Early yesterday, foreday morning, an old lady called me.
She said: “Wild Coot, you don’t know why the offshore sector dwindling, going to Bermuda? Is because they change the annual fee from $50 000 to $200 000 in one fell swoop”.
I said: “Yuh lie!” and promptly hung up. Don’t want to be involved in gossip. She called back again.
“Wild Coot, dem people in the service no longer civil ’cause some of dem pay reduce by over $1 000 even with the changes and now still cannot pay electricity, telephone, water, mortgage, gasoline and food, all of which in addition to increased cost have increased VAT. They acid!”
And I hung up.
She called back but before she could utter a word, I started putting my “spin” on it.
In the beginning, long before man could walk upright, there were savings. The country recognized that in order to afford business, some citizens had to put up their excess money, and some adventurous other fellows had to try their luck at borrowing this money.
Then, lo and behold, people asked to whom must we entrust this money and from whom must we borrow this money. And man came up somehow, in the 14th century – some say before Christ, with a mind-boggling answer: a bank. Now they speak with one voice. Funny, I reiterate to the minister that Barbados needs its own bank if small businesses are to go past the hatching stage.
Sometime before Anno Domini, people like the Greeks, or perhaps Caesar Augustus, joined in the trek to develop business. And so banks thrived. Banks were supposed to be the intermediary between savers and borrowers.
The banks recognized their position of power and said to the people, if you want to borrow money from us, you must give us security just in case. If you do not, we will not lend since we have a responsibility to our savers, and maybe our shareholders.
This put Government in a delicate position, because if it wanted growth in the country, it stood to reason that borrowers must be able to borrow in order to drive business. Hence, a stand-off and cussing!
Fast-forward to 2012 in Barbados. Banks are in a dilemma and since there is no catalyst bank to rock the boat, they hold the upper hand. Either government finds its own solution to growth or yields to their demands. Banks say their loans are not being serviced because there is insufficient money in the private sector, which Government is crowding out with its taxation policies. Through fear!
Then banks say in order for us to lend, you must change your policy. Give people the money so they can spend, create jobs at all levels – computer experts, doctors, accountants, maids, gardeners and so on. Then banks would flourish.
Government is keenly aware of this and has said: “That cannot be; who will buy our Treasury Bills and Debentures or the Bonds for the turbo Special Purpose Vehicle?”
I have one thing to say to my old lady friend about the 2012 Budget: it was a bloodletting Budget using leeches. Restaurants and the hotel sector must be cringing after begging so hard. After all, Barbados is more than an economy; it is a society – they say.
Upper, middle and lower classes are being brought down to a common denominator by efforts to follow an ephemeral Medium-Term Strategy set by foreign people who have no experience even running a rum shop. The Budget was full of highfalutin promises, made for a presumably educated people to swallow.
The Government is timid. I recommend reading a book by Hernando De Soto called El Otro Sendero. I believe an English translation is available.
Why do our politicians think people cannot be trusted and that they should do everything? Remember, when Sir Erskine asked people to bring back their foreign exchange, they did.
