Living in Barbados

You Really Going To Crush My Corns?

noreply@blogger.com (Dennis Jones) — Wed, 16 Dec 2009 20:10:00 +0000

What is the worst news that a Caribbean island can get? It may be warnings of an impending hurricane: the season is long and many such alarms come and go without any damage and complacency sets in. It could be the rumblings of a volcano, signalling that one of the active, though dormant caps may blow. We have seen their devastation often enough on those tiny isles, such as Montserrat: the British arrive and offer to take people away from danger in boats, and many refuse. It could be a plague of African snails, munching on our crops and devastating what harvests were due. But if we are offered a bounty to capture these beasts the money goes unused and if we are told we can cook and eat them, people are more ready to say "Who me?" than swallow their pride and prejudice and chew on the grubs.

But worse is the news that British Airways unions are threatening a strike to happen over the Christmas period. We read that "The 12-day walkout could cost loss-making BA £30million a day and ruin the airline." But the strike could cost many islands their tourist revenues for the season. The UK news lines are reporting the frantic action being taken by airline and potential passengers (see Mirror report): court cases, re-booking like crazy.

I spoke to some academics and practitioners in the tourism sector recently about the fact that I dislike tourism for many reasons. One is that the industry is hard to control from the suppliers side: you cannot make more sun, sea or sand that easily, or make them better; you can make rooms fancier and offer more discounts, but they eat away your earnings. I also do not like it as a pillar for development, because it sucks up so many national resources that cannot then be diverted elsewhere if needed. Unused hotel rooms/nights are a 'perishable' good a well known US hotelier said recently: once past their 'sell by' date they are useless.

So what will countries like Barbados do if the Brits cannot come in a few days time? Not much Christmas cake can be made and eaten if those airlifts do not arrive? The hardy will try to get here by hook or by crook and by any airline routing they can--they have money to preserve too. Maybe it needs a Churchillian effort to 'evacuate' Blighty and deposit ship loads of Brits on the beaches--like 'Operation Dynamo' from Dunkirk in reverse. Makes you feel miserable?

Here's to a merry Christmas.

A Tiger Caught By The Tale

noreply@blogger.com (Dennis Jones) — Sun, 13 Dec 2009 12:06:00 +0000

I may be the only person writing these past two weeks who has not been like Tiger Woods and bowed to a simple temptation, in this case to write about the fall from grace of the golfing phenom. Truth is that TW, or Tiger, has become the butt of jokes so fast that I had to step back and wonder if the readiness to pull down the great is so strong that as soon as we get a handle on a rope that will tug such people to the ground that we all pull on so hard. We are mostly all quite normal, so the super normal is hard to understand and when it or they show that they are superbly normal and horribly flawed in go the fangs on we love to watch the blood spurt. So, with Tiger. Now, for my piece of the flesh.

Caribbean people often laugh that the seeming prudeness of societies such as America's, which flaunt wild and loose lifestyles, then seem shocked when everyone appears to live by loose and wild lifestyles. In this region, we are far from perfect but in some aspects we have reached a very sensible position, and the area of sexual promiscuity and infidelity is one such area. We joke about: 'how many outside women one man has' (aka sweethearting); 'how many outside children' a man or woman may have ('giving bun', in Jamaican parlance); how a man may be fooled into thinking that the children his wife or woman bears are his ('jacket'). It would be a matter of pride and stature that a man was found to have had as many as 11 affairs during the period of a 4 year marriage, let alone being a near unbeatable golf champion at the same time. That is what we call highly energetic. We have many famous songs about the process of being caught and denying it. One of the all time classics is Pluto Shverington's 'Your Honour':

For those who are challenged by Jamaican patois, here are some of the lyrics:

Oh lord, anybody see my trial grieves for I
Why lord I was badly beaten, found by loved ones
Battered by an irate husband
Searching for a man that wasn't I.
When we reached the court we garn inside,
the hand of justice shall preside
over this case the trial shall begin.

Your Honour I was inside de closet
minding I and I own business.
Your Honour it was a complete stranger
causing these disturbances.
Him claims of me touching him wife
which is a wicked and awful lie
Me two hands 'em was occupied
me shirt's in me left
and me pants in me right
me hand 'em was occupied
me shirt's in me left
and me pants in me right

Dear Judge, can this court accept my story from me heart?
Why Judge,if by chance you don't believe this tale
ask him why she will not fail to agree I was a better man than he.
Just in case she refuse to answer, ask de maid
downstairs, Agatta
she gonna be glad to testify for me.

Not the alibi! My hands were occupied...Bottom line is that Tiger could swan around the Caribbean without all the hair shirt stuff and maybe less than sincere promises to turn over a new leaf.

But, as the comedic tendencies have show, Tiger was tailor made for ribadly. He has many things going against him, not least his name. 'Tiger': now a mere pussy cat rather than a fearsome, growling, stalking, attacker; we have him by the tail and want to hear his tale; can he change his stripes? (or spots, as one writer asked). 'Woods': he would, of course; we want to know about his wood; tell us about the stick.

His sport is all too easy to parody. 'He got his balls too close to too many holes', is one great line I have read. He wanted to have a hole in one but could not be satisfied with one hole, or really wanted to have one in a hole. Now, his wife has given him a hole in his head and he may soon have a hole in his pocket. He should have had no trouble getting out of the brush. Did he use his iron or his wood, and what did he do with his wedge? He was using his putter to do too much puttering, and if he had just kept it to a few pots in the garden shed then he would have less dirt on his hands now.

But, TW has shown me many simple truths. I shared with some friends yesterday my view as an economist:

"Everything has a price, and supply and demand do work. Tiger found out that truth is a currency. Had he not lied what would have been the 'value' of exposing him? Very little. Having lied (making truth more scarce), he bid up the price of truth. Econ 101."

Not everyone may see it this way, but interestingly, John Daly, a fellow golfing professional, was reported as saying, "I feel like if there's anybody in this world - after what I've gone through, the ups and downs - I might give him some advice. They always say there is nobody bigger than the game of golf, but right now in these times there is, and it's him," he added. He said Woods should have come out publicly when news of his affairs first broke and told the truth.

Some women friends of mine have been mercilessly roasting les boules du tigre all week, and as most of these ladies are black, they have lammed him for his choice of colour. I actually think that this is not as much of an issue as the ladies would like, because they come to it through their racial definitions, and clearly TW did not share them. Why? Is it a major problem? Hard to say. In the same way that POTUS does not share the racial definitions and categorization of so-called African Americans. But that will be a discussion for the ages.

I am wondering about all the funky financial deals TW seemed ready to put up to keep his pecker pecking. I am also intrigued by all the 'victims', who are actually more like carrion, ready to feed on the boy. I am absolutely sure that not one of Tiger's 'conquests' thought that she was 'the one'. I am even more convinced that for them, Tiger, was not 'the one'. The player was being played as hard as he was playing. It was hard on him that he could not see that. Hard on him, indeed.

Now, he has decided to step away from what he should have focused on, his golf, to try to repair his family relationship. Is he sincere? When you are the product of image managers--remember that Tiger's playing wardrobe is meticulously choreographed by Nike and others--it is hard to believe that such actions are 'all natural'. I wondered how he had to time for all the double and triple and quadruple dipping. All those golfers I know have no relationships because they seem to spend all their time golfing and hitting their balls. No time for clubbing as they are too busy with their clubs.

His sponsors are taking different steps but broadly putting (with put, not putt-ing) distance between Tiger and their products--Gillette, Accenture...not heard from Buick (who must have been miffed and pleased that he mashed up a Cadillac). My wife has put out the warning that after Henry and his hand on the ball, have Tiger with his balls in his hands, so what of Federer? Will we soon hear that Roger was doing his thing to get felt up--other than just brushing balls with his forehand strokes. In fact, Roger's stroking of balls and his fore(hand) play should make his a very worrying story.

None of our interest is inappropriate: we made him with our adulation so we can demolish him with our disapproval. These people are thrust on us and we lap them up. Now, we are ready to spit them out. Personally, I want to remain obscure, if fame has this kind of price. So when people start to call me a celebrity because I blather on the radio and have a blog, I duck my head and say "No way, brother."

So, I am off to brush my balls and get felt up good and proper with a man, to boot. I will be courting him hard and if he wants to know what is my racket, I will tell him honestly...it's a Wilson. He may want to give me his Head to play with, but I'm no fool and will decline, graciously.

Blessings.

Barbados And OECS Corporate Performance And Outlook Report

noreply@blogger.com (Dennis Jones) — Fri, 11 Dec 2009 10:57:00 +0000

Dr Justin Robinson, Head of the Department of Management Studies at the University of the West Indies, Cave Hill, shared with me a new report on sub regional corporate performance. Data were collected in September. The report will be published on a quarterly basis, data will next be collected in January of 2010 and a report published in February 2010.

The survey indicates that financial performance of the majority of companies has worsened over the last six months, with “the majority of companies in St. Lucia, Antigua, St. Vincent and Barbados report a worsening of financial performance”, surprisingly “public utilities sector should report the most significant decline in financial performance”.

The majority of companies in St. Kitts, St. Lucia, Dominica and St. Vincent “expect the decline in financial performance to continue for another six months, while a majority in Grenada, Barbados and Antigua expect financial performance to improve over the next six months”. But, the “majority of companies in all countries expect financial performance to improve within a year”. All industries, except for public utilities, “expect financial performance
to improve within a year, but the slump is expected to continue for another six months in the crucial construction, and tourism sectors”. This suggests that these economies have some serious economic contraction ahead in 2010.

The “investment outlook for the corporate sector in Barbados and the OECS is bleak over the next six to twelve months”. The survey results indicate that “the majority of companies have no capital investments of any form planned over the next six or twelve months”, and this is in all sectors with the exception of companies operating within the community/social/personal services. This implies that the “majority of companies in Barbados and the OECS expect the level of employment in the corporate sector to remain unchanged or increase slightly over the next six months”. Companies suggest that they “do not plan major layoffs”, despite the fact that they have experienced worsening financial performance over the last six months, and expect financial performance to continue to worsen over the next six months, and “expect employment to increase over the next twelve months”, and they are more optimistic about employment prospects over a twelve month time horizon as compared to a six month horizon.

Companies “expect the local economy to remain largely unchanged for the next six months, while they have a positive outlook for the global economy”.

Why these local conditions prevail is not a part of the survey, but it would be useful in future studies to try to get behind the thinking of local firms, in particular regarding their attitudes and apparent reluctance to lay off workers in hard times.

*********************

Barbados and OECS

Corporate Performance and Outlook Report

Introduction and Background

We are pleased to introduce the “Barbados and OECS Corporate Performance and Outlook Report” published by the Department of Management Studies at UWI, Cave Hill. The survey aims to provide policymakers and the public in general, with timely and readily accessible information on the, Financial Performance, Financial Outlook, Investment Outlook, Employment Outlook, Local Economic Outlook and Global Economic Outlook, as it relates to companies in Barbados and the OECS. The aim is to provide more of a ground level perspective on financial and economic matters as compared to the more macro-economic type data that is typically available.

The results of this edition of the survey are based on responses from 758 companies in Barbados, Antigua and Barbuda, Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines (Table 1 provides a breakdown of the responses by country). The data was collected in September, 2009, thus companies would be reflecting on their performance from March to August of 2009, and their six month outlook would be from September to February 2010, while the twelve month outlook be from September 2009 to August 2010. The report will be published on a quarterly basis, data will next be collected in January of 2010 and a report published in February 2010. The report is funded by the Department of Management Studies at UWI Cave Hill and we encourage a broad cross section of organizations to participate in our survey as we seek to provide this public service.

Table 1: Respondents’ Profile

Country	Frequency	Percent
Antigua and Barbuda	172	22.7
Barbados	80	10.6
Dominica	77	10.2
Grenada	151	19.9
St Kitts	51	6.7
St. Lucia	140	18.5
St. Vincent	87	11.5
Total	758	100.0

Section 1: Financial Performance and Outlook

Financial Performance

As a measure of financial performance, companies are asked to indicate whether their financial performance compared to six months ago was, much worse, worse, unchanged, better or much better. Based on their responses, a “Financial Performance Index (FPI)” score is then computed. FPI scores above 100, indicate improved levels of financial performance, whereas scores below 100 indicate worse financial performance compared to six months ago.

The FPI score for companies in Barbados and the OECS is 85, indicating that the financial performance of the majority of companies has worsened over the last six months. Despite the much publicized economic slowdown of the last year, the majority of companies in Grenada, Dominica and St. Kitts, report unchanged or improved financial performance over the last six months. However, the majority of companies in St. Lucia, Antigua, St. Vincent and Barbados report a worsening of financial performance. Companies in St. Lucia and Antigua report the most significant declines in financial performance, with nearly two-thirds of companies reporting a worsening of financial performance. See table 2 and figure 1 for a summary of these results.

Table 2: Financial Performance Compared to Six Months Ago

Country	Much Better / Better	No Change	Much Worse/Worse
Antigua and Barbuda	13%	24%	63%
Barbados	18%	26%	55%
Dominica	31%	36%	33%
Grenada	35%	46%	19%
St. Kitts	37%	20%	43%
St. Lucia	6&	30%	64%
St. Vincent and the Grenadines	18%	26$	56%

Figure 1

The decline in financial performance is evident across a broad variety of industries. The entertainment and education and cultural services industries have managed to weather the storm so far and report improved financial performance, whilst all other industries report a worsening of financial performance over the last six months. While the declines in construction, retail, wholesale and tourism related industries are to be expected, it is somewhat surprisingly that the public utilities sector should report the most significant decline in financial performance. See figure 2 for a summary of the results by industry.

Figure 2

Financial Outlook:

The companies surveyed were then asked to indicate whether they expect their financial performance in the next six/twelve months to be, much worse, worse, unchanged, better or much better than current financial performance. Based on their responses, a “Financial Performance Outlook Index (FPOI)” score is computed. FPOI scores above 100 indicate an expectation of improved levels of financial performance, whereas scores below 100 indicate an expectation of worse financial performance.

The majority of companies in St. Kitts, St. Lucia, Dominica and St. Vincent expect the decline in financial performance to continue for another six months, while a majority in Grenada, Barbados and Antigua expect financial performance to improve over the next six months. However, the majority of companies in all countries expect financial performance to improve within a year. All industries, except for public utilities, expect financial performance to improve within a year, but the slump is expected to continue for another six months in the crucial construction, and tourism sectors. These results are summarized in Table 3.

