New party offers economic solution for Barbados

The near two-year-old Solutions Barbados, which focuses on the improvement of governance and business development in Barbados, is promising a workable solution to the island’s debt of 145.9 per cent of gross domestic product (GDP) as at the end of December last year.

Political leader Grenville Phillips II said under his party’s plan Government debt would be eliminated within a year.

Speaking at a University of the West Indies (UWI) Cave Hill Campus panel discussion hosted by the Political Science Students’ Association last night, he said if given the chance to lead the country, Solutions Barbados would implement a four-step plan.

“Our plan is workable. Firstly, reduce taxes. Whenever we reduce taxes we take in more revenue in Barbados, it is proven. Secondly, manage all public service properly in accordance to the ISO 9001 quality project management system. Everyone agrees that are public services are poorly managed, the days of the long lines can be over,” he said.

“Additionally, address corruption. We have been overpaying for goods and services because of corruption . . . .And, finally, our plan is to depoliticize our civil service, so that persons are promoted on merit alone, nothing else, not on who you know.”

Phillips said he was so confident of success, a Solutions Barbados administration would resign if the plan failed to put the country’s economy back on track and eliminate its debt.

He outlined his party’s proposals as he lamented that the country’s debt-to-GDP ratio was a long way off the 40 per cent recommended by the International Monytary Fund (IMF).

And he blamed for the major political parties which have governed Barbados since independence, for the state of affairs.

“The Democratic Labour Party believes that we finance our development; the building of our roads, airports and these things by taxing people. The Barbados Labour Party believes that we finance the development of our country by going into debt. Debt financing, you borrow money and then use that money to build,” Phillips said while recounting the country’s debt history.

“Errol Barrow [the first Prime Minister] got the country and it was debt free and after his ten years we were $259 billion in debt. Tom Adams came along with the Barbados Labour Party and after his ten years $3.1 billion in debt. However, we had an airport and good infrastructure. The DLP came back and Erskine Sandiford struggled with the high debt and we were left with $4.3 billion in debt, so the Barbados Labour Party took over but they took the debt to $9 billion . . . .The current DLP led administration has now taken it to $14 billion,” he charged.

Phillips contended that corruption was thriving here, blaming a lack of accountability.

“You have never been able to hold a Barbados Labour Party or a Democratic Labour Party administration accountable ever, not in Barbados. Every few years, each side accuses the other of gross corruption, every five years the evidence comes out and we are told it is incontrovertible evidence but when the party gets in all the evidence goes away,” he said.

Phillips said the country was on the brink of economic ruin, the accountability method of ‘trust us or believe us’, which has been used for over 50 years was no longer acceptable.

Central Bank Governor Cleviston Haynes recently announced that the island’s foreign exchange reserves had slumped to just 6.6 weeks of import cover, or $410 million at the end of December last year, and he urged the Freundel Stuart administration to “continue to build on the gains it has made on reducing the fiscal imbalance” for fiscal year 2018/2019, arguing that “further consolidation, particularly through structural expenditure reforms and improved tax administration, was now required.

“Effective implementation of these measures would help to prevent further accumulation of arrears which will aid in restoring confidence and facilitating private sector activity,” Haynes advised.

In addition, the IMF has warned that the economy would slow to a jaundiced 0.5 per cent growth this year, and has emphasized the need for a comprehensive restructuring of state owned enterprises, saying this was critical in order to address structural imbalance in the public sector, “in particular by reducing Government transfers”.

17 Responses to New party offers economic solution for Barbados

  1. luther thorne February 13, 2018 at 11:46 pm

    SOLUTIONS BARBADOS sound good though !
    NDP and Richie Haynes had nuff ideas too.
    Nobody aint vote for them doe
    ……..And Owen Seymour being the smart cunning fox used some of Richie ‘s best ideas.

    Solutions have the right ideas but nobody will vote for them
    They do not have the ground game , the finance or the personnel to pull it off. Not at this time. They are not enough dissaffected persons to swing their way.

    HOWEVER , having said all of the above, I am beginning to warm to SOLUTIONS BARBADOS

    My needle is beginning to turn in their direction.

    Reply
  2. Bobo February 14, 2018 at 5:37 am

    Ref to above comments–what do you know of Barbados political view and legacy–life is about change– and change is what Barbados needs at the moment–political infrastructure — citizens taking responsibility of their lives their children and country–life with visions– this is what Barbados Solutions are bringing– reliving our ancestors integrity– vote Barbados Solutions

    Reply
  3. Sheron Inniss February 14, 2018 at 7:11 am

    Up de ting Grenville.

