A word to the Wise

Courage is what it takes to stand up and speak.

Courage is also what it takes to sit down and listen. – Sir Winston Churchill.

THE MINISTER OF HEALTH AND NATIONAL INSURANCE would do well to heed these immortal words of Sir Winston Churchill when prescribing remedies for the investment of pensions funds owned by thousands of Barbadians.

No amount of ungracious shouting across the floor of the House about lecturing by some, who should know better, will dispute two simple facts. One, that Owen Arthur has a considerable grasp of the intricacies of large injections of cash into the local economy and two, this is a young Government with only one member who has had any Cabinet experience.

It is time that the Government faces its fears and the reality that the Opposition is not seeking to deny them the chance given to them by the electorate to run the country. By the same token, we will not sit idly by when the security of Barbadians’ pensions is being threatened.

While we can admire the spirit of the doctor’s prescription, simplistic though it is, to invest the millions in paid-up contributions in a socially productive remedy, we must caution against playing fast and loose with people’s future financial security. The $300 million in surplus contributions Bajans make to the National Insurance Scheme (NIS) every year must be invested to yield the greatest possible return in the safest possible way. We trust that one of the “dynamic duo”, preferably Senator Arni Boyce, will give the doctor a crash course in “Investing 101″.

What are the available options? Previous NIS boards have been challenged to find the right mix of investment vehicles to earn the best return with the least risk, in addition to the strictures imposed by the domestic economy’s ability to absorb such large inflows of cash. Size does matter in this case, Doc.

Dr David Estwick has stated that the NIS must stop financing Government’s debt. However, Government debentures (preferred because of their higher yield) and Treasury bills are considered a soft risk simply because no Government of Barbados has ever defaulted on payment. It therefore has less to do with financing Government’s debt and more to do with the prudent financial management of the people’s money.

Further more, the NIS is limited to a ten per cent cap when it invests in equity of companies so as to minimise any risk. Any investment over this requires ministerial approval.

Foreign investment has been increasingly allowed in the last decade. The NIS may invest in United States Treasury bonds, earning a good yield, spreading the risk and removing the surplus that the domestic economy would be hard-pressed to absorb comfortably. However, apart from taking foreign exchange from Barbados, we are effectively financing the deficit of the United States – doing for the United States what Dr Estwick does not want us to do for Barbados.

Further, investment in low-income housing is essentially in the sub-prime market. The NIS has traditionally made some of its investments in housing but through financial institutions structured to deal with housing, like the Barbados Mortgage Finance Corporation. The investment must be carefully appraised and managed if we are to avoid the historic crash of this market segment recently witnessed in the United States. It is here that the doctor’s prescription could well become an unpalatable antidote with some nasty and unwanted side effects.

If we write an open cheque to the people most at risk by any contraction in the economy and they cannot make their mortgage payments, their personal misfortune will have ripple effects throughout the whole economy. And it is not that we do not want people to progress, but the exposure to high risk must be contained.

Now is not the time for experimentation, Dr Estwick, for not only will you be putting people’s life savings at risk, but their pensions as well.

DLP BLUNDERS Part 1

This community councils concept needs to be properly articulated for the people of Barbados to fully understand exactly what this new administration plans to do.
If this is some ploy to userp the authority of duly elected MP’s by putting handpicked DLP operatives onto these councils all over the country the BLP will not stand for any such councils so constituted.
This policy of using taxpayers money in a way that is not supervised by a permanent secretary as required by the laws of Barbados will require and attract the necessary scrutiny that it deserves.

How Low Can You GO

The public swearing-in of the Cabinet of Barbados at Kensington Oval was a time for much celebration among the Democratic Labour Party (DLP) faithful – and rightly so. It also showcased the Prime Minister at his gracious best. He called for national healing and unity and promised that there would be no victimisation by the new Government.

Alas, his words ring hollow in the face of a series of inhumane dismissals of his fellow Barbadians, whose major crime is the fact that they support a political party other than his own. While we are not entirely surprised by this volte face, having watched the Prime Minister in close quarters during his tenure on the Opposition benches, we are nevertheless disappointed at the manner in which the present Government is engaged in what can only be described as political bloodletting.

In his zeal to correct what may be viewed as political imbalances, the Prime Minister has adopted a most unfortunate stance of dismissal by Press statement.

He did it at the Urban Development Commission and he did it in the Prime Minister’s Office. And it is not that the Prime Minister is not entitled
to hire and fire as he sees fit, but surely our level of political maturity 42 years after Independence should dictate a more dignified approach to the rotation of political and statutory appointments.

Is this the change that Barbadians envisaged when they made their way to the polls on January 15? The politics of victimisation and spite?

The Barbados Labour Party (BLP) Government did not preclude the son of a former DLP Cabinet minister or indeed the daughter of our first Prime Minister from appointment to two statutory bodies. If it makes the Prime Minister a bigger man in the eyes of his party faithful by the Government sending home Carol Roberts from the National Cultural Foundation or by putting Peter Scott from the Rural Development Commission on indefinite vacation leave, we are in a sorry state as a people.

In our view, this type of politics further diminishes the process of nation-building. There is already the belief among political observers that young professionals and other gifted young people among us are shying away from political service for fear of character assassination and victimisation by some elements in the political arena.

This type of behaviour does nothing to assuage those fears. It is not a practice that will be condoned or perpetuated by this new Barbados Labour Party.

At the end of the day we are all Barbadians, some with small children to support, others with mortgages to pay, and the type of cruel and unnecessary embarrassment wrought on our brothers and sisters within recent weeks is demeaning to us all. By all means implement new policies, bring your own character to the affairs of state and employ those with whom you feel comfortable, but live up as well to the example trumpeted in your manifesto “to put aside personal differences and consider what is good for Barbados”.

When the wave of political bloodletting is past and the dog and pony show is over, the people’s expectations will still be there. So, too, will be the high cost of living, soaring energy prices and the threat of an international economic meltdown.

To whom much is given, much is expected. The campaign is over and the ministerial excursions around the countryside are drawing to a close.
The smokescreen is wafting away on the breeze. It is time to get down to the people’s business.
Change cannot mean business as usual, particularly when it echoes the worst of our political experience from the last century.