The IMF Executive Board published its 2010 Article IV Consultation with Barbados and as you would expect all the local media channels are abuzz with its findings. The truth is BU attempted to read the 43 page document and gave up in fairly quick time after being nauseated by the feeling of déjà vu. We decided to get a local perspective by reading the Barbados Economic Society blog titled BES Survey of Economists’ Expectations – Q3 2010 and that did not help to improve our outlook for the economic forecast for Barbados. A surprisingly high number of local economists anticipate some growth even if it is marginal.
The reality has finally taken root that Barbadians just do not get it!
A layman analysis by BU supports the view that the government judging by its recent budget is relying on revenue measures to attack the burgeoning deficit. We have therefore seen the most significant increases in the VAT rate to 17.5% and a 50% increase on the excise tax on gasoline. All the experts seem to be suggesting based on the numbers that the inevitable will have to happen if the government insist on its current policy. Bear in mind the government has promised in a very uncertain economic environment to balance the budget by 2015/2015 fiscal year.
BU suspect this is a pie in the sky projection.
Back to why we have been feeling nauseated. We have blogged on it before and it merits repeating. The economic model which fuelled much of Barbados’ success before the world economy went belly-up was unsustainable. We relied mainly on tourism and foreign direct investment. Obviously a successful tourist product is 100% dependent on favourable economic conditions in the external markets. Secondly foreign direct investment was real estate driven on our 166 square mile little rock. Central Bank reports confirm significant growth in bank lending for mortgages and building related loans in the period leading up to the global crash. Can there be any reasonable analysis posited to support buoyant sustained economic activity based on foreigners pumping money into real estate and construction in Barbados?
BU say no!
Barbados public debt is expected to rise to well over 100% of gross domestic product in the current fiscal year. A very disturbing forecast indeed. Minister Sinckler delivered the politically correct statement during the budget that the government will be protecting jobs which he used to explain the government’s astronomical rise in debt. Our ‘army of occupation’ appears to have risen from twenty one thousand plus in 1994 to over thirty thousand in 2009 without any commensurate increase in national productivity. The government finds itself in a corner with few options open to it if revenues continue to suffer. Next on the table will be to aggressively reform the public sector which the United Kingdom has already started and to levy user fees on education and health services. There goes our socialist policies and the mendacity which it has incubated.
The political dynamic at play for the DLP government raises the spectre of 1991 all over again. No way will they want a ‘2peat’.
It is time our government confronts the problem facing it. It is noble to want to keep Barbadians employed but to do so by unsustainable means compares equally to when the Arthur administration racked up debt because a ratio indicator suggested Barbados had the capacity to repay loans. Despite our touted high literacy, we never learned from the simple philosophy of the ant and now we will have to pay a very expensive price. Even in the face of a global economy in the soup, Barbadians who have never had to confront lean years are demonstrating they do not have the mental or intellectual capacity to brainstorm their way out of the mess we find ourselves.
It was ironic to listen to an academic in the news last week opining that Barbados will have to diversify its productive sectors if it expects to create capacity in the economy to fuel growth.
It is time we get our best and brightest from at home and abroad and let us strategize and mobilize to position Barbados for future success. On the current path we are headed …
Let us thank God for the National Insurance Fund!
Barbados Underground 
Yes that truly too long of read. The IMF does address the need to increase productivity and also diversify the tourism industry more in Point 35. The problem is we need to diversify away from the tourism sector and have revenue generating industries in other sectors. This has been said for many a year and probably be said for many a more. It not going to change anytime soon unfortunately :(.
Barbados best strategy is still to focus on Tourism and offshore Business.
Import substitution is critical so expanding food production is important.
New ideas to diversify the economy will take time to implement. There is no quick solution.
Will David, or some of the best and brightest that he constantly alludes to, explain to this member of the not to bright family; what “increase productivity” in the Barbadian context really means?
A Google on the subject of declining national productivity in Barbados can help you out.
