Tuesday, May 21, 2013

Has the Barbados Economy reached the tipping point?

Genuine Concern by Investors
Article written by Ryan Straughn published in the Business Authority on May 19, 2013.


As I sat to scribe this article, one thing kept running through my mind. “Bring drinks, somebody gine pay!”  The Minister of Finance in his own style stated recently that local financial institutions (FIs) were not keen on investing in long term government paper.  A startling admission for any public official to make about the state of government finances least of all the Minister actually responsible.  By raising the T-bill limit by $1 billion last week to help finance its underestimated deficit of $1.25 billion, the government has again signalled to the market that it has absolutely no intention of reducing expenditure in any meaningful way.  No wonder financial institutions have them on the shortest possible leash.   

Further, the avoidance of government’s long term paper is another clear signal that our credit quality has diminished significantly amongst local investors which is consistent with credit status/downgrades from both Moody’s and S&P. Those who choose to open their eyes would see this flight from long- to short-term securities as genuine concern by institutional investors that the fiscal imbalances and government insisting there will be no change of course makes a default more likely at some future date.  

Last month the Central Bank stated the medium term fiscal strategy (MTFS) was off track and needed to be brought back on track. As an economist, it is my view that the MTFS was never on track since at its core the intention was to run current account deficits in order to solve a current account deficit induced debt problem. Further there was no plan to repay the debt incurred by running said current account deficits.

The government also admitted its reliance on both the Central Bank and NIS purchasing T-Bills. The reader must be reminded that part of the MTFS was for the NIS to finance UWI, Transport Board etc. to the tune of $110 million a year.  In addition, the NIS acquired around 70% of the $1.7 billion debentures issued in the last 5 years and also increased its holdings of T-Bills by $180 million in the same period. After all the song and dance about the economy being stable, the government simply increased its own credit card limit by another $1 billion again with no plan on how to repay.  This is but another sign the government is panicked. The government assumes that by increasing the borrowing limit on T-Bills FIs will provide more cash without considering how we found ourselves in this position. It’ll be interesting to see the rating actions of Moody’s and S&P and the IMF consultation later this year because clearly our government seems incapable of learning.

Twenty years ago the Mighty Gabby sang a sweet calypso in which he pleaded “Oohhh Loorrdddd, send an answer fuh we!” With businesses closing rapidly, bankers and insurers losing confidence in government paper, it is no longer a matter of whether the economy has reached the tipping point, it’s time to put on your pyjamas and say good night.

Monday, March 25, 2013

President's comments to BLP Forum



Comments delivered by President of the BES at BLP Forum on 2013-2014 Estimates of Revenue and Expenditure

Sunday March 24, 2013 Advent House


Good afternoon ladies and gentlemen,

Just over twenty years ago Barbados was in the midst of a structural adjustment programme. This was precipitated by an election in 1991 and the subsequent increase in government expenditure was in part responsible for the decline in foreign reserves.
We are all very familiar with the accompanied layoffs (11% of public sector), 8% cut to public servants salaries, the introduction of the stabilization tax and other taxation measures that followed.

NIS contributions were also increased and unemployment and sickness benefits reduced.
What is less well known is that Barbados government was unable to renegotiate one of its loans with the Japanese government. This meant an outflow of foreign exchange at a time the Barbados government had begun a spending programme that was itself making demands on the same reserve stock.

Naturally, having no where to turn to get foreign exchange Barbados went to the IMF for assistance. Generally speaking the IMF don't engage countries on a long term basis. The IMF is a financial institution that exists to provide short-term assistance to its member countries and being a financial institution it must ensure that it protects its loan portfolio and by extension its membership.

The measures under the stabilization programme were designed so the IMF could ensure the short-term assistance would be repaid in full and in the shortest possible period. Clearly they would have examined the fiscal accounts to determine what the terms and  conditions would be.


Fast forward 20 years.
The fiscal situation 20 years ago was not nearly as dire as it is today. When I assess at the state of the public finances today I am very concerned because what was passed in parliament last week is a clear demonstration of the most fundamental lack of understanding of economics. What has enabled the country to continue with some sense of normalcy is the stock of foreign reserves we have been able to maintain.

Let me state here, that I don't know the extent to which the 2013-2014 Estimates as presented might have been different had your party won the recent general election. Though time would have been against you, had they been presented as is I would have great difficulty in not arriving at the same conclusion given the technical ability of the economists in your ranks.


It has become quite evident that the current government has little if any interest in following economic advice proffered by anyone foreign or domestic.

IMF, Caribbean Development Bank 
Standard &  Poors, Moody's 
Local or regional economists

Clearly, sovereign governments have the absolute right to craft their own policies but in my view when you ignore sound and consistent  advice from different sources each with different motives then you do so at your own peril.