Section 2: Investment and Employment Outlook

Investment Outlook:

In order to evaluate the investment outlook for Barbados and the OECS, companies are asked to indicate whether or not they have any major capital investments planned over the next six/twelve months. An “Investment Outlook Index”, is created based on their responses. An index value greater than 100 indicates that the majority of companies have major capital investments planned over the next six/twelve months, while an index value less than 100 indicates that the majority of companies have no capital investments of any form planned for the next six/twelve months.

The investment outlook for the corporate sector in Barbados and the OECS is bleak over the next six to twelve months. The survey results indicate that the majority of companies have no capital investments of any form planned over the next six or twelve months. These results translate to a six month Investment Outlook Index (IOI) score of 72 and a twelve month IOI score of 52. Companies in St. Kitts have the most optimistic investment outlook over the next six and twelve months with IOIs of 104 and 96 respectively, while companies in Grenada have the most pessimistic six month outlook with an IOI of 52, and St. Lucian companies the most pessimistic twelve month outlook with an IOI of 32. The bleak investment outlook affects all sectors with the exception of companies operating within the community/social/personal services, where a majority of companies have major capital investments planned for the next six months. These results are summarized in Figure 3 and Table 4.

Country	Financial Outlook Index Scores (for the next 6 months)	Financial Outlook Index Scores (for the next 12 months)
Antigua and Barbuda	101	121
Barbados	113	129
Dominica	95	122
Grenada	115	117
St Kitts	92	118
St. Lucia	93	119
St. Vincent	96	120
Industry	Financial Outlook Index Scores (for the next 6 months)	Financial Outlook Index Scores (for the next 12 months)
Agriculture, fisheries, and mining	107	124
Educational and cultural services	107	118
Government services	93	107
Manufacturing	112	133
Financial/banking/insurance services	112	125
Public utilities	86	90
Retail/wholesale	98	120
Entertainment	106	123
Business/professional/real estate services	99	120
Construction	95	109
Transport, communication and storage services	95	117
Community, social, personal services	97	118
Tourism/restaurant/hotels	98	113
Other	113	137

Table 3

Financial Performance Outlook Index by Country and Industry

Note. Index scores above 100 reflect optimism, whereas index scores below 100 reflect pessimism.

Figure 3

Industry	Investment Outlook Index Scores (for the next 6 months)	Investment Outlook Index Scores (for the next 12 months)
Agriculture, fisheries, and mining	57	35
Educational and cultural services	64	44
Government services	30	21
Manufacturing	91	56
Financial/banking/insurance services	46	45
Public utilities	22	22
Retail/wholesale	80	53
Entertainment	52	28
Business/professional/real estate services	68	43
Construction	90	65
Transport, communication and storage services	100	74
Community, social, personal services	169	59
Tourism/restaurant/hotels	70	64
Other	57	45

Table 4: Investment Outlook By Industry

Note. Index scores above 100 reflect optimism, whereas index scores below 100 reflect pessimism.

Employment Outlook:

To evaluate the employment outlook for Barbados and The OECS, respondents are asked to indicate whether they expect employment at their company to increase, decrease or remain unchanged over the next six months. Based on their responses, an “Employment Outlook Index (EOI”) is computed. An EOI above 100 indicates an expected increase in employment, whereas an EOI below 100 indicates an expected decline in employment.

The six month EOI for Barbados and the OECS is 108. This suggests that the majority of companies in Barbados and the OECS expect the level of employment in the corporate sector to remain unchanged or increase slightly over the next six months. This suggests that companies do not plan major layoffs, despite the fact that they have experienced worsening financial performance over the last six months, and expect financial performance to continue to worsen over the next six months. Companies in St. Kitts and Barbados are the most optimistic about employment prospects over the next six months, while companies in St. Lucia and Grenada are the most pessimistic. Across industries, companies in the financial and government services industries are the most optimistic about employment prospects over the next six months, while companies in the community /social/personal/services and, transportation/communication/storage are the most pessimistic.

The twelve month EOI for Barbados and the OECS is 115. This suggests that the majority of companies in Barbados and the OECS expect employment to increase over the next twelve months, and they are more optimistic about employment prospects over a twelve month time horizon as compared to a six month horizon. Companies in Barbados and St. Vincent are the most optimistic about employment prospects over the next twelve months, while companies in Grenada and St. Lucia are the most pessimistic. Across industries, companies in the financial / banking /insurance services and government services are the most optimistic about employment prospects over the next twelve months. See figure 4 and table 5 for a summary of these results.

Figure 4

Industry	Employment Outlook Index Scores for the next 6 months)	Employment Outlook Index Scores (for the next 12 months)
Agriculture, fisheries, and mining	114	120
Educational and cultural services	104	117
Government services	126	126
Manufacturing	117	117
Financial/banking/insurance services	126	129
Public utilities	118	118
Retail/wholesale	104	112
Entertainment	119	116
Business/professional/real estate services	99	111
Construction	111	122
Transport, communication and storage services	98	105
Community, social, personal services	95	102
Tourism/restaurant/hotels	101	104
Other	114	126

Table 5: Employment Outlook by Industry

Note. Index scores above 100 reflect optimism, whereas index scores below 100 reflect pessimism.

Section 3: Economic Outlook

Companies are asked to indicate their outlook for the local and global economy over the next six/twelve months. Based on their responses, a “Local Economic Outlook Index (LEOI)” and a “Global Economic Outlook Index (GEOI)” are calculated. An LEOI or GEOI above 100 indicates a positive outlook for the local (global) economy, whereas an LEOI or GEOI below 100 indicates a negative outlook for the local (global) economy.

For Barbados and the OECS, the six month LEOI is 103 and, the GEOI is 128. The index scores suggest that companies in Barbados and the OECS, expect the local economy to remain largely unchanged for the next six months while they have a positive outlook for the global economy. Companies in Dominica, Grenada, and St. Kitts are the most optimistic about the prospects for their local economies over the next six months, whereas those in St. Lucia and St. Vincent are the least optimistic about the prospects of their local economies over the next six months. In terms of the global economic outlook, the majority of companies in all countries expect the global economy to improve over the next six months, with companies in Barbados and St. Lucia being the most optimistic, while those in St. Vincent and Dominica the least optimistic.

For Barbados and the OECS the twelve month LEOI is 109 and the GEOI is 118. The index scores suggest that the majority of companies in Barbados and the OECS expect the local and the global economy to improve over the next twelve months. They are, however, more optimistic about the prospects for the global economy than their local economies. Companies in St. Kitts and Dominica are the most optimistic about the prospects for their local economies, while those in St. Vincent and St. Lucia are the least optimistic about the prospects for their local economies over the next twelve months. In terms of the global economic outlook, companies in Barbados, St. Kitts and Grenada are the most optimistic, while those in and St. Vincent, Dominica and Antigua are the least optimistic.

In terms of industries, manufacturing, government services and entertainment are the most positive about the prospects for the local; economy over the next six months, while business/professional/real estate services, community/social/personal services and educational and cultural services are the least positive. Over a twelve month horizon, entertainment, construction and manufacturing are the most optimistic, while public utilities, business/professional/real estate services and tourism/restaurant hotels are most pessimistic. The results are summarised in Figure 5, and Tables 6.

Conclusion

Companies in Barbados and the OECS are currently feeling the effects of the global economic slowdown. This is reflected in a worsening of financial performance over the last six months across countries and sectors. Companies in the tourism and financial services dependent economies of Antigua, St. Lucia and Barbados are among the worst hit, whilst companies in the public utilities, tourism related and the retail and wholesale sectors are among the worst affected. Companies in the entertainment industry are the least affected. Residents of Barbados and the OECS appear to be partying despite the economic slowdown.

Unlike their international counterparts, companies in Barbados and the OECS appear disinclined to lay off workers as a means of responding to worsening financial performance. However, there appears to be a hold on investment, with the majority of companies report no major investments planned for the next six/twelve months.

Companies in Barbados and the OECS appear to expect the economic slowdown to last for another six months at least, but they expected improvements in the next twelve months. The prospects for improvement appear to be driven by an expectation that the global economy will recover in the next six to twelve months.

Figure 5

Industry	Local Economic Outlook Index Scores (for the next 6 months)	Local Economic Outlook Index Scores (for the next 12 months)
Agriculture, fisheries, and mining	101	111
Educational and cultural services	93	104
Government services	109	115
Manufacturing	112	119
Financial/banking/insurance services	102	105
Public utilities	60	82
Retail/wholesale	108	108
Entertainment	109	127
Business/professional/real estate services	91	97
Construction	101	121
Transport, communication and storage services	106	108
Community, social, personal services	91	102
Tourism/restaurant/hotels	99	102
Other	117	120

Table 6

Local Economic Outlook Index by Industry

Industry	Global Economic Outlook Index Scores (for the next 6 months)	Global Economic Outlook Index Scores (for the next 12 months)
Agriculture, fisheries, and mining	124	116
Educational and cultural services	120	115
Government services	136	127
Manufacturing	139	130
Financial/banking/insurance services	136	124
Public utilities	132	127
Retail/wholesale	125	115
Entertainment	131	116
Business/professional/real estate services	131	113
Construction	122	121
Transport, communication and storage services	126	115
Community, social, personal services	132	115
Tourism/restaurant/hotels	120	114
Other	133	125

Note. Index scores above 100 reflect optimism, whereas index scores below 100 reflect pessimism.

Going Into The Dragon's Lair: Can The IMF Be Our Friend?

noreply@blogger.com (Dennis Jones) — Thu, 10 Dec 2009 09:39:00 +0000

Sir Lloyd Erskine Sandiford, former Prime Minister, and current Ambassador to the People's Republic of China, made what many will see as a bold statement earlier this week. The Nation reported that he endorsed countries, including Barbados, to use the International Monetary Fund's (IMF's) technical assistance, even if they do not wish to be held to following IMF-supported economic and financial policies. The cartoon carried by the Nation (see alongside) gave what to many seems like a familiar view of the IMF in the region at least--a strange and probably fearsome beast.

There is terrible misunderstanding about what the IMF does--part of which is the Fund's fault; some is plain uninformed ignorance; some may be willful misunderstanding especially by politicians, but I wont go there. Sir Lloyd's comments are interesting because they try to stop people seeing the Fund as some demon and make clear a distinction that was also made recently by outgoing Governor of the Central Bank of Barbados, Marion Williams. Namely, IMF technical assistance is something that Barbados (and any country) should make use of to the maximum; it helps build up national capacity, and is often very cheap, if at any cost. Barbados has been guilty of not using such assistance, preferring either to let weak systems persist or to go another route and then suffering some unnecessary consequences. The IMF set up regional technical assistance operations, based in one country but offering a range of assistance to countries in a region, be that in Africa, Asia, the Middle East, or the Caribbean. The Caribbean Regional Technical Assistance Centre (CARTAC) has been based right here in Barbados for a decade, a point stressed by a letter to the Nation's editor by CARTAC's Programme Coordinator, published today (and reproduced alongside).

IMF policy advice should also be used as much as possible, and it often comes with no strings. The Fund is there for member countries to use, and if any nation wants it, they can be in constant contact with Fund staff, seeking advice on economic policy or on particular economic or financial issues. Its can be a pain for staff to have to deal with a nation's policy makers and civil servants on a near daily basis, but if a PM, Minister of Finance or Central Bank Governor makes this demand of Fund management it is rarely refused. The Fund may consider whether it would not be better to try to assign a policy adviser to the country; this could be anywhere from a few weeks through several years, and/or be on a rolling basis (e.g., a visiting adviser, who stays say 2 weeks and visits every 3 months), or on a specific area (e.g., foreign exchange policy, reserves management, bank supervision, budget preparation, tax administration, etc.) or general (macroeconomic policy, for instance).

IMF -financed support is not necessarily what a country needs--especially if such support may come at a political price that a government finds too high. But a country can move far if it uses advice well, and that does not mean taking the recommendations, but does mean listening to critical assessments of national policy proposals and thinking through policy actions. The Fund has the great advantage over any national economic policy maker of seeing details of economic issues for almost every country in the world. There is little that is really new to Fund staff, therefore, and they can often put a country's policies into a regional or broader international context. But, countries have become so fixated that they may be tainted by association with the Fund that they stand as far away as possible. I think this is a terrible loss.

I'm not privy to any discussions that Barbados might have had with the Fund on policy or technical assistance issues, but know that the current central bank governor, DeLisle Worrell, spent his time at the Fund providing principally technical assistance to member countries. This would have given him much insight that should make some of these points better understood by the government. Former central bank governor, Winston Cox, also worked for the Fund as a consultant after his time as Governor, and may also be and have been instrumental in improving such understanding.

Countries, especially small ones, need to leverage what the international institutions have to offer, because it comes much the same in terms of national needs whoever you are. I recall that the first phase of my career at the IMF was providing technical assistance, mainly in monetary and financial statistics. This included the seemingly mundane exercise of ensuring that countries reported their data correctly for standard monetary and financial series. It also included very difficult tasks such as helping a country identify what international reserves it actually held, and in one case having to explain to an African central bank governor that though his staff told him the country had enough foreign exchange to cover several weeks of imports that in fact there were none, because the country was already committed to spend the money. More complex and intriguing work was done, combing over files and dossiers with staff for weeks. The benefit of all that was to leave systems in place that countries still use to control their operations. That is not trivial.

I hope that the government and central bank take the seemingly bold step to use the IMF technical assistance and to do it with a public flourish.

Who's Got Their Finger In The Cookie Jar?

noreply@blogger.com (Dennis Jones) — Wed, 09 Dec 2009 09:50:00 +0000

Today's Advocate editorial makes for very interesting reading. Under its catchy title of "Stop the rot", it celebrates the fact that December 9 is International Anti-Corruption Day by warning that Barbados should not get beyond itself by thinking that it does not have a problem with corruption. I imagine that most people who pay attention to things like Transparency International's corruption perception index understand its severe limitations. Not only does it not measure actual corruption, but it also does not look at perception beyond the public sector. So, you could have a country known to be rampantly corrupt, but if most of that is within the private sector and the public sector does enough to disguise what corrupt practices it has, then the country could score with low perceptions of corruption. Lies, lies, and damned statistics, indeed. But, let us first find corrupt practices and then move to see what if anything will be done about them.

I would be lying if I said that I was not disappointed with the slowness with which the government has proceeded with integrity, transparency and accountability legislation. Deliberations are all well and good but how much deliberation is really needed to move in these areas. Barbados is by far not the first country to move on these areas. It is also a small country. Some argue that the same smallness is one of the factors braking progress. Everyone is supposedly known to everyone that the prospect of fessing up on a relative, friend or colleague who has been dipping the finger into the sugar bowl is close a move for permanent social ostracism.