“Minister Sinckler delivered the politically correct statement during the budget that the government will be protecting jobs which he used to explain the government’s astronomical rise in debt. Our ‘army of occupation’ appears to have risen from twenty one thousand plus in 1994 to over thirty thousand in 2009 without any commensurate increase in national productivity.”
David,
You have in making – the above cited comments – identified one of the major strategic blunders of this current DLP Administration.
However, there is nothing politically correct about what he said, in view of the fact that it is being bandied about by some ( not us ), that the government is borrowing each month BDS $ 50 million to pay salaries.
Instead, Mr. Sinckler is already showing signs of gross incompetence in managing the financial affairs of the government.
Although you are making a pretty nice juxtaposition ( the growth in the employment in the public sector, with no commensurate increase in national productivity), the question of the last point in the cited comments is noted.
But, this type of horrendous policy is bringing untold prolonged disaster to the management of the affairs of the wider so-called economy of Barbados.
The answer ( albeit partial) lies in drastically reducing the size of the government, and putting in place a political business partnership program to properly transition those affected into the private sector.
PDC
Given your seeming access to the best and brightest, I expected better. I shall however do as you suggest.
ADDRESS BY HON MIA AMOR MOTTLEY, Q.C., M.P.,
LEADER OF THE OPPOSITION
POLITICAL LEADER BARBADOS LABOUR PARTY
TO THE BARBADOS CHAMBER OF COMMERCE
Wednesday 29 October 2010
“Dare to Dream. Determined to Do.”
____________________________________________Good Day Ladies and Gentlemen;
I have had the pleasure of addressing you before, but this is the first time I am doing so as leader of the Barbados Labour Party. It is no less a pleasure today.
Let me also say how much I enjoy discussing the business of Barbados with you.
I would like you to join me in traveling down a telescope of the economic events that have helped to shape this small but great nation of ours.
I will start near the small end of my telescope and remind you that the economic model that was available to Grantley Adams, Errol Barrow, Tom Adams, Bree St. John, Erskine Sandiford and to a lesser extent Owen Arthur is no longer
available to us today. The luxury of having access to preferential markets, protective tariffs, quotas, subsidies and industrialization by invitation lives now mostly in the history books and academic texts. They are relics of another time
and space that served us moderately well for the first thirty to forty years after Independence.
Within five years from now though, by 2015, we will no longer have one of the key instruments that has supported economic growth and that has supported our enterprises. Think if you will that almost every large-scale enterprise in tourism,
manufacturing and agriculture has been the beneficiary of generous incentives from the government of Barbados in their setup and operations. That option of substantial fiscal incentives will be removed from our economic arsenal.
The Government and people of Barbados will have to find new models to fuel our future development. A significant part of this government’s problem today, the reason its fiscal position is so precarious and unsustainable, is that it has continued to cling to old models of development that assumes government’s only levers of action are tax and spend.
+++++++++++++++++
That was part of what The Hon. Mia Amor Mottley, Q.C., M.P., said to the BCCI in September this year. The full speech is at the right of this blog and that is where I copied the above from.
Now friends, Mia Mottley is not an Economist. She is just honest and bright and has outlined a blue print for a new development model and a new politics for Barbados.
I agree with BU! Let the real conversation begin!!!
By the way, there is no need to read the entire IMF Report. The poison is on page 15.
Please that budget does not protect jobs. The figure that was left out in the growth of the public sector is the number of jobs created by David Thompson & DEMS since 2008 to 2010 that resulted in the swell of the transfers to statutory bodies. Hospital, NHC, Transport board and others increased their numbers, together with wage increases have cost the public an additional 400m per year in salaries and wages. This is scandalous given a crisis, when those jobs do not generate new jobs, save or create foreign exchange. They incurred debt to pay wages and to whom Families First crew. Those jobs are the jobs being protected, at the expense of the jobs that are real and necessary to the economy. Spending money of Barbadians that would support shops, vendors, manufacturers, invest in the growth and marketing of businesses etc diverted from productive use to feed supporters with fatted calf. Removed by higher taxes and removal of protection – fuel, utility bills, fees of all kinds, VAT, etc. We are losing jobs in the private sector, tourism crew on short hours, while those Families first public servants on full pay with little to do. You should hear a friend of mine on the matter he works at NHC. The people are doing no work because there is nothing for them to do.
