BARBADOS ADVOCATE – DENIS KELLMAN’S COLUMN- THE DEBATE

OCTOBER 29, 2004

The Barbados Labour Party Government set up the Fair Trading Commission (FTC) to regulate certain private sector monopolies, like the Barbados Light and Power Co. Ltd and Cable and Wireless Ltd along with certain Government agencies.

Cable and Wireless applied for increases and they had to conform to the new regulation by presenting their case to the Fair Trading Commission.

The Barbados Water Authority now seeks a rate adjustment and it does not present its case to the FTC as one would have thought, but it’s case is presented to the Minister who has accepted and delivered his dictate without reference to the regulating body set up to deal with such decisions.

When the Fair Trading Commission was set up, I charged that the Government was going to use it to increase bus fares, house rents, natural gas and water rates and that it should be renamed “Fear Trading Commission”.

I was told by the then Minister that I was wrong because the Barbados Water Authority could not present a case before it corrected certain problems like its leakages and also being able to present true costs.

Not based in Science

We are now seeing a new rate being applied and it is not a rate based on any scientific calculation, but it seems to be the dictate of the Inter-American Development Bank (IADB) to double water rates. This cannot be true because I can remember the Barbados Labour Party using water rates as an issue in the 1976 and 1994 elections making the point that we were not a caring Government. This charge was made in 1976 when workers were not under wage restraint and the unions had a voice and were not included.

To date, the workers would have enjoyed over ten years of wage restraint, part of a social partnership where the other two partners have been able to increase their revenues over 100 per cent while workers have been called upon to hold strain by their union leaders.

One thing we as a responsible party cannot do is to encourage the social partners to interfere with the economy as has occurred in the early nineties when the country was on its sick bed and the social partners were encouraged to march 40 000 strong up and down Bridgetown.

Everyone should have been encouraged to increase production, instead of destroying it. We were told then that foreign reserves were poor, unlike now, when the Government boasts of having the highest reserves ever.

For years, the Barbados Labour Party and the “Economist” have accused the DLP of using money belonging to the Barbados Water Authority. Before any consideration of increases in water rates, that amount should be given a present value and transferred to the BWA.

Inform the public

The Minister needs to tell the public about the costs of utilities and the public should be told when the BWA has to pay substantial sums to the Barbados Light and Power Co. Ltd. Is it true that the cost should be substantially reduced if BWA was to generate its own electricity?

Is it also true that the profitability for one company is played off against the other? Or is it what I wrote about last week where economists worry about size of the deficit, whereas the Accountants worry about the size of the profit?

We have the sewerage plant that was transferred to the Water Authority before completion and costs that should have been carried by the Minister of Health had to be carried by the Water Authority. Desalinated water is being bought by BWA at a cost much higher than is required.

Since the plant is not operating at its optimum level, we need to utilize it better and last but not least, the leaks that are running at a percentage much higher that 40 per cent have to be reduced to a lower level.

We need to hear Mr. Toppin on these issues as they relate to the Fair Trading Commission. It is clear that the position taken by this writer is one with which the former Minister agrees. It would do the present Minister good if he gets back to the basics.

Mr. Morris must be congratulated for his opinion on Fruendel Stuart.  I want to thank him for the statement.

(Denis Kellman is the Parliamentary Representative for St. Lucy, Barbados)

BARBADOS ADVOCATE – DENIS KELLMAN’S COLUMN – THE DEBATE

(OCTOBER 22, 2004)

Good leadership seeks to impart and not control. The leaders within the Caribbean would do good to disseminate information to cause their equals to fall in line and stop behaving as if they need experience and seek to get it by tapping resources that they ignored and bad mouthed.

Fora or consultations are set up by these persons to get ideas to espouse and then behave as if these ideas are original.

A good example of the above occurred during the last two weeks and throughout the presidential race where the Republicans continue to formulated policies from the Democrats.

I have consistently warned politicians not to wait to the last minute to let the electorate know their ideas, but advocate them from early so that when they are repeated the public would be able to associate you with them.

Another example is when the present Government seeks to ignore sensible comments by pretending that they have no merit, but then implement them months after in a different fashion. If these ideas were copyrighted the present Government would have been liable to this writer. These include ideas of Community Tourism, Cotton, Sugar, Poultry, OECD, Bretton Wood, Taxation, the expansion in the number of Ports and many other enlightening suggestions which were branded by them as “Kellmanomics”.

Professor Michael Howard was heard lately lamenting the fact that the stars from on top of the hill (at Cave Hill) seem to have forgotten their training and were afraid of the politics of inclusion leaving them behind. A point ably made by this writer in Parliament and in this column.

We cannot continuously educate people for them to continue to wait for the right moment to disseminate the information. The truth is, Mr. Boos, Mr. Toppin and other Accountants who are more widely trained must come out and speak on these vital points made by Mr. Howard. Times have changed and what is happening in the world at present more suits the Accountants than the Economists since it has to do with actual, assumptions and many other hands-on approaches that can only be carried out by persons who have been exposed to the discipline that Accountants have to undergo.

Stamp authority

The present Governor of the Central Bank must stamp her authority as a public servant as was done by her predecessor, given his training. She must exert her authority by educating the officials from the Ministry of Finance. What is happening is too complex for persons who have been trained in other fields to believe that the problem can easily be solved by a sweet smile or sweet talk.

What is required is for persons with the right training and an appreciation for the social happenings to come up with policies suitable of sustaining growth within the economy. The constraints should be removed from workers allowing them to increase their disposable income without increasing production costs, reducing the revenue of Government and the profits of the private sector.

