Levelling VAT not the answer: Former Barbadian Leader Owen Arthur spoke to packed UWI crowd, Ex-PM sounds Battle Cry for Stalwarts as Recession continues

First of all let’s give a huge round of applause to Barbados Today for using my question about Ministerial Salary Reductions as a means of bolstering the infrastructure of Barbados. It’s good to know that another online entity has to rely on my expertise to make their story – will send you a bill soon folks, LOL!

Second – as our friend Amit always makes sure to state before any declaration or rant related to finance… IANAE, I Am Not An Economist – I may have Terms or References wrong, this should be no surprise… When Income Tax time arrives, I let other folks handle it, I am merely looking at this item as a newsworthy event.

Mia Mottley in foreground as packed crowd is totally locked into Owen's delivery

Mia Mottley in foreground as packed crowd is totally locked into Owen's delivery

This presentation was very much a show of force by BLP Stalwarts – Symmonds Sr & Jr (Dru, pere et Kerry, fils); Jerome X. Walcott, Ronald Toppin, DeLisle Bradshaw, Trevor Prescod and Mia Mottley (It appears that Mia and Owen have kissed and made up, throughout his speech I would hear her mutter assent often like “Yes” or “That is true” and even “I Agree“). The Vice President of the Young Economists Association of Cave Hill declared Mr Arthur as ‘the best Prime Minister Barbados ever had!‘ There’s an old cliche of ‘packed to the rafters‘ and for this night it was indeed so, when question time happened – there were two queries reserved for audience members who stood outside…

Anyway, enough atmosphere chat, let’s get into the nitty gritty of the matter – Owen believes Barbados should have a Tertiary Levy so all Bajans can enjoy a University education like how he so benefitted from an early age.

He feels any wage cut of MP’s Ruling or Opposition is a symbolic gesture, even though I alluded to St Vincent’s Cabinet performing just such a measure when they assumed office under Dr Ralph Gonsalves. After the speech and away from any prying media who would write stories off of my analysis, I was able to speak briefly with Mr Arthur. I suggested that perhaps if VAT was reduced to 8% and made across the board – inclusive of Hotels and Restaurants, plus removing duties from vehicles and jewellery what would such a scenario be like for Barbados?

In Mr Arthur’s view, this is not a good idea as it would crimp the average man’s personal budget even more – his contention is what would happen to the basket of goods you have to ensure for each citizen?

Then I suggested that the Water Authority who came under fire for a drastic increase in billing was partially at the BLP’s door, since they subsidised the BWA for a long time… Mr Arthur vehemently disagreed with that suggestion, he claims that $150 Million was given to the Authority to fix broken mains, and what has become of that money? Why are there so many mains still in need of repairs?

What of Mr Arthur’s speech? He is never far from humour, he stated he has documents outlining proposed austerity measures by the current David Thompson regime which he compared with Hannibal Lecter?

Mr Arthur’s belief is that rather than clamp down on the Barbadian spirit Government needs to encourage it to grow – not just by entrepreneurship but through incentive programmes to allow for renewed growth even in the midst of severe financial crises.

He called for a comprehensive Fiscal Strategy to look at the period of 2010 to 2014, the Mona trained Economist stated that solutions could exacerbate current hardships endured by all, but if steered correctly can implement policies which revitalise Barbados even if in the long term as opposed to the short term.

Mr Arthur not only endorsed Central Bank Governor’s Dr DeLisle Worrell’s proposal of Countercyclical policy, he further emphasised that Government should be entrenched in a Countercyclical attitude. The former PM questioned the opening of three new Embassies in the midst of fiscal restriction, he wanted to know how can this benefit Barbados at this moment?

Of course, the St Peter MP used the evening as a chance to blow his own trumpet… He compared Barbados up to 2007 with European counterparts of the same period;-

He says that the current deficit-ratio for Barbados of 8% to GDP is a heavy burden for Barbadians to endure. Mr Arthur made it clear there are no broad across the measure strokes any party can implement so as to engender recovery and that is why patience and careful planning are key to moving this island forward. He just hopes the current Government realises they need to convert the same 8% to a surplus of at least 0.7% by 2015.

Mr Arthur pointed out that Barbados through small and medium businesses earns a large slice of Foreign Exchange from within the region. He says the Caricom Single Market & Economy allows us to draw at least 50% of Trade, the ex-PM says this slice is more than any business done with Europe, Canada or any other part of the world!