Businesses are closing and not just those reported in the paper. A friend of mine working for a small company that will close this month, he is now out of a job and his wife is not working; and they have a mortgage. This last budget will make this even harder for businesses to hold employees as consumer spending drops.
So what do we lose at the expense of the Families first civil service staff – lose businesses as consumers reduce spending; lose foreign-exchange savings or creation possibilities; lose VAT revenues; lose jobs; lose capital. This is a criminal act, to protect the unproductive sector at the expense of the productive sector. You put the weight of the adjustment on people in lower middle and lower classes. Ignorance personified and have the liver gall to tell Bajans that we have to take bitter medicine.
@Bajan Truth
Let us accept your position for the sake of moving the discussion forward. Does it resonate that Barbados at some point needs to change how we do things? Leader of the Opposition Arthur stated as much in his reply to the budget.
The Barbados Economic Society has updated its blog to comment on the IMF recent report.
http://barbadoseconomicsociety.blogspot.com/2010/12/commentary-on-imfs-2010-article-iv_16.html
@ Bajan Truth
You raised some interesting points. To be honest, in its last Article 1V Report (2009), the IMF recommended a reduction in wages of central Government by 10% of GDP. That implied a reduction of 8.2% of the wages bill in Central Government per year or axing 2,000 jobs per year for five years.
Now if 3,000 additional people were added between 2008 and 2010, it would suggests that 13,000 people “may” at some point have to be sent how from the public service, despite who forms the next government. At least that is what the IMF is recommending.
The more time passes the more painful the cuts will be but we must act now in the interest of Barbados for the next 15 to 20 years. We need to have serious conversations and a shared vision about the way forward.
There was the National Strategic Plan 2006 – 2025; the Medium Term Fiscal Strategy and the Development Plan and then there is the Mia Mottley blue print (praised by academics) but yet to be discussed in a serious way.
It does not matter who the plan come from. As long as it makes sense and enabes you to meet your strategic objective – I would get the majority to support it and then implement it.
I. R. Nottobright
I agree … “It is time we get our best and brightest from at home and abroad and let us strategize and mobilize to position”
In two years we have had a couple of National Consultations and these involved a room packed with “Best and Brightest”, many of them were your usual Jack Asses, some with PHD’s that took forever to make a simple obvious suggestion or two. I did dey and I din even get de chance to unpick my teet’, as these Best and Brightest from the floor were the only ones to attract the attention of the chair. When you have Best and Brightest sitting on the panel, half the day done just by reading out their qualifications alone ….! Result of these two fiascos, nada, nunca, kaput …!
With PDC I concur … But cut from the top and come down … for example the “Executive Chairman” of the BWA, and every man and woman in the Stat Corp’s that hold the title of CEO but cannot demonstrate that by their presence, the corporation’s position has improved enough to at least cover the cost of their salaries…!
The Barbados economy, our best research shows, never grew more than 2% in real terms when the economy was at its so called zenith under the former government.
Perhaps the economists can educate us what this nugget of trivia portends.
@David,
I am not among the brightest,best or educated but here is my 2 cents worth.
The GOB and BTA should STOP buying and or renting tradeshow exhibits OUTSIDE of Barbados.
Build all Exhibits in Barbados.Make them shippable by Fedex or as Air Cargo.
This would save money and create an Exhibit manufacturing/assembly Industry employing young Bajan designers,detailers,carpenters,metal workers and Graphics designers and producers.
The above is small but still an excellent idea … innovative and workable. If mentioned at the National Consultation it would have easily won first prize, but of course only the Best and Brightest were given voice …
… SIX MONTHS in China; every public servant considered to be at the level of Best and Brightest had the opportunity to fly out and visit Beijing.. and not one Fart can be evaluated as a return on investment …
Best and Brightest my Ass … Tell you what, why are some of the Best and Brightest still in an Embassy out there in my Intelligent Agent’s home city …? If we must cut Big Government, let’s just do it and save valuable foreign exchange as well.. no?