I have purposely ignored any specific reference to budget items because I wanted to provide some high level context for the situation we currently find ourselves in.

The first quarter of 2013 is likely to be the first instance in several years when the stock foreign reserves decline rather than increase. Latest estimates put the import cover at approximately 14 weeks. In about a fortnight, the Central Bank governor will update the country in his first quarter review about the level of foreign reserves. Barring the sale of some government asset in the next week  to a foreign entity or some other extraordinary item,  I am confident this out turn will materialise. Obviously, this would reflect the decline in tourism value-added where we have less tourists, spending less over a shorter length of stay.

Against that backdrop, I am left truly bemused by the presentation 2013-2014 Estimates.

Historically, the estimates have turned out to be the best case scenario presented by respective governments as all have had to seek supplementary financing from the Consolidated Fund. 
Ladies and gentlemen we are about to start with a deficit of $1.2 billion to financed before the customary supplementaries are requested.

This is a time for drastic decision making. Under this scenario, everyone in the country is now vulnerable. My simple message is for you to tell your friends and family and even strangers to prepare themselves for the economic ride ahead.


I take absolutely no pleasure in making these statements in this forum this afternoon. I hope that time will prove me wrong. However, as a professional economist, my training does not allow for hope. We economists spend our time understanding the nature of relationships and part of our skill set is to identify trends whether positive or negative.

In summary, our job has never been to tell you what you want to hear. Barbados is not on the right side of the economic track. Therefore, politicians need to understand both the power and limitations of government.


Ladies and gentlemen, if you fail to prepare then you must be prepared to fail.


Thank you very much for your attention. 

Thursday, March 14, 2013

Public Lecture & Panel Discussion - Strategies for Growth in the Barbadian Economy


Dear Member,

With the aftermath of the general elections and looking to the future, the CICMC-Barbados Chapter will be hosting its inaugural lecture and panel discussion under the theme “Strategies for accelerating growth in the Barbadian Economy” on March 18th, 2013, 8:00pm at the Lloyd Erskine Sandiford Centre. This lecture comes at a pivotal time as our newly elected government will be seeking to navigate the country out of economic hardship. This lecture/ discussion will provide the audience with proposals for strategic, implementable initiatives that can jump start the economy, as well as ensure that it is steered in an economically viable direction.

The lecture will be presented by Professor Andrew Downes, Pro-Vice-Chancellor of Planning and Development at the University of the West Indies. He is a notable Professor of Economics at the University of the West Indies Cave Hill Campus and economic consultant to several regional and international organizations including the Caribbean Development Bank (CDB), ILO, IDB, World Bank and the UN. 

Panelists will include:
- Celeste Foster- former President of the Barbados Small Business Association and successful entrepreneur
-  Lalu Vaswani- President of the Barbados Chamber of Commerce and Industry
- The Honorable Robert Morris- Ambassador of Barbados to the Caribbean Community (CARICOM).

Admission is free. There will also be live streaming of the event at http;//trident10.tv.

Monday, March 11, 2013

Short-term Consultancies, Government of Guyana

Request for Expressions of Interest, short term consultancies, Government of Guyana (Closing date: Friday 5 April 2013)


 
Ministry of Tourism, Industry and Commerce
Support for Competitiveness Programme
Request for Expressions of Interest

Short-Term Consultancies


The Government of Guyana (herein after called the “Borrower”) has received financing from the Inter-American Development Bank (IDB) (herein after called “Bank”) towards the cost of the Support for Competitiveness Programme (SCP). The Borrower intends to apply a portion of the funds towards eligible payments under the Contract for which this request is issued. Expressions of Interest are hereby invited for the following consultancies:
  1. Consultant – To Develop CJIA as an International Air Hub;
  2. Consultant – To Conduct a Feasibility Study on Cruise Tourism and Terminal Development at Port Georgetown – Guyana; 
  3. Consultant – To Develop an Eco-Tourism Training Strategy for Guyana; 
  4.  Consultant – To Develop a Tourism Investment Guide for Guyana; 
  5. Consultant – To Develop Programmes to support a Hospitality Training Institute for Guyana.

Interested individuals who are fluent in English and from a Bank’s Member Country are herewith invited to submit their Expressions of Interest (EOI) together with CVs.

Applications must be received no later than April 05, 2013 at the following e-mail or postal address:  
     
Programme Coordinator
Support for Competitiveness Programme
Ministry of Tourism, Industry and Commerce                                               
229 South Road Lacytown
Georgetown, Guyana
Tel: (592) 223-5150 Ext. 263

Detailed Terms of Reference for the consultancies referred to above can be obtained from the abovementioned address or http://competitiveness.org.gy or http://www.eprocure.gov.gy/

Only shortlisted applicants would be contacted. 

Wednesday, February 13, 2013

Catch the Genie before the bottle breaks!!