The Auditor General's (AG) Barbados Audit Office has produced another unflattering report on Barbados' public sector contracting, monitoring and implementation, with its Special Audit of the Barbados Road Network Infrastructure Improvement Project. The report identifies many areas where government departments, in this case the Ministries of Transport and Works and Finance, did not seem to be fully in control of a project for which they were responsible.

The report indicates many areas where these public agencies displayed irregularities in their procedures regarding competitive bidding and contract awarding; contractual arrangements were weak; they did not have full control over projects, or did not appear to fully understand the projects and the rules under which they operated. Work begun without full designs and thus full costing information. That the completion of the highway project is dragging along like a tattered bag perhaps sounds harsh, but after living through it for the past three years I would argue that it is fair.

The AG’s role and function, however, is not to provide solutions though its recommendations may form their basis. It presents information to Parliament, and it’s for the Public Accounts Committee to take matters forward, or not. The AG has already indicated that the latter has not been functioning properly. But in no sense can the AG’s office just decide to go off and do more than what it’s charged to do. So, we look to Parliament for having been derelict in its duties. We have to ask why, given the it's the public's money that they should be concerned to protect.

The AG and his office are known public entities, who conduct discussions with other known public and private entities (which is disclosed), and supports his reports with documentation, which is laid before Parliament.

Previous reports have given a good indication that malfeasance may exist in the way various public sector activities are conducted, but it's legislators who must bring public officials to book and prosecute if evidence is there to do so.

Public officials are often slippery customers and regularly hide behind various pieces of legislation to not disclose what they are doing, at the behest of Ministers or without their explicit consent or knowledge. Barbados is in danger of being seen as a fool's paradise by the total absence of any cases that involves public officials doing wrong. No country exists where John Public Servant has not done something criminal. So, why is it that Barbados manages to march along like good Christian soldiers? A country that is 'squeaky clean' should have no problem is putting in place the elements for public servants and politicians to declare their assets. It should have to problem putting up to public scrutiny what is done through the public sector, if there is nothing to hide or disclose.

The editorial quotes from Hamlet, with "Something is rotten in the state of Denmark". Critics have argued much about what this really meant, but many agree that it talked about the 'state' as being government, and that corruption, like a rotting fish, starts at the head. It should also look deeper into the play, and think about Hamlet's famous soliloquy:

To be or not to be – that is the question: 
Whether 'tis nobler in the mind to suffer 
The slings and arrows of outrageous fortune, 
Or to take arms against a sea of troubles
 And, by opposing, end them.

There's much more in the speech, but the opening lines are always helpful to focus on the matter of whether we have the moral courage to do anything about wrongs.

Four Seasons Project: The British Press Gives It Prominence

noreply@blogger.com (Dennis Jones) — Sun, 06 Dec 2009 22:30:00 +0000

While people in Barbados wait to hear what will be the fate of the Cinnamon 88/Four Seasons/Paradise hotel and residences project, the British public are having the matter put in front of them (see Guardian report). It is essentially a British story, as the main creditors and initial purchasers are Britons, who happen to have chosen Barbados to do their develop and build their dream million pound homes. The stalling of the project is of interest too as Barbados is so heavily visited by UK tourists and familiar to them. Interest is fuelled because of the high profile Britons who are supposed to be creditors, such as TV celebrity, Simon Cowell, and musical impresario, Andrew Lloyd Webber.

The project went horribly off track months ago as credit woes affected British banks. Reports of progress have all been 'reports' so far, and 'unfinished business' is the order of the day.

PM David Thompson stepped in and tried to intervene in getting negotiations on a solution to the financing of the project. Various sources indicate that news of progress may be forthcoming before the year end. However, in the meantime, it's very much wait and see.

Tourism Week When Tourism's Weak

noreply@blogger.com (Dennis Jones) — Sat, 05 Dec 2009 09:28:00 +0000

The coming week marks Tourism Week, hosted by the Ministry of Tourism (see Government Information Service). Under the theme: "Achieving Success through Service Excellence", the public are invited to participate in a range of events between December 6-12, ending with a Christmas concert in Independence Square featuring a number of local performers. Among the events that struck my eye was a public lecture on December 7 entitled "A Vision For Tourism in the Future", which will be held in Lecture Theatre 2 of the University of the West Indies, Cave Hill Campus, from 7:00 p.m. to 9:00 p.m. The lecture will be delivered by Professor John Tribe from the University of Surrey in the United Kingdom.

Many people seem confused about what is happening to this sector, which is a main earner of foreign exchange and provider of jobs in the economy.

The latest and most comparable data (through November 24) are those provided by the Caribbean Tourism Organization (CTO), see http://www.onecaribbean.org/content/files/dec4Lattab09.pdf. These show a clear 10+% decline in stop over visitors during January-October (over the same period in 2008). Virtually every reporting country or destination recorded a decline, and Barbados looks to be about in the middle of the region for performance; but the data are not all for the same period, so I wont go into that more. A notable bucking of the trend was seen in increased visitor arrivals to Guyana (+6%), Cuba (+3%) [both January-September] and Jamaica (January-August), which increased by 4%, boosted by a 28% increase in visitors from Canada. This reportedly reflects 'new accommodation', increased airline seats, and 'aggressive marketing', especially to western Canadian provinces (see comments by Tourism Minister Bartlett).

For Barbados, only visitors from Canada registered an increase (+10%). Visitors from every other region (US, Europe, other [mainly Caricom]) showed substantial declines (-12/13%). The Canadian story seems to reflect a lot of hard work on the ground to boost travel, and some real knock-down fares. Similarly moves (prompted by the start up of JetBlue's service from New York on October 1) to lower fares from the US north eastern corridor were probably too new to have yet had an impact on arrivals from there. We know that North America and Europe have been mired in a deep recession since 2007, so the fall off in travel should be no surprise.

CTO's data show cruise passengers to Barbados were up 5% over the same period. Many specific conditions affect cruise travel. However, the data show some huge variations by destinations, eg Dominica + 52%, St Vincent +51%, Antigua/Barbuda +26%; with notable declines for US territories and Martinique, and Cozumel (presumably H1N1 related).

Government ministers have tried to put the most positive spin possible on the clear downward trend in tourism this year, and naturally have started to move to the prospect of a more positive outcome in 2010.

One area where the spin is positive but hard to fathom concerns what tourists spend. What I know of travel statistics makes me have little faith in any data on spending, as they are really good guesses at best. Some countries have well developed systems for data collection, for instance, Canada has a very sophisticated way of measuring such spending, in part in calculating GDP, see http://www.statcan.gc.ca/pub/13-009-x/2009002/meth-eng.htm. But good statistics for tourism spending has many implications, including how they would affect any re-estimated GDP.

Whatever ministers say about tourism spending showing signs of increase I would take this to be pie in the sky. One thing that has been noticeable to me when travelling to/from the US the past few months (to Miami, New York and Washington DC) is how many of the passengers from the US had Bajan accents, rather than American-accented people. In terms of spending, ‘US’ visitors who are really returning nationals usually means less spending. Indications of how tight times are in the developed countries include signs that a reverse remittances story is developing, with residents in the Caribbean sending support to their relatives in North America and elsewhere, not the usual direction of 'from foreign, back home'.

But, I sense that some people are really lost about what tourism means for the country. Tourism does not matter much to a country merely because tourists have a good time; if the good time is at national expense, then you better look out. People may not know that much of the past tourism business was based on heavy discounting by Barbados' government. That means Bajans were paying tourists to come and have a good time. That went a step further this year with refunds for bad weather. Note that we who live here do not get any financial breaks 365 days a year.

Many positive comments have come about the past weekend's 'Tennis pon de Rock' event, featuring Serena Williams and Caroline Wozniacki as the main attractions. Most people had a good time and the tennis stars loved being here and want to come back. As Ms. Wozniacki noted in her blog, she loved her suite at Sandy Lane. But, who would not? Some would feel that prices for tickets and the billing should have given them more than one set of tennis over 20 minutes from these super stars. Others might say that, as it was a charity event, it was a great achievement to get them to come to Barbados, which has no really high standing in world tennis.

But the benefit of events has to be demonstrated in terms of income it generates, new business it generates or may generate, and new income it may create, less all the expenses that have to be paid to help generate that income. That’s as true of your corner shop as for any major event. If you want to look at it at an extreme look at how putting on Olympic Games have cost the cities that host them. Forecasts of profits turn out to be losses. Look at Cricket World Cup as a regional example. Everyone loved the events, but now the citizens have debt round their necks and some white elephant structures on the landscape.

Some people seem reluctant to want to do the accounting for what took place. Yet, if you don't do that then you should not be surprised with the burden that you may be carrying in the future.

What is interesting is that rather than know any answers people seem ready to enjoy the party and not worry about who may have to pay the bills. I guess where ignorance is bliss, who wants to be wise?

Some see posing questions as 'beating the drum of gloom and doom'. Yet the doom and gloom, if any, only comes if the answers are not favourable. The questions themselves show that you have an interest in going beyond what you see on the surface. They seek to go in the direction of investigation–asking for information–rather than assuming anything (good or bad). Maybe this is uncomfortable to do. Like not visiting the doctor because one fears what he or she may say?

People seem afraid to ask what tourism is really doing for the economy or what any event has really done to boost tourism (sport or otherwise) this year or in the future. How is it supposed to help? If the product is so good, why does it need to be subsidised? How does positive comments go to offset the critical views recently aired of those who come from overseas to try to arrange sporting events in Barbados? Is the event a one-off or is it sustainable? And so on.

The question has been asked many times, "What is the net benefit of tourism for Barbados?" The answer remains elusive.

The Link(?) Between Garbage and Economic Prosperity

noreply@blogger.com (Dennis Jones) — Thu, 03 Dec 2009 09:50:00 +0000

Fellow blogger, and soon to be MBA graduate, Amit Uttamchandani, has had enough of how Bajans treat their environment, so he's written about it in the letter below. It's very pointed and for many of us who live in Barbados, very familiar. Many would say to Barbados "It's time to clean up your act: Barbados is littered with litter". Some of us have written on this topic of abuse of the environment, as observers and sometimes as cleaners-up after others in various 'beauty' spots. Amit's letter is a spoof. I sending it to me, he wrote "...of-course I'm being silly and sarcastic, but maybe it'll make people thinking about the environment a bit". But, he is being anything but silly, and I encouraged him to send it to the local papers. Whatever they choose to do with it, it will be seen by a part of the world's public on his blog (see http://pullpush.net/)and other blogs, such as mine.

Barbadians say they care about their beautiful country. But they have a funny way of showing it.

*****************************************************
Dec 2, 2009

Letter to The Editor

Sir, I am writing this letter to you today because I would like your assistance in thanking someone.

A few days ago, while driving home from work, I noticed someone throwing their garbage out of the window of a bus waiting at a junction.

Sir, it is this individual that I would like to thank and I am seeking your assistance in doing so by asking that you publish my letter. What follows is for him (or her):

You see, when you (i.e., the throw-er of the garbage) threw whatever you threw out of the window, you weren't littering, you were doing your bit for the economy! You were trying to show us that there is another way besides tourism!

You probably figured that if everyone else were to throw their trash out of the windows of buses and cars and trucks and whatever other vehicles that had windows that were available to throw trash out of, that it would result in the SSA going on a mass recruitment drive, or, increasing the salaries and wages of its current employees (as a result of the increase in trash).

You are clever, whoever you are. They (whoever 'They' are or were), wouldn't just let the trash sit there and pile up. No, you knew that someone would come behind you and clean it up at some stage.

You never intended to act in a selfish, dirty, disgusting, shameless and disrespectful manner. You were merely trying to achieve two important objectives: 1) Job creation and 2) Increased wages and salaries! How noble of you!

An increase in employment and/or wages would be good news for everyone! Wouldn't it? Yes Sir! More people working (and earning more we hope) means more money being spent in the local economy. Hah! Who needs tourism?

However, tread lightly here, my friend, be wary of inflation. IANAE (I Am Not An Economist). Inflation is, from what little I've read, a general increase in the supply of money and/or credit. This in turn may cause the prices of goods to increase (so long as there is no equal increase in the supply of goods).

More money in people's hands means they can offer more for various goods and services. This may result in people themselves driving up the prices of said goods and services (provided that the amount of goods and services remained at pre-inflation levels and did not increase in line with inflation).

A poor simple example: A and B want to buy a car. C, the seller is offering the car for $5,000. A and B can't quite afford it. However, because of every one's increase in littering, the SSA recruits A and B (or increases their existing salaries or wages).

A and B can now afford the car, maybe even afford to pay more than the asking price. Assume that C, the seller, knows of A and B's new found wealth (hmm, no information asymmetry here), C, may increase the price of the car knowing fully well that A and B can afford it and provided that D, E, F, G etc, don't plan on selling their cars (the amount of goods and services after inflation is still the same, but the amount of money available to buy said good has increased), C raises the price.

But you know what? IANAE (I Am Not An Economist).

In conclusion, I'd like to thank you, but be careful of this inflation thing. Carry on smartly! We need more like you! Folks like you who care about this country by adopting unusual methods in order to secure economic prosperity (i.e., throwing your garbage out out of a bus thinking that it will create employment and raise salaries and wages).

Happy Holidays!

Yours,
Amit Uttamchandani.

Mixing Up Metaphpors: What Corner Shop?

noreply@blogger.com (Dennis Jones) — Wed, 02 Dec 2009 07:01:00 +0000

Sometimes when travelling it's easy to write, other times it's not. So, a few days in Washington for a spot of turkey eating with friends and looking after some other business allowed me to read a lot but left little chance to write. A few things struck my eyes, though. Amongst them was a commentary by Richard Bayles, CEO of Sagicor Life Jamaica Ltd (see Gleaner November 30 report). The Gleaner reported that he compared Jamaica's progress with that of Barbados and Singapore and said the growth levels of those two countries, as well as Jamaica, could in the recent past have been compared to a corner shop: "One has become a supermarket, the other a Wal-Mart and the third has remained a corner shop. That's Jamaica,". That's a very difficult metaphor to work when looking at these three countries. To me, it's silly to try to say that Barbados is a supermarket, while Jamaica is a corner shop. If he means in terms of wares, he had better check the shelves again: in a simple sense, people do not flock to Barbados to shop. If he means in terms of how the countries are run, I've no idea what he means.

Agreed, Singapore has managed spectacular economic growth. It is also a very open economy. It has managed to run large budget surpluses. But that does not fit well with comparing its performance to a mega retailer other than saying that it is bigger on various measures (including population) and has done much better than the other two countries. It is a model of social order and stability, but not many would wish to have had, or were capable of carrying out, the Lee Kwon Yew model of dsicipline and development. By and large, Caribbean countries have not embraced the approach Singapore took.