@Hants
Good idea because we need to start building out new industries. On that note BU was happy to learn the Lamberts Wind Farm has been given the green light after so many years on the desks of bureaucrats. It will take 2 years to deliver but we are on the right track. This news has come on the back of a government loan received from the IADB to do some work on building a renewable energy program.
Suggestion: Let us begin to shape fossil based behaviour from now. One way the government can assist is to allow the hard hit mildleclass to access funds used to reduce taxable income without penalty. Currently only first time homeowners are allowed to withdraw 10% or $25,000, whichever is less from registered tax incentive schemes. Those who want to withdraw to retrofit or install alternatives energy products, government should provide the incentive.
@BU.David: “Those who want to withdraw to retrofit or install alternatives energy products, government should provide the incentive.
Not a bad idea…
But, personally, I still argue those who are thinking about photovoltaic panels should wait a while longer.
There’s some very interesting kit to come down the pipeline in a couple of years, and those that buy now might regret their purchase in the near future.
@Chris
We will always have the early adopters. Let them go if they want and reward them for so doing.
@David: “We will always have the early adopters. Let them go if they want and reward them for so doing.
Agreed.
But the “smart money” is waiting for the “early adopters” to help bring the price per kW/h down for everyone for photovoltaics.
I think the Lambert’s wind farm and other provisions in the new Alternative energy project has the potential to improve Barbados’ economic development and when fully implemented could be the most significant developmental project in Barbados for a decade.
Chris Halsall talks about new developments in photovoltaics being just around the corner. That story was with us for over a decade now and there have only been small incremental improvements in efficiency and sizing. I hope he’s right but I’m investing in a small 160 watt solar system to learn about the technology and to use as a backup for any outages or hurricanes that might pass our way. Tomas was a wakeup call for me. My electricity was off for over one week and in that time I kept my computer and internet system going using an inverter and a battery that I recharged every two days or so at a neighbour who had not lost his electricity. I hope that in the not too distant future I can set up a solar system that can recharge a bank of batteries and provide lighting for essential spaces as well as run my two or so computers, a small fan and a thermoelectric cooler that will free me from having to buy ice everyday in an emergency to keep essential foods and medicines chilled. I think that it might be possible for a number of homes to also use some of the new efficient personal vertical shaft wind turbines to at least reduce their usage of fossil fuels for energy. I would hope that Government expands the incentives that are already in existence to facilitate people adopting these technologies.
The Government must be commended on pushing forward with this project.
Oops! I meant for decades above. Not a decade.
Change is most vital and necessary, because at the bottom of all these numbers is the people. The people catching hell when there are incompetent governments with bad policies; people catching hell in a world wide economic crisis. The people making it hell by low productivity , poor service attitudes; low level management behaviours, risk avoidance, little innovation. to turn this economy it is necessary to address the mindset.
@Checkit-out: “…I’m investing in a small 160 watt solar system to learn about the technology and to use as a backup for any outages or hurricanes that might pass our way. Tomas was a wakeup call for me.
And that cost you watt (joke intended)? About 800 USD?
Meanwhile, you can currently buy a small portable (gasoline powered) generator which provides 2kW (read: more than ten times as much power as your kit) at 110/120 volts at 50/60 Hz (read: you don’t need the additional cost of an inverter and batteries) for about 500 USD (read: less than your kit).
Please don’t get me wrong — I’m a strong backer of renewable energy.
But also please don’t be mislead — for the individual consumer renewable energy doesn’t yet make sense.
@C. Halsall,
for the CHILDREN of the individual consumer renewable energy makes sense NOW even if it is costly.
@Hants: “for the CHILDREN of the individual consumer renewable energy makes sense NOW even if it is costly.
Please don’t bring emotion into the debate.
As anyone who knows what they are talking about will tell you, it is far more cost effective for anyone who cares about those around them to invest in carbon based standby generation than photovoltaic.