Dispelling Political Myths with Economic Facts (Part 2)
By Ryan Straughn

In my previous article I sought to identify the fiscal genie and also demonstrated that it was loose. Some of us were blissfully unaware of the existence of the genie and the fact that is was loose made absolutely no difference to our way of thinking. Those who labelled themselves Bees swarmed to raise awareness of the loosed genie whilst those who labelled themselves as Dems sought to find excuses to avoid recognition of the facts. Despite the pending elections where winners and losers will be declared on both sides, in this coming economic battle we will either all be winners or all losers. 

The focus of this article is on the national debt situation and by extension how the fiscal genie (current account deficit) has contributed along with the evolution of interest payments as part of government’s recurring expenditures. First, some definitions and general information for clarity to prevent the further spread of misinformation and then some charts.

Definition 1: Debt trap is a situation where you add on a new debt in order to pay existing debt. (See http://wiki.answers.com/Q/What_is_debt-trap)

Definition 2: Debt trap is a situation in which a debt is difficult or impossible to repay, typically because high interest payments prevent repayment of the principal. (See http://oxforddictionaries.com/definition/english/debt%2Btrap)

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General Information – Recording of Debt

The reader should note that whenever government issues any debt security or acts as a guarantor for any of its statutory corporation the following usually happens. #1 Loans (Debentures & Treasury Notes) are secured on the Consolidated Fund and assets of the Government of Barbados. A sinking fund will be established by half-yearly appropriations out of the Consolidated Fund with accumulations of interest to enable the Debentures/Treasury Notes to be redeemed when they fall due.  For Savings Bonds, there is usually no sinking fund provided to meet redemption of bonds surrendered or maturing and payment of principal and accrued interest are charged on demand on the Consolidated Fund.

What this means it that government always knows in advance what its level of debt service will be in future time periods. So any loan issued at any point in the past has already been recorded in the national debt outstanding irrespective of whether it was done above the line (on budget expenditure) or below the line (off budget expenditure). The Accountant General and the Debt Management section of the Central Bank both keep meticulous records of all government issued debt. I said all this to say this, when politicians make references to “bringing off-budget spending and debt on to the books” it suggests that the public servants in both the Accountant General’s office or the Central Bank have plotted to hide the true nature of the national debt situation. Nothing could be further from the truth and since these public servants can’t set the record straight themselves I hope this note helps to dispel that much repeated myth. 

I hope I haven’t lost the reader but I feel it important to state that the one thing we know with absolute certainty is you cannot spend the same money twice. Therefore, bringing old debts to book must involve significant revisions to the past debt profile. It cannot only affect the present and future profiles.

Now to some graphs and tables.

Fiscal Current Account, Debt & NIS

For your information all data related to Public Debt Outstanding can be found at this link http://data.centralbank.org.bb/docs/downloads/Public%20Debt%20Outstanding.pdf

Since the end of 2007 gross general government and gross public sector debt has increased by $2.277 billion (48%) and $2.469 billion (43.3%) to reach $7.021 billion and $8.168 billion respectively by end of September 2012. As a percentage of GDP the debt ratios for gross general government and gross public sector debt rose by 26.4% and 28.7% to reach 79.3% and 92.3% respectively. See charts below.

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The reader should recall from the previous article that the cumulative current account deficit over the last 5 fiscal years was approximately $1.744 billion and is the single largest contributor to the sharp rise in debt levels. Government debt held by the NIS increased by $1.154 billion (82.2%) from the end of 2007 to reach $2.554 billion at September 2012. Of this amount, $981 million (85%) were additional debenture acquisitions.

Based on prospectus information available on the Central Bank’s website (General Press Releases), since 2007 up until end September 2012 the Bank had issued on behalf of the Government of Barbados $2.455 billion in securities inclusive of savings bonds, treasury notes and debentures. Total debenture issuance during this period up to the end of September 2012 was $1.3 billion. This means the NIS purchased three-quarters of the debenture issuance over the period. The reader should bear in mind this doesn’t include the additional estimated $200 million that was loaned directly to the UWI, Transport Board & BTA from the NIS in the last two fiscal years.

In the 2012 Budget presentation, the Minister of Finance outlined in great detail the administration’s plans to further utilise the NIS to finance government’s operations without making any reference as to how any of the finance (new or old) will be repaid. I have gone on record before to state that NIS funds should be used to provide the benefits to those that have contributed to the funds and government MUST NOT view NIS funds as part of the Consolidated Fund. We are already in dangerous territory with the public finances and we absolutely cannot allow the National Insurance Scheme to become insolvent because government is unable to control its spending.

Interest Payments

On account of the rapid rise in debt, interest payments have risen by $184 million to 527.8 million in FY2011/12 since FY2007/08. Between FY2002/03 and 2007/08 these payments increased by $75 million.