Byles said "Singapore and Barbados, which have far healthier debt-to-GDP ratios than Jamaica, have fared better because they had a plan and stuck to it." What debt data was he looking at? The IMF's 2009 Article IV report showed Singapore's debt/GDP ratio at 99% (see staff report http://www.imf.org/external/pubs/ft/scr/2009/cr09269.pdf); Jamaica's is just north of that, around 110%, and Barbados is teetering past 100%. Statements do not make truth: 'far healthier' is far from true.

True, Singapore has managed its budget very well, and after several years of running sizable surpluses was able to mount a stimulus plan to deal with the current economic downturn and finance part of that from the surpluses rather than needing to issue debt. The other two countries have no such room to manoeuvre.

Bayles said that Jamaica "had a comprehensive economic plan since the 1950s and '60s when the import-substitution model was implemented with some measure of success". Planning makes little sense if you cannot control many elements, so whatever 'plan' Jamaica had--and I would argue that the 'model' was not a 'plan'--did not have the makings of success.

It's perhaps unfair to dwell too much on what the paper reports as his comments on other failings and what needs to be done in Jamaica:

'The Sagicor boss said any effective plan must have four key ingredients. First, he said, "the leadership must step up and make the decisions expected of leaders and do what is right even when it is not the popular thing...Education, he added, was key as "Jamaica can't go anywhere without education and we must find the money to educate the population". Both Barbados and Singapore, he noted, had invested heavily in education with outstanding results....Third, Byles pointed out that security is an area that requires immediate attention...."Colombia, which previously had worse security problems than Jamaica, including the mother of organised crime, can today say they whipped it," he said. "I don't know how, but somebody needs to know."...Turning to high-energy costs, Byles called for a solution and programmes to reduce this nationally and also recommended improved communication between the authorities and the people of Jamaica "so that everyone can understand where we are going and get on board".

Sorry to say it but the ideas as reported are a jumble of wants and not so evident truths. It's far from true that Colombia has 'whipped' crime: it's still endemic and at high levels, very violent, with much of its core coming from drug-related organizations. Also, maybe Mr. Bayles does not look at 'crime' in terms of government corruption. For what it's worth, Transparency International's 2009 Corruption Perception Index ranks Colombia at 75 (with Barbados at 20 and Jamaica at 99).

But, Singapore has had a very different approach to most countries. More notable, as a small, open economy, it has been very mindful of its vulnerability. Its rapid growth and well managed budget provided both a source of economic strength and social stability. But, it has also seen it fit to be wary of being exposed. It has been increasing its international reserves, and from near 5 months of import cover, they are now near 7 months of imports.

So, it looks like Mr. Bayles will have a few people baying about 'corner shop', but a deeper look may have people baying after him.

World AIDS Day

noreply@blogger.com (Dennis Jones) — Tue, 01 Dec 2009 13:23:00 +0000

Today, December 1, is World AIDS Day. I do not have any friends or relatives who have had the HIV virus or AIDS, but I do not expect that to last forever. In the same way that I only have a few acquaintances who have had cancer. Life is taking on different shape in terms of health and afflictions. But, what I do know is that whenever a debilitating illness takes hold it seems to separate people: some show amazing fortitude, others wilt like new shoots in the sun. I look at my father battling back in his 80s from a stroke. I look at friends sounding like they are dying when they have a flu. I think of a friend whom my wife said this weekend 'should have been dead 20 years ago' but is now regaining her ability to walk and do without a wheel chair after a brain tumour and various operations.

Those who are ill need very much the support of the healthy. Sick people are too easily condemned--and society used to do that too readily rather than deal with symptoms or even root causes. I thank my lucky stars that none of my children have had any major congenital diseases. I pray that life will continue so that all of my family has the kind of illnesses that can be easily treated or cured. But, I also hope that when a friend of mine tells me that she has been diagnosed with breast cancer or HIV or multiple sclerosis, or a man friend says he has colon cancer that I can stand up and say "Let's get through this together".

Independent? Free To Show How To Excel?

noreply@blogger.com (Dennis Jones) — Mon, 30 Nov 2009 09:42:00 +0000

Barbados today celebrates 43 years of Independence from British rule. But, national independence is merely relative: if it engages widely with the rest of the world, a small country is always dependent on the rest of the world for its survival. That's no tragedy, but needs to be constantly understood. Barbados does not have the luxury to mistreat the rest of the world and has to suffer often being mistreated by the same. The world and life is not symmetrical or fair. But, that does not stop a country doing a lot to help itself.

Barbados has much of which it can be proud: with a small well-educated population and few natural resources other than sun, sea and sand, it has managed to rise as a country with much hope. On that hope it can build; but the hope needs to move from just a set of promises. Barbados undervalues and underuses one of its major resources--it people's talents. It has not blazed a trail that highlights what its people value, and made that stand up to the world as representative, no matter how limited the current appeal may be. It does not matter that no one else knows or plays road tennis, it should be pushed for its uniqueness. Games like boules (petanque) or curling are obscure and maybe limited to certain weather conditions or come closely associated with certain cultures, but their proponents find pleasure in pushing them in front of others' eyes, and even managing to get Olympic recognition, and let the joy spread where it will. They can all be learnt and improved upon by others: that's clearly the case with football, and of course cricket, whose appeal though slower to spread is wider nevertheless. What better than promoting a sport that needs barely any equipment or space?

If you have a 'world champion' in a sport, as Barbados does with draughts and 'Suki' King, then that can be part of the national image, no matter how lowly the sport may seem or how eccentric that world class player may be. Let his playing skills symbolise some positives about the country and its people--as Russia does with chess or China does with table tennis. I remember the days when darts and snooker were played in pubs and bars with beer-swilling and cigarette-smoking raucous yobbos as the main spectators. Now, both are major televised events and have gained style in the way they are played and presented, even if at their base they are little changed and skills must be honed in dark snooker halls or loud pubs and bars. The main thing is that the world has learned to understand that throwing a dart accurately into a board or hitting a ball with a stick so that it hits another ball and falls into a pocket require great skills, dedication, nerves, and more good attributes. They offer positive objectives that can be presented for young people as worthwhile. They do not run counter to learning. Pride comes from mastery. Similarly, if the country is about 'excellence' then tolerance of the mediocre needs to end.

Waiting for other people to 'big you up' is always fraught with disappointment, as it may never happen. Barbados has been lucky in having Rihanna, who now represents the country no matter what she does: her confused life need not reflect badly on the country in equal or greater measure to the way that her singing reflects positively. She can become a positive 'symbol' in many ways, not least saying that it does not matter where you come from if you can raise your talent.

A country really needs to know how to put itself on the map. Barbados knows how to do this because it has maximised the positives out of its various economic and social achievements. But, it seems too content to raise one aspect of those as THE message and image: stability. Barbados need not be known as 'risky'. If the country is 'steady as she goes' then that image can be exploited to show that whatever 'rocks' and 'high waves' it encounters, it can stick to a course. But you have to have a clear course to chart. Barbados is struggling to maintain a clear course, but enough elements are there for that to not be hard to re-establish. The current economic problems it faces are yet another opportunity to show that its 'steadiness' is more likely to prevails with good results--but it needs to be shown not presumed. That way, those who want to go 'off course' are prepared to stay with the ship and its captain.

These are messages, which if believed need constant reinforcement--not mere repetition, but real action and decisions that are consistent with the messages.

Professing To Know About Financial Regulation: A Bajan In The Lead

noreply@blogger.com (Dennis Jones) — Fri, 27 Nov 2009 14:09:00 +0000

Barbados is fortunate to count among its current citizens several very talented economists. I'm lucky to know a few of them as friends. People's eyes pop at the kudos that flows to this small island from Rihanna's successes on the world stage, with or without provocative glimpses of her body and with or without more revealing or embarrassing details of her personal life. But they should also open wide when people like Dr. DeLisle Worrell, Professor Andrew Downes, or Professor Avinash Persaud go public on the international stage with much less flourish, and thankfully keeping all of their body parts well covered up. But, they really show how to punch above your weight, and reflect one aspect that the island needs to take more seriously: how to produce 'heavy weight' thinkers and policy makers who can hold their own in the rough and tumble of the international arenas.

Professor Persaud has many views about the current state of economic developments and policy in Barbados and it's worth reading them on a regular basis now that he is writing on the newly launched Barbados Business website (see http://www.barbadosbusiness.net/). This is quickly becoming a go-to place to read pertinent articles on the economics, finance, and business of Barbados and other Caribbean countries.

He has also been tilling some very obscure land in the area of international financial regulation, in particular as Chair of the so-called 'Warwick Commission'. Its report has just been published and I would recommend reading commentary on it in both The Economist and the Financial Times. I reproduce both below, for ease of access.

The Warwick Commission report and its executive summary are also available online (see http://www2.warwick.ac.uk/research/warwickcommission/report).

++++++++++++++++++
Systems failure (see http://www.economist.com/businessfinance/economicsfocus/displaystory.cfm?story_id=14960099)

Nov 26th 2009
From The Economist print edition

Two new papers explore how to regulate the financial system as a whole

BANKS mimic other banks. They expose themselves to similar risks by making the same sorts of loans. Each bank’s appetite for lending rises and falls in sync. What is safe for one institution becomes dangerous if they all do the same, which is often how financial trouble starts. The scope for nasty spillovers is increased by direct linkages. Banks lend to each other as well as to customers, so one firm’s failure can quickly cause others to fall over, too.

Because of these connections, rules to ensure the soundness of each bank are not enough to keep the banking system safe. Hence the calls for “macroprudential” regulation to prevent failures of the financial system as a whole. Although there is wide agreement that macroprudential policy is needed to limit systemic risk, there has been very little detail about how it might work. Two new reports help fill this gap. One is a discussion paper from the Bank of England, which sketches out the elements of a macroprudential regime and identifies what needs to be decided before it is put into practice*. The other paper, by the Warwick Commission, a group of academics and experts on finance from around the world, advocates specific reforms**.

The first step is to decide an objective for macroprudential policy. A broad aim is to keep the financial system working well at all times. The bank’s report suggests a more precise goal: to limit the chance of bank failure to its “social optimum”. Tempering the boom-bust credit cycle and taking some air out of asset-price bubbles may be necessary to meet these aims, but both reports agree that should not be the main purpose of regulation. Making finance safer is ambitious enough.

Policymakers then have to decide on how they might achieve their goal. The financial system is too willing to provide credit in good times and too shy to do so in bad times. In upswings banks are keen to extend loans because write-offs seem unlikely. The willingness of other banks to do the same only reinforces the trend. Borrowers seem less likely to default because with lots of credit around, the value of their assets is rising. As the boom gathers pace, even banks that are wary of making fresh loans carry on for fear of ceding ground to rivals. When recession hits, each bank becomes fearful of making loans partly because other banks are also reluctant. Scarce credit hurts asset prices and leaves borrowers prey to the cash-flow troubles of customers and suppliers.

Since the cycle is such an influence on banks, macroprudential regulation should make it harder for all banks to lend so freely in booms and easier for them to lend in recessions. It can do this by tailoring capital requirements to the credit cycle. Whenever overall credit growth looks too frothy, the macroprudential body could increase the minimum capital buffer that supervisors make each bank hold. Equity capital is relatively dear for banks, which benefit from an implicit state guarantee on their debt finance as well as the tax breaks on interest payments enjoyed by all firms. Forcing banks to hold more capital when exuberance reigns would make it costlier for them to supply credit. It would also provide society with an extra cushion against bank failures.

Each report adds its own twist to this prescription. The Bank of England thinks extra capital may be needed for certain sorts of credit. If capital penalties are not targeted, it argues, banks may simply cut back on routine loans to free up capital for more exotic lending. The Warwick report says each bank’s capital should also vary with how long-lived its assets are relative to its funding. Firms with big maturity mismatches are more likely to cause systemic problems and should be penalised. The ease of raising cash against assets and of rolling over debt varies over the cycle, and capital rules need to reflect this. Regulators should also find ways to match different risks with the firms which can best bear them. Banks are the natural bearers of credit risk since they know about evaluating borrowers. Pension funds are less prone to sudden withdrawals of cash and are the best homes for illiquid assets.

The Warwick group is keen that macroprudential policy should be guided by rules. If credit, asset prices and GDP were all growing above their long-run average rates, say, the regulator would be forced to step in or explain why it is not doing so. Finance is a powerful lobby. Without such a trigger for intervention, regulators may be swayed by arguments that the next credit boom is somehow different and poses few dangers. The bank frets about regulatory capture, too, but doubts that any rule would be right for all circumstances. It favours other approaches, such as frequent public scrutiny, to keep regulators honest.
When banks attack

No regulatory system is likely to be fail-safe. That is why Bank of England officials stress that efforts to make bank failures less costly for society must be part of regulatory reform. That includes making banks’ capital structures more flexible, so that some kinds of debt turn into loss-bearing equity in a crisis. Both reports favour making systemically important banks hold extra capital, as they pose bigger risks when they fail.

The Warwick group also thinks cross-border banks should abide by the rules of their host countries, so that macroprudential regulation fits local credit conditions. That would require that foreign subsidiaries be independently capitalised, which may also be necessary for a cross-border bank to have a credible “living will”, a guide to its orderly resolution. This advice will chafe most in the European Union, where standard rules are the basis of the single market. But varying rules on capital could also be used as a macroeconomic tool in the euro area, where monetary policy cannot be tailored to each country’s needs. Regulation to address negative spillovers that hurt financial stability might then have a positive spillover for economic stability.

* “The role of macroprudential policy”, Bank of England, November 2009

** The Warwick Commission on International Financial Reform, November 2009

Boomtime politicians will not rein in the bankers (see http://www.ft.com/cms/s/0/8c0a1de4-dacf-11de-933d-00144feabdc0.html; login may be required).

By Avinash Persaud

Published, Financial Times: November 26 2009

One of the features that singles out the Warwick Commission on International Financial Reform, which publishes its final report on Friday, is that while other expert groups tiptoe around it, we have been able to point to the true source of the worst financial crisis since the 1930s: regulatory capture and boomtime politics.

Today regulators are working conscientiously to address the issue of banks being too big to fail; the lack of responsibility that can follow securitisation; imperfections in credit ratings; capital requirements which accentuate boom and bust; regulators which were global champions for their local banks; and more. But we should not forget that just a few years ago, regulators, with few exceptions, wanted big banks to have lower capital requirements if they had sophisticated risk models; they were cheerleaders for securitisation and asset sales by banks because, they said, this spread risks; they hard-wired credit ratings into bank risk assessment; they promoted home country regulation over host country control; and they dismissed the idea that regulation was dangerously pro-cyclical.