As Checkit-out himself said, “I’m investing in a small 160 watt solar system … I hope that in the not too distant future I can set up a solar system that can recharge a bank of batteries and provide lighting for essential spaces as well as run my two or so computers, a small fan and a thermoelectric cooler
Has Checkit-out done the math on how much energy he wishes to consume in relation to how much it will cost him to collect, store, and provide the energy to his various devices by way of photovoltaics (which only receives energy for about 12 hours a day here in Bim — and only rarely at 100% of the rated watts)?
Has he compared the cost to that possible by way of a traditional generator?
For those truly serious about being able to be “off the grid” for extended periods, may I please suggest you also look into natural gas electrical generators?
We had a number of Best and Brightest at a Springer Memorial Lecture two years ago when a Canadian guru on Alternative energy spoke at length on a Canadian scheme dubbed “Distributive Energy”. In short each household would become a node for the production of energy (Wind – vertical turbine, PV and Geo thermal) enough for its own use and the rest would be fed back to the National grid via BL&P infrastructure. Peter Williams was present, along with Worme and Minister Estwick, not to mention a healthy cross section of Barbados’ Best and Brightest…
This guru said that the “kits” were available and that Barbados would be a wonderful example for a test roll out at significantly subsidized prices; all that was needed was an email. The Central Bank paid good money for this man to speak and all that the Best and Brightest could afford as a meaningful offering was a hearty applause… which resound in my ears to this day…!
Maybe I am missing something … or then again …
I need to know something. This David that has been running this site is DEFINITELY NOT the same David that started the whole thing going. This fella seems a great deal older and experienced…!
Maybe I am missing something … or then again …
@Chris
The idea is we have to start promoting the behavioural change required NOW. This is why the government can use tax incentives which would subsidize/compensate for the current cost disadvantage RE Vs Fossil. In the aftermath of TOMAS there is a healthy demand we would suggest.
@BAFBFP (December 17, 2010 at 5:30 PM)…
ROFLMFAO…
To speak to this…
1. Wind – vertical turbine… Since it took (how many?) years for a simple wind farm to be agreed to, how would the average Bajan feel about having a spinning tower in their neighbour’s yard?
2. PV (photovoltaic)… As I’ve said before, and I stand behind, PV doesn’t yet make economic sense to the individual consumer.
3. Geo thermal… So every household is supposed to accept, pay for, and maintain at least two holes drilled down several kms in their own back yard?
@BAFBFP… Was this guy, Estwick, Williams and Worme actually able to keep their faces straight during the presentation?
@BU.David: “The idea is we have to start promoting the behavioural change required NOW.
With respect, I understand that wish.
@BU.David: “This is why the government can use tax incentives which would subsidize/compensate for the current cost disadvantage RE Vs Fossil.
With respect, I do *not* agree that Bajans (either directly or through subsidization (since the latter really means that we all pay for it)) should invest in technology which doesn’t yet make economic sense.
@BU.David: “In the aftermath of TOMAS there is a healthy demand we would suggest.
Agreed.
For example, why was the Barbados Met office and CERO so busy morning the passing of one man, rather than doing their jobs and altering the public of what they were likely about to (and did) face?
Oh Chris! Oh Chris!
Thy leaves are so unchanging;
Not only green when summer’s here,
But also when ’tis cold and drear.
Man the man was invited here by Barbados’ best and Brightest. He came with impeccable credentials. He is backed by the biggest companies in Canada. He spoke of possibilities. I am an optimist be in positiveness. My face was straight. By the way did I not mention that he was Canadian..?
If I was interested enough and had the time to follow through I would enjoy trivializing your comment … but … not tonight ..!
Lets go nuclear guys. In a few years time the new technology in nuclear energy (PBMR) will be commercially available. Just one pre-assemble plant could supply all of Barabdos energy needs. It is safe, cleaner and cheaper. A 100MW unit will cost around US$100 million .