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The table above shows the extent to which interest payments exceed the primary balance. In five of the last ten years the primary surplus was not sufficient to pay the interest on debt. This is significant because as all other expenditures are subordinate to debt then the amount of revenue available to provide social services has diminished. Therefore it is imperative that the next administration begin to address the fiscal imbalances before we run out of creditors.  There needs to be a clear plan not only to correct the fiscal imbalances but also to repay the debt incurred from accumulated current account deficits. To do otherwise would find us in a situation where even if were to catch the genie, the bottle would already be broken and we find ourselves in a debt trap.

Additional Debt Post September 2012

Gross public sector debt outstanding at the end of September 2012 stood at $8.168 billion.  The reader may be interested to note that between the end of September 2012 and January 29, 2013 the Central Bank has issued on behalf of the Government of Barbados an additional $460 million in securities of which $395 million are debentures and $65 million Treasury Notes. Unfortunately, I have no information regarding the level of subscription for these additional issuances nor previous issuances but I think you probably have begun to catch the drift by now. It probably wouldn't be a million miles from the target to guess that the NIS  may have subscribed to the additional debt given what has transpired before. 

We appear well set and hell bent on falling into a debt trap from which there is no easy escape. As a country we must collectively decide to take the medicine required to first catch the loosed genie (correct the fiscal imbalance) and psychological prepare for the even harder task of putting the genie back in the bottle (repayment of current account induced debt). 

Happy Valentines.

Any comments are welcome.

Ryan Straughn is a member of the Barbados Economics Society

Dispelling Political Myths with Economic Facts (Part 1 Note)

Dispelling Political Myths with Economic Facts (Part 1 Note)
by Ryan Straughn

Since writing and posting my article last week, I've received numerous calls and emails so let me thank all those who took the time out to read the article and for providing feedback. Those contacts have very interested as persons have both scolded me and provided encouragement. Some have even gone so far as to tell me what I should and shouldn't write, how I should write and how not to write and called into the question the timing of the article. 

This week, I'm focussing on the national debt situation and by extension how the current account deficit would have contributed to that along with trajectory of interest payments but I will deal with these issues in part 2.

For those that are interested in replicating the charts in the previous post please note the following.

Data used to plot the charts were taken from TABLE G1 CENTRAL ADMINISTRATION - SUMMARY OF GOVERNMENT OPERATIONS which can be found at http://data.centralbank.org.bb/

Once there click I Agree and select Public Finance on the left side of the page.

The data range there is from fiscal year 1955/1956 to 2010/2011. Data points for 2011/2012 and first 3 quarters of 2012/2013 were obtained from the latest Central Bank of Barbados Press Release December 2012 (Table 4: Summary of Government Operations on page 11) using the following definitions.

Click to enlarge

I have long maintained that the public finances aren't in crisis because of a lack of revenue but squarely on account of an expenditure problem. I leave the reader with these 2 charts to ponder whether my assertion has any basis in fact.
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Click to enlarge

The genie is out and catching it is going to be a ....... not to mention forcing it back in the bottle. Everyone will have to put more than skin in the game.

I look forward to any comments.

Ryan Straughn is a member of the Barbados Economics Society

Wednesday, February 6, 2013

It cannot be business as usual…it must be business unusual


LUNCHTIME LECTURE SPONSORED BY THE UNIVERSITY OF THE WEST INDIES AND THE CENTRAL BANK OF BARBADOS AT THE GRAND SALLE TOM ADAMS FINANCIAL CENTRE

30TH JANUARY, 2013

Hilford A. Murrell

HAS TERTIARY EDUCATION RESPONDED TO THE SOCIAL AND ECONOMIC CHALLENGES OF BARBADOS


I am informed that I have been selected as the first in a number of presenters for this year's Lunchtime Lecture Series under the sponsorship of the University of the West indies and the Central Bank of Barbados. In the prosaic of cricketing parlance, I called upon  to face the 'new ball'.  This situation teases my memory to  recall the  day I was invited to attend a cricket coaching session which was being directed  by cricketer emeritus, Mr. Everton Weekes, now Sir Everton Weekes.

With the charisma and  diction  that would be the envy of any Oxford don, he emphasised to the gathering of  young Lodge School students, the importance of keeping one's eyes on the ball. In explaining the rationale for this instruction, he indicated that the bowler's job  is to send you back to the pavilion as quickly as possible while, as the batsman, your responsibility is  to frustrate his intentions. He demonstrated how we should anchor our right  foot to enable us to pivot, drive or execute a shot in response to the delivery but stressed that we should at all times keep our left foot forward with our heads  over the ball. I was selected as the first candidate to rehearse the instructions that were given.  I failed miserably, not  even able  to make connection with  the ball. As a result the coach with almost spontaneous assessment   gestured ' next man' and with the colouring of  a seasoned diplomat, declared '....by the way  youngster, you do not  have to come back'.  All I can say is that I am more mature  now.

