Central Bank Governor of Barbados preaches Inverse Economics: Higher Vat, lesser income + Decreased Tourism, less spending + Higher Utilities, static wages = 2% Growth?

How an economist is given autonomy within a Government department is a truly intricate balance probably more delicate than a Flying Wallenda tightroping on a Unicycle over the Grand Canyon… You will recall late last year I pointed to how a former PM seems to believe that a Central Bank governor should adhere to the regime in situ. Dr DeLisle Worrell, the current person in place at the Tom Adams Financial Centre appears to be more a creature of the Finance Minister than the PM in situ.

(CLICK FOR BIGGER) DeLisle Worrell is a very affable host, even in the face of the most disarming questions his composure remained at an even keel, his unflappability is worthy of Obama or perhaps the other way around when you consider their ages?

Dr Worrell, like his predecessor Marion Williams, is a true Patron of the Arts – there are many Bajans who feel the Central Bank does more for Culture and Crop Over than the NCF itself! This incarnation of governance at the Central Bank is also extremely proactive in terms of webcasting, using the website to disseminate information and to be accessible to the public even at his own consternation!

The Governor faced the media in a live TV transmission & webcast to review the report prepared on the first six months of 2011, the diagnosis was grim yet the prognosis was upbeat…

  • Despite a raised VAT drawing less funds (which the BLP’s Mia Mottley predicted in November), Tourism took a beating in two key visitors – Canadian & UK, one set spending less while the other nationality choosing other destinations, wages remain at a level one can consider frozen as Utilities have a severe jump upwards – yet, in spite of all of this the Barbadian economy is expected to leap forward by 2%? {CLICK ON FOLLOWING LINK FOR FULL AUDIO};-

The Governor stated in his view how Tourism expanded albeit at a discounted measure, and real growth comes from volume of Goods & Services and Tourism reflects in that volume of activity.

It is more than likely the previous interrogation led Geralyn Edward of the Business Authority to probe Dr Worrell point-blank as to if he has any intention of resigning, after a hearty gust of laughter he simply replied, “NO.” Emmanuel Joseph from Mix FM asked if Tourism is the only plank which Barbados can rely on for drawing income and the Governor did not even suggest shoring up Information Technology nor Intellectual Property via books, music, etc.

What were the questions the Bajan Reporter posed and were the queries justifiably met? Let’s see…

  • Is the Government of Barbados printing money or is the Central Bank of Barbados engaging in ‘Qualitative Easing,’ and given the Moody’s downgrade, who is lining-up to buy Barbados Government Paper? {CLICK ON FOLLOWING LINK FOR FULL AUDIO};-

Dr Worrell says if the USA prints money then everyone at a global level rushes forward to buy, if Barbados were to do a similar exercise all it would be is leanding ‘NEW’ funds to Government and it impact negatively on FOREX reserves.

  • Bajan Reporter sought to define who buys Paper after printing and release in the market, here’s what the Governor indicated without divulging much {CLICK ON FOLLOWING LINK FOR FULL AUDIO};-

He said the Credit Union, National Insurance and Treasury Funds are regular sources to purchase large amounts of Government paper once issued.

  • I asked what is the average amount of FOREX which is viewed as “comfortable” in counterpart nations and Dr Worrell stated (IT IS INTRIGUING TO NOTE THE CURRENT CONGRESSIONAL IMPASSE IN WASHINGTON WILL NOT ONLY LOWER FOREX RESERVES BUT RESULT IN A DOWNGRADE OF THEIR PREVIOUS HEARTY CREDIT STATUS) {CLICK ON FOLLOWING LINK FOR FULL AUDIO};-

The Governor claims he prepared a Paper four decades ago examining what is a sufficient level of FOREX for a country to have in store… But he says in the end, it it is what people perceive as acceptable – an intriguing response of itself. which may indicate his true perspective on the Report?

  • The key query I posed – HOW WOULD YOU RESPOND TO THOSE WHO, HAVING READ YOUR REPORT, NOW CONCLUDE THAT THE INFORMATION YOU PRESENTED TO THE COUNTRY, PROVES THAT THE MOODY’S DOWNGRADE IS JUSTIFIED, ESPECIALLY GIVEN THE NON PERFORMANCE OF GOVERNMENT’ REVENUES AND ITS FAILURE TO MEET THE TARGETS SET IN THE MEDIUM TERM FISCAL STRATEGY, AS IT RELATES TO THE DEFICIT AND THE FOREIGN EXCHANGE EARNING SECTORS? – led to the following reply {CLICK ON FOLLOWING LINK FOR FULL AUDIO};-

The Governor says Chris Sinckler will be looking at expenditure reductions for a medium term strategy in the Budget due in August

(CLICK FOR BIGGER) The Dining Room was packed as not only Bajan Reporter, but CBC, VOB, Advocate & Nation plus Mix FM were in full force...

Previously I thought Oliver Jordan, Neo and the Artful Dodger (strictly on the basis of that last literary character’s name infers with relation to avoiding difficult situations) were in a class by themselves, but it appears there is a new master on board and we must give full salute to Dr DeLisle Worrell of the Central Bank of Barbados!

One Response

Stay in touch with the conversation, subscribe to the RSS feed for comments on this post.

  1. I agree with you, but i’m sure there are people who wouldn’t, that’s their problem right? Good post nonetheless, well thought out & tough questions too.

Comments

add a comment

Some HTML is OK

or, reply to this post via trackback.