Home remedy

Visiting economist says outside help not needed to solve economic crisis

In what could be music to the ears of Minister of Finance Chris Sinckler, a visiting senior economist is strongly recommending a do-it-yourself formula to resolve the island’s economic crisis.

Former Governor of the Central Bank of Ireland Dr Patrick Honohan Thursday said Barbados could solve its problems without outside help, since no one understood the economy as well as Barbadians did.

“You as a country, it is the country that solves its problems. It is not outsiders. The last thing you want is for somebody, either me, or somebody from Washington, to come here to say, ‘I know what you should do, you should do this, this and this, and please do it quickly’. No, that is not the way any country is going to deal with its problem. Why? Because any prescription that is coming from outside will be adopted half-heartedly at best or even at worse it could be said, ‘oh, what does he know,’” he told journalists at the Central Bank Thursday morning.

Dr Patrick Honohan

“And it is true, only the local people understand the economy, they understand the pressure points. There are various things you can do to deal with all these problems; there are choices to be made, and choices to be made by Barbadians . . . political decision made by the people of Barbados – by the Government of Barbados in consultation with the people of Barbados – and I think that is the only way to think about this.”

In any event, the visiting fellow said, whatever package was agreed must make sense and must have the public’s support.

Consequently, he warned it was important that Government maintains clear and open communication with Barbadians.

“Policy packages have to make sense. It has got to be a coherent medium-term goal to know where you are going as a Government and as a people so if there are surprises and shocks and you are knocked off track you still know where you are going . . . and you can make the necessary corrections.

“And I think open communication with the public is very important. That kind of open communication build political toleration,” Honohan said.

His position on outside assistance is in line with that of the Freundel Stuart administration, which has insisted throughout the crisis that it would stick to a homegrown programme to try to drag the economy back from the brink, despite the conclusion of economists and Minister of Agriculture Water Resource Management Dr David Estwick that the homegrown programme had failed.

Honohan’s recommendation is also is in direct conflict with that of the man expected to lead Government’s economic advisory team, former Prime Minister Owen Arthur, who remains adamant that nothing but a bailout from the International Monetary Fund will save the country.

Honohan made it clear he was not about to tell Barbadians how to run their affairs.

However, he shared experiences from Ireland and other European Union (EU) countries as he spoke on the topic, Recovering From Crisis: Lessons From Europe – a hint that Barbados could learn from those experiences.

The former World Bank senior advisor on financial sector issues explained that some EU states came to an early conclusion that tackling their economic woes required a number of critical steps – including early acceptance of the depth of the national crisis – and they decided to ask for help early if it was needed.

Procrastination and denying the existence of problems would make matters worse, he added.

Honohan advised that despite the ailing economy, Barbadians should not be “too negative” because he expected the economy to emerge from the crisis “over a period of time”.

“Obviously there are problems, but I would be dubious about being too negative. There are solutions and there are best courses of action. I see Barbados as in a situation that it can come out of quite strongly over a period of time,” he said, adding that generally economic recovery from “a severe” financial crisis usually happens within ten years.

marlonmadden@barbadostoday.bb

23 Responses to Home remedy

  1. jennifer March 24, 2017 at 3:12 am

    Just go back, and quickly.

    Reply
  2. Everick Holder March 24, 2017 at 5:00 am

    Man catch the next BA flight to Gatwick or Heathrow.

    Reply
  3. Tony Webster March 24, 2017 at 5:37 am

    Too little, Sir…and waaaaay too late. I prefer to interpret your comments/prescription,thusly:
    “If Barbados Big-Brains had acknowledged earlier that which was clear to them, but hidden from us, and had acted accordingly to apply the obvious remedies, then yes, you might have avoided the inevitable outcome, as local ACTION and IMPLEMENTATION, is essential, whether help from outside is received, or not.”
    N’est pas?

    Reply
    • J. Payne March 24, 2017 at 7:30 pm

      @Tony Webster. I believe all naysayers were cried down by those in authority who claimed they ought to know better.

      Fact remains Barbados is taking too much loans in USD. These will likely need to be paid back now in USD. Venezuela’s ALBA pushed basic commodities bartering but the partnering countries all kept snapping up USD from IDB which basically means they have to go back to earning USD to pay back the IDB loan.
      It is unknown if Barbadians have the will to cut-back in order to save country. Imports need to be slowed and wherever possible locals would need to be pushed to preserve some foreign exchange. Barbadians who like certain fruits or vegetabes would do well to see if the item can be sourced within Barbados. Some Barbadians might have to let some foreign exchange burners be reduced. Light and Power, C&W, Cable TV, etc. Slow down on new clothes.

