IT IS GOOD AND WHOLESOME to see that our Prime Minister has broken his silence and has sought to assure Barbadians that there will be no devaluation. Except for sand and sea, what products do we have to export in order to support ourselves and to survive? But coming out at this time as the report of the governor of the Central Bank, our leader’s words may be as empty as the gentle easterly breeze that cools the island daily.
In the face of the governor’s words that at last seem to indicate that he has come to the end of his printing tether, we get the assurance that big projects will start within months and that there will be an answer to our devaluation anxiety. We do need these projects, even for a temporary respite.
Let us look at what has been reportedly said. US$100 million will be a one-time injection from the sale of the Barbados National Terminal Co. Ltd (BNTCL). There are two prospective purchasers – Sol and Rubis.
Rubis has vociferously drawn to the attention of the Fair Trading Commission (FTC) that selling the shares to Sol alone will create a monopoly that would be detrimental to Barbadians and to its business in Barbados. The FTC has issued a promise to look into the matter. It has not said that it is fair to award the sale to Sol, but the Prime Minister’s early assurances speak volumes.
If the decision is in favour of Sol, then is the foreign exchange to make the purchase part of Barbados’ holdings of foreign exchange that is held by the Central Bank and the commercial banks? Unlikely. (Barbadians may hold foreign exchange investments outside of this arrangement with the understanding that if called upon, those investments can be made available.) If perchance the US$100 million investment is not sitting idle abroad and is productively invested, what will the return be when invested in BNTCL?
Both Sol and Rubis face the implied question. Even if brought in from abroad, is the investor going to be satisfied with the present return obtained by Government? That would trigger other questions involving prices of fuel at the pump and in the kitchen. Would we be swapping black dog for monkey? Sir Frank did not deal with that in his recent speech.
Now the Prime Minister speaks of a decision for the commencement of the Hyatt building in seven days. David Comissiong says that no environmental impact study or public consultation has been done to date. A trip to the High Court would delay the Prime Minister’s promise.
In any case, in my humble opinion, funds for the construction of Hyatt are doled out to the builder, first as mobilisation, then according to quantity surveyor’s reports as the work proceeds over whatever time span is the project. What comes in also goes out in foreign exchange in respect of materials from abroad. The real gain is wages from month to month.
Talking about wages brings us to the arrangements for Sam Lord’s Castle. Did not the Chinese stipulate a percentage of workers that must be Chinese? Unions! Is building material to be sourced from China?
While Sandals may in fact provide only labour for Barbadians, we already see that much of the labour force at Dover has been imported from some of the islands for whatever reason. Dropping the names of Sandals at Heywoods, and Four Seasons can only be a diversion in the need for an immediate injection of foreign exchange support.
These and others are worrying questions that might be at the forefront of the Central Bank’s latest lacklustre report. Something is wrong in the state of Denmark. What is happening in terms of foreign exchange involving the Trinidad banks does not make sense. What do we owe to Trinidad for food, loans, oil and dividends?
As George Elliot (the English novelist Mary Ann Evans) puts it: “If there are two things not to be hidden – love and a cough – there is a third, and that is ignorance, when once a man is obligated to do something besides wagging his head.”
While the promise of US$250 million is dangled before us like the grapes before Tantalus in Greek mythology, this level of expected foreign exchange input comes with contingencies that are not evident in the upbeat promises of our Prime Minister or his Cabinet.
Are we to be guided by them or by the warnings that are listed by the Central Bank, as it sees that an open policy in dealing with foreign exchange is now counterproductive? The Wild Coot has been saying so since Adam was a lad in short pants or fig leaves.
• Harry Russell is a banker. Email: quijote70@gmail.com
