try to paint a picture of the damage which the earthquake has caused. Countries in the Pacific Rim are on tsunami alert which is expected in the post-earthquake period.

Our prayers extend to all affected by this calamity.

Up to the time of posting this blog 147 people have been reported dead and unknown numbers remain buried under collapsed structures. The epicentre is being reported as 320 km from the capital Santiago which is reported to have a population of over 5 millions or a third of Chile’s population. Reports however suggest that the older cities bordering Santiago with older buildings have been affected more that the newer city of Santiago. Chile is a country use to earthquakes.

Owen Arthur Says Current Policies Of Government Will Lead To Domestic Recession

Former Prime Minister Owen Arthur

To standing room only former Prime Minister Owen Arthur delivered a speech to an appreciative audience at the Errol Barrow Centre for Creative Imagination last evening. Since demitting office Arthur has said very little regarding the current state of the economy and related matters. Thanks to the economic society at UWI, Cave Hill which is comprised of campus students, Barbadians got to hear Arthur’s views on the most topical issue of the day; the economy.

For nearly two hours former Prime Minister Arthur systematically attacked the government’s policies. He labelled the economic strategy of the government as one prescribed by the International Monetary Fund (IMF) and suggested there is no precedent in world history for austerity measures leading to prosperity. He was very uncharitable towards Minister of State in the Ministry of Finance by suggesting the government has resorted to managing the economy based on indices and ratios.

Owen Arthur Should Play Each Ball On Merit

Hartley Henry - DLP Political Strategist

Don’t know about you, Dear Reader, but I am eager to hear what Owen Arthur has to say tonight. I really hope he rises above traditional partisan rhetoric of ascribing all good to his previous Barbados Labour Party administration and all manner of evil and wrong doing to the current Democratic Labour party government. If Arthur does that, it would be a wasted moment in time.

Owen Arthur should use the occasion and the opportunity this evening to commence his long march to elder statesmanship. He has made clear that he has no ambition to lead his party or country again, and I believe him. Incidentally, I also believe that the moon is made of cheese!

Nevertheless, Arthur should be purposeful and constructive in his presentation tonight. He should not feel pressured into towing any particular line; be it party or profession. I make this point because, as a trained economist, he might be tempted to take positions that are theoretically sound, but he has had the benefit of 14 years practical experience at the helm of the Barbados economy and he therefore knows what is real and doable and what is not. By the same token, he should not feel pressured into embracing all the outrageous and outlandish positions of his successor at the helm of the BLP, Mia Mottley.

Mottley is politically green and inexperienced. She wings it a bit too much and does not understand her role as Leader of the Opposition. Surely, no one would expect Arthur to get up tonight and chirp that nonsense about doing away with summer camps and criticizing free bus fares for school children. Also, we would not expect Arthur, a former Minister of Finance, to espouse the theory that huge salary increases should be granted public officers, irrespective of the current economic situation. That type of political reasoning or lack thereof is associated with green horns like Mottley and Dale Marshall.

Is Barbados On The Side Of Argentina In Falkland Island Dispute?

Submitted by Sargeant

Passions starting to flare between Britain and Argentina over the Falkland Islands or as the Argentines call them Las Malvinas. The latest flare up is over the Brits exploring for oil off the coast of the islands which Argentina still claims. During the 1982 war Britain was led by a female Prime Minister Margaret Thatcher, now Argentina is led by a female President Christina Kirchner (who was last in the news when she declared that pork is better than Viagra).

Chavez was also on his radio program telling the Queen to get out of Argentina, however my interest was piqued when I read that Argentina had secured the unanimous support of 32 Latin American and Caribbean countries during a meeting on Tuesday.

Which Caribbean countries?

Delivering On An Election Promise

Dr Leo Brewster, Director of the Coastal Zone Management Unit - Nation Newspaper

Early in 2008 BU family members would have read comments on BU which suggested that some murky practices were being practiced by some at the Coastal Zone Management Unit (CZMU). The revelation this week that the Director of Public Prosecutions Charles Leacock has handed a file over to the Commissioner of Police for investigation we find interesting. The action to prosecute Dr. Leo Brewster appears to be supported by a Special Audit which was recently undertaken by the Auditor General of Barbados.