UWI Cavehill  and the Central Bank of Barbados
Before I commence  my address on the selected topic, I feel compelled to thank  the Cavehill Campus of the University of  West Indies  and the Central Bank of Barbados for providing sponsorship to facilitate  this initiative of Lunchtime Lectures. Together, these two institutions represent an exemplar of over 90 years of dedication and direction that has  enlightened and, in no small measure, transformed our society. We therefore  hope that these series of Lunchtime Lectures will continue as a  platform for  public education.

In this context of education, we must rightly  be reminded that education should never be considered a destiny but a journey. A journey that  that may lead us into unchartered waters. However, girded with the presence of tolerance and forbearance, characteristics that have been nurtured and inculcated  in the process of higher education, no burden is too heavy, no task too difficult to accomplish.

The relevance of Education- the Regional  perspective

As I seek to address the topic Has Tertiary Education responded to the social and economic challenges of Barbados, let me be the first to concede that this is a wide-ranging topic which neither time nor opportunity will facilitate its fullest  exploitation. My focus of attention may not target the varied and varying syllabi presented for  tertiary education  but   I will endeavour to speak to those several beneficiaries of that upper level of education.

 I am sure that you will forgive me if I employ  as my point of departure, the opening lines  from a  1960 publication  entitled The Tyranny of Economic Paternalism in Africa penned by S Herbert Frankel, Professor of Colonial Economic Affairs in the University of Oxford. I have chosen the opening extract from this booklet as it embodies and embraces the very philosophical vista that will engage our discussions. 

Here the Professor asserts " The history of economic development of new countries can be usefully looked upon as a process of adjustment on three planes: (a) political and territorial (b)sociological and economic, and (c) psychological. None of these can be separated in hard and fast compartments. They can all be seen as a struggle which is both objective and  subjective." Some of you may begin  to wonder what  political and territorial adjustment has to do with the topic at hand.

Permit me therefore to clarify. Firstly, the University of the West Indies  is a regional institution which continues to shape the philosophical and , at times, the ideological inclination of its students. The economic survival of Barbados and is fellow  Caribbean States  demands that there is some stable level of regional integration. This assertion is  evident  from  the persistent  calls for regional unity that were  exemplified and articulated  by  Professor Sir Arthur Lewis  in his publication The Agony of the Eight . In this 39 page booklet, Sir Arthur assiduously  chronicled the simmering  differences that prevailed among leaders of the West Indies Federation until it eventually  collapsed on 31st May 1962

There is an old adage which states ' pressure from without forms unity and cohesion within'. With the designation as a Small Island Developing State, Barbados shares many things in common with its Caribbean neighbours -  diminishing economic growth, growing unemployment, high debt servicing burden and a significant dependence on foreign capital assistance.  This affirmation coupled with  a virtual warning to steer the Caribbean  territories towards regionalism, was expressed in the  publication The Third World in the age of Globalisation....Requiem or New Agenda? Here, its author Dr.Ash Narain Roy, Assistant Editor of The Hindustan Times, New Delhi, unreservedly  declared that in this world of rabid global competiveness, regional integration is a necessary imperative if social and economic survival is to be assured. And what is the Number 1 priority in responding to this New Agenda .....Education.

It is therefore  instructive that the Revised Treaty of Chaguaramas establishing the Caribbean Community and The Caricom Single Market & Economy (CSME) to which CARICOM member states gave their signature of approval  on 5th July 2001, included in ARTICLE 6-  Objectives of the Community....." intensified activities in areas such as health and education." Moreover,  in  ARTICLE 46  which addresses the Movement of Skilled Community Nationals, graduates of tertiary education (University Graduates) head the list of the categories  of  Community nationals accorded the right to seek employment in their jurisdictions. The message being conveyed is that tertiary education is at the vanguard of national and regional development. But one may rightly ask, is  that opportunity being fully exploited?

Education - an instrument of economic policy

Before seeking to respond to that question, please bear with me as I take leave  into the realm of education as an instrument of economic policy. In this regard , there is a generally accepted principle,  that investment, particularly international investment, seeks a resting place which gives comfort to its  long term strategic plan. Heading the list of such expectations, is the educational quality of the workforce coupled with a social environment that is not far removed from being a replica of its home base.

While these basic precepts are standard prerequisites,  Lester Thurow, the Lemelson Professor of Management and Economics at the Massachusetts Institute of Technology,(M IT)  was more candid and unceremonious in his determination of such expectations. In a publication  Fortune Favors The Bold....what we must do to build a new and lasting global prosperity, the MIT Professor asserts that business firms can effectively veto any country's entry into the global economy. He posits that business firms , not countries, decide whether a country has the right criteria to participate when they decide where they should locate their activities. Thurow then summarised his opinion  in an  undiluted expression " ......No one is interested in producing the goods and services of tomorrow in a country with an illiterate workforce, without modern electronic infrastructure, and in a context of social chaos - crime, corruption, and no social services."