Congratulations to the article writer, nice to see that someone recognizes the problem. Barbados must ditch the COMMUNIST IDEALS (everyone is entitled to a job), and realize everyone is NOT entitled to a job.
In a country of 300,000 it is unrealistic to have 10%(30,000) of the population as public employees. In most developed countries the civil service (public employees) make up less than 1% of the population base. How can a small country like Barbados with limited resources(basically none) and only two main sources of revenue generation(tourism and off shore finance) expect to maintain such a high ratio of civil servants. In fact the civil service in Barbados employs to roughly 20% to 25% of every individual employed in the country.
The new budget does not remotely address the countries serious financial situation. The lack of political will to correct the countries financial woes, will no doubt to result in some vary painful measures in the near future.
Quoting The Hon. Mia Amor Mottley, Q.C., M.P.,”The Government and people of Barbados will have to find new models to fuel our future development”. I would like to re-phrase “The Government and people of Barbados will have to find new models to ensure our countries future survival”. Forget development, survival is now the issue.
Now I know there are numerous individuals that will think this is an extreme view, to those individuals I suggest you stop looking at the forest and look at the trees. I’m not a Bajan, but I’m extremely proud of Barbados and whats its accomplished since independence and would be saddened to see a country with such great potential fail. Being small in size has great advantages, however it also has significant opportunities for failure.
What does the stats that Bajans credit card debt is in the region of over $200,000,000, and mortgage debt in excess of $1.1 Billion?
What exactly do these figures reveal about our society?
Coyote
Maybe I don’ know nah better, but it seems to me that you only seeing One tree …!
Chris Halsall;
I discovered, after Tomas, that all I really need in an emergency situation of 2 weeks or so are a few low energy lights at night, adequate water in my gravity fed water tanks, food, a gas stove, a small radio, and something that can keep certain medicines and juices chilled. The 160 watt solar system can quite adequately power the electricity needs for such a system. I was not trying to suggest that I thought that I could replace a modern electricity grid system with the small photovoltaic kit or indeed mislead anyone in that regard. Photovoltaic solar systems can’t compete with wind turbines or gas generators in terms of cost efficiency as one would have to cover a very large roof with photovoltaic panels at a cost of a few times the cost of the house alone to provide the energy needed to power a house equipped with all the modern conveniences.
Emergency use is my main goal but I will probably run my computer equipment off the solar kit under normal conditions and keep the batteries trickle charged for any emergency situation.
I’ve done the maths. I know that individual household solar energy for a household such as mine is far from cost effective at present. I was responding to your earlier post about the imminent production of cost effective solar kits and I think that I indicated that all I’m planning to do is to use two small solar panels in kit form to provide energy to 2 notebook computers and peripherals including an external modem, wi fi, etc. a few energy efficient lights including two 7-watt night lights, a small table fan of about 20 watts and a small energy efficient thermoelectric cooler in any emergency situation that might occur.
This isn’t about saving money at this time. Its about convenience and building a system myself as a hobbyist of sorts. The payback is better than that for a Blackberry phone that costs about as much, given that one can, even now, claim the photovoltaic kit as an allowable income tax expense.
I don’t like generators. They are too noisy. My yard is much too small to sustain a traditional wind turbine but it could perhaps sustain one of the new vertical shaft ones of a few kilowatts capacity that could allow me to save a fairly significant portion of my current energy costs.
And before you scoff again at spending $800 US essentially for an emergency system. A traditional generator costs about 3 to 4 thousand dollars barbados. In a typical household it would be somewhat strange and costly if a generator were to be used for normal generation of electricity outside of an emergency situation. But to run them in an emergency one has to feed them expensive diesel or kerosene. True they can do a lot more than a small solar kit but at least the solar kit uses sunlight which costs nothing for providing energy for the few purposes I consider to be essential.
Chris; You often write in a way that suggests that you are the only one on this blog that knows anything about science, IT matters, etc. You are wrong.
I vote for Checky to lead the Anti- Chris (tian) movement on this blog … hear hear ..!
BAFBFP
I maybe seeing only one tree but it’s very clear through my bi-focals.