These and other regulatory mistakes all pushed financial institutions in the same direction. Large international banks compete better on “process” and “models” than credit assessment, and reap economies of scale when rules that segment finance within and between countries are liberalised. As I wrote here in 2002, financial regulation had all the hallmarks of being captured by banks, to the detriment of financial stability.

Separate but related to regulatory capture is the politics of booms. A boom persists because no one wants to stop it. The government of the day wants it to last until the next election. The early phase of a boom brings extra growth, low inflation and falling defaults. Governments tout this as a sign of their superior performance. Bankers argue such alchemy justifies their golden handshakes and excuses their golden handcuffs. Booms spread cheer by providing finance to the previously unbanked. Donations to worthy causes and universities temper traditional channels of criticism. How easily can the underpaid regulator stick his hand up and say it is all an unsustainable boom?

The capture and influence is subtle and there is always a genuine reason, if a wrong one, for why it is different this time. Indeed, one of the key challenges not yet seriously addressed is why the universities and press, falling over themselves to kick bankers today, did not play a more effective counterveiling (sic) force to this capture.

One indirect consequence of capture is the mistaken treatment of risk that lies at the heart of regulation. Many politicians and watchdogs think of risk as a single fixed thing inherent in instruments. As a result they put faith in processes that link capital to measures of risk, or in committees charged with determining what is safe and what is risky and banning the risky. But risk is a chameleon: it changes depending on who is holding it. Declaring something safe can make it risky and vice versa. Investment scams are attracted to booms, but booms are in fact built on the belief that some new thing has increased the return or reduced the risk of the world: motor cars, railroads, electricity, the internet or financial innovation. There is often a large element of truth about the original proposition – the world will be different – but the over-investment creates new risks.

In a world in which risk is poorly measured and regulators are vulnerable to political influence, we cannot rely as a defence against a crisis on the regulation of financial instruments, statistical measures of risk, systemic risk committees or the foreign “home country” regulator.

It is not financial instruments but behaviour we need to change. A better defence will come from increasing capital buffers at financial institutions, making these buffers counter-cyclical, and focusing on structural – not statistical – measures of risk capacity. Liquidity risk is best held by institutions that do not require liquidity, such as pension funds, life insurers or private equity. Credit risk is best held by institutions that have plenty of credit risks to diversify, such as banks and hedge funds. No amount of extra capital will save a system that, because measured risks in a boom are low, sends risk where there is no capacity for it.

The writer is chair of the Warwick Commission, chairman of Intelligence Capital and an emeritus professor of Gresham College
++++++++++++++++++

As countries' regulators try to get closer in their chase for how to regulate financial institutions, one notion that Professor Persaud highlights is worth noting: the idea the risks change is often forgotten. In that vein, I touch again briefly on Barbados' standing with credit rating agencies. Simply, a good risk today is not a good risk forever. Remaining less risky for a country is a constant exercise in good management of economic and financial affairs. No one remembers last week's win, when you lose today; and if you lose again next week, look out to see how the fans start to head for the exits. The other point that is a sub text is that regulators who do not regulate properly can quickly and dangerously raise the riskiness of a country by simply not doing their job properly, and by leaving a nation ignorant of, and complacent about, the problems it has. If that hat fits any local regulators they better get refitted rapidly.

Do Good Things Come To Those Who Wait? Economists Talk About Issues

noreply@blogger.com (Dennis Jones) — Thu, 26 Nov 2009 13:21:00 +0000

I love the fact that a public debate on economic issues is now going on that involves a good number of people who call themselves professionals in the field. I have said on several occasions that I felt that those who should be able to engage well on this topic seemed to have decided that relative silence was the line to follow. I really thought that the airwaves and newspaper pages would have been filled with 'expert' opinion from before the time I got here, because some of the seeds of the current economic problems were already planted here and starting to sprout, and those that came from the wider world economy were also beginning to show their first brown shoots. But, all good things come to those who wait. Pity that letting the issues fall without the kind of public engagement that now seems to have started meant that more time was lost on getting a better general understanding of some of the solutions that will be needed. I do not think that many of the hard solutions have yet been made clear but I am sure they will, in actions, if not in words

We economists talk a different language, with all of those different deficits, equilibriums, counterparts, elasticities, and so forth. But what we usually do that others can follow is stay with a certain logic, so that even if you disagree with what we are saying you should be able to retrace our path, suspending belief as needed on where we will reach.

I was glad to read that the new central bank governor, Dr. Delisle Worrell, has come out and spoken publicly on some current issues. The position of governor is more than just overseeing the financial system and making sure that it is healthy. It is more than just overseeing the banker to the government and protector of the national currency. A good governor needs to give impartial economic policy advice. Doing that may mean straddling that uncomfortable barbed wire fence between technical imperatives and political realities. In some countries, that is very simple because the governor is just the mouthpiece of the government and numbers may be made to fit the desired story, or if they do not then nothing that knocks the government will pass the governor's lips if he or she wants to stay in the nice leather chair for long. But, often, even when the central bank is not independent, the governor can be at loggerheads with his ultimate political masters as he or she 'tells the truth' about economic developments.

I'm not going to make the straddling anymore painful. But I am going to watch how that works out. The new governor is absolutely right to say that the recent downgrading of the economic outlook by Standard and Poor's 'should not be cause for any panic'. But I do not recall anyone really saying that it was. It was a reflection on where a rating agency thought the economic was headed, and it was not dire, but one of several warnings that have come from many quarters, including from the government and central bank in different form and in other words. I think a lot of agreement exists on the path that the economy is taking. The question is how far down the path will it go. The IMF said that with regard to debt levels there was a risk of them becoming 'unsustainable': that was not a prescription, but a flashing light that says 'action is needed'. They did not discuss the consequences of being saddled with unsustainable debt.

The governor said that Barbados is 'not going the route of borrowing on the international market, choosing to use less expensive sources of funding'. He included 'making low risk government securities available to investors'. I take that to mean tapping the domestic market. That route may well be good. But, it's ironic that 'low risk' was assigned to government securities. I read yesterday some reviews of a new book by Professors Carmen Reinhart and Kenneth Rogoff, This Time It’s Different. They document the history of eight centuries of “financial folly.” As one reviewer wrote 'What we learn from it is what we already knew – that borrowers are often perfidious, crises are usually insidious, and bankers are morons.' (see Daily Reckoning).

Reinhart and Rogoff remind us that always and everywhere, debt leads to trouble. Too much debt caused France to default on its sovereign debt eight times. Spain defaulted six times before 1800 and then another seven times later. Economic historians know that this pattern of soverign defaulting went on for centuries. Typically, say Reinhart and Rogoff, public debt increases 86% over a three-year period following a financial calamity. Then come more catastrophes, caused by too much debt in the public sector. Rightly, then, the world is very scared that both Britain and America are now running deficits of more than 10% of GDP. Neither has a creditable plan for reducing debt or deficits. Much more trouble lies ahead, many foresee.

Just last night, financial markets went into a tizzy because Dubai hinted at a delay in sovereign debt payments (see Bloomberg News).

I am not suggesting that Barbados is likely to default. But a government is risky if it cannot pay easily. Governments that start to be seen as heavily indebted--and a ratio of debt/GDP puts Barbados squarely into that category--will be seen as riskier. That perception is only removed by continuously servicing payments, but now people are more wary and that can be the small kernel of a problem that may grow into a much tougher nut to crack.

Dr. Worrell also mentioned something that made me stand up--not that it's new, but that he said it, and in so doing highlights for me a brewing dilemma. It is that government spending is detrimental to the country's international reserves, by facilitating imports through maintenance of government jobs: Barbados spends about 76 cents of every dollar on imports, he cited. Maintaining adequate reserves is one of his jobs. But, I do not see the government doing much to curb its job creation. So, my question is when will the reserves feel the pinch? Yes, 20 weeks import cover is a good level, but when the main sources of foreign exchange are less than before--from tourism receipts and foreign direct investment, mainly--and government is not curbing spending, how do you hold that level?

The discussion is underway and better that people hear the official views well expressed so that they then can pose questions.

Do You Have The Stomach For The Fight?

noreply@blogger.com (Dennis Jones) — Wed, 25 Nov 2009 10:35:00 +0000

A long time involved in public policy making highlights certain aspects that are not always apparent to the general public. One of them is consistency. Another is credibility. One more is fortitude.

My wife said to me yesterday, as we walked in Washington DC, "It's a really nice day." Cold rain drops were drizzling onto our heads, and the sky was grey. Leaves had fallen off most of the trees, and the wind was noticeable though not biting. I said, "Today is not a nice day, except if you say that you had expected a heavy blizzard. We live in Barbados, and a nice day has sunshine at the very least; even when it rains, that is warm." She glared at me and said I just wanted to be negative. I said I was being realistic and truth full. She wanted to make things seem goon and in a relative sense, she perhaps had an argument. I preferred to see things in a more absolute sense: cold, damp weather do not a nice day make.

I look at some of the national movements over the state and fate of the Barbadian economy in terms of these two sets of aspects. Let's look at the weather analogy first. When you compare what is happening to the local economy some may see a 'nice' day: they had expected that things would be much worse, so even though measured unemployment has topped the psychologically important 10 percent level and the economy looks set to generate 4 percent less income (or goods and services) than the year before, this is not as bad as some had feared. Some look around and say that the fact that many companies are still in business and that tourist arrivals had not fallen through the floor, and that their friends are still mainly in jobs means that things are good, or for sure not as bad.

Realistically, though, many people did not have a good frame of reference for the economy beyond faded memories of the early 1990s. Whatever the reality then, it is seen as 'the darkest hour'. Anyway, look around. All of the world is in a similar plight and some, even the mighty Britain, are as badly off as Barbados, so what's the worry?

Well, the worry really comes from not really being able to deal with bad weather except to hope for a really good day. In other words, the weather comes and goes and not much the nation does really affects it on the ground. People in Barbados have seen lots of nice days after nasty ones, so think they can wait it out, like the tide lapping on the clothes left on the beach. The real weather comparison though ought to be preparing for hurricanes. Because they usually bypass Barbados, everyone talks about them but do little to be ready: no spare food or drinking water, no lamps, no batteries, no window coverings, etc. When the winds and rain look set to hit, then off to the supermarket and hardware stores they go to try to get what they can in a rush. The winds and rains come but not too badly and there is muttering about how it was all for nothing to get all that stuff. So, next time the tendency is to just not bother. But if next time is THE big one, we know what will be the result.

In that hurricane sense, people may look at the country's international reserves and say that at about 20 weeks of imports they would allow a lot of things to carry on as normal if the economy really started to tank. Maybe. Lots of things make that block of foreign exchange seem enough, but a few turns for the worse in terms of what adds or reduces it can make it seem less comforting. But, let's be glad that oil prices seem stuck between US$70-80 a barrel, and that tourists are still coming--though I am not so convinced that money coming is not less than appears from the data. We know that a prime sources of foreign exchange--so called direct foreign investment--has virtually dried up. So, let's keep and eye on magic number 20.

I would be less comfortable with 10 percent of the workforce being unemployed if it seemed that it was going to be short-term, but I do not believe it will be. I also do not believe that many of those being added can find new work just because the economy starts to grow again. The general jobs are getting fewer and fewer and careful consideration of whether a group of unemployables is being built. If so, they need to be trained fast or they will develop the kinds of skills for money making that will threaten all of us. Giddit?

It is never easy to make policy that affects people in a negative way, unless you are unfeeling or are sadistic. Politicians often dislike spelling out truths to their populations if these are not pleasant. They feel that the blame will fall on their shoulders so prefer to cast things in the more optimistic of all possibilities. The clear dangers is that when reality strikes people will feel that they were misled--rightly so--and argue that had they known then some preparation would have been possible.

If you look at what most Bajans are seeing of the economy, do they see signs of a faltering economy? One of the main signs has been company closure, but most of these have been in the food area, and the closing of restaurants does not affect a lot of locals in terms of opportunities lost--these were for the tourists mainly. But their going, from an economy based so heavily on tourism, must mean that the major pillar of the economy is crumbling. We hear of more air lifts--JetBlue bargains, British Airways increasing their flights, US Air back on the runway--and about more cruises. But, walking around, do you see a lot of tourists and what are they doing? The place has not been overrun, and talk is of a 'pick up' over the winter period. That's hopeful thinking. Has Barbados remained THE place to visit? Some Britons I met at the weekend said reassuring things: "Barbados is cheaper than Europe." Though the pound has had a tough time against the US dollar (and thus the Bajan dollar) over the past 15 months, it has had a tougher time against the Euro. Once, going to places like Ireland, Spain, Portugal, Greece, or Italy was cheap when they had their own weak currencies, now they are all in Euro-land and Brits like a bargain, so those who want to, still drop down to Bim. But, for Americans and Canadians, they see cheapness coming from not spending on a Caribbean vacation or heading to Orlando rather than to Bim.

So, what have the policy makers done to get people to gear up for this 'new normal'? I see little credible in most of what has been said about how tourism has been doing, though the 'over optimism' has been consistent. I still do not see a real 'strategy', though I hear of many 'events' and 'opportunities' being sought.

I do not see consistency in the message about what will be done to bolster the economy: much talk about getting to grips with government spending has not been matched by anything tangible. Sure, it's tough to imagine getting rid of people to save money but why should public servants who are not giving value for money eat other people's lunch? Why should public utilities get any ease on wasting money that they have and look likely to waste money they may get from higher rates while not doing anything much to stop water draining away? That's where we get to fortitude. Setting the Barbados Water Authority (BWA) afloat with a 60 percent rate increase but with no stated plan for what to do about the large stock of existing arrears just defies financial logic. So, when the PM said last week that he was disappointed that he had seen no improvement in BWA he really ought to reflect on what incentive he had given to make changes. He'd given them access to more money with no commitment on their part to do anything to earn it.

I have not seen much to make anything stronger or really offer sacrifices to weather what is going to be a bumpy ride. A lot of that may come down to attitude as much as application. Giving up gains has not been part of the national need for so long that no one knows how to go about it. When I read last week about delays in paying refunds from the Inland Revenue Department, I have to admit to understanding nothing of the PM's attempt to explain that there was no cash flow problem. I'm not the brightest button on the coat, but I usually manage to figure out what is meant. But, I was left scratching my head.

My argument is to question if the nation is ready for a recession and a hard slog to get the economy back into a growth setting. The country has been in it, but I am not sure that people have really come to terms with what they are experiencing.

