Michael Howard
Economist Michael Howard has given the thumbs up to the Democratic Labour Party’s (DLP) manifesto, which he says attempts to address the critical issues facing the economy, such as the high fiscal deficit and dwindling foreign reserves.
Commenting on the 56-page document launched in Oistins, Christ Church on Thursday night, along with a single-page economic policies addendum, Howard told Barbados TODAY he was also satisfied that it clearly identified the fundamental economic challenges.
However, of particular interest to him was the section of the document which states that failure by Government to raise at least $500 million from the sale of several state assets will require alternative sources of foreign exchange, such as an International Monetary Fund (IMF) loan, with the conditionalities that come with such a loan.
“This approach seems to suggest that the DLP is prepared to go the IMF if necessary,” Howard pointed out to Barbados TODAY this afternoon.
“It seem to me the DLP will continue the fiscal austerity programme and go to the IMF if absolutely necessary,” he stressed, adding that it was “an appropriate strategy in the context of a high fiscal deficit and low and falling foreign reserves”.
The IMF position articulated in the DLP manifesto is the clearest statement yet from the incumbent party, which has been reluctant to turn to the Washington-headquartered Fund for financial assistance, based on past history with its bitter economic remedies, that it was prepared to do so if it had to.
“The DLP’s plan is to raise at least $500 million in foreign exchange without incurring any new borrowing. The initiatives to raise these funds have already been announced and are already in train,” the election document states, while pointing to the planned sale of the Barbados National Terminal Company Limited, the Hilton Barbados Resort and the development of a Hyatt Centric Resort for $200 million each.
“Failure to complete these transactions will require alternative sources of foreign exchange, such as an IMF loan with the conditionalities that come with such loans,” it added.
On the last occasion that the island turned to the Fund, the DLP was also in power, but not for very long after it implemented an IMF-approved structural adjustment programme in the early 1990s that called for an across-the-board eight per cent pay cut and other bitter remedies.
Cognizant of the likely political fallout from another IMF austerity programme, the DLP has identified the loss of approximately $200 million in tax revenues from the offshore sector; the need to reduce the high fiscal deficit by at least another $200 million annually; and the boosting of the foreign exchange reserves by at least another $500 million as “the most urgent challenges” facing the economy.
And just as the Barbados Labour Party (BLP) did when it launched its manifesto last week, it indicated that it would be seeking to have the country’s debt reprofiled.
In fact, the DLP document said “Government has already hired an international firm to prepare debt reprofiling proposals for Barbados”, adding that “this is expected to provide annual savings of between $70 million and $100 million”.
Additional plans for tackling the country’s deficit, which stood at about 4.2 per cent of gross domestic product at the end of March this year, include the introduction of a national health insurance scheme that would see the annual transfers to the state-run Queen Elizabeth Hospital reduced by between $70 million and $100 million annually.
Without providing details, the DLP also proposed to introduce a national recycling programme, which it said once fully implemented would reduce the transfers to the Sanitation Service Authority by between $20 million and $30 million annually.
If granted its wish of a third straight term in office in the May 24 election, it also plans to restructure the sugar industry, with a view to reducing by $20 million to $30 million Government’s annual transfers to the Barbados Agricultural Management Company.
Based on two recent studies by PricewaterhouseCoopers and the IMF on state owned enterprises, the DLP also promised that “on full implementation of selected proposals within both reports, transfers and subsidies will be reduced by between $25 million and $35 million annually”.
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In view of the need for the bulk of voters across Barbados to vote for the candidates of the party and its coalition partners that present the greatest, most progressivist and people-centered developmentalist
agenda for Barbados, I hereby help to state the following twenty seven (27) fundamental objectives that - out of many more - will be helped brought about by the People's Democratic Congress (PDC), in rightful and dutiful
association with those partners helping to form this future coalitional government of Barbados:
1) The Abolition of Taxation - the promulgation of alternatives to TAXATION;
2) The Abolition of Interest Rates - the promulgation of the thesis that financial institutions MUST EARN MORE of their
own receipts;
3) The Abolition of
Public Debt - the declaration that mere use of the public money by the public, or members thereof, and which is NOT backed up by any corresponding incomes, revenues, transfers, receipts, to be satisfied, CANNOT generate money
debts;
4) The Abolition of
ALL so-called Exchange Rates
Parities with the Barbados Dollar - the declaration that the transferring of local/foreign money/credits from locals to foreigners or from foreigners to locals is to be done without reliance on such so-called parities;
5) The Abolition of
All Motor Vehicle Insurance - the use of public money to support any valid claims for persons/entities losses involving motor vehicular accidents on any
public
highways/public
properties;
6) The Abolition of the crooked practice
of Parliamentarians having to only serve
2 terms and therefore to qualify
for parliamentary
pensions for the rest
of their lives. They
will have to wait until they reach pensionable age to get publicly supported pensions.