As the saying goes…..
THOSE WHO CAN: DO,
THOSE WHO CAN’T: TEACH and
THOSE WHO CAN’T TEACH BECOME POLITICIANS.
What is a politicians greatest asset ?
But Wily
I am respectfully prepared to add that
THOSE WHO CAN’T BECOME POLITICIANS become Chief Justices.
i agree check CH comes asross as very patronising…acts like he is de only man in de world that knows bout science, math, etc.
CH quit acting like a ch
I am sorry, but what the f*ck is a CH …?
Sorry I have never seen one or whatever it is so some guidance please ….!
Amused everybody done talking. Man at least I know that you like me … It’s late man but say something. Don’ give BU a reason to ban me too …
Lets keep the discussion going people.
I think barbados should get into growing shi_* industrially
* ghanja marijuana (see ganja)
The government has promised to balance the budget by fiscal 2014/2015, with unemployment in double digits government spend on maintaining social services will of necessity balloon. Again BU ask the economists to step up and answer the hard questions.
People who DO also TEACH.
If they don’t they do not get TAUGHT and thus stagnate.
We learn from each other.
“I notice that despite all this, the inadequacy of plans and absence of real initiatives the Minister Estwick is pinning its hopes on a 2% expansion next year.
I would never thought I would have to accuse Dr. Estwick of modesty, but after an economy has contracted by 10%, pinning your hopes on a paltry rebound of 2%, too small to put people back to work, is far too modest, but perhaps as much as we can expect from the auto-pilot.
The bottom line is that to achieve fiscal consolidation, to restore the country to real growth of 5% plus per year, you need more than hope and bits of paper. You need a fundamental re-think of the way we do business and the relationship between the Government and the private sector. Tinkering around and canceling the order for paper clips will not do it.
Clearly we must not throw out the baby with the bathwater. What works well must
be protected, what needs tweaking must be tweaked and what needs radical
overhaul must be overhauled.
However, if we start from the simple premise that government plays a large role
in all that happens economically and socially in our land, we will recognize that
we must act now to reform the role and structure of our Government. Let us reconstruct Government if we are to deal with the reality that the cost of our government is no longer affordable.
What is the purpose of a Government for us today?” – The Hon. Mia Amor Mottley, Q.C., M.P.,
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The above is The Hon. Mia Amor Mottley, Q.C., M.P., speaking at the BCCI luncheon, as indicated to the right of this blog
Where are the suggestions and ideas for Business ventures that might help Barbados.
All I reading is a lotta long talk.
Another idea from NOT one of the best and brightest.
Canada and the USA imports products and partially built products from China.
These items are packaged or assembled labelled as “product of Canada” or “made in the USA” and then sold around the world.
Barbados could do the same.
We have an Embassy in China. We have Invest Barbados offices in North America.
Then they are Bajans who work in management positions for companies that make products in China.
No body remember whose ideas it was but who actually did it. Here seem to be some recommendations for the business sector:
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“Further I say to you that no enterprise should be brought to the brink of disaster because it cannot get a VAT refund in a timely manner. It is counterproductive.
If government cannot refund the returns in a timely manner then it needs to look at easing the situation for enterprise. I would like to hear your views on a Refund Certificate that can be used as collateral to extend an overdraft, secure a loan or enter into a factoring agreement. The latter would surely be cheaper than
servicing an overdraft at 16 or 18%.
Then there is the issue of factoring which this Administration promised to introduce some 16 months ago. I wonder how many businesses have had to tighten their belt and lay off workers simply because they could not survive the
prolonged delays in cash flows. How many have suffered while waiting for Government or private enterprise to pay? We do not believe that this agency should be located in the Central Bank as announced but indeed within the context of a private sector framework with the necessary government
guarantees. In so doing we create another profit centre, ease the cash flow of many small businesses and ensure that jobs are not lost. This is Government as facilitator and nudger for stronger enterprise.