The message from the MIT Professor is that in an  environment of  incisive international competitiveness, countries have to learn how to sell themselves to global firms as good places to do business. As  a country that yearns to attract foreign  investment,  Barbados well understands the arguments on the importance of education as an economic input hence the adoption of a  socioeconomic policy that grants free education from primary to tertiary level. However, can Barbados cope  in this challenging  environment of fierce global competition?

Coping with the challenges in a dynamic world

Attracting  foreign investment is  both a social as well as an  economic imperative; social as a source of job creation and economic, as a provider of foreign exchange which is vital to economic sustainability.
In both categories, Barbados must place itself at the cutting edge of information and communication technology. This applies as much to the mature worker as it does to the youth who are more readily  inclined to grasp any innovative concepts. In its 2007 World Development Report styled Development and the Next Generation, the World Bank presents a case for more effective use of technology both as a tool for learning as well as for employment.
With a focus on tertiary education, the Report lauds the Internet's capacity for two-way interaction in that it offers the greatest promise for improving access and affordability and for providing the flexibility  to combine work  and further study. From a domestic and private  perspective, the Internet is the playground  for the youth and this offers social challenges especially in households where there is limited or even an absence of computer literacy.

To stem the possibility of our unsuspecting youth being entrapped in child pornography and other forms of  deviant exposure, tertiary  graduates in his discipline should  form themselves into volunteer groups and teach the youth to be safe and responsible users of the new technology.

I mentioned earlier that information and communication technology (ICT) was one of the several prerequisites of attracting business to our shores. In fine tuning these policies the   World Bank Report  states that the main ICT priority of any government is to ensure a good investment climate that allows private companies to serve the growing demand for ICT services, by enacting regulations that provide for easy entry and competition.

In addressing the concerns of the youth, the Report charges that Government should provide good regulatory conditions for modes of communal access, such as village phones and Internet cafes. Above all, the Report calls upon Government to provide the youth with skills needed to best take advantage of new technologies, through teaching global languages and developing ways to teach youth to be responsible users of the technology.

When we speak of Government in an abstract sense, we are actually referring, in the main, to those  persons  who at one time or other are the very beneficiaries of tertiary education and who can direct  and assist in the formulation of Government policy.

Keeping pace with the competition

I mentioned earlier the subject of international competitiveness. In any civil activity that involves an element of competition, it is not uncharacteristic to ferret out  even  some  basic  understanding of a rival's procedure and propensity. The same can be said of education as a fulcrum for economic success.

  In this context I have chosen to make reference to the broad views expressed by David Coates, a Worrell Professor of Anglo - American Studies at Wake Forest University, North Carolina. In his publication Models of Capitalism......Growth and Stagnation in the Modern Era,  Professor Coates   affirms that the importance of education as an economic input has been triggered by the intensification of  international competition. He then  advances three distinct theses to support his claim.
In the first instance, Coates   asserts that education is now the nation's key resource - its ultimate guarantor of economic success -  because it alone focuses on the one input into economic activity. He further added  that  in an age of global capital, investment in human capital is all that remains as an instrument  of policy for a government  that seeks to attract  global investment to its territory and economy. In  short, his thesis reminds us  that educational performance becomes the central    determinant of where high-value-added production facilities settle and reside.

The second thesis advanced by Coates recognises the paradigm shift in business culture. He argues that the old principle  of sustained  profitability  through market dominance and economies of scale have given way to less tangible assets  such as Research and Development. This paradigm shift has introduced a new work ethic which again places education at the forefront of economic growth.  What this means is that successful economies will in future place greater  reliance on tertiary education as central to economic success.

In his third hypothesis, Coates argues that the new paradigm will renew enthusiasm for educational routes to economic competiveness and this in turn will raise productivity of the economy as a whole.

The examples proffered by Professor Coates are as relevant to Barbados as they  could be to and other developing country in the Caribbean or elsewhere . It is on this premise therefore  that we will now turn attention to the domestic market/environment.

Tertiary Education and the Local Environment
The social revolution of 1937 was a watershed in the history of Barbados. Thereafter, the  Colonial Government maintained a watching  brief on its West Indian colonies then, one of its main sources of sugar. On the pretext of being a protective and caring  landlord, the Colonial government commissioned Sir George Seel  in 1951to undertake what in modern terms, would be referred to as an audit of the Development and Welfare of the West Indies. In  his Report which  was shared with the Colonies, he included as a point of reference,  a statement made by British Prime  Minister Benjamin Disraeli in the House of Commons on 15th June 1874 ....Upon the education of the people of this country the fate of the country depends. Ironically, this broad statement continues to be the bedrock and standard bearer  of our social and philosophical perspective.