Who's Fooling Who?

noreply@blogger.com (Dennis Jones) — Tue, 24 Nov 2009 09:31:00 +0000

Even if I tried hard, I could not avoid making comparisons between Barbados and Washington DC. Now, there is very little that ought to be compared between the two places, other than each is the place where one would find a national leader who is of mixed race. But, eyes bent skyward and wondering where the sun had gone to, I landed at National Airport on a drizzly day. "Look, Daddy! Some of the trees are naked," Miss Observer yelped. Out came a good parental unit's explanation of evergreens and leaves falling and the origin of the word 'fall' in the US language. I peered to see if I could glimpse the White House as I drove along the highway; I couldn't but would try to stroll by later to see who the new neighbours were.

As we settled into our hotel home for the next week, I took a look at the Washington Post. It is always a good read. My eyes lit straight away on a headline article: Policy, portfolios and the investor lawmaker. My mind had been on the topic of integrity legislation in Barbados and how it seemed to be taking a dreadfully long time to move from pre-election promise of fast implementation to prime minister's promise of being an objective for the current term. I'm really only a natural cynic when it comes to politicians. I read the piece with great interest:

This juxtaposition of investments and policy has become more common as stock ownership has soared on Capitol Hill over the past two decades. The investments increasingly put lawmakers in the position of voting or advocating on matters that could affect their personal wealth, whether the lawmakers realize it or not.

That issue has become more acute over the past year. Congress has intervened in unprecedented ways into the private sector, allocating billions of dollars for stimulus projects, federal bailouts and health-care reform....

But growing investments on Capitol Hill, such as those in the medical-device industry, raise questions about appearances of conflict. Even if lawmakers have done nothing wrong, ethics specialists said, such apparent conflicts are troubling because it is often impossible to know whether the lawmaker is acting in the interest of citizens or their own portfolios. On Wall Street and in federal agencies, the suggestion of a conflict is often the basis for an investigation.

When I looked at the text table showing all the persons who had to declare their assets before taking office and annually during tenure, and the disclosure requirements for financial sector professionals, I knew that Barbados was a long way from being serious about letting anyone know anything about any politician's money. I'm not a voter in Barbados, but if I were I would be looking forward to roasting to good political feet very soon. Good, honest politicians should have nothing to fear about integrity legislation. But, do we have such a species in the little paradise isle? There's a topic to ponder.

My combing through the Post led me naturally to think about journalistic standards. I have little real confidence that I will ever see a good news report every day in the local Bajan papers. The Advocate of November 23 was a classic reinforcement of that. Nearly two weeks after the publication of a CADRES poll commissioned by the Barbados Union of Teachers and UNICEF to look into Corporal Punishment And Other Major Educational Issues in Barbados, it was only then that I saw a full report in that paper. (I wanted to double check online but the paper is still tweaking its archives and one can search for nothing.) The Nation had reported the story straight away and a lot of discussion has gone on since then, including a vigorous debate between the pollster, Peter Wickham, and an outspoken educator-cum-commentator, Matthew Farley, about whether the poll was aimed at making schools ungovernable. The paper also put out an Editorial on November 23, in which it noted many interesting areas for further study, including, 'Deserving to be probed is the question of the strong backing for corporal punishment being held by people described as having had lower levels of education.' So, why would the other major paper choose to leave that story on the side for so long? Conclusions too uncomfortable?

One of my perennial issues has been about the perception of Barbados and its reality. We all know that perceptions matter a lot and doing all possible to preserve an image is no surprise. Digging deep into local issues is not what one does if one wants to preserve a perception of stability and order, because naturally discovery may take you into the realm of many things that show instability and disorder. Better to say nothing or very little. But the old days of having only a few means of reporting have really changed how the perception game is played. News wires pump out their material but now the world can be informed instantly and those who do not like what is reported are immediately playing catch up.

As I think about whether the wool-over-eyes syndrome is just a national pastime, I have to wonder what is so hard about good reporting. The models are many and widely available. Is it a matter of pay? Is it a matter of capability? Is it a matter of not risking job security? Is it a matter or attitude?

Jungle Juice: A Weekend In Belize

noreply@blogger.com (Dennis Jones) — Sat, 21 Nov 2009 09:11:00 +0000

It's hard to imagine that a week ago I was in the Belizean jungle. Then, a few days seemed so long, and this past week has seemed to pass so fast.

I've spent a little time regaling acquaintances with the trip along the New River and the visit to a Mayan village and temple. They also heard about what the world looks like from atop the trees in the jungle, while zipping along a wire. I have not been to see a psychiatrist, but I think I am certifiably mad. Why else would I think that a man in his mid-50s, who is not President Putin, would think that clambering up 60 feet of scaffolding as if he were Tarzan's chimp was a good idea? My mate had decided that parenting is an active occupation which means that at least one unit be present, and quickly dispelled all notions that she would be 'going for a ride'. But, no. Macho man had to surface. Truth was, when the offer was made early in the morning, I'd recalled with clearly a very blurred memory taking a zip line run or few when I was a boy. Then, in London's Holland Park, there was a rope contraption that ran through the woods, and friends and I regularly went there for a bit of whoo-hooing. It was simple enough and I remember--true or not--flying along in jeans and T-shirt, and having to jump off at the end instead of crashing into a tree. No harness. No helmet. Just a bit of guts.

But, times have changed. Now, I was being trussed up in a harness that looked like a skimpy diaper. I was given a workman's glove--one, yes--and did not feel that it made me look like MJ. Then, I was pointed to my objective. Way up above me stretched the scaffolding. Atop that was a platform--well, three planks set on top. "Up you go," I heard come from a drawling youth in his mid-40s; his name was Mark and he had long straggly hair. I trusted him because he was the owner's son. His smile was evil. In the late afternoon, with a tired and sweaty body, and the prospect of being high in the sky with only my bottom as support, I wondered if I really was being smart. I climbed. "You're going on the outside. You need to be on the inside," I heard from below me. I gave a glare. "What difference does it make on which side I fall 30 feet?" I yelled back. Tschoupse!

As I took a midway break, I looked down and saw nothing but tree and rock to fall onto. Comforting. I wanted to get to the top fast because my arms were aching and I knew that more time meant more thinking, meant more worry. I reached the top platform and was not put off that the plank raised as I tried to sit on it. It's only 60 feet down, I thought as I wavered. As I was hooked onto a pulley, my guide said "Just suspend yourself on the wire and get comfortable." I looked across the tree canopy and down to the ground. Suspend. Comfortable. Who is he kidding? I looked as his fellow pushed off and zipped toward the lower platform 500 feet away. Seemed easy enough. I pushed off and suspended....disbelief at first that I was not falling. Thank God, I thought. "Ready?" evil-looking Mark asked. "Like dead Freddy," I chimed. "Let's go, then," Mark snickered and pushed me away. Wheeeeeee!

Time moves slowly in a crisis. I tried to put up my gloved hand to pull on the wire to test how the braking worked, remembering that it was sensitive and that too much pulling would make me flip. I touched the wire and in an instant lurched forward. I let go immediately. I whizzed on, but now was starting to spin as my body was buffeted by some wind and I wondered how it would feel to hit a concrete column at 20 miles an hour. I tried to steady my swinging, and in doing so saw my glasses fly off into the jungle. What you cannot see, cannot hurt, right? I put my gloved hand up again. One finger got caught in the pulley and the glove dangled. I had no means now of holding the wire without burning or cutting my hand. I thought about impact. I braced. I put my legs out a little in case I needed to cushion my impact. Then remembered. The zip line turns up towards the end and that should slow me down. It did. A huge sigh as I got near the end and arms came to control me.

I had survived. But, hold on. As I stood atop a ladder waiting to be unharnessed, I heard "Wait. Stop. He's not off the line." I looked between my legs as I bent over to be unharnessed and saw evil-looking Mark racing toward me. Why were his legs outstretched? Surely, he was not aiming for me? I did not panic. Where could I go? I might fall off a 6 foot ladder.Better that than off a 60 foot scaffold, I rationalized. I thought that my bottom clearly was a good target and laughed to myself that I would have an ignominious end to the day. But, no need to fear. Mark skilfully braked his run and stopped inches from my backside. He saw my smiles, right way up. "You want some more of my beef jerky?" What an offer.

We headed back to the not completed lodge and lodged our complaints over several bottles of locally made fruit wine, tamales and meat pies. Stories were not ready to flow along with the fruit juices. Natural juices had already flowed freely.

I started from the end of the story, though. Beforehand, we had been taken as the first visitors along a 'medicine trail' still under construction, where there would be about 110 marked posts indicating plants and trees that had proven medicinal properties (for curing hepatitis, running bellies, enhancing sexual prowess, countering snake bites and more) or had geographical or cultural importance.Nature has a wonderful system of self regulation, so no sooner had we found a tree with a venomous sap, than we found alongside a plant that would reduce the rash that it caused.

But, the walk seemed tame compared to having to clamber around deep caves for several hours. Even though the inside of caves are dark and cool, working your way up and down the 'paths' is very hard work, and sweat mixed with bat guano is still not going to be a killer product on any market. But you have to get used to the combination. As I looked around at Mayan era remains on the cave floor, I wished that more of history could be absorbed by merely being in a place. I did not want to see the ritual human sacrifice as much as to understand what people really thought they were doing and what would be achieved. Now, with a few relics of old civilization to help, we can try to piece together life from 2000 years ago.

I discussed this week in an online forum views about Europeans cultural influence. I tried to argue that we overplay its role and significance, especially in the Caribbean and Americas. We forget, or do not know, of ancient Mayan and Incan culture, and misunderstand what Europeans did, including giving them credit for erasing those cultures even though the cultures were on self-destruction paths. It may seem oddly contrarian, but I feel that focusing on the negative view of Europeans' influences amounts to putting the wrong people on a pedestal.

Pride Comes Before A Fall? Heeding The Credit Rating Warnings

noreply@blogger.com (Dennis Jones) — Thu, 19 Nov 2009 09:42:00 +0000

Except for those blithely ignorant tourists who think that Barbados is part of Jamaica, no sensible person would ever confuse the two countries. Much has been written about the divergent paths that the countries have taken in their economic policies and performance over the past 30-40 years.

A working paper published by the National Bureau of Economic Research in January 2009, by Stanford economists, Peter Blair Henry and Conrad Miller, and titled Institutions versus Policies: A Tale of Two Islands examined the divergent macroeconomic paths taken by Jamaica and Barbados since independence. It argues that while both countries started in 1960 from a similar colonial heritage - including property rights and legal institutions - and a similar small-island economic base, they experienced "starkly different growth trajectories in the aftermath of independence". Between 1960-2002, Barbados' per capital GDP grew roughly three times as fast as Jamaica's. Thus, the income gap the two countries became about five times larger than at the time of independence. Jamaica suffered a sharp decline in its standard of living after 1972, with Jamaica's growth (-2.3% a year) slowing much more dramatically than that of Barbados (-1.2%). In more easily understood figures, the per capita income gap between the two countries moved from real per capita GDP in 1960 of US$3,395 in Barbados, compared to US$2,208 in Jamaica - an income gap of US$1,187 - to Barbados having in 2002 real per capita GDP of US$8,434, against US$3,165 in Jamaica - an income gap of US$5,269. Shockingly, the income gap between the two countries now exceeds the overall level of Jamaica's per capita GDP.

In analysing the factors that might account for the variation in the growth trajectory of the two economies, the authors argue that "countries have no control over their geographic location, colonial heritage or legal origin, but they do have agency over the policies that they implement. Of particular importance for small, open economies (that is, most countries in the world), is the response of policy to macroeconomic shocks such as a fall in the terms of trade. Pedestrian as it may seem to say, changes in policy, even those that do not have a permanent effect on growth rates of GDP per capita, can have a significant impact on a country's standard of living within a single generation."

At the heart of the difference are the policy choices made. But those choices also cover what a government believes it can implement. Jamaica's governments chose a route that has involved heavy borrowing, and devaluation, but they have never been able to get good control over wages (in part due to unions relative strength and other institutional problems). Many would say that those choices reflect a certain political trade off as well as lack of will to tackle some deep-seated problems in the economy and the results--large fiscal deficits, high debt ratios, high interest rates, and a sharply devalued currency--are merely the playing out of that.

In 1993, the International Monetary Fund recommended that Barbados devalue its currency in order to stimulate production and return the economy to full employment. Barbados used a 'Wage and Price Protocol', whereby workers and unions agreed to "a one-time cut in real wages of about nine per cent and agreed to keep their demands for future pay rises in line with increases in productivity. Firms promised to moderate their price increases, the government maintained the parity of the currency, and all parties agreed to the creation of a national productivity board to provide better data on which to base future negotiations."

This was costly for all parties, and was even fought in the courts. However, the actions led to overall monetary restraint, fiscal discipline, and wage cuts which helped to restore competitiveness and openness to trade. This, Henry and Miller argue "had the side effect of enabling the monetary authority to maintain the exchange-rate parity without losing external competitiveness. In contrast, Jamaica's policies were never consistent with maintaining commitment to any parity the government might have wanted to adopt."

Having gone along these divergent paths, Jamaica can teach Barbados many things, not least in the realm of negatives to avoid.

Jamaica is on a slippery economic slope on many fronts, and one aspect of that is that when you need it most it is hard to find anyone to say a good word for you when a few would be really welcome. In the economic area, having just been downgraded by Standard and Poor's, Jamaica got the boot in the proverbial goolies when Moody's Investors downgraded the country's local and foreign currency bonds from B2 to Caa1 with a negative outlook (see Gleaner report). But it is not just the downgrade that is damaging. The reasons given are chilling. According to the Gleaner, 'Moody's said delays in reaching an agreement with the International Monetary Fund (IMF) factored in the downgrade'. Moody's naturally said the IMF agreement was crucial to "maintain confidence, meet this year's government funding needs and provide foreign currency inflows to sustain the external position". A 'CCC' rating signals that the ratings agency sees the debt issuer as 'vulnerable', and is an alert to investors that there could be interruption in servicing of the debt. Moody's rating obligations as 'Caa1' means seeing them as of "poor standing and are subject to very high credit risk". Bitterly put, Jamaica is seen to be on the verge of defaulting.

Perceptions mean so much. Good looks are important but cannot trump poor performance and Jamaica is now getting the hurricane breeze for too long not dealing with its fundamental problems, especially that heavy debt burden and getting its budget into shape.

Cue Barbados.The PM stated in Parliament this week that with regard to the recent downgrading by a credit rating agency of its outlook for Barbados from 'stable' to 'negative' that "investment grade is great and we will seek to save it". But, he made it clear that he not going to maintain investment grade "at the expense of the quality of life in this country...not going to do it at the expense of jobs in Barbados...". He stressed that "if Barbados has to step down a peg to step back up ten, we will go down first and will rise back up and we will prosper" (see extract alongside from The Barbados Advocate). Would that things were so easy. The Nation's cartoon yesterday, reproduced here, has an ominous tone. I would suggest to not contemplate glibly sliding down, thinking that all one has to do is put the engine into reverse and then all would help turn the country back up. Events have momentum. Sportsmen know and often repeat that winning is a habit. But they also know that losing is also a habit and once it becomes a habit even good play tends to be not enough to secure winning results. Taking that metaphor, that is the problem if one assumes that slipping is alright. The world starts to see you as who you now are and quickly forgets who you used to be.

