LEADER?OF?THE?OPPOSITION Owen Arthur’s assertion in his reply to the Budget Speech last Monday that Government should sell its shares in Barbados National Bank (BNB) to parent company Republic Bank rather than increase VAT “temporarily” by two and a half per cent was intended to serve two purposes, he said.
The first, obviously, was that Government could have picked up in the sale of its remaining BNB stake roughly the same amount as it estimated it would get from the VAT increase over 18 months.
The second – and the Opposition Leader made the point that he had “signalled” it well before the Budget – was that he was not against selling off that remaining portion of the nation’s BNB “family silver”.
Mr Arthur’s position was itself opposed by Minister of Finance Chris Sinckler, who said later in the week Government would not be selling its BNB stake at the price offered, which was much lower than they were worth only a couple of years ago even though BNB remains very profitable, since it would have been akin to a fire sale.
It was confirmed by the end of the week that Republic had scuttled its offer, saying rather huffily that it had come to the table invited and had not been dragging anyone there.
In other words, if you beg, you can’t choose.
Right price
For its part, Government murmured loudly that it might seek another buyer for the shares, which it would sell if the price were right.
The stage, however, has now been set: there can no longer be said to be anything intrinsically unpatriotic about selling Government-owned assets, a view still widely held among the people, as far as I can detect.
Do I hear the sounds of rusty BOLTs being oiled in anticipation of joint ventures relating to our airport and seaport, transportation of the public and health care delivery?
Right now, besides the still-available BNB shares owned by Government, ANSA McAl Trinidad is offering to buy up all of the shares it does not yet own in ANSA McAl Barbados, and last Friday, the new majority shareholder in Barbados Light & Power, Emera Inc., of Canada, also made known its interest in doing the same with the country’s major electricity provider.
At the other end of the investment spectrum, however, successive Governments have tried various measures to encourage more people to invest in their own businesses, and in his first budgetary proposals, Mr Sinckler joined himself to the efforts of his predecessors.
There is no point reciting all the initiatives again, as in my view, anything at all done in this regard is helpful, and I might go so far as to say, Government could do much more, and probably will over time.
Personality
But while it is good to give grants and soft loans to start-up companies, provide tax incentives for medium-sized business to employ more people and innovate their processes, and enlarge the scope of mentorship programmes, going into business takes more.
By that I mean more money than can be raised by taxpayer-funded fund schemes and more determination and sheer desire to operate your own business than can be inspired by well-meaning business gurus.
It comes from the core of personality, I think.
And it is not for everybody.
So while I don’t mind us selling off the old family silver as long as we get good prices for it, I am worried that we are not replacing it with new ownership at a fast enough rate.
In the future, now almost upon us, will we be just a nation of consumers buying almost everything we need from companies in which Bajans don’t have much of a stake, if any at all, except the very small ones?
Cashing out the old shares and putting the money into safe, less risky investments may be good for investment institutions, but Barbadians need to be growing their stakes in the hurly-burly competitive world of business, because, despite the risks and sometimes the losses, that is where wealth is created fastest.
• Patrick Hoyos is a long-standing journalist and publisher of the Broad Street Journal.