    Reply
  4. Greengiant February 14, 2018 at 8:47 am

    Seems like the B L P and D L P economic gurus gone to sleep. All the long talk and none of them don’t have a comment to make on the solutions proposed by this new party.

    The U W I and it’s economic department needs to comment on the solutions offered. For those Barbadians who don’t understand these economic proposals the economics department of the U W I needs to study these proposals and give the people the facts. Remember that your students will be the future of these parties, and these countries in the region. The experience of these economic changes in our country will be vital tools for our people’s future. Similarly, Solutions Barbados will be a vital to the future of this country.

    Reply
  5. Grenville Phillips II February 14, 2018 at 11:51 am

    Dear All:

    Just to clarify. I said that the deficit (the amount that we overspend each year that then contributes to the national debt) will be eliminated in our first year. Under the DLP’s new plan, they do not achieve that until 2021 and with harsh austerity. The BLP said that they cannot solve our economic problems during their first 5-year term. We turn everything around during our first year in office.

    Our plans have been published for the past 2.5 years for rigorous public scrutiny. We have submitted our numerical analysis to highly qualified independent economists and accountants for critical examination. We recently received our first report from a Fellow of the Institution of Chartered Accountants of Barbados, who noted the following.

    1. Our assumptions are ultra-conservative.

    2. Our ultra-conservative plan clears the deficit in our first year and provides a surplus.

    3. Our plan provides sufficient foreign currency to start paying the national debt and not just the interest payments. This should reduce interest payments.

    4. Our plan allows all of the downgrades to be reversed to return us to investment grade in our first year.

    5. The other parties should seriously consider our plan.

    The questions that reporters need to ask are:

    a) Why won’t the other parties examine our non-austerity plans?

    b) Why has the Barbados Chamber of Commerce and Industry (BCCI) barred us from presenting the only non-austerity plan to their members, but they are happy to entertain the BLPs and DLPs austerity, bitter medicine (for non-politicians and merchants) plans?

    c) Why are the media constantly reporting on the BLPs and DLPs high austerity plans, and the economists’ currency devaluation and IMF based plans, but have completely ignored the only workable non-austerity plan on the table?

    d) Why are we so desperate to suck the salt that Guyana and Jamaica were forced to experience?

    e) I thank this reporter, but where are the other reporters?

    Reply
  6. F.A.Rudder February 14, 2018 at 12:26 pm

    We can look at no other country in these economic time but ours. Our remedy is unique to our environment and no other nation bears our suffering at this time. We as an educated population of people have to find and agree to the fairest of humane measures acceptable in today’s environment; globally. This nation is our nation and everyone benifits when the checks and balances gives us a good reportcard. May the team whose plan of action and foresightedness prepare us into the next half of a decade. Remember our very own national anthem’s line; “These fields and hill are now our very own”! and further on it says “Strict guardians our heritage; firm craftsmen of our faite”.

    Reply
  7. Alex Alleyne February 14, 2018 at 12:37 pm

    “GOVERNMENT DEBT WILL BE ELIMINATED WITHIN A YEAR”.
    I will believe such only if the Island of Barbados is eliminated of the face of the earth.
    Sir, please tell me things that are practical and possible if you really need my vote.
    This is the age of a “generation of New Knowledge”…..Higher Education.

    Reply
  8. Alex Alleyne February 14, 2018 at 12:41 pm

    It is going to take the Party who go to office no less than 15 years to start to reverse the mess that this Island is in. Who think differently is living on the Moon.

    Reply
  9. Bajan patriot February 14, 2018 at 2:48 pm

    Barbados today. What is your reasons to sensoring people with different opinions here.for months you have been deleting my post
    Just for my difference opinions. If you don’t want us commencing on your news stories them close the reply opion page.

    Reply
  10. Andrew Simpson February 14, 2018 at 4:26 pm

    Providing that a TEAM of experienced professionals are installed to manage the various economic sectors, in a transparent and accountable manner; without being hindered from businesslike decision making and toward a surplus aimed at paying dividends to shareholders, I stand ready to invest accordingly, to immediately convert my share of the National debt to equity, in a new incorporated Barbados.

    Reply
  11. luther thorne February 14, 2018 at 6:28 pm

    I AM WARMING TO SOLUTIONS BARBADOS

    In the coming weeks I will announce bigly which party I will endorse for the coming elections which really should have been called since November /December 2017.

    Standby for the big announcement.

    The DLP does not care more about Barbados than they care about their personal aggrandizement. It is just about what they can get for themselves .
    To my mind , It is about accumulating money and property not really about serving the people.