The incumbent Democratic Labour Party (DLP) ran a platform last election to root out corruption in government and to prosecute those deemed to be guilty of malfeasance. The DLP whether to feed on the publics perception of corruption in the former government or a genuine need to create transparency in government, promised to implement Integrity Legislation (IL) and Freedom of Information (FOI) within 100 days of assuming government. It is approaching the mid-term or two and half years since assuming office and last report is; the draft IL and FOI bills are stuck in a Cabinet sub-committee. Recent mouthings by Prime Minister David Thompson and Chairman of the body responsible for submitting drafts on the IL and FOI bills suggests there is infrastructure which has to be established before IL and FOI can be proclaimed. Additionally the Prime Minister has expressed his wish to learn from other jurisdiction in the region who have struggled to implement similar legislation.

The Three Remaining GEMS Hotels Valued At $74 Million!

Submitted by Adrian Loveridge

According to an article carried in the Midweek Nation Wednesday 24^th February, 2010 ‘the book value of the (GEMS) properties was only $74 million’.

How is this figure arrived at?
Reading from their own website, Savannah has 98 rooms, Time Out at the Gap, 76 and Blue Horizon 70. So a total of 244 rooms or a stated ‘book value’ of $303,278 per room with ‘accumulated debt of $229 million’. Put that in context to our little hotel of 22 rooms and it would value us at around $6.672 million.

One big difference of course, we have no outstanding debt and have been profitable for a consistent number of years. Both Time Out at the Gap and Blue Horizon need extensive refurbishment, if they are going to live-up to their stated ‘3star’ rating.

No private sector in their right mind would take on the massive debt burden over the equity value, so where does Government go from here?

Tourism In Perspective

Submitted by Looking Glass

Go back to when America was Virginia and the monument of the Greek Prince, George Washington’s grand-father in St John’s church yard; Barbados has always been a tourist Mecca for the rich and famous, not for the average soul. It was in the 1940s-50s that the West and South Coasts became established as tourist resort areas. It was a ‘natural’ process that required little government spending.

The development of tourism as an industry got started in the Development Decade of the 1960s when banks and agencies, their coffers overflowing, sought investment opportunities in the developing countries (LDCs). The OECD touted tourism as the saving grace for the LDCs, the source from whence all goodness flowed. The World Bank (1972) said it was a more efficient earner of net foreign exchange, the IADB concluded that tourism benefits were not limited to economic considerations. For us it meant a huge investment in infrastructure and indebtedness.

In time hotels sprang up, most catering not to the rich but to the average person. By the late 1970s we were faced with excess capacity. This at a time of world economic prosperity. Many hotels and guest houses have since disappeared but we continue to add accommodation in an unstructured industry. In essence we invested billions in infrastructure to accommodate the low income tourists, but the largest amount of tourist revenue came from and continues to come from the West and North Coasts.

Dr. Justin Robinson Misrepresented On VAT Issue: Pondering The Options – Increase The VAT Or Lobby For The Dreaded Wage Freeze

The following statement was received from Head of Management Studies Dr. Justin Robinson, UWI, Cave Hill

Dr. Justin Robinson

I want to state categorically that I did not call for an increase in VAT.  The traditional media chose the sensational approach to the issues raised in a panel discussion titled, The Fiscal Deficit, Causes and Possible Solutions.  In my presentation I outlined what I saw as the causes of the deficit and a number of possible ways to correct it.  I outlined, economic growth, borrowing, revenue raising measures and expenditure cuts as possible solutions.  Under the heading of revenue cuts I stated that if it got to the point that the government needed revenue raising measures then in my opinion the VAT would be the best approach.  I stated that this should be an absolute last resort.  The presentation was somehow reported as me calling for an increase in VAT.