#BTEditorial – Creating a space for all to prosper

Barbadians are not known for splurging, as too many in our society do not have the level of disposable income that would predispose them to such luxuries.

Given the austere and unpredictable times that we are living in, people are more prone to setting aside what excess funds they may have for the inevitable rainy days.

The events surrounding the COVID-19 pandemic which resulted in massive, sudden, and sharp job losses have made most citizens acutely aware of how easily their livelihoods can unravel.

We have, of late, heard admissions from Government officials that our unemployment rate reached a staggering 40 per cent or more during the height of the pandemic in 2020/2021.

Unemployment that rises to such high levels, would have had a major ripple effect, not only on the economy, but the psyche of the breadwinners that were impacted and their families.

And if businesses, in their recent financial reporting, are still lamenting that they are still recovering from the effects of the pandemic, surely the same must be occurring in households.

This is an important segue to one matter that has been arousing ire among individuals and the business community – that is the issue of banking fees and how financial institutions are relating to their customers and members. This has merged with general concerns about our National Insurance Scheme (NIS) and the possibility that it could be bankrupt in another 12 years.

Barbadians are obviously paying greater attention to their financial wellbeing given their recent experiences. They are watching and reading the international news and appreciate the level of uncertainty that envelopes the global economy.

There is increasing interest about the country’s level of debt and the rate of borrowing. Barbadians are also more vocal about food insecurity and matters of the environment and climate. They no longer see these issues as the domain of special interest groups but matters that impact people everywhere and their quality of life.

In an International Monetary Fund (IMF) blog last month reflecting on the “gloomy and more uncertain outlook” for the rest of 2022, it pointed to the higher-than-expected inflation in the United States and major European economies, which was “triggering a tightening of global financial conditions”.

This is not good news for small tourism dependent economies like ours.  We depend on North American and European households  feeling confident about their economic state, so that they are prepared to spend more on activities such as overseas vacations and travel.

It was interesting to note that amidst the complaints of Barbadians about gas prices and the general cost of living, a corporate entity was also criticising the level of bank fees and charges, which it said was biting into its profits.

The Banks Holding Ltd (BHL), the beverage group that produces the famed Banks Beer and owns majority interest in the Pine Hill Dairy, called out the impact bank fees were having on the group’s bottom line.

Reporting to its shareholders on the half-year performance, the board of directors of BHL said “interest charges, primarily driven by large deposit fees from the commercial bank continue to erode profits”.

This was highlighted at a time when Prime Minister Mia Mottley too has called on the Central Bank of Barbados to investigate the matter of banks fees and charges, and to address some of the concerns of customers.

It seems obvious that the Government’s approach of gradually relinquishing  control of the financial sector and leaving the market to bring about balance, has failed consumers.

The majority of Barbadians are low income earners and their savings accumulation in the current economic environment are extremely constrained. Most people are doing their best to provide for themselves and their families, while living in the hope that their personal conditions will improve.

It is understandable that commercial  banks, like most entities, are seeking the best return for their shareholder investment.

However, financial institutions and their customers exist in a symbiotic relationship – they need each other. It will continue to be challenging for banks to achieve maximum returns if the economy and citizens are not prospering.

Banks and financial institutions cannot get blood out of stone. They too have a role to play in creating an enabling environment for individual and commercial clients to grow, which in turn translates to growth for these institutions.