    Reply
  12. david gibbs February 14, 2018 at 8:06 pm

    Clearly Solutions Barbados doesn’t wish to be taken seriously and is content to simply insult the intelligence of Barbadians. If it wishes to be accorded respect among the electorate it should immediately present its proposals to the Barbados Economic Society and/or to the Economics Department of UWI. Citing some nondescript “Fellow of the Institution of Chartered Accountants of Barbados” is farcical.

    Reply
    • John Carter February 18, 2018 at 12:01 am

      Mr Gibbs, Sir
      Why are you dismissive of Solutions Barbados policies and a Fellow of the Institute of Chartered Accountants? Do you think Mr Phillips is lying? Don’t you respect the conclusions of the Institute of Chartered Accountants? Examine the policies. Show where they are faulty. As for the Barbados Economics Society, why haven’t they made a statement about the policies? Their prominent members comment on many other things in this country. Hmmmmm. And now to Barbados Today. Like Bajan patriot, I have to ask why you have not been publishing my comments. I have not been insulting. I have not used foul language, but you wuld not publish me. Why?
      John Carter

      Reply
  13. Mark Adamson February 14, 2018 at 8:50 pm

    ARE SOME OF SOLUTIONS BARBADOS’ POLITICAL ECONOMIC PROPOSALS ELECTION GIMMICKS???

    In the recent past, I have asked that Solutions Barbados not just outline and describe some of their political economic and financial policies to many members of the public in Barbados, but also explain them, as a means of getting such persons to properly understand some of the ideological, philosophical and psychological bases upon which they have been putfoward

    Now having twice tonight watched the below video representing Weatherhead’s contribution to the meeting that took place in Independence Square in November, I now present some responses to some of what Weatherhead stated or assumed at that meeting.

    Indeed, the first time I did watch his contribution was when it was part of the longer video to the same meeting in Independence Square.

    What was disappointing was that though he did outline the particular TAXATION, debt forgiveness, etc, policies, he did NOT explain them to the audience there or to the viewers to the video, as a means of removing any confusion that might have existed eventually in the minds of such people over such policies.

    Here are some concerns of mine.

    1) He did NOT state how Solutions Barbados was going to contain growth in the government’s debt after the government has forgiven its debtors, in view of such a reduction in TAXATION? in view of Solutions Barbados plans of not sending home anybody from the government sector??

    2) Alternatively, he was extremely silent on a Solutions Barbados government increasing the government debt. Why???

    3) If a Solutions Barbados government were to achieve government next election and it was going to maintain the employment numbers in the government sector, still maintain NIS pensions and government debt servicing, then it must look for at least 3 Billion in money and credits to do so in at least 1 financial year. Now the concern is: how would it do so in a context where would reduce its TAXATION THEFTS to 10 % of GDP and yet without increasing borrowing from certain especially local sources?? Huh?? Would there not be this so-called deficit still that Weatherhead spoke about and that he is so critical of??? Huh??

    4) What was even more staggering and which discredits Solutions Barbados TAXATION policies and its so-called New Economic Vision, is that in order for the government to steal at least some part of the 10 % across the board, the so-called GDP of Barbados would have to reach 20 billion on an annualized basis??

    5) Assuming that even half of that 20 billion generated can be saved in the core financial system, would there not be the belief that that 10 billion would be entirely costly to the core financial system to maintain on the basis of a wicked interest rates system and that not even the borrowing by the government of the so-called 1 billion from the core financial system to help maintain amount of savings would be enough to offset the cost to them of the savings?? Something is therefore fundamentally wrong with some of the numbers (or assumptions) extrapolated from the proposals put forward by Solutions Barbados.

    6) With the possibility of the cost of use of money (local money) being so astronomically high at even say 10 billion, would Barbados not become bankrupt in a relatively short space of time, even if 10 billion of such would be saved in the core financial institutions, given that the assumption would be that there would be no way that a money stock of 1.2 billion dollars (too limited) could EVER support a 20 billion series of commercial transactions in one year???

    7) Now, where would the business and commercial activity be that would generate such 20 billion at the current levels of our population numbers, immigration numbers, school leaving numbers, retirement numbers?? Where would be the commercial and other relevant supports for such??

    8) What would be the impact on the export of foreign credits to exporters of goods and services to Barbados by local importers of goods and services?? What??

    9) Could it be that the 20 billion could be achieved by a change in the ratio (from $ 2 BDS: $ 1 US, to $ 5 BDS: $ I US) that exists between those persons who would transact Barbados Dollars and cents and credits and those who would transact, say, US dollars and cents and credits at the financial and commercial levels inside and outside of Barbados???