Micro leasing is another aid to small and micro business. The temporary rental of fully equipped factory, technical or office space must be provided to give small business a hand up without them having to find the scarce capital for wholesale
acquisition of critical plant and equipment. Government can play a role in facilitating this.
I think most of the experts agree that any recovery in Barbados will be private sector led. Indeed, micro, small and medium size businesses will lead our recovery and ensure that the fanciful but offensive notion of jobless growth will
not be our future. It is for this reason that I strongly support the new Enterprise Initiative being promoted by a number of you.” – The Hon. Mia Amor Motttley (address to the BCCI)
****copied and pasted from article published by BU to the righ of this blog.
And what did she do when she was in charge of economic affairs?
Another point……
The IMF Report states that the present Unemployment Rate is 10.7%, which in reality, considering that 20 to 25% of the jobs in Barbados are civil servant positions ,which are never UNEMPLOYED, then the actuality is the present unemployment rate is probably around 13 to 14% in the private sector.
Barbados must significantly reduce it’s base of civil servants in order to aid the country’s recovery. This can be done in a number of ways,
1. privatize some government departments/agencies /operations,
2. look at staff reduction through efficiencies,
3. get ride of non profitable government crown entities,
4. staff layoffs
and my personal favorite
5. reorganize the countries labor relations so that Unions are more respectful and less dominant.
Economists that have studied the Barbados situation suggest the Barbados Civil Servant base should be about 10,000 and not the present 30,000. At present the government of Barbados is paying the salaries of 1 in every 4 or 5 individuals employed which accounts for the major expenditure for government. Like I pointed out in a previous post, these socialistic ideals are not appropriate in the present economic climate for a small democratic entity like Barbados. There are some examples (Dictatorship in China)where these ideals appear to thrive, however there are other examples (Soviet Union) where they failed on a grand scale. There are also number of northern European countries that operate with these ideals and function. It should be noted however, that in these countries they have a wealth of natural resources that are major revenue generators.
Question….. will the UAE survive when the oil runs out ?
Food for thought.
The Barbados economy is a “Public Sector Led Economy” which means the civil servants stay!!
The socialist/welfare model which has served us well has reached its tether as evidenced by what is happening in the UK. Perhaps a conversation we need to be having is the model we need to morphed to. The reason why BU promoted the position that the government should have called an election after Thompson’s death to acquire the mandate to prescribe the bitter economic medicine required. It is highly unlikely it can do what is required and reasonably expect to win the next general election in the intervening period. The conclusion then can be drawn it that the incumbent will band aid the issues to ensure they can squeeze past the poll next time around.
A word of warning to PM Stuart, two years is a long time in politics.
Even Cuba is admitting the need to implement economic reforms!
Karl Marx once wrote:
“In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!”
Imagine then the perversity of the Castro brothers to recommend that 500 000 workers be laid off and further to charge license fees to be self employed. One can only be made incredulous by the claim that such crass measures are to strengthen socialism.
I know the problem with renewable energy is that those currently in charge would lose most of their control. Why not continue growing cane, as we already have the infrastructure and convert the sugar factories to make ethanol. Growing fuel cane is simply changing the type of cane we now grow.
All the vehicles on the road can handle a light mix of ethanol (15%) and gasoline(the rest) government does not even have to take the risk, let the private sector handel the factories conversion.
The farmers all ready have cane growing experience and there is already more of a demand than a supply if all the gas stations were made to sell the 15% mix.
As I am no expert it should take me 2 weeks to run some number for you guys, maybe longer because of the Christmas season.
We have a top of the line cane breeding station that can increase the amount of ethanol in the cane (but they would have to work)
There is a 15% cut off our fuel import bill and money to circulate.
Plus we want to keep our farmers happy.
Wily
“3. get ride of non profitable government crown entities,”
True enough. Let’s start with the Prime Ministers office and work our way down through to the Lower House and the Senate.
Boots Boots Boots and more Boots, on the feet of Young Trigger happy recruits.
Why we still have these boots ‘bou de place
With all the turmoil that the United States has caused around the world over the past Century, you would think that it is the US that people should be looking to for change … and not Cuba