Trinidad Buying-up Barbados yet the DLP alleges that the Barbadian Economy Stronger than Port Of Spain’s – A Henderson N. Bovell Observation

With a general election approaching, the Government seems obsessed with getting the electorate and rating agencies to believing that the Barbados economy is “stable.” It therefore seems to be ignoring the elementary fact that the rampant joblessness that now exists – might be resulting from an inadequate demand for goods and services and people’s inability to spend.

Even with the rate of poverty jumping from 8.7% to 19.3%, businesses becoming bankrupt and closing, inflation over 9.4% and prices sky-rocketing, government cannot even halt the decline by increasing spending or cutting taxes. Instead – it imposes further taxation on the same society that is already being over-taxed. And, since the DLP continues to “politically choke and rob” Barbadians, there can be no doubt that the present Government is the real crisis Barbados faces.

How does the government expect growth when investor confidence and foreign direct investment is down; income has been frozen, people do not have money to spend and (according to the Central Bank Governor) local businesses have already used-up all of their savings? The bottom-line is: Barbados is suffering from crippling inflation – brought on in large part by internal shocks. Government’s indebtedness, including to the Central Bank and the NIS funds – is also cause for great concern.

In addition, the Government is yet to outline a sensible strategy to control its manufactured “rising inflation” or to achieve ‘economic stabilization.’ And, while the Central Bank Governor is now talking about economic stabilization, it remains unclear, whether (in the absence of a ‘Heritage and Stabilization Fund’ like Trinidad) Barbados is entering a “STABILIZATION PROGRAMME WITH THE IMF” where it will be able to draw SDR’s. The DLP is running out of options! Barbados has a serious fiscal crisis and the government is already incurring more debt to pay re-current expenditure. But with an election around the corner, it needs money badly. It can hardly borrow on the private international market and with an unfavourable poll just published – panic has taken over.

While there may not be a need to strengthen the banking system, there seems to be a strong case for some urgency to (a) implement reforms to ensure sustainability of our balance of payments without further foreign borrowing and (b) to ensure more than just the anemic growth the DLP seems “JUST” capable of. But, the DLP could not get this done in four and a half years and there is little of hope of it now being done by November, this year. There is also the urgent need to expand the ‘basket of goods’ and to shield the most vulnerable, who are likely to be worse impacted by this fire-storm and economic tsunamis, the DLP has manufactured. As political hush-money, some of this might be addressed in the up-coming gravy-train budget.

This brings me to the ‘Trinidad economy v the Barbados economy.’ In recent days, the Central Bank Governor of T&T said that the economy there is in a “slump,” whereas the DLP keeps trying to get Barbadians to believe that the Barbados economy is “stable,” despite it ONLY showing anemic growth for 6 consecutive quarters, or the past 18 months. My view is: if a patient is alleged to be stable but is not responding to medicine and treatment for 18 months – he would have to be in a coma and on life support.

The bottom-line is: Trinidad had a curfew and a state of emergency imposed, Barbados did not. Trinidad has a stabilization fund with billions, Barbados does not. Inflation in Barbados is over 9.4% but in Trinidad a mere 5.3%. Unemployment there is just 5.8% but close to 15% in Barbados, by now.

Companies in Barbados are becoming bankrupt and closing, while Trinidad businesses are buying-up Barbadian companies. Trinidad has a low debt to GDP ratio and high reserves. Not so in the case of Barbados, as regards the debt, which the country is now hearing – is not a problem. Incidentally the debt was alleged by the DLP to have been a problem and too high when the BLP was in office. Apparently not so, under DLP rule – even though, Barbados is far more indebted and exposed today and with a serious fiscal crisis.

The DLP does not seem to understand or even believe that managing economic openness and volatility requires extreme fiscal discipline. It is therefore a serious threat to national stability that the DLP has so negatively manipulated domestic conditions – that the environment it has now manufactured – is causing Barbados to faces major and unnecessary competitive challenges. In short, because of flawed DLP policies, costs and prices in Barbados are rising considerably faster than those of its main competitors.


We are now hearing that “prices in Barbados have surged by roughly 16% over the past two years and by 9.4% in 2011 alone.” In addition, “that the rate of inflation is 3 times higher than that of our major international trading partners,” and that “it was also the highest rate of inflation in the entire Caribbean.” Again, further proof that the DLP is the real crisis Barbados faces!

In the circumstance, talk about the Barbados economy doing better than that of Trinidad is “election-speak,” and seems like trick; an part of an elaborate gimmick to get Barbadians to believing that the DLP knows what it is doing and that the economy is getting better, which is clearly not true. Stable for 18 months is not getting better but a holding pattern. It is also an ill-advised gimmick to attempt tricking rating agencies, who are already aware, that the DLP made a bad situation, much worse.

Barbadians need to guard their mind and their ears from the DLP. Even more important, they must brace themselves! With the DLP – much worse is yet to come!

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


add a comment

Some HTML is OK

or, reply to this post via trackback.