    With all respect due to Grenville Phillips, it is clear those particular proposals are mere election gimmicks and are so unrealistic and farfetched that they could NEVER EVER be achieved on the mere basis of the current nature, structure and functioning of the political economy of Barbados.

    Reply
  14. F.A.Rudder February 15, 2018 at 2:59 pm

    Being accepted by Barbadians under a constitutional, free and fair vote to the elected; if so be it, the winning party has to; from Day One be disciplined into their portfolios as though they were preparing their doctorate papers. It’s no “Johnny come lately” affair. The economy has to be balanced within reasonable ratios, environment, and ecology matters have to be met and addressed and national security and public safety issues beefed up in a changed Barbados 2018 AD. The first two years of empowerment to the ruling party on the sovereign nation of Barbados must show positive progress. Without that progress there shall be a “No Confidence Motion” called by the people of the land Barbados!This is how most Barbadians at home and abroad look at the matter.

    Reply
  15. Solutions Barbados February 15, 2018 at 7:30 pm

    Let me try to explain some of Solutions Barbados economic policies in greater detail. There are two ways for a government to increase revenues. Every 1st year economics student knows that. One way is to increase taxes, and the other way is to reduce taxes. BOTH methods will increase revenues to government unless tax saturation has been reached; but the second method only works if the tax system is very efficient. The Barbados tax system is highly inefficient, there are so many holes in it, that it could rightly be called a sieve. This is why successive governments have had to add additional non-direct taxes such as VAT, NSRL, consumption tax, and other taxes in order to capture everyone, because our progressive tax system in Barbados simply does not capture everyone. This is why Solutions Barbados will replace the current progressive tax system with a new flat tax system. This is also why Solutions Barbados will change the way corporations are taxed from 25% on profits, which is so easy to avoid, to 10% on gross income, which no business can avoid. By creating a new extremely efficient tax system which catches everyone, and by reducing taxes, government revenues will actually increase, NOT decrease. In addition, government expenditure will decrease since government is the largest purchaser and employer in the country. So when Government increases taxes in order to meet the deficit, they inadvertently have just increased the cost of running the government, because the cost of living in the same country has just gone up. So they miss the deficit target again, and chase a constantly moving target, they will never reach. Barbados is past tax saturation, therefore increasing taxes will NOT raise any more revenue, it will only make the revenue problem worse. The only way out, is to REDUCE taxes, and create a more efficient tax system that every single citizen and business contributes to equally. This is NOT the case today. Most smart businesses avoid paying much if any corporation taxes. They simply create offshore tax structures that allow them to avoid taxes legally. Any good accounting firm in Barbados can set one of these up for you in St. Lucia or the BVI, and Presto! No more corporation taxes to pay the following year. There is more money flowing from Barbadian companies to St Lucian, and BVI US bank accounts, than you can possibly imagine. These off-shore corporate structures also create a drain on the foreign reserve. Every single major corporation in Barbados uses them to shelter profits and avoid corporation taxes in Barbados. Where is all the profit earned? It is earned in US dollars in St. Lucia and other Caricom Jurisdictions and NOT in Barbados, and the profits can legally be repatriated to the Barbadian corporate Shareholders tax free. Solutions Barbados new tax system will close this tax loophole. Therefore the poor and middle class do not need to pay as much in taxes such as VAT, NSRL, consumption Tax, Import duties, if the tax burden is equally shared, and no one can avoid it. So yes the GDP will increase dramatically, when all those avoided US tax dollars come onshore suddenly. The cost of running the government will also come down, because the cost of living will come down. Will we need some debt consolidation? We might, but the IMF is not the only source for debt consolidation. Will we need to increase the foreign reserve, of course we will, by creating policies to stimulate foreign investment in Barbados among other things. Comparing Solutions Barbados Economic Policies with the DLP’s current plan, or any BLP plan is like comparing Apples with Oranges. Solutions Barbados economic plan is not simply a plaster for a wound, it is a completely new economic model entirely. It is however NOT a new invention, it has been done over and over in many other countries that faced what Barbados faces today. It is just new to Barbados.

    Reply
  16. Helicopter(8P) February 16, 2018 at 3:01 pm

    Solutions Barbados you have now made your statement clearly understood. Now that’s it on taxes and revenue, but now what about infrastructure, production and manufacturing? These are the key every day man’s wants and wishes. If your party can satisfy the families of Barbados with a pleasable every day living and asurity of a healthy retirement then it would mean prosperity for the future generations.

    Reply

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