The Barbados National Bank saga goes further back than its iniquitous sale to the Trinis. It started shortly after its inception.
The Barbados National Bank, with a back burdened like Atlas’, struggled along virtually rudderless for many years and did not fulfil its potential – the fantastic goodwill of the Barbados Savings Bank and of Barbadians. Neither did Barbadians take advantage of the bank’s potential to drive the country forward.
For example, being in the market gave it the ability to dictate the savings and loan interest rates and general charges, types of mortgages (especially to chattel houses), promotion of entrepreneurial business, and most of all being a catalyst in the banking system in Barbados where foreign banks dictate our policies and rates.
Former Prime Minister Owen Arthur, frustrated by Barbadian laissez faire, sold [Government’s] share to Trinidad. It was a fundamental mistake even so.
Look what the Trinidadians have done! It is in keeping with the way they have stripped other large institutions and will continue to do so. With due respect to my friend Bobby, it is the mindset that has led to the present hostility many Barbadians feel towards Trinidad businesses – not the people themselves, because despite the inertia among CARICOM leaders, the people have no such problem; but 18 months is a long time.
First of all, before stamping the Republic emblem on Barbados’ face, the bank drew the Barbados Mortgage Finance Corporation (BMFC) into the mainstream of its banking. They may have considered this a master stroke, especially as our Central Bank played Nero. But the BMFC was a critical factor in the low-income housing market.
It has left the Ministry of Housing catspraddled despite what it says, because it is now left to the politicians to scramble for financing to meet the huge demand for housing in Barbados. Surely we cannot depend on Republic Bank to lead the way in low- and middle-income housing.
Someone claimed that Trinidad is not an automatic teller machine. Neither is Barbados. The many businesses that trade in Barbados are allowed to take what profit they make to their own countries. It is not a free ride for Barbados.
Indeed we have just seen the demise of Almond and the breadlining of 500 workers; maybe there will be more. Our politicians need to review the meaning of open economy if we have to drop our knickers in search of the universal American or Trinidadian dollar even to the extent of selling our citizenship on the bulletin board.
Take care we not squander the birthright of our young people. They are watching.
Our Central Bank may have missed a trick when it strenuously stated that we have no intention to devalue. If the IMF or IADB or even the rating agencies have not required it of us, why go on about it? When Sir Lloyd was in a far worse position and it wasput to him, he simply said no and did what he had to do.
Unless we take steps to curb expenditure and bite the bullet (hard just before elections), it is the outside investor who will say “I want more than two dollars for my American dollar.” Or the visitor does not feel that a two-to-one exchange is value for his money and goes somewhere else. In that case the Central Bank Governor could talk “hoosey” [but] we would have to brace for harder times or devalue.
Devaluation will not be of any use to Barbados. In this regard the Governor has a valid point. He is perfectly right when he says that we do not produce what we consume. Our biggest problem on which we could concentrate is to vastly lower that $700 million oil bill. Hic opus est – therein lies the challenge. We need to take a serious look at the viability of our hotels and their tax challenges.
• Harry Russell is a banker. Email [email protected]