      His commentary isn’t shocking it is the type of message you give to an independent country. Not one waiting on a mother country, or international agency to come in and fix everything for them. If you don’t have cofidence in your own independence then wuh you really doing?

      Reply
  4. hcalndre March 24, 2017 at 6:50 am

    Sir, I remember when barbados used to call in the Scotland Yard to solve their crimes, you don`t think that barbadians should have known then how to solve their own crime? Now you`re telling them that no one knows barbados better than them about the economy. So now you know what`s best for barbados which is said to be the same as the PM and his MOF and that`s not working so go peacefully back to whence you came and maybe you can come again and enjoy your invitation.

    Reply
  5. The Elephant March 24, 2017 at 7:27 am

    If he came bearing a downgrade, maybe, more doom and gloom, the cronies would be in a posture of adoration and praise. However, when there is an innate proclivity to negativity people will continue to thrive on negative and fail to see the good in any situation.

    Primate and elephant and even pig societies show considerable evidence of care for others, parent-child bonding, solidarity in the face of danger, and so on – Christopher Hitchens

    Reply
  6. jus me March 24, 2017 at 8:09 am

    AH!! So this logic is actually intended to function in a Mad House??
    Home grown Mad men, functioning on Lunacy in a real Home Grown Mad House. Barbados.

    How many Irishmen does it take to replace a light bulb??
    1000001.
    1 to hold the bulb and the other 1,000,000 to pick up the house and turn it in circles to screw in the bulb.

    Thank you Sir , please come again next mad season.

    Reply
  7. Jennifer March 24, 2017 at 8:12 am

    THEM LOT IS WHO GOT BARBADOS SO. Think they full of Head. Recessive controlling dominant.

    Reply
  8. Leroy March 24, 2017 at 8:56 am

    1. We can fix our problems if the persons entrusted to fix it have the talent.

    2. These fixes still need to yield confidence in the international community.

    A home grown plan seems great but I am unsure if anything Sinckler or Fruendel touches will be any good.

    Reply
  9. lester March 24, 2017 at 9:32 am

    POLITICAL RESPONSES ON EVERYTHING? BAJANS ARE A BUNCH OF DUMB DOGS, ITS THE MAN OPINION STUPID BLACK PEOPLE, THAT IS WHY THE INDIANS, EUROPEAN AND HOME GROWN WHITES AND OVERSEAS WHITES BUYING UP ALL THAT IS BAJAN, KEEP BEING POLITICAL

    Reply
  10. Donild Trimp March 24, 2017 at 9:38 am

    @Jennifer – I follow your comments on a daily basis because I do see an nonparallel level of sophistication in your messages.

    To make it clear, I am an admirer not a stalker.

    Now to my point. Your comments on this issue is baffling because Dr Honohan is saying the exact same things that you espoused.

    Reply
  11. Donild Trimp March 24, 2017 at 9:39 am

    *an unparallel

    Reply
  12. Richard Johnston March 24, 2017 at 9:52 am

    Barbados got into this pickle on its own, professor.

    Reply
  13. Ann Thomas March 24, 2017 at 10:33 am

    This advice might be true, in any other circumstance than the ones we find ourselves in now.

    Those (the DLP Administration) who got us in this mess, most certainly are not the ones to get us out, particularly after years of failed policies and programmes.

    The first step in making the above advice a reality is to call elections. Then a new government, and hopefully not the DLP revisited, can take the country forward.

    Reply
  14. greengiant March 24, 2017 at 10:37 am

    The problem really is that we have no trust or confidence in our own. This European is here telling us that a home grown program is always best. This is true because the imported model is based on the experience of other nations. They’re very few with our type of economy, population size, and business combination. Remember our public sector employs thousands and have a huge monthly wage bill, we have few raw materials, internationally controlled energy cost, communication cost, a main foreign exchange sector with huge international influence.

    So yes, our open economy is quite unique. Sir Lloyd used a home grown fiscal approach many years ago, and today many of you would have been saying the said things you say about this administration. Remember some BLP politicians call his method, madness and even worse. Later they too admitted that his medicine actually restored our economic health in the short term of just under a decade. This experienced economic adviser who has served major international agencies, seeing several models succeed and fail is telling us the best method is ” home grown, and it takes about ten years to recover”.