7) The making sure that the Real Actual Cost of Use of Money in Barbados is substantially reduced in the medium to long term;
8) The making sure that the Money Turn Over Rate is substantially increased in this country;
9) The establishment of a National Currency Board (NCB) to manage currency and financial credit flows within the country, and into and out of it;
10) The legalization of the uses, by persons 18 years and over generally, and by persons of the approved professions, specifically, of marijuana and its various biological relatives, and the legalization of the specified and specific amounts of such that are consistent with the social, personal, recreational, religious, commercial, medicinal, and research purposes for which such plants, their main derivatives, and their uses will be put to, respectively;
11) The making sure that there is almost total freedom of interaction between the nominal receipts of individuals, businesses and other relevant entities, and the nominal receipts that are to be made by the entities that would be charged with running the business and corporate affairs of the Seaport, Airport and at all other points of entry in this country, where there is the transacting of commercial goods and services entering/exiting Barbados;
12) The making sure that locally based exporters of goods and services receive their transfers (nominal receipts) through the National Currency Board (NCB). These local exporters will get from the NCB, the equivalent amounts of local money/financial credits that local business people - in the like cases - will get from local people, businesses and entities, when getting/having got ownership of the identical/similar goods or uses of the identical/similar services to those goods and services that have been exported. In such cases the NCB will be deemed to be acting on the behalf of the overseas parties who will eventually own those goods and/or use those services, and who under the said contracts will either give foreign currency or foreign financial credits to the NCB which - in turn - will thereafter give to the locally based exporters the amounts in local transfers that are wholly due to them;
13) The introduction of a regime of the assembling of aircraft, motor vehicles, missiles, satellites, the building of ships, etc for Barbados;
14) The introduction of PARTNERSHIP ENTERPRISES to take the places of companies, ministries, statutory corporations, etc, and wherefore in every instance - before the coming about of such Enterprises - there would have had to be seen - in any business or governmental organizations in operation in this country – two or more persons involved in them. The incoming Partners will be the part owners of these enterprises – hence, the substantial elimination of the work system/culture in Barbados;
15) The establishment of a Hire Purchase Relief Fund for persons (not businesses) who - under their respective hire-"purchase" contracts - will be proven to have had genuine difficulties in giving over monies to the relevant hire-"purchase" enterprises;
16) The establishment of a Water Expense Relief Fund to help those persons (only individuals) who - at whatever times after its implementation - have proven genuine difficilties in repairing the receipts debts owed to the BWA type entity, as a result of the receipts challenges helped brought on by imbalances in their commercial industrial and other related affairs;
17) The ensuring that NO foreigners whatsoever are able to own land spaces rights in this country – only that they may be permitted to lease such rights;
18) The provision of a plot of land for every household in Barbados - to be used for residential, agricultural or commercial purposes;
19) The institution of a serious Regime of Rent Control over all residential, commercial and social accommodation in this country;
20) The building of a modern efficient railway system for Barbados, to run back and forth on what is now the existing ABC/Ronald Mapp Highways;
21) The introduction of specialized secondary school education, via the institution of Academies - the Abolition of the Common Entrance Exam – the introduction of an appropriate National Continuous Assessment Program – and the introduction of Full Zoning for Barbados, with some reasonable exceptions thereto;
22) The building of a modern acute care 200 bed hospital for the north of the country;
23) The implementation of a Proportional Representational Electoral System for all national elections of Barbados (elections of the Cabinet/Judges of the Supreme Court), to take the place of the very inadequate and deficient first past the post electoral system;
24) The election of Judges to their Supreme Court positions in this country;
25) The institution of Constituency Assemblies for Barbados – one per constituency – and whereby - within them - elected constituents - as members thereof - will have all opportunities to propose and debate the laws of this country;
26) The establishment of a system of Parish Councils for Barbados;
27) The removal of the Queen as head of the governmental system of Barbados - and the creation of an Executive Coalitional Republican System for this country, which (as earlier represented in (23 above) will itself be nationally elected.
Also, I invite those persons who have read the above PDC policies to make sure that they are implemented in this country, as part of the great thrust to redevelop and reposition Barbados on a new and invigorated trajectory of the greatest fairest most sustainable growth and development possible for all people in this country, and for their proper and equitable uses and benefits.
Mark Adamson,
Political Leader,
The People's Democratic Congress (PDC).
Barbados needs most urgently three fundamental things:
1) A new model of development;
2) A new model of governance;
3) A new model of institutional finance.
The present Westernist, oligarchist, exploitation and dependency model of dedevelopment is the ultimate guide for the dedevelopment, decline, decay, collapse, ruination and destruction that are taking place in so many affairs of
this country.
The last BLP government (1994 - 2008) in seriously applying various aspects of this model of dedevelopment
helped to quicken and sharpen the said dedevelopment, decline, decay, collapse, ruination and destruction that are currently being
witnessed in our country.
