Economist wants to hear more on bond offer
Economist Jeremy Stephen says careful consideration should be given to the recent offer from British billionaire Andrew Stewart and his business partner to assist the island.
However, he is concerned that Barbadians have been too quick to reject the offer of support in floating a bond on the international capital market.
“The arguments that have been thrown against [the offer] mainly by people of Barbados cause me to think about whether we truly understand the situation we are in or not,” said Stephen, while pointing out that “economies are driven by investment and those that have surplus capital”.
Stephen, who is the president of the Barbados Economic Society (BES), said the social impact, the long term decision-making ability and authenticity of Government officials should be considered in reviewing the offer.
However, he said there was need to move away from concerns about neo-colonialism, which he said added no value to the current discussion.
“What we have to be able to do is to utilize these opportunities knowing what we are giving up,” said Stephen.
While he is not recommending that “we up and take the deal”, the BES head stressed that it should not be negated simply on the grounds that Barbados might be giving up some of its sovereignty.
“Every time we borrow money from the IADB [Inter American Development Bank] or anytime we borrow from the World Bank or the IMF [International Monetary Fund] we do lose a part of our sovereignty,” he pointed out, adding that the good years that Barbados enjoyed was partly due to wealthy investors from overseas.
“I want to know what the costs are, what the benefits are [to them] and how do we benefit. Since the gentlemen kindly forced it into the public domain these are questions that deserve to be answered before we can condemn the deal and these are the kind of exercises that we will need going forward because there will be tons more people coming to the fore. In fact, we should get worried if these people do not come and see the opportunities because then we could end up being like Haiti in no time soon.” explained Stephen.
He said the Government had the right to explore all offers and should do so since that was the only way to know which offers would make sense and which ones would not.
“But further the Government should ensure that the right people who understand the nature of these transactions help in advising, not making the decision but advising. There are many persons out there that could easily spot these deals and say this is what you need to be asking. There will be a lot more. Anytime a country is struggling there are a lot. I would go as far as to say that you will get deals where you would never find out the Government would have taken money until the estimates come around,” he added.
Stephen said what was of concern to him was that while Stewart was popular he and Fordham did not have “the reputation of certain hedge funders”.