One time a man went into a bank to borrow some money. The bank manager knew him well as he was accustomed to bouncing his cheques like a ping pong ball. He wanted to borrow $100 000 because he was in urgent need of a life-saving operation. The bank manager had compassion on him and would not have wished to see him die.
“Verily, I will lend you the $100 000, but under the following conditions: (a) you must give me a first legal mortgage over your house, stamped to cover $300 000 (to cover interest added), (b) a life insurance policy for $150 000 that is paid up to date and has a cash surrender value of at least $50 000, (c) a garnishee order signed in blank for your pay from your employers covering the next two years, (d) while you are incapacitated an assignment of your wife’s salary should come straight to the bank to reduce your indebtedness, and (e) a guarantee from a friend or a close relative for $100 000.”
The man said: “Give me a day to think about it.” He immediately called the Wild Coot to ask him if the terms were reasonable. Hear the Wild Coot: “How did you previously manage your business with the bank?”
“Well, the manager had to send back a few cheques, to be honest; I managed it badly.”
The reference is a bit exaggerated, but a parallel could be made of a country and its approach to the International Monetary Fund. The IMF was set up as a lender of last resort. Just as that man was faced with a painful decision, so those countries that go to the IMF have to face a painful decision. It is like poor Antonio going to Shylock in the Merchant Of Venice. A pound of flesh taken from a choice part!
The IMF gets to the root of the problem – your wage bill is too high; either you cut it yourself or if you want our help, you must agree to cut it. You could preach like Paul in all his epistles, those are our terms! That is the purpose of the IMF.
Look at the reaction of Greece, France, Spain, Portugal, and Ireland! The people marched, but to no avail. Compare Barbados!
Now, how could our Minister of Finance and our Central Bank Governor expect any other reaction? Why get the country into a tangle with the IMF or into its bad books? Indeed, why open the books at all? Do what has to be done and bite the bullet. This calls for intestinal fortitude. It has been done before by Sir Lloyd.
Instead of arguing with the IMF, Sir Lloyd, knowing what the IMF would recommend, instituted the measures himself. Barbadians were vex as hell and voted him out, but they still awarded him a knighthood – “pour encourager les autres” (to encourage others). Our present Prime Minister might be accorded the same honour – perhaps.
People in Barbados know what are the alternatives, and just as how we pulled through when the eight per cent wage cut was made, so would we now. The Government is not the main engine of growth. It is the tax-oppressed private sector. If the private sector is allowed to grow, wealth could well absorb some of the labour force that the Government would have to shed.
Why are you afraid that the foreign exchange will be depleted badly if you share your fears with the people?
Sir Courtney Blackman, writing in his book The Practice Of Persuasion, said on Page 26: “Economic development, in its most radical formulation, describes the process by which most people in a society are progressively enabled to carry out a large number of productive activities in an increasing manner. This proposition rests on the premise that people are the roots of economic development, the irreducible minima in any economic system.”
Tell the people where to dig, rather than worry about being re-elected. Who knows if we will be hit by a hurricane and need the IMF’s help?
• Harry is a banker. Email [email protected]
