‘We missed the boat’

UAE plan could have saved the day - suggests Stephen

Economist Jeremy Stephen has publicly revealed that he was one of the major architects behind Cabinet minister Dr David Estwick’s controversial United Arab Emirates (UAE) alternative financing proposal.

“I was one of the people that worked on that UAE proposal. I kinda fed it to Dr Estwick  [as] they [members of the Freundel Stuart Cabinet] were looking for new sources of finance, looking into new markets,” he disclosed during a panel discussion held last night at the Grand Salle of the Central Bank.

While strongly lamenting that the US$5 billion sinking fund proposal for wiping out the country’s entire debt and restoring economic growth and sustainability was never allowed to see the light of day, Stephen argued that at the time of conceptualization back in 2012/2013, interest rates were low, which means by now “we would have been recovering on the debts profile side, despite how people feel”.

“It’s all about accessing opportunities wherever it lies,” he told participants in the forum hosted by the Barbados International Business Association under the theme, Thriving in Crisis.

The noted lecturer in banking and finance at the Cave Hill campus of the University of the West Indies contended that the rescheduling of debt, as envisaged under the proposal, would have bought the country some much needed fiscal space. However, he acknowledged that it was met with strong resistance from senior members of the Stuart administration.

“The push back in Cabinet is that it would have caused downgrades . . . [even though] it was as clear as day that you couldn’t deal with the expenditure issue.

“Of course there is a political issue if you continue to cut expenditure too rapidly . . . [so] you had to balance the politics with the actual economics, unfortunately and possibly,” said Stephen, who specifically recalled having a conversation with Minister of Finance Chris Sinckler back in 2012/2013  “about how could you stop the [economic] backsliding”.

However, he complained of “reluctance to change”, while suggesting that Sinckler “has always been right at the wrong time” and that “we’re in a situation now because of being late with the right remedies”.

“That reluctance to change would have been stymied  further by the fact that it would have been tougher perceivably in 2012 thereabouts for international business to thrive in such an environment, mainly because the butter and bread of Canada [international businesses] would have signalled that it is time to open up all the goods that it had before for Barbados,” the economist said, adding that the economic decline had reached a point “where drastic remedies would have to be taken on both the onshore and offshore sides of the economy.

“Onshore side we’re seeing it right now with the effects of the NSRL [National Social Responsibility Levy] on local businesses,” Stephen said, warning that while the levy, which was increased on July 1 from two to ten per cent on the customs value of imported and locally produced goods, might not necessarily impact international businesses, “it will have an impact in the foreseeable future, particularly given the implied cost, the devalued cost of the Barbados dollar which is two per cent higher than it was a couple months ago”.

In this context, Stephen further warned that downgrade number 21 could soon be coming for the island on the heels of last month’s Standard & Poor’s lowering of its long-term local currency sovereign credit rating on the island to ‘CCC’ from ‘CCC+’.

“Look out for one more before the year is out,” the economist said, pointing out that “I said it earlier this year that two will come, another one will definitely come just given the environment we are in”.

15 Responses to ‘We missed the boat’

  1. Tony Thornhill October 18, 2017 at 10:52 pm

    No Cabinet can so clearly be running on parallel tracks. Estwick had a duty to resign from the cabinet if he was eager to put an alternative policy. He remained in cabinet because he lacked the balls to do the right thing. It is a tragedy for Barbados , for Estwick et al . He must go down with the ship.

    Tony Thornhill

  2. Ali Baba
    Ali Baba October 19, 2017 at 1:41 am


  3. Simon Gooding
    Simon Gooding October 19, 2017 at 1:49 am

    ….Ha…Buhbaydus people….who is the better of the two..the Arabs or the IMF .??????..The government made the right decision when they had rejected the UAE deal…The IMF is …………but the Arabs are worst………

    • Eddy Murray
      Eddy Murray October 19, 2017 at 6:17 am

      So we now taking the South America MAFIA money

  4. hcalndre October 19, 2017 at 3:56 am

    @Simon Gooding; bring your proof about the Arabs, did the government took some 3 wheel motorized vehicles from them to do ambulance services when they were not even capable of ambulette transportation, what ever became of them?

  5. bajansun October 19, 2017 at 3:57 am

    Who the hell going save this sinking ship. SOS

  6. Angus Benn
    Angus Benn October 19, 2017 at 7:08 am

    How could you know that the ARABS are worst deal when you never TRY them.

  7. Sheron Inniss October 19, 2017 at 7:25 am

    I would rather take my chances with the U A E based on what I have read and a visit to a number of their booths during the 2008 London Book Fair.

    I was fascinated with them and vice versa. Maybe it was something to do with my business logo Sunlight Creations. Every book I left with from that section was given to me free of cost; no kidding.

  8. Anton Brown
    Anton Brown October 19, 2017 at 7:41 am

    It’s a shame that the current administration have ruin Barbados to this level. Anyway you look at it “ nobody give you or in this case lend you anything without a high cost”. Matter of deciding who is the worst devil and what cost Barbados will pay for mixing them hands with the Devil pocket. That’s what happens when you fall asleep for to long and allow governemrn to bring both country and ppl to the state it’s now in. He should have been gone after the first term in office along with his whole crew.

  9. Angela October 19, 2017 at 8:37 am

    Self sufficiency is something we seem to have been colonised to forget. Nobody in these chats seem to be able to think outside the box of depending on the Arabs, or the IMF or some other so thought saviour. I am making a plea for your thoughts on how to solve these issues mainly by our own sweat.

  10. Carson C Cadogan October 19, 2017 at 9:09 am

    Now I see why he is so bitter against the Govt.

    It is not based on any principles, simply because the Cabinet didn’t bow to his demands. As a result he is hoping for the worse for the country.

    The more the monkey climb the more he shows his tail.

  11. Thunder October 19, 2017 at 10:00 am

    Which boat did we miss?all I know is the boat is not only rocking but sinking, this government is trying to erase debt while fighting to build a monument for 34 million, this government is arrogant and does not care, they will continue to oppress the people,the power lies in our hands,vote them out!
    You have already raised 50 million from your NSRL,now to hear, another tax is coming before the year ends,just now we will not be able to feed our pets,this government is a waste of time please vote them out!

  12. Milli Watt October 19, 2017 at 12:44 pm

    just what we need…….camel riding emirates in de place, mosque at every corner and ISIS visiting on special occasions

  13. luther thorne October 19, 2017 at 1:06 pm

    I would like to hear the views of the Prime Minister of Barbados on this and all other relevant matters. Sir you are in a position of power and influence . You need to use that influence for the betterment of this country Sir .

  14. archy perch October 19, 2017 at 1:32 pm

    Poor Jeremy is all over the place these days with his conflicting thoughts. Like a bunch of crabs in a bucket, these UWI so-called Economists and those trained at that institution, are now jostling for a position in the future BLP government, under the dress of our royal first fully qualified lawyer and most ever qualified Prime Minister Mr, Mia Motley.
    The rhetoric of of Peter Wicker and his over the moon predictions of a BLP land-slide at the polls, has got all these opportunists heads effed up.
    I find it amazing, that as expert Jeremy is said to be, not one thing the government has done since 2008 has he praised the administration for. No one thing.
    The DLP government has made tremendous strides improving health care dispensed at the QEH and polyclinics. This is good, for in 2018 all these institutions will be needed to care for the many naysayers collapsing with heart attacks etc. following a DLP return to office.
    The orchestra will strike up the band with the hymn Abide with Me!


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