TODAY MARKS THE BEGINNING of the 45th year of Barbados’ Independence.
We should all be proud and commit ourselves to contribute to improved standards and achievement of excellence during the next 12 months and beyond.
Indicators suggest a hard and rugged road ahead, but we have prided ourselves in being craftsmen of our fate. Still further we have acknowledged the legacy of our forefathers with a promise to uphold same and to recognize these fields and hills as our own. To live up to these ideals calls for a rigid adherence to excellence and respect for law and order.
Education, health facilities, national insurance, medical benefits and our unstinting support for democracy have afforded us worldwide recognition as a developing country of envy notwithstanding, other than human capital, an acute shortage of other resources is a real challenge.
The ongoing recession has and continues to test our mettle and to stretch our resilience beyond ordinary limits. Consequently, we have little choice but for all hands to be put to the plough if we are to salvage a wobbly economy. Invention and innovation are the name of the game.
In presenting the recent Budget Minister of Finance Sinckler, anxious to ensure peripheral issues do not frustrate recovery, urged the commercial banks to be more sympathetic to the cause and to respond swiftly to minimum deposit rate reductions by the Central Bank of Barbados. It was puzzling to hear the president and country head of RBC Royal Bank, Horace Cobham, pleading on his own bank’s behalf and presumably all others, bearing in mind the existence of a bankers’ association, that “there is a need to stop looking at banks as the evil”.
He goes on to argue that “interest rates have declined but liquidity is still the highest it has ever been”. This situation underlines a straight case for further reductions in lending rates.
Then he makes a statement which is difficult to follow that in the absence of opportunities for growth, they (the commercial banks) will not borrow regardless of the interest rates. We disagree entirely with this thinking.
Firstly, each business house determines
its own axis of growth. Secondly, prudent captains of business seize opportunities such as the existing climate to craft and capitalise on planned expansion, retooling, training and diversification to ensure they are well prepared for the inevitable upturn in the economy.
The banking industry cannot shy away from the fact that the speed with which interest rates are increased bears no relationship to the tardiness – often three months – before interest rates are reduced. Meanwhile, there is the continuing increase in commission and other fees, as well as the introduction of new charges, and here the operation of savings accounts, the bread and butter of the banking industry, is not excluded.
All the Minister of Finance is saying to the commercial banks that gobbled up $187 million in profits last year is that they too must come into the sunlight and feel its burning rays at this time of national sacrifice.
