Home' Trinidad and Tobago Guardian : June 8th 2014 Contents A22
Sunday Guardian www.guardian.co.tt June 8, 2014
Peter Boos, former
Caribbean chairman of a
accounting practice, relaxes at
home in Barbados. Atlantic waves
pound offshore, skies are blue,
the breeze light. Peter looks wor-
His country, he says, has
reached a "critical tipping point."
Like most Barbadians, he is com-
mitted: "I am a Caribbean citizen
and this is home, where I want
to live and see my children and
Yes, Barbados is in trouble. The
economy has contracted since
2008. Real wages have declined
by about 12 per cent. There is
pain---and not just for low-
An IMF team was on the
island last week. The annual
Article IV visit is not due until
October. Somebody is worried.
Alex MacDonald, chairman of
the Barbados Private Sector
Agency, said IMF talks were
"wide ranging and informative."
Nice language. But I would rather
hear "focused and decisive."
For every ten dollars the Gov-
ernment spent last year, it raised
just seven dollars in taxes. The
rest was borrowed.
For years, the Government has
borrowed to pay bills. Its accu-
mulated debts are close to one
year s GDP---that s the entire
earnings of every man, woman,
child and offshore company in
Of every ten dollars the Gov-
ernment spends, three go in debt
interest. Effectively, they are bor-
rowing to pay interest on past
Parliament last year raised its
ceiling for local borrowing from
US$750 million to US$1.4 billion.
In May, it went up to US$2 bil-
lion. Last week, they added
another US$500 million for spe-
It gets worse. A decade back,
lending to Barbados looked risk-
free. Not again. The island lost
investment grade status at the
end of 2012.
In December last year, Barba-
dos borrowed US$150 million
from Credit Suisse, at over eight
per cent interest. They borrowed
again on similar terms in March.
Last week, ratings agency
Moody s last week downgraded
Barbados debt three notches,
deep into junk status at B3. The
outlook is negative. Next stop is
the "C" league.
Barbados has a strong reputa-
tion for good governance. Trans-
parency International rates it 15th
from the top in its Corruption
Britain and Belgium, and 68
places ahead of T&T.
The awful truth is that the key
word there may be "perceptions."
Boos says: "There are far too
many credible reports for us to
ignore. Procurement procedures
and contracts need to be trans-
parent." The auditor general s
report is a "total indictment of
financial management and
accountability in the public sec-
The finance ministry last year
told the IMF that most state-
owned companies have not sub-
mitted financial reports for sever-
Boos calls eloquently for civil
society to take independent
action to reform the island s gov-
He quotes a former IMF
staffer: "For many years, minds
residing in la-la land have chart-
ed Barbados s course." Ouch.
Governance reforms are needed
throughout the Caribbean, but
they won t happen overnight.
Barbados needs stop-gap answers
The IMF wants better tax
administration, fewer tax breaks,
a rational monetary policy, and
better public-sector management.
They want tighter controls on a
public-sector wage bill which (in
proportion to the economy) is
the highest in the Caribbean.
Last December, finance minis-
ter Chris Sinckler promised---or
threatened, take your pick---to lay
off 3,000 by March, 12 per cent
of public-sector staff.
In May, he did not know how
many bodies had been dumped---
he vaguely thought between
2,500 and 2,800. Many have
been low-paid landscaping work-
ers. The process has been painful
Meanwhile, divesting some
state assets could atone for past
sins. But to address the future,
tourism needs more whoomph.
Tourist numbers for January to
March---peak season---were down
1.2 per cent on last year.
Last year was 5.2 per cent
down on 2012.
And 2012 was 5.5 per cent
down on 2011.
Hotelier Bernie Weatherhead
says more than half the hotels
are in deep trouble with bank
debt. "That tells you a million
stories right there." Even a year
ago, 14 per cent of bank loans
were "non performing."
The economy won t really roll
until more hotels get built.
Barbados has 20 per cent fewer
hotel rooms than it did in the
early 1980s. Sam Lords is a
burnt-out ruin. The former Silver
Sands sits empty.
The former Cunard Paradise
Beach site must be the most
idyllic in Barbados---shady
manchineel trees, white sand,
blue waters. It is more than 20
years since it pulled a tourist.
Next to it lurks a half-finished
Four Seasons, construction at a
halt since 2008.
Barbados needs fast creative
thinking to get tourism invest-
ment up and running.
Opposition leader Mia Mottley
hopes the Moody s downgrade
will "jolt us into our true reality."