The Advocate editorial yesterday (see Advocate editorial) seems to acknowledge that things must change. It began with “Barbadians must buckle down and adjust their lifestyles to survive this economic downturn.” Then it urged Barbadians to prioritise their spending. It is worth reading carefully what it feels are valid criticisms and what is critical for success:

Barbadians are highly literate, but we spend more time in the clubs and bars than in the library or at the many free lectures on important issues such as health and finance that can empower us even further.

Barbadians are educated – many to the tertiary level – but many of us lack the confidence to start our own businesses.

Barbadians are healthy, thanks to State-provided health care, but more and more of us are killing ourselves with inactive lifestyles and unhealthy diets.

Our much-touted 97 per cent literacy rate and our progressive social programmes are all for nought if we cannot move on to the next stage of our development.

It is time for each Barbadian to take more responsibility for his or her own success. It is time for the State to see a return on its investment.

I repeat, the world starts to see you as who you now are and quickly forgets who you used to be. If Barbados does not get the message quickly whatever pride there was in having built over several decades a sustainable economy wont count for much if debt becomes unsustainable. It does not take as long for an economy to crumble.

Who Are You Calling Corrupt? The 2009 Corruption Perception Index

noreply@blogger.com (Dennis Jones) — Wed, 18 Nov 2009 08:34:00 +0000

The spin masters got a great opening yesterday when Transparency International (TI) published its 2009 Corruption Perception Index (CPI), which measures perceived levels of public sector corruption (see http://www.transparency.org/policy_research/surveys_indices/cpi/2009). Note that this is merely perceptions, from a range of surveys, not evidence of actual corruption. Note also that it does not cover the huge area of potentially corrupt practices in the the private sector.

Huguette Labelle, TI's Chair, stressed that political stability and well functioning government are important in the battle against corruption and that this is reflected in the top countries. New Zealand is ranked number 1, and it is notable that Singapore has risen to number 3 (from 4). Lee Kwon Yew's legacy rolls from strength to strength.

But, Ms. Labelle was concerned that the vast majority of the world is perceived to be more corrupt: about 130 (out of 180) countries scored under 5, on a index from 1-10, with 10 being best. See the map and note that the more corrupt areas have the darker blues. Listen carefully to her commentary.

Some in the UK press screamed about how Britain had fallen one notch, to 17th place (see Daily Telegraph report); no one was really concerned about the difference between perception and reality, with discussion of the MPs' expenses scandal fresh on tongues. TI said that it blamed the poor showing on a collapse in confidence in politicians triggered by The Daily Telegraph’s own revelations about MPs’ expenses.

But, look, 'little England' is right on big England's tail, as Barbados rolls in there with many of the world's most developed nations, at number 20 (from 22 in 2008), one place behind the USA (20), but nipping ahead of Belgium (21) and France 24, but topping the region, just ahead of St. Lucia in 22nd equal.

Jamaica, poor souls, limped in at 99th equal (96 in 2008), in company with a very wide bunch including Bosnia and Herzegovina, Tonga, Madagascar and Senegal.

Fragile, unstable states which have been scarred by war were at the bottom of the index, so it should be no surprise that Somalia is right at the bottom at 180.

It's worth thinking about what Ms. Labelle said that it was “essential to identify where corruption blocks good governance and accountability, in order to break its corrosive cycle...Stemming corruption requires strong oversight by parliaments, a well performing judiciary, independent and properly resourced audit and anti-corruption agencies, vigorous law enforcement, transparency in public budgets, revenue and aid flows".

It is ironic that despite its lowly position on the TI CPI, Jamaica has many of the necessary elements in place to deal with public sector corruption, and legal cases currently alive concerning MPs are testimony to that. By contrast, Barbados lacks some of these same safeguards, though rumours abound and intimations of malfeasance are made about corruption in the public sector: look at the recent Accountant General's report and its lament about parliamentary oversight as well as poor auditing and lack of transparency in budgets.

I always take the TI index with a pinch of salt. It tends to flag poor government control in cases where substantial aid flows exist. It does not touch private sector corruption. This has always struck me as odd as a significant source of corruption comes from private sector pressure on public officials as well as private sector corruption within the sector itself. I do not know why the surveys do not cover this and give us a complete picture of national perceptions.

Despite the high ranking of the public sector in many richer, developed countries, we should never forget that many of these same countries have private firms and public officials who are indeed deeply involved in corruption in poorer, developing countries. Greasing palms is unfortunately seen as a part of doing business worldwide.

Un-Belize-able: 2012 And All That

noreply@blogger.com (Dennis Jones) — Tue, 17 Nov 2009 13:20:00 +0000

No two English speaking Caribbean countries are the same. But those that are part of the Latin American mainland are intriguing because of the cultural and linguistic mixing with non-Anglo Saxons that has gone on for centuries and continues, while most of the islands do not have this phenomenon as a constant. Having met Belizeans decades ago in London and been fascinated that these people from central America spoke like Jamaicans, I was always intrigued by the possibility of visiting their country. I later learned that it was slaves from Jamaica who had been taken to work in logging for Britons some 200 years ago that formed the based of Belize's black population. Well, I got my chance to visit this small country at the weekend, as I followed the head of household to one of her periodic meetings with high ranking officials from the region.

Belize (formerly British Honduras) has a population just larger than Barbados, with some 300,000, but with a huge land mass of some 8,860 square miles--big, but about 1/10 the size of Guyana.

The country is regarded as poor, with GDP of about US$ 1.4billion and income per head of about US$ 4,250. But, on the ground, the place looks like better than many other Caribbean countries, though I did not go far into Belize City, and I heard that garbage is a constant problem. There are good roads that take you from the coast into the interior. But I was not on a big economic study tour. I was looking forward to seeing some the famed history and culture.

Starting out around 7am, we had the pleasure of a day tour of the New River lagoon and Mayan ruins at Lamanai (meaning 'submerged crocodile'), to the north of the country. The river ride was placid and dotted with sights that our guide and boatman skilfully pointed out to us. We saw howler monkeys, who loved to be fed bananas and were happy to jump into the boat. Iguanas basked in trees. Adult and baby crocodiles languished near the river banks--more or less submerged. "Jesus" birds walked across the water and lily pads. Cormorants just looked on from their perches. As possible, our boat turned into a sprinter as we scooted around bends: I've never before been in a boat that did a wheelie. But the boat ride was a prelude to a tour of a Mayan village.

The Mayans were the masters of the place nearly two thousand years ago. It's still amazing to see what their culture created, whether or not you think that they were really aliens. Their ordering or life and time are now coming to the fore as the year 2012 approaches: this is supposed to be the end date of the Mayan long calendar and portends various kinds of cataclysms or major physical and spiritual transformation. The Mayan population in Belize was reported to be some 3 million and the Mayans did things on a big scale, as evidenced by their temples. I have seen them before and visited Mexico's Teotihuacan site. Climbing that had been hard due to dealing with altitude. When I saw the smaller temple at Lamanai, I knew it would be hard too, as it had really steep steps. So it was, as my gazelle-like wife was leading the charge with one of her super fit Bajan women colleagues, whom I'd met in the gym in the morning doing her normal routine, so I knew she was in shape. I clung to the rope to help me up. We were all stunned by the views from on top. We were then all seized of the steepness of the descent we needed to make to get back down. Mummy! Some of the descendants had to take the hindmost way down and mud stains on the pants were no sign of shame.

We were glad to get back to our little picnic area and enjoy lunch provided by our guide's mother: rice and beans, stewed chicken, onions steeped in hot peppers; washed down by a few ice cold Belekins, the local beer.

The boat ride back to our bus was like a speed boat race as the two boats jockey for position as we negotiated the river bends. More than one Jones lost a hat, and at least one Jones was assaulted by a flying baseball cap.

The hour long bus ride back to the city was notable subdued: after eight hours of fresh air and food and fun it was understandable that people were tired. While some could pack their bags and think of sitting in airport lounges the next day, some of us had to be up bright and early to head off on the road again, elsewhere into the interior. That will be another story.

Till Debt Do Us Part: Down We Go Again

noreply@blogger.com (Dennis Jones) — Mon, 16 Nov 2009 20:33:00 +0000

Last week I wrote that Standard and Poor's (S&P) were warning that another credit rating downgrade was coming for Barbados (see You Take The High Road...), and they did not lie. S&P lowered the island’s rating from stable to negative, on Friday, November 13 (ominous), citing “a worse-than-anticipated recession” in Barbados for the situation. It added that it believed that the timeliness and magnitude of the island’s fiscal consolidation “is uncertain because of a worse-than-anticipated (global) economic recession”. The rating agency forecast net government debt at 52 per cent of GDP this year, up from 42 per cent three years ago.

Standard and Poor’s said results for the first three quarters “underscore a rapid deterioration” in Barbados’ public finances and a “sharper economic contraction”. It revised its real GDP estimate to negative 4.8 per cent this year with a further decline of one per cent expected in 2010, before a return to growth in 2011. This underscores the IMF's earlier assessment and its focus on the unsustainability of Barbados' current debt profile.

This warning points to another worrying development looming on the horizon: Barbados' debt may be headed for the dread 'junk' status if it is downgraded another notch. Whether or not people like the term 'junk' is not material. What is means is that those people who look to lend will have to avoid Barbados as they face limits on how much debt they can carry that is not investment grade. To change things needs more than a shift in confidence. It needs policies that attack rapidly the size of the debt. The sands are drifting down the clock and I fear that Barbados may not have as much time to deal with this as it would like.

Tommy, Can You Hear Me?

noreply@blogger.com (Dennis Jones) — Fri, 13 Nov 2009 10:15:00 +0000

If you are not familiar with The Who's 'rock opera', Tommy, I suggest you listen to it and try to understand some of its messages. The capabilities of people who cannot see, or hear, or speak, or generally those who do not fit the norms, are often much misunderstood.

Many misconceptions surround the world of blogging. When it is discussed by the established media houses it is often in terms that are dismissive, as they focus on blogs produced by people not within media, governmental or commercial organizations. Part of me understands that as a natural reaction to something that can be seen as competition and thus a threat. Yet, if one were to point to the whole range of blogs that exist it would be hard to substantiate a dismissive attitude. I look often at what the US government has been doing since the change of administration this year, as reflected on the White House's website (http://www.whitehouse.gov/). The Obama administration is trying to change many things and one of those is access to information about what the President and his government are doing. Technology has allowed the updating of information at lighting speed across the globe, and the White House is keenly aware of that. It's site is very up to date and extensive. And it has several blogs.

From what I see, anyone from the administration may post on the blogs. Its latest general offering, on Small Business and Health Reform, was posted by Christina Rohmer, Chair of the Council of Economic Advisers. Different parts of the White House also have their blogs featured, for instance, the Office of Management and Budget; its Director, Peter Orzag posted the most recent blog on 'Fiscally Responsible Health Reform'.

In similar vein, I have been noticing that the UK's political world has moved not only into blogging but using technology to 'get out the message'. I now follow on Twitter regular postings from 10 Downing Street, the Foreign Office, and a range of MPs.

The major media houses too have moved in the same directions, with blogs, Facebook presences, YouTube videos, Twitter accounts, and more. They have reached out through new technology and social media to reach as wide an audience as possible, and the way that messages are transmitted is much wider now than say just a year ago, and certainly very different from a decade ago. Once tightly reserved organisations, like the IMF, now bombard the world with online updates using many of these same tools. For those who need or want information and prefer it quickly, these developments are a boon. But, they have opened up 'reporting' to almost anyone. The major news organizations have captured that mood by realising that content can come from anyone who can be an eyewitness. Major event where there is no correspondent? Send a message to the world for reports and videos and pictures from anyone who was there.

The general message is that new technologies have extended the reach of opinion shapers and decision makers and use should be made of them to better inform and do so quickly.

My sojourn last weekend into a discussion of journalism from the position of a blogger has left me thinking a lot about the many misconceptions about what people like me do and represent. First, as I said during the radio broadcast, I cannot really speak for more than myself, but there are many facets of what I do that would resonate with other bloggers.

As I read through the days' news online--and that is important because I could not cover them all if I had to read printed versions--and inform myself, I know that the sources of information that I rely on are essentially those of the standard media houses. Why is that? One reason is the belief that a greater proportion of what is written or spoken or portrayed visually is broadly based on facts and accurate. I couch my terms because I know that it's very easy to bend facts with the selection of what to report and all reporting is selective. So, I tend to trust certain media houses for having high standards of fact checking. I know that does not apply to all. I know there is bias and I try to deal with that.

But, I also refer to a range of new media forms. Why is that? One factor is their very different perspectives. When I read The Onion I know that I get an irreverent view on almost any newsworthy topic, but that irreverence really works only if I have an idea of what is really being discussed, such as its report on recently resigned CNN host, Lou Dobbs, claiming 'CNN Host Had Been Living Illegally In Country Since 1961'. You need to know about Dobbs' stance on illegal immigration to appreciate the piece.

I was fascinated to read this morning how the US government has moved to integrate the Chinese blogging community into President Obama's visit to Asia. The Obama campaign and now administration showed the way in using social media for political purposes. Now, the US State Department just held simultaneous press briefings for a select group of predominantly Chinese bloggers in several major Chinese cities, giving a run down of the schedule and taking questions. That reflects several things. One is that the bloggers are felt to be reaching a significant audience that is not under the thumb of the Chinese government, i.e., not the mainstream voices. Another is to push the agenda of press freedom, whether the Chinese government likes it or not. Another is just information exchange by getting a handle on bloggers' concerns and also the problem of access to information in China.

All of that is to say what? I think in Barbados the media houses are missing the point. Blogs are a new part of the collective voice. In the same way that discussions in rum shops and restaurants, or around kitchen tables, or in the hairdressers or barber shops, or in the markets, are all part of the pre-existing national voice. But, by publishing, the opinions can be shared more easily. That's really all. The views are no more or less valid than the soundings that come from a town hall meeting. Where the media houses may get into a pickle is if they think that the blogs are like them in trying to portray events in a certain way or need to adhere to all of the same so-called in industry standards for journalists. I do not think they try to be like like the standard media houses other than in offering their views to the public. But in being different from the standard media, they are also not absolved from responsibilities that apply to any individual or groups, and if they are deemed to transgress then ways have to be developed to redress those transgressions. That may be a challenge but it is not impossible.