In this context, I could not fail to bring to your attention  part of the citation in 1988 by Princeton University on Nobel Laureate , Sir Arthur Lewis who is reported to have devoted his life to the thesis that "the fundamental cure for poverty is not money, but knowledge."

As I speak to the positions adopted by some of our graduates of tertiary education, it  behoves me to rekindle  the memory of those present  as well as those absent  that 'To whom much is given, much is expected'.

I make this declaration because  I hold steadfast  to the view that  one  of the fundamental principles of education is to lend a helping hand to the less fortunate. This means that the higher one ascends the ladder of educational exposure, the greater the burden of responsibility. Such  responsibility must be expressed not only in the narrow confines of the workplace but also in a specific as well as general sense for public edification.

As far back as the Colonial Estimates for the fiscal year 1948/49 expenditure under the head of  Education was £234,108.00  equivalent to 25% of overall Estimates. This trend of high allocations to Education  has continued with the result that during the last 15 years cumulative expenditure under the Head of Education stood at BDS$6,566,605,908.With such levels of  expenditure on education,  are we getting open feedback on matters of  to public interest and concern?  I can hear the rumblings in the background..."Me and get transferred" ," Not me, I have my children to feed " " Let so and so make that suggestion, because  she/he is a "B" or "D" depending on which  political Party holds the reins of government. If this muzzled situation persists one may be inclined to question to what avail is this  expansive expenditure on education.

The truth of the matter is that for long a  time  Barbados has become too politically polarised. This trend of  purposely  engineered party affiliation  has stymied and stifled critical analysis  and intellectual discourse for fear of parliamentary backlash. It is indeed ironical that with  the privilege   extended under the umbrella of  our system of parliamentary democracy, these very Parliamentarians have a licence to speak freely and fearlessly of and about anything and , at times, about anyone of their choosing within the precincts of Parliament.

 However, if  the  maturity of higher  education is to be realised and manifested, those who have benefitted from  the highest station of education must join forces and let their voices be heard on matters of public interest and concern. We must ask ourselves, for how long will  our society continue to be influenced only by the few commentators from the Cave Hill Campus who enjoy  security of tenure in their workplace? My guess is for a long time. What is yours? The reason simply is   - the preservation of job security in a society with  limited employment opportunities.

But there are times when personal conscience takes precedence over political patronage. I refer no doubt to the passage of The Tenantries (Freehold Purchase ) Act 1980 which for the first time,  allowed working class persons to own the  parcel of the land on which they resided. The price of ten cents per square foot may be inconsequential but the enshrined right of passing this legacy  to generations yet unborn will be immortalised in the memory of these workers.

It is indeed an enduring shame that some of  the very  offspring from   working class background who attained the highest levels of education and should therefore know better, frowned upon what may ordinarily be termed a 'gift' to those who, with minimum wages,  cut and loaded our canes, forked and weeded our cane fields, picked up the trash and headed canes in the most difficult terrain , in the boiling sun and pouring rain. They withstood all these hardships  in an effort to enhance the Barbados' foreign exchange  earnings  from sugar production which, after  surpassing the 200,000 mark  in 1967, has steadily  declined to an all time low of 23,524 and 24, 526 tonnes for the years 2011 and 2012 respectively.

If a political argument may be advanced for not supporting one's  rival, there is no excuse why those of higher learning distanced themselves from any association with the working class who sought their assistance. Let me give you an example. In 1997, in the spirit of worker empowerment, Government with the blessing of the Barbados Workers Union (BWU) decided to partially privatise some of the operations of the Transport Board. A company United Commercial Autoworks Limited(UCAL) was incorporated and a Prospectus issued with a public offering at $1.00 per share. With all the diatribe of support for the working class, guess how many private individuals persons sought to acquire shares in this working class company.......less than twenty.

There is a song which asks "Where have all the flowers gone?"  Why did all those beneficiaries of higher education distance themselves even to give critical support  to  an initiative to which  they would have been taught, and indeed expected, to give guidance and direction? These persons must be reminded that those who are most highly educated have a moral obligation to come to the assistance of the less fortunate. This proclamation was made in a publication The Creation of Wealth in which its author Professor Brian Griffiths makes reference to the following quotation from renowned economist/ philosopher Adam Smith ".....In  civilised societies man stands at all times in need of the cooperation and assistance of great multitudes, while his whole life is scarce sufficient to gain friendship of a few persons. In almost every other race of animals each individual, when it is grown up to maturity , is entirely independent, and in its natural state has occasion for the assistance of no other living crature. But man has almost constant occasion for the help of his brethren."