In mentioning Europe, Mr Arthur concentrated a fair portion of his address to how Europe will affect not only Barbados but the rest of the West Indies as of next year, he also posed a query as to if the DLP will examine what happens when the European Union’s Economic Partnership Agreement grace period expires next year? For the UWI graduate, this is one of a number of areas the Thompson Administration needs to look at crucially before 2010 passes;-

Owen also alluded to the fact that Canada will diversify its investments to not just Barbados but the rest of Caricom in the next 5 years. This loss will generate another generation of Policies to redress imbalances outside of prevailing global forces, current or incoming. Arthur ponders – What is happening?

The Speightstown representative listed a number of accolades from his stewardship which he states were not spurred by the World Bank nor the IMF but a desire to have 100% Bajan solutions, no matter the duration or difficulty to overcome. He wants for the party in power to make it easier for Barbadians to rise in economic self-defence to shore up the country’s reserves.

Lion In Winter? Or one more fight?

Lion In Winter? Or one more fight?

In summarising, Arthur felt there are five key guidelines for success in spite of recession;-


The question now remains were these bold strategies simply to assist barbados in its time of need? Or were these policies a stepping stone to re-establish a toehold on not just the leadership of the now Opposition Barbados Labour Party, but a rallying cry to engender Snap Elections which would favour the BLP yet again? Not with Mia, but Owen at the helm – these young economists while praising Arthur one has to consider most of them grew up under a BLP regime of the same Mr Arthur’s design… Another point to mull – If Owen can not rebuild the BLP, will he construct a new political animal from the ashes of the old engine?

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3 Responses

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  1. Very nice set of views on the lecture.

  2. Something is fundamentally wrong with our decision-makers? brains, there seems to be a fault in their logic and reasoning area.

    It`s Tuesday Morning, 1:30am, yet sleep eludes me, because something is bothering me. I took my usual trip to the bathroom and and without much thought depressed the tank lever and the toilet was flushed; a function we take for granted and other Caribbean countries, even those with rivers cannot, because of drought caused by climate Change. Jamaica, Trinidad and even Guyana with their rivers have being experiencing dry taps and saw it fit to ration their water supply.
    People, thanks to Global Warming, droughts in one area and flooding in others will be the norm so get used to it. A Growing population, urbanisation, deforestation, global climatic changes and pollution are some reasons for the increased pressure on the existing water bodies. Population expansion is the single biggest reason behind the increased pressure on fresh water resources. Water consumption has almost doubled in the last fifty years and naturally, per capita availability of water has steadily decreased.

    I have heard lots of talk on Barbados not being a water scarce country so I will inform the uninformed that water is a finite commodity. If a country has less than a thousand (1,000) cubic metres (m3) per capita per year it is designated a Water Scarce Country. Barbados? available water resources are currently rated by the FAO at (390) Cubic Metres per person. One cubic metre is equivalent to 220 gallons. We are adjudged to be the fifteenth water scarce country in the world.

    Though approximately 70 per cent of the earth?s surface is covered by water, only 2.5 per cent of it is fit for drinking. The rest is all salt water, which fills up the vast expanse of the oceans and seas ? unfit for human consumption. Why then in 2010 are we are still flushing expensive potable water down our toilets and using it for agriculture.

    Common sense also tells me that the BWA should have long ago been encouraging persons to conserve water and start water rationing. Logic suggests to me that the BWA is leading the Minister responsible for The BWA rather than the Minister leading the BWA. This modus operandi can only lead to poor judgment and chaos, as well as poor decision-making. Thus it?s like a case of a Private leading a troop into battle, rather than the Commanding Officer. Will it take our Hotels, Schools and Restaurants? taps to run dry before we act?

    Mr Lowe, this is an issue of National Security please show some leadership and stamp your authority. Our inability to imagine what we may be faced with and be proactive is because we have never experienced the stench from unflushed toilets. Can someone tell me if the BWA management has employed an obeah man or some seer thus the delay of a water caution decision until March? Or is this another case of poor advice from technocrats to Ministers who are afraid to manage their ministers for fear of been accused of micro-managing.

    Mr Lowe can you please pilot legislation as your legacy, so that all homes can be encouraged through a tax rebate to install water tanks for water harvesting.
    Finally I genuinely recommend the reading of the Biblical parable of the Ten Virgins (Matthew 25:1-13) to those responsible for the managing of our water supply.



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