That’s how prominent financial analyst Peter Boos has described Government’s management of the Barbados economy and, in particular, the use of National Insurance Scheme (NIS) funds.
Speaking at a Rotary Club of Barbados luncheon yesterday afternoon at the Hilton Barbados Resort, the entrepreneur blasted the use of the NIS by successive administrations to finance Government expenditure and warned that the NIS debt may have to be restructured eventually.
“This situation, plus the printing of money by the Barbados Central Bank and buying up Government paper and now the plan by Government to increase the debt ceiling to $4 billion, is very worrying. Where will this end?” he said as he delivered a presentation on the topic, Speaking On The Subject Regaining Paradise: Addressing The Crisis In National Governance In Barbados.
Boos, who was particularly concerned about NIS funds, said “what is in reality long-term debt, is termed short-term, so that lower interest rates are justified”.
“The NIS Fund’s own guidelines for asset diversification are in serious breach, with loans to Government accounting for somewhere around 70 per cent of the investment portfolio,” the financial guru declared.
He said it was highly improbable that the Government would be able to repay the debt to the fund on normal commercial terms.
“NIS debt restructuring is inevitable eventually,” added Boos.
He also pointed out that audited financial statements for the NIS had not been produced for several years.
Saying that such a situation was unacceptable, Boos added: “Had this occurred in a financial institution in the private sector, the consequences would be immediate and severe.”
As he gave his frank assessment of the Barbados economy, the chairman of the Entrepreneurship Foundation of Barbados dismissed the repeated arguments that the world recession was responsible for the current state of affairs.
“Our decline has little to do with the 2008 financial crisis and subsequent recession. We made the bed in which we lie,” he insisted.
The businessman said that while it was bad enough the country is losing its way, what was worse was the failure to admit the true state.
Also on Boos’ charge sheet against the Freundel Stuart administration was its failure to pay its bills.
He said the Government’s “failure to settle its liabilities as they fall due and to continue to purchase goods and services knowing they don’t have the money to pay promptly, is a serious failure of governance.”
“Good policy is what we need,” the financial analyst insisted. Not borrowing to spend beyond our ability to repay our liabilities.”