Of course a lot of unsubstantiated opinions is hard to deal with, but that is the case wherever it exists, and should be dealt with as usual. Put facts in the open to challenge the opinions. You cannot stop the expression of the opinion, but you can try to show that it comes from a wrong base. People have their prejudices and bias and saying they are irrational or wrongly-based misses the point.

The debate in Barbados on undocumented immigration is a great case. So much of the recent debate has been based around opinions and not much more. The government did not help the forming of better informed opinions by furnishing facts over which people could debate, so largely baseless opinions ruled. As some facts dribbled out, they were still going to have a hard time pushing aside well-entrenched opinions. People like me hope that as the amnesty draws to a close there will be a body of facts about undocumented immigrants that can help discussions going forward, but a lot of opinions are now so hard formed that the facts may not matter much.

It may seem self serving but it is not meant to be so. I hope that those who work in the media houses, government and industry here realise that the blogs are part of a current trend that gives people access to information more readily and gives them also the chance to express their views without much restriction. People can more easily feel that if they do not find their views reflected in what is fed to them, they can feed the world their views quite readily. Perhaps, we used to be limited in doing that by say having to write a letter and mailing it somewhere and waiting for it to be read. Now, we will just post it on the Internet as well as send it to where we want it to go. We are less bothered by the delays of the postal system, or by the slowness of a bureaucracy. By the time that either of those work in our favour, a body of opinion will have formed that will affect decisions eventually (in our favour or against). So, holding on to the old standard will always mean doing catch up. It is now hard to deny people a voice. Radio call-in programs exemplified this before and still do, and whether they are liked or not, it is foolish to ignore them. I say that same argument applies to the blogs that exist.

Supporting An End To Flogging: The Need For A Lead From Government

noreply@blogger.com (Dennis Jones) — Thu, 12 Nov 2009 10:15:00 +0000

Each nation should chart its course. Jamaica has a very difficult path to carve for itself, economically, socially, psychologically, and even spiritually. As I look at the physical carnage perpetrated each day as shown by those mind boggling murder statistics, I know that the country has a heart that has much kindness. It is often evident in people's daily dealings with each other. As I thank my lucky stars that the burden of finding the right economic policies to get out from under the weight of debt does not sit on my shoulders, I marvel at the way that for decades Jamaicans have found a way to survive and do more than eke out a pauper's existence. Of course, not all income is declared. Of course, barrels make a big difference. Of course, the investment schemes put a lot of money into pockets and financed spending almost out of thin air; now that balloon is burst and down to Earth many will fall.

How to deal with discipline in a society is never easy. In the Caribbean, our slave history in part seems to have given us a readier acceptance of what I view as sanctioned abuse, in the form of flogging. While there are signs that views on the acceptability of this are changing relatively fast, it is not and may never be universally accepted. So, it's good to see a push coming from legislators, because the desire to do the right thing is not easily translated into laws and systems.

I was heartened to read that at a high political level, Jamaica has decided to put an end to flogging and whipping (see Gleaner report). The Public Defender has spoken clearly: "such a punishment constitutes inhumane and degrading treatment". This follows a declaration from a backbench MP, Gregory Mair (North East St Catherine) that not only were the laws backward but represent a stain on the people, given their history. I could not agree more.

Barbados is still working its way towards a wider acceptance that flogging is not the way to go. A new CADRES poll, under the auspices of the Barbados Union of Teachers and UNICEF, shows that public acceptance is waning (see Nation report). As reported by pollster, Peter Wickham, it's overall finding is that, while 'in 2004 a UWI/CADRES national survey demonstrated that 69 per cent of Barbadians supported flogging in schools and when this view was tracked in 2009 it found that now only 54 per cent of [Barbadians] support it'. He argues that better education has much to do with this change, but notes too that absentee fathers make disciplining children a harder task and a single mother seems more ready to resort to flogging. The poll is also interesting in showing that a substantially larger majority of people favour flogging in the whom over flogging in schools.

I can ally myself to Mr. Wickham's conclusion that 'The trend both here and elsewhere in the world is such that corporal punishment will eventually become unpopular and successive generations will not resort to it by choice, however, this day is still sometime off and it is therefore important that Government appreciate its responsibility to protect the children of our nation, while we wait for Barbados to become more enlightened on its own. '

One Flew Into The Cuckoo's Nest: In the Madhouse With PSVs

noreply@blogger.com (Dennis Jones) — Tue, 10 Nov 2009 19:25:00 +0000

Here we go, the inmates are about to run the mental asylum. I read this morning that representatives of those who own public service vehicles (PSVs) are angry because the Attorney General (AG), Mr. Freundel Stuart, commented that a new move to combat the bad behaviour on PSVs and by their operators "may well involve legislation that would temporarily relieve the owners of their licences to those vehicles if they are unwilling to control [their] people" (see Nation article and Nation report)

The press reported that Vice-president of the Association of Public Transport Operators (APTO), Judy Forde, said her concern was that Mr. Stuart "is making these comments as though the owners themselves are not concerned as well." That's right. Because if there was concern why had the problems not been addressed? Why the crocodile tears?

But not to be outdone, the press reported that:

'David Bynoe, an owner since the mid-1990s, was adamant that owners could not accept responsibility for the actions of their drivers. He too pointed to the judicial system which allowed drivers with several convictions to simply pay a fine and not have their licences revoked.

"I don't understand the system, because how can we be under threat of losing our licences when there are drivers in this industry [who] have over 20 convictions but never lose their licence? They simply pay fine after fine and the problem continues," he said'

Well, the AG is doing what the courts should have done, so Mr. Bynoe should be happy.

Who is supposed to be responsible then, the public with their lives? If an owner does not know the true state of a driver's records that is irresponsible for a public service provider. To talk glibly about drivers with 20 convictions and think that people will not see that as the state of affairs that is the result of complicit owners is ridiculous. Passengers cannot be expected to accept that checks are not being done. Other road users cannot get to a stop light and pull down the window and say "Driver, show me your papers, man." Let American Airlines or LIAT start flying planes with rogue pilots and making the kind of arguments we are getting from the PSV sector. What utter madness. Let the schools start employing sex offenders and not doing background checks and sending letters to parents saying "It's not our responsibility to check that we are employing molesters and rapists to teach your children...We are concerned." Better still, let's take any jack rabbit who wants to be a policeman, stick the person in a uniform and hand out the guns.

Please! We don't even have to get emotive about the carnage that happens as a result of an attitude that is the epitome of recklessness not concern.

When such problems have occurred with PSVs around the world and over the centuries, it was only the threat and application of the removal of privileges to carry passengers that led to changes. Why will it be different in Barbados?

Journalists Under Fire? A Day Later And The World Is The Same. Surprise!

noreply@blogger.com (Dennis Jones) — Mon, 09 Nov 2009 10:21:00 +0000

Perhaps people have unrealistic expectations when a topic dear to their hearts gets into the public's eye. They give the impression that all of the hard issues that have been there, whether discussed before in public or not, will be resolved and are terribly disappointed when preferred topics get less than their due coverage or no commitments are made to make the world a better place. I must admit I had no expectation that a two-hour radio call-in program would change much. So it was. One of my better forecasts, I'll say, tongue in cheek.

The Nation covered the event this morning (see attached photo from their report under Journalists weigh in on Freedom Bill, a headline which is a way to focus the reader even if it was not THE focus of the discussion).

A lot of the flow of radio discussions, including call-in shows, comes from the person in charge of the studio, both the host (I do not like 'moderator', as it suggests a style that is not necessarily accurate) and the producer, who holds many keys in terms of who from outside the studio gets to speak, and what words they say get aired. In Barbados, one of the important constraints that journalists face is to skirt the waters of the defamation laws, and one sees the problem daily on Down to Brass Tacks, when callers are 'cut' or 'silenced' when saying something that may get the radio station into hot water. Inside the studio, one gets to hear the full conversation and can always second-guess any censorship (though one only gets to hear of this at the time from those listening in).

The panel I was part of was made up of:

Host:
JULIUS GITTENS - Barbados Association of Journalists (BAJ), Interim Vice-president

Panellists:
ADRIEL “Woody” RICHARDS, Caribbean Media Corporation (CMC), Secretary/Treasurer, BAJ

SALEHA WILLIAMS, head of new media at Starcom Network,

ANTOINETTE CONNELL, Editor, Daily Nation

I was pleased to be included in the panel discussion, and tried to speak not as a spokesman for all bloggers, which was a two-edged sword, but important because they are not like one, and each should have the chance to speak for him/herself, but anonymity on the part of some bloggers puts a natural barrier up to certain types of participation. Perhaps the radio and TV stations will have to focus solely on blogs one day and get a discussion involving the practioners in that area only.

The discussions were quite lively and got a little testy at times, especially between the host, Julius Gittens (Interim Chairman, Barbados Association of Journalists), and Senator Orlando Marville (Chairman of the Advisory Board on Governance), who could not initially agree on how to proceed and then got into a little spat when the Senator uttered an acronym and the host asked for an explanation. The "You don't know what that is?" clearly indicated that the Senator had forgotten that the audience was more than just the one person to whom he was speaking. But, that's how it is sometimes and hopefully as grown ups no one will be sobbing still or playing alone this morning. But that incident touched well one of the major issues facing the media houses and politicians: how to package information so that understanding can be as broad as possible.

As I intimated above, it is unrealistic to think that we would be further ahead after two hours of Sunday radio broadcasting; that would put a lot on the shoulder of a 2 hour radio program.

I took away some key points that I think were not clear before:

Media house journalists feel that a major constraint on good reporting is limited personnel resources, and job cuts have not helped. We heard that CMC is working with a ’skeleton staff’.
New media formats are being developed by the Nation Group/One Caribbean Media, and this has boosted revenues with little need for additional resources.
News houses are not sending reporters to cover stories (Roosevelt King, Secretary General, Barbados Association of Non-Governmental Organisations (BANGO), and Chris Halsall, Technical Advisor, BANGO, corroborated this in the recent BL&P hearings case).
News media houses believe that they have rigorous standards of fact checking and accuracy and that blogs are not held to the same standard. I tried to counter that and argued that some blogs/bloggers do exercise similar standards. They should not be swept away with a generalisation that is incorrect.
Politicians manipulate the press and the media houses were criticised (by lawyer, former journalist and now MP, Stephen Lashley) for poor news room management, notably relying too much on press conferences and releases.
Media houses clearly employ self censorship, fearing and being made fearful of defamation cases. We heard of the stories of how merely filing a defamation case will kill a story and gain someone a few easy dollars as the press prefer to settle rather than get caught up in a lengthy and costly legal case.
Mr. Lashley said he would support Freedom of Information (FOI) legislation measures in principle and removal of defamation constraints on journalists.
Senator Marville explained that an 'Information Commissioner' would eventually decide what information could be made public. However, he could not understand why it was taking so long to move forward on FOI legislation.
Citizens do not help investigative journalism, often pulling back from getting full stories reported.
The question was posed whether ‘activism’ should be the role of the press or the role of citizens. The on-air discussion was not conclusive (no surprise). [This may be an interesting topic on which to get views.]
Media house follow-up on stories is weak, but they claim lack of resources and pressures to report new stories.
Jeff Cumberbatch, a lawyer and columnist who has looked a lot at defamation laws in the region, argued that there is a need for reform of how defamation cases are handled so that they can be speeded up. He felt that existing legislation, especially in Barbados, is very good. The ‘public interest’ defence and the ‘Reynolds’ case does not apply only to the UK and at least two cases have been filed in the Caribbean (Jamaica).
Media houses need to make information more digestible and Roosevelt King spoke to how ‘packaging’ of complex issues needs to be improved. I raised with him how BANGO could perhaps help in that process.
Media houses were criticised for lack of preparedness and unwillingness to be better informed by those who understood issues, getting facts wrong as a result (Chris Halsall made this point referring to recent BL&P hearings and received an on-air apology for errors not corrected).
Malcolm Gibbs-Taitt, Director General, Barbados Consumer Research Organisation (BarCRO), criticised the media houses for how they treat consumers.

We can argue till the cows come home about the quality of the program but I would never think that such an airing can be transformative on major issues. One only has to think about the many hours of broadcasts that go on world wide with no apparent changes in any aspect of life.

You Take The High Road And I Take The Low Road: Debt Ratings Warnings

noreply@blogger.com (Dennis Jones) — Sun, 08 Nov 2009 10:43:00 +0000

Dont blame the messenger.

Jamaica's government kicked up a terrific stink with Standard and Poor's (S&P) after the rating agency again downgraded the country's debt. The newspapers reported that downgrade Jamaica's long-term foreign and domestic currency ratings from CCC+ to CCC, apparently on news of the dismissal of Bank of Jamaica Governor Derick Latibeaudiere, prompted the Government to dismiss the rating agency's reaction as premature at best (see one commentary from the Jamaica Observer). I have to laugh at the notion that "Latty" had become someone's 'buddy". S&P did not change their view, however. Surpirse! With Jamaicans rarely the kind to give up without a fight, the real conversation really sounded like "Wha' de warra?", as the Jamaican politicians yelled over to the US. S&P, not surprisingly said "We nah change nuttun. Tek weh you self!" The cartoon captures things pretty well.

What will Barbados' normally more polite and circumspect politicians do, however, with the warning shots about more debt downgrades?

CariCRIS (Caribbean Credit Rating and Information Services Ltd.), the Caribbean's regional credit rating agency has just issued a downgrading of Barbados' debt (see report): "Caribbean Information and Credit Rating Services Limited (CariCRIS) has lowered its ratings on the debt issue (notional) of the size of USD 300 million of the Government of Barbados to CariAA (Foreign Currency Rating) and CariAA+ (Local Currency Rating) on its regional scale from CariAA+ (Foreign Currency Rating) and CariAAA (Local Currency Rating). The ratings indicate that the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean is high." The take away is in the last word; the debt is still of high creditworthiness. But, CariCRIS is painting signs that confirm the view that Barbados' fiscal and debt situation is worsening. In their word, "The downgrade reflects the severe impact of the global recession on the macroeconomic performance of Barbados resulting in contracting economic activity, a widening fiscal deficit, increasing public sector debt levels and a deteriorating current account contributing to a balance of payment deficit." This is not news.

However, the concerns are not going to go away soon. Today's Advocate reports that Standard and Poor's (see attached image) have warned that another downgrade may be coming if Barbados' fiscal position is not tightened (i.e., improved) from 2010 onwards. That's a clear road map, already drawn by the IMF a few months ago, that points two ways--high road or low road. No one here can say "No one told us this would happen." If one does not deal with a debt burden it will become a burden till your death.