    Please tell me if any of you who come here to support your sorry six or one dozen political parties and their failed, tired, sell by and use by date expired candidates has a magic bullet to our economic recovery. They will either have to use a home grown model agreed to by the social partners, or enter a foreign influenced agreement with precise take it or leave it instructions. So lets cut the chase, I want to hear either one or the other. Do you prefer a home grown solution, or and international solution?

    The way see it we should privatize state entities, freeze wages and salaries for five years after giving a 5.0 percent increase, stagger the Vat on items, control imports on products produced here.

    Consolidate all government financial services with a central funding department for payments, with all or recommended Vat registered companies receiving any form of government revenue. This will improve governments cash flow, remove much of the red tape and free up the best civil service employees to address critical aspects of the operation. This will give us a chance to breath clean air and make necessary adjustments each year to further stimulate a continuous growth path.

    The only thing is none of the two major parties have the courage to do these things, they will debate them for years with little or no action. We should understand though, as that’s what lawyers do on a daily basis for a living. So they just come to parliament to debate as if they’re in the courts. So solution number one is, ” get the lawyers out of parliament and with them the two parties who have brought them over the years. We all talk about Owen Arthur being the most successful leader economically. The difference between him and the others is, ” he’s not a lawyer”. That’s the answer, less lawyers means more production.

    Reply
  15. Sheron Inniss March 24, 2017 at 11:21 am

    Actually everything the gentleman said makes sense. The problem is the DLP refused to listen. THAT IS THE PROBLEM

    Reply
  16. greengiant March 24, 2017 at 11:38 am

    They and the B L P have too many lawyers, they spends to much time debating problems, so by the time the solution is agreed the state of the game changes. It’s like in court, they delays causes murder accused to get bail, and some other accused walking free because the files are lost, or the complainant gets fed up. They understand the relevance only when their client is be disadvantaged by the issue. Similarly it bothers them when they’re in opposition, but when in government they say it’s normal because the others did worse than them. It’s alright to do a bad job once the others did worse that you.

    Reply
  17. Tony Webster March 24, 2017 at 1:30 pm

    Too many lawyers? Too many regulations, procedures, requirements? It is no accident. A price of paper touches so many hands, it provides ” work”, and work equates to “jobs”, and jobs provide “value”….right? Such “value” might even find its way into G.D.P., yes?

    Our ‘Muricans friends, have a way that has proven highly effective in dealing with those who wouldst band themselves into cartels, cartels which might unfair the average citizen Joe or Jean, whether it be in goods, or in services ( such as attorneys and lawyers), namely “Anti-Trust Legislation” ( Federal law, If memory serves), and also referred to as “distraint of trade” legislation. Such laws make illegal, ANY act, Comission or omission, directly or indirectly which has the effect of adversely impacting the purchaser of such goods, or services”. And woe betide those who infringe anti-trust legislation: they get HAMMERED!

    Yes folks….In the U.S.A., all members of our local Bar Association, would get lock-up. Yes, lawyers, bankers, doctors, cabinet ministers, or Q.C.’s, (even coconut-vendors )who agree or connive to trade at a set price. When we move to a Republican type constitution, this is but ONE repugnance in our current constitution, which must be sent to hell.

    Why? Go figure . Do the mathematic$.

    Reply
    • hcalndre March 24, 2017 at 6:48 pm

      Hello Tony Webster: Republic, Socialist, Democracy, Independence, Barbados will remain Barbados after 400 years.

      Reply
  18. greengiant March 24, 2017 at 2:29 pm

    Totally agree with you Tony Webster.

    Reply
  19. Alex Alleyne March 24, 2017 at 5:02 pm

    YEAH, plug back in the money printing machine and stop taxing we to death.

    Reply
  20. harry turnover March 24, 2017 at 6:31 pm

    I thought what the man said would have been good news for Bajans since that would mean that we won’t have to go the route of the IMF….but judging from some of the comments some of them like they don’t really know what an IMF deal would be like.

    Reply
  21. Jennifer March 24, 2017 at 6:46 pm

    Why I do not agree with this man is because nothing of what he has said will in any way cause the see saw to balance. It will remain bottom heavy with the 95% sitting FIRMLY AT THE BOTTOM. And the REST on the top looking down. He is obviously talking to his kind.

    Reply

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