The BLP must NEVER be reelected into the government of this country, for the gross and reckless mismanagement and maladministration of this country's affairs, owing to the MASSIVE government, the MASSIVE transfers, the MASSIVE borrowings, the MASSIVE debts, the MASSIVE TAXATION, that it had embarked upon and which have had such farreaching but unsustainable effects upon the proper functioning of the Barbadian society.
On this current dedevelopment, declivity, decadent, imploding, ruinous,
destructive trajectory, Barbados will become a virtual FAILED state in the next 9 months to 5 3/4 months.
The vultures are out...cant say a word against mia or for the dlp
This guy is just another expert who is as like all the others , who has got nothing correct since 2007 ,, they are all people who keep shooting in the dark, needing to seek further education.................
Stop fretting, Mia going to the IMF TO GET US OUT HOLD STRAIN
If this country don't get some serious foreign investments or a construction boom it will have no choice but to go to the IMF and consolidate all the debt Chris should done that long ago
The Democratic Labour Party will win the General Elections. The naysayers yardfowls and ducks supporting the crooked Barbados Labour Party all prefer to keep their heads (I cannot say in the sand. It would have to be between Mia's onions) than to face the truth or facts. But come Thursday, many of these brainwashed individuals will be crying like old Saint Nick on Facebook, Youtube and the dreaded CBCTV. LOL.
How does the DLP expect to be trusted that it will institute any of those measures? It can't be. On the other hand the BLP did say that the DLP was trying to copy it's manifesto which means the policies are somewhat similar.
Bajans need to oppose the country being handed to the IMF whether under the Bees or the Dems. This is a solution to the government's financial woes that is worse than the problem. As David Hall points out, any such deal will involve "thousands of civil servants being sent home, services cut, new taxes imposed and triple austerity measures introduced". In other words, the working class and other poor Bajans will be made to pay while the local and foreign elites will escape scot free. This is always the medicine dished out by the IMF because they are anti poor people.
The current justification for the demand that we go to the IMF is the fact that in an economy worth BD$10 billion each year, the government spends BD$4.4 billion while only collecting in taxes BD$2.7 billion, thereby leaving a deficit of around BD$1.7 billion, which is near to the amount of money it spends each year on servicing the debt. There are numerous questions Bajans need to ask about this situation and there are also various options for addressing it.
First, we need a clear analysis of our country's debt. Which countries was the money borrowed from? What was the borrowed money used for? How much has been repaid on each loan and how much is still outstanding? Was any of the borrowed money misapppropriated and, if so, by whom? In the case of misappropriation, such debt would be odious debt and we should no longer be responsible for paying it. In 2015, a Greek parliamentary committee investigating that country's debt found that a significant proportion of that country's debt was odious.
Secondly, government expenditure is not all directed to providing services such as health care, sanitation services and public transport for Bajans. A significant portion is also passed over to local and foreign elites through the privatisation of government services. For example, the government is obliged to underwrite a guaranteed minimum payment of $22.6 million per year to Mr. Bizzy Williams’ Sustainable (Barbados) Recycling Centre Inc over a 20 year period for the processing of solid waste at its landfill site. There are other cases of so called corporate welfare which depletes the government's coffers.
Thirdly, there is the failure of the local and foreign elites to pay adequate taxes on the economic wealth they take out of the Barbadian economy which also deprives the government of finances. For example, speaking recently, Owen Arthur pointed out that Canadian companies doing substantial business in Barbados paid 1% in tax while remitting their profits and dividends to Canada. Then there is The Elegant Hotel Group. This British trans-national corporation owns 7 hotels in Barbados and employs 1000 workers. In the financial year ending 30 September 2017, this company received BD$120 million income from the operation of these hotels. On this income, it paid BD$3.6 million in tax to the Barbados government, while paying out nearly BD$13 million in dividend payments to its shareholders who are practically all based in the UK.
So it is clear that numerous options exists for reducing the government deficit which do not involve attacking the living standards of ordinary Bajans. For example, the government could levy corporation tax on income rather than on declared profit. It could eliminate all its corporate welfare streams. It could put a hold on tax concessions and introduce emergency taxes which keep more money in Barbados instead of it leaving the economy in the form of profits and dividends.
Bajans must make it clear to any new government that they will not tolerate any attacks on their standard of living. Let the rich pay. They can afford it.
The time has come where long talk has no value. The power returns to the people on May 24 th, 2018 who have to decide it the future of the country comes first. The election is about saving Barbados from becoming a failed State. The chances of this happening if this incompetent Government is re-elected is assured as they have lost the confidence of the World Financial Community and Foreign Investors the Country desperately needs, The Local Banking Establishment , The Local Business Community and the Local investor. Thousands of people will loose their jobs, their homes, their families, crime will escalate, Most important election since our Independance. Go out and vote to save our beloved Country.