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In just one week and two airplane rides, the media, the speculators, the “expert” analysts, and the political spin doctors are up at full speed. Contradictions of opinions, historical precedencies, former diplomatic maneuvers, and fairly obscure academics are having their one minute soundbites that will give rise to yet another book.

They all focus on the unstable and seemingly volatile President Trump, who has set them in a frenzy of analyzing the rationality of a man who thrives on chaos. The concept of cursing your friends and embracing your enemy seem so illogical, but economic indicators seem to be predicting positive outcomes, and today the Stock Market indicators are up.

The President was in a rough mood with the other members of the G-7 especially the Canadian Prime Minister Justin Trudeau, and capped it off by refusing to sign the communique, and suggested that Russia should be re-admitted. I wonder who had a Cold War for decades with Russia? Which countries supported the USA with embargoes that hurt their own economies? Who are NATO allies?

Who is the largest economy and who loses in a trade war? Who claims to be the champion of democracy, pillories Cuba, Iran, but warms up to North Korea? Today the Stock Market indicators are up. 

These could all be final examination questions in a number of courses: logic; financial analysis; psychology; international relations; and risk management. The correct answer when translated to short term gains could make millions for the accurate “punter” as this seems to be a horse race that has been tampered with, but we have not yet pinned it on the owner, jockey, trainer, or the groom; perhaps it may be the bookmaker.

Our fascination with the flamboyant, innuendos, social media misinterpretations, fake news, focus our attention on the unpredictable, and distracts us from real opportunities (like Barbados). So here are some exams for the second paper:

  1. If Barbados devalues, will there be any bargain buys or investment opportunities in US dollars?
  2. Will hotel prices be reduced to allow a lower budget visitor?
  3. Will the future of tax-incentives be continued, discontinued, or revoked?
  4. Will Barbadian workers in the service industries become more civil to non-white visitors?
  5. What will the increase in income taxes and the addition of more company social payments contributions mean for business profitability?
  6. Will wealthy Barbadians sell out and migrate?
  7. What will the net pay differential be for UWI lecturers in Barbados, Jamaica and Trinidad after the tax increase and minus the cost of living when expressed in US dollars?

These are just a few of the obstacles/opportunities for expansion or contraction in the surrounding countries and trading partners of NAFTA and CARICOM. It is also an opportunity to sit back and do nothing but grumble about not getting paid for goods and services by Barbados.

The situation impacts the sources of UWI and UHWI funding and both must find ways of implementing counter measures and projects so as to avoid a financial crisis that will impact the plans for educational expansion. It requires a well thought out strategy right now.

James Moss- Solomon
Executive in Residence
Mona School of Business and Management

June 12, 2018

Barbados has a historical reputation (similar to Jamaica) of punching above its fighting weight. Who can forget the famous telegram supporting Britain in the Second World War: “Go ahead, Barbados is behind you”, this as Britain declared war on Germany and Hitler’s 3rd Reich. It was more than a statement; it was an AUDACIOUS statement from “Bimshire”

Barbados continued with its leadership in CARICOM, and prior to that in the Federation where Sir Grantley Adams was the first leader of that West Indian alliance. However jealousy quickly showed its ugly head and Jamaica left the Federation, and Dr. Eric Williams made his famous statement “1 from 10 leaves 0”. Some amounts of hard feelings have survived the decades making CARICOM a rather difficult organization to manage.

The unprecedented total victory of Prime Minister Mia Mottley has brought some degree of relief and challenges, but also the firm reality that the previous actions are no longer relevant and resistance to change is now impossible. Already the IMF has visited and promised support (read guidance and discipline), however the conditions will, no doubt, be similar to that of Jamaica.

However I do not see Barbados getting away with the lethargy of Jamaica with regard to re-structuring of the Civil Service. This brings the Trade Unions into play, and by personal observation only, Barbadians do not seem to have as much of the survival instincts or street-savvy that we possess in Jamaica. The size of Barbados does not lend itself to grey or illegal economic activity. In fact they may often be held up as an orderly, literate, and fairly legal society.

We by comparison have been accustomed to live outside of the law and for some time our questionable activities have rivalled the official economy. Barbados is spatially small enough so that secrets are hard to hide, and they do not have an “informer fi dead” mentality. Now that they have an Opposition they will be in a better position to meet the terms of the IMF in moving forward.

My major concern is about domestic debt held by corporations domiciled in Barbados which have Barbadian dollar debt. Their risk of decreased earnings due to “haircuts” such as we has in Jamaica, has future impact on their Balance Sheets, in different degrees, but perhaps more so in the financial services sector of their listed companies.

The Barbados Stock Exchange lists: Ansa McAl; Banks Holdings; Barbados National Bank; Barbados Shipping and Trading; Bico Ltd; Cave Shepherd and Company; FirstCaribbean International; Fortress Caribbean Property Fund; Goddard Enterprises Ltd.; Insurance Corporation of Barbados; Sagicor Financial Ltd.; West Indies Rum Distillery; among the larger ones.

The degree to which these companies are invested in local instruments will determine the impact on their future performance forecasts. Some may have to seek external loans or equity investments that may change the structure of their ownership. For the proud Barbadians, this may take them close to the edge of survival, but for the skilled negotiators there may be several win-win situations.

Like Jamaica, Barbados will not die and vanish. They are at the brink however, and it is only through skillful adaptation that they will prosper again. We in Jamaica should be investigating cooperation with Barbadian firms, and we are perceived as better suitors than the notorious T&T aggressive winner take all mentality.

We should our Government to use diplomacy to get closer to Barbados starting with CARICOM, and followed by the Private Sector who may see value in future partnerships. We have a lot of valuable experience to help Barbadians lose the “take your meat out me rice” mentality, and now is the time to reevaluate our relationship in business ventures with Barbados.

James Moss- Solomon
Executive in Residence
Mona School of Business and Management

June 8, 2018

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