She says: "It cannot be business
Donville Inniss, Minister of
International Business, Commerce
and Small Business, sees it dif-
ferently. "We are feeling very
upbeat," he says. "Nobody ever
said it was going to be an easy
"Easy ride?" Isn t that pretty
much what his party promised
before last year s general elec-
"Failure to implement correc-
tive policies could result in a dis-
orderly adjustment process," said
the IMF end-term report in Feb-
ruary. Disorderly? That sounds
un-Barbadian; it s a tipping
"Somebody is contributing to the
fact that in ten years T&T has
moved 40 places in the wrong
direction in the corruption league
table. Some people are responsible.
Will we name them, shame them,
or keep quiet because we don t
want to upset our chances of
future business? And even those
who, hand on heart, know they
have never made a dodgy pay-
ment, never paid a bribe: have you
contributed to the problem in other
"Who here has given an intern-
ship to their friend s child and in
so doing denied an opportunity to
a more talented, more deserving
candidate who lacks the family
"And who here sits quietly as
they benefit from an economic sys-
tem that appears designed to offer
a wonderful lifestyle to those above
a certain line: minimal tax, cheap
electricity, cheap fuel for your
boat, all the while tut-tutting that
it is unsustainable."
Arthur Snell, British High
Commissioner, speaking at the
Port-of-Spain Rotary Club
luncheon last week.
My grandmother told me
a story about a magnif-
anniversary cake baked for her
parents. It was stiffly iced, many-
layered, richly textured, brandy-
saturated for months, nutty,
piquant. She knew because she
and her teenage siblings tasted it
as it stood under a net in the
dining room a week before the
party. One midnight, the children,
unable to resist it, made a cun-
ning incision with a compass and
each of the five siblings had a
taste. They did this every night
with a surgeon s precision,
emboldened each time they got
away with it.
On the night of the party, sur-
rounded by guests, my great-
grandparents stood ceremoniously
to cut the cake. At the touch of
the ribboned knife, it fell apart. It
was hollowed out.
I thought of that cake at the
Port-of-Spain Rotary luncheon
last week, to which I d been invit-
ed, to hear British High Commis-
sioner Arthur Snell speak. I d been
told by my host he would speak
of responsibility and the killing of
two boys, nine and 15, who were
executed in front of their mother
in their living room by gunmen.
The mood was sombre---unusual
for a Rotary event, where success-
ful people (mostly men) slap one
another on the back with a "hail
fellow well met" bonhomie, mix-
ing picong with serious charity
work. When business and profes-
sional men in groups go very
quiet, you know something is
wrong. They glue countries
together. Without the middle
classes, a country buckles.
As I guiltily picked at the cake
at lunch, businessman Gregory
Aboud was saying that 90 per
cent of the gang murders, domes-
tic violence and road deaths had
to do with a nation suffering from
poor self-esteem. People around
the table agreed. With 400,000
functionally illiterate, you don t
have an education; if, as well, you
don t have a family life or social
workers around---absent fathers,
hustling mothers---and your role
models are men in public office
who kick ass and flout rules, then
you don t have hope. But you
have a gun. You use it.
I thought of how inured we are
to everyday horror as Snell was
speaking of his outrage at our
collective response to the death of
this child, as we dismissed him,
felt he deserved it for being a
"terror" (as absurd as a journalist
deserving a death threat for
Snell reminded me of the con-
versation I had with a ruggedly
handsome white man from my
yoga class in a leafy neighbour-
hood---a man who, here, would
get a knee-jerk reaction yo-yoing
from sycophantic deference (pre-
supposing economic and social
clout) to a jealous loathing. He
had trouble with his knee during
I thought he had injured it
playing squash with the boys.
When we walked out, I realised
he was limping badly, and that his
speech was impaired.
"What happened?" I asked.
"Oh," he said, casually: "One
Carnival, a decade back, a bandit
smashed my skull on the ground.
I went into a coma. I had several
mini-strokes. I ve never recov-
A casual horror.
As Snell spoke of how we con-
tinually devalue life to children by
publishing macabre photos of the
murdered---a severed head as
headline---I thought of the woman
I met earlier this week. We were
in smart dresses at a lunch,
drinking chilled wine, when she
reminded me that she was the
widow of a man who had his
head cut off. Nonchalant horror.
The middle class can make its
walls higher, and sharper with
barbed wire, but we are jittery
because the inhumanity we ve
created is not just destroying
itself, but turning on us. Our cake
is crumbling from within. We ve
eaten at the Treasury, kept our
people illiterate, dependent,
Snell reminded me how we all
"prey upon ourselves, like mon-
sters of the deep."
This intrepid diplomat chal-
lenged us to "stop blaming one
another" and take responsibility:
"How many more little boys
must die as gangsters before we
realise it might be too late?"
The cake that is T&T is being
hollowed. It s time we stop the
pillaging before it falls apart, gives
off an empty toxicity, and before a
casual terror engulfs us entirely.
CRUMBLING FROM WITHIN
BAD MOODY FOR BARBADOS
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