However, despite the national stand-off, come 31st July 2013 , UCAL will celebrate its Sixteenth Anniversary under the Chairmanship of Sir Roy Trotman. It worthy of  note that during its sixteen year existence  not one employee has been laid off or put on short week employment. Why therefore is all the rhetoric  about giving ordinary citizens  a stake in the ownership  of productive assets via partial privatisation?

Facing the challenges of tertiary education
I would be the first to admit there may be some fear and trepidation when commenting on the policies and programmes of Government or even the Private Sector. When I began to comment on financial and other  affairs, I was summoned to the Central Bank and told that  99 persons will have something to say, but  only one will write. He advised me that some readers  will criticize you, others may consider your writings of some worth, but do not be discouraged.....never give up. That advice came from Dr. De Lisle Worrell in the mid 1980's, and I now pass it on to those other beneficiaries of higher learning.

When I delivered an address at the Graduation Ceremony of one of our Secondary Schools on 7th July 1991,  I was informed that over the  last ten years, 2914 local students graduated from UWI. In contrast, the figure for local graduates over the period 2007 to 2011 stands at 8059.This means that the pool of persons capable of  commenting on both public and private matters of interest and concern has grown significantly.

I said earlier that there are many persons in our society who express their sentiments in the comfort of the living room in fear of victimisation. However, I recall that the late Prime Minister David Thompson, in his maiden speech to the BCCI in February 2008 warned them not to tell him what they think he wants to hear. I will take licence from our former leader and make reference to some areas of national concern. ****(ad lib)

Privatisation, Entrepreneurship, Share-ownership are all wrapped in the same cloth. There is a general feeling among some of us  that everything imported  is better than local...even ideas. Therefore, on this question of privatisation, allow to quote from an article in the Financial Times of Thursday 20th September1984. Here Dr David Owen, then leader of the SDP stated " the best way of promoting a progressive and prosperous social market economy is to insist on a more dispersed ownership of property and assets, so that the benefits and the degree of personal independence which it makes possible become widely available - instead of being confined to the few."
Transport Board
For the Financial years 1991 to 2008, the Transport Board made cumulative losses of BDS$245,539,696.00. With a fleet of 294  omnibuses as against 164 Minibuses and 227 ZR's public transport is already in the hands of the Private Sector. If we are to go forward, further sections of the Board's operations can be privatised in a manner similar to UCAL. Allow  the same working class persons to establish corporations similar to UCAL where there were no job losses. The only complaint that so far has surfaced about privatisation is  the possibility of not having a late bus for workers. Let us work together to reduce these spiraling losses ever being mindful that we now have 75060 private cars, 566 Maxi Taxis and 1260 registered Taxis.
 It cannot be business as usual - it has to be business unusual.

Summer Camps
Government has  committed itself to the principle of entrepreneurship. No one will deny that this has been a commendable suggestion which has borne fruit. During the period 2008  to 2012, 12171 Business Names have been registered. This represents an increase  of slightly less than  300 over the previous five year period of 11883.

Let us put  back the Summer Camps into the hands of the youth thereby creating a novel system  entrepreneurship. This will allow these  young  individuals  an opportunity to gain experience in areas such as building  inter personal relationships, budgeting, target setting, and problem solving, to mention only  a few. Above all, contributions by government will be towards the most needy and should be a considerable saving in the public purse. It cannot be business as usual-it has to be business unusual

Constituency Councils/ SSA

I have lumped Constituency Councils and the SSA together because I am of the view that a meaningful  relationship between these two bodies can be a forum for job creation. Let me make my position absolutely clear. I agree that there should be some tier of responsibility  between the Parliamentary representative and his/her constituents but the alignment of a Council to a particular representative conveys a master/ servant relationship. I have already made my position clear on this matter to the Minister of Finance and have also written my piece  on the subject.

The re-branded entity can circulate persons living in the several new developments and seek their authority to institute  private garbage collection days. If properly structured,  the cost to householders would be sufficient to fund  the operation and will create a new cadre of private working class owners along with additional  jobs or  for garbage assistants. This will  relieve the pile up of garbage throughout the island where such developments reside.

There will be no job losses and existing garbage units can be deployed in those densely populated and suburban areas  where is likely to be an overflow of garbage. Perhaps Government may even wish to include any such private expenditure as an allowable tax deduction. It cannot be business as usual - it has to be business unusual.

Conclusion
When I compiled my presentation, I had no knowledge that the date for General Elections would have been announced. Some of what I said may therefore find its way on the political platforms. That is good because, it would mean they have read it or heard about.

I thank all of you for coming at the sacrifice of your luncheon hour. God bless you and God bless Barbados.

Hilford A. Murrell, LLM, LLB
Attorney at Law
Vice President, Barbados Economics Society