We must understand that deficits are seen by Economists as a right, but Accountants see them as losses that must be financed not by borrowing but by increased output and by revenue outmatching expenses. Mr. Boos and his comrades should speak out on more issues. It cannot only be about Offshore Banking, because their exposure is too wide to deprive the public of fair comment that is required in these difficult times.

Topics like Direct Taxation versus Indirect, the effects of double taxation on workers at the top forcing them to do chores that they would normally not perform, creating unemployment, reducing production and the effect of Direct Taxation on local production.

For the last two weeks, we discussed the Green Paper on aging. We were able to conclude that we have to provide more opportunities for our experienced citizens to impart their knowledge to younger persons. We must have a tax system to encouraged experienced persons from retiring and not using the vast experience which would have accumulated. This knowledge could be imparted to persons who are now seeking to gain experience.

It would be more attractive for these repositories to maximize their earnings knowing that they can draw a pension and still earn a salary from business owned by them. This would encourage these persons to continue to work knowing there is a benefit. With increased disposable income, they are now able to have a choice in their purchases. Government could save foreign exchange through import substitution if these persons are encouraged in that direction.

Foreign exchange would be more difficult to learn if we do not reduce production costs, while keeping workers stress free and the private sector interested in making profits and not spending time creating revenue expenditure instead of capital expenditure.

Deficit budgeting creates long term problems and it must be financed. We cannot allow Governments to continue to run deficits that must be financed by borrowings or the sale of the family silver and at the same time bragging about foreign reserves that have not been earned.

(Denis Kellman is the Parliamentary Representative of St. Lucy, Barbados)

VEGETABLE RICE; MACARONI PIE

FRIED KING FISH;FRIED SNAPPER

GRILLED TUNA; BAKED PORK

BAKED CHICKEN; CREAMED SWEET POTATO

LASAGNA; STEAMED VEGETABLES

LAMB STEW; PLAIN GRAVY

TOSSED SALAD; COLE SLAW

 Kaieteur News (Guyana)

The main opposition People’s National Congress (PNC) yesterday hailed the National Insurance Scheme (NIS) on its 40th anniversary, but called for greater efficiency and a clear statement from Government on the Scheme’s $6 billion investment in failed insurance company Clico.
The NIS celebrated its 40th anniversary on September 29. The Scheme was set up by PNC founder, the late Forbes Burnham in 1969.
“Over these forty years, the NIS has been highly successful and has provided major assistance and a multiplicity of benefits for Guyanese of all races and classes,” current PNC leader Robert Corbin said at his party’s Congress Place headquarters yesterday.
“These benefits include areas such as sickness benefits, employment injury benefits, maternity benefits and allowances, invalidity grants, invalidity pension, old age pension, survivors’ pension, disablement pensions, overseas medical care, survivors’ grants, funeral grants and industrial death pension.”
Corbin stated that the ruling People’s Progress Party (PPP), not only criticized the Scheme as a PNC political instrument intended to penalize sugar workers, but also vigorously organized demonstrations by sugar workers against NIS.
“Ironically, these workers became the largest single category of beneficiaries of the scheme,” he said.
Today, the Scheme has become a major source of finance for the PPP/C administration to undertake many projects.
There has been the US$4M loaned to Government to build the CARICOM Secretariat Headquarters; in excess of $250M loaned to Laparkan to facilitate, among other activities, their hire purchase programme; and the investment of $6 billion in the Berbice River Bridge.
The PNCR said it hopes that as the NIS celebrates its 40th anniversary, the PPP/C administration would pledge to return that institution to professional management free from political control and direction.
“It is the only way to guarantee that such an important institution is preserved to fulfil the goals that it was intended to achieve: social security for all Guyanese,” Corbin declared.
He said the actuarial report as at 31 December 2006 made many recommendations for the future viability of the scheme that have been ignored, while the Government, in an attempt to avoid those recommendations, caused the Board to embark on, so-called, national consultation aimed at circumventing the professional recommendations.
Among the ideas being peddled by the Board was the extension of the pension age from 60 to 65, to which the PNCR has already objected in Parliament as being unacceptable, having regard to the life expectancy of Guyanese, Corbin stated.
Of greater concern to the PNCR is the fate of the significant investment of $6 billion of NIS funds in Clico.
Both President Jagdeo and the Parliament of Guyana assured NIS, like other policyholders, that the Government would guarantee to all policyholders that they would incur no losses.
Yet, to date, the people of Guyana have heard nothing of significance from either the President or the Government, Corbin stated, and urged the Jagdeo Administration to make an unambiguous statement to the contributors of the NIS scheme, on the timing, manner and procedure that would be used to reimburse the NIS the money invested in Clico.
The PNCR called on the management of NIS. to seriously review its systems to improve its efficiency and service to the contributors and beneficiaries.
The party said the complaints against the NIS are many, including the unusual practice of forcing living pensioners who present themselves to incur expenditure to obtain life certificates from specially identified persons before they could obtain their entitlements, and, the length of time spent by beneficiaries to obtain their entitlements.
These are some of the matters that need serious attention and it is hope that they would be urgently addressed, Corbin stated.
While lauding the NIS on its 40th anniversary, Corbin said that it is incumbent upon the Government to ensure that the Scheme does not remain static, but strives to expand its scope and benefits.
Among the issues for serious consideration are the expansion of the benefits and the incorporation of a scheme for unemployment benefits to persons out of employment.

-Jagdeo urges private sector
GuyExpo, the country’s largest trade and investment event, opened last evening with a challenge thrown out to the private sector to see opportunities in the midst of a harsh economic climate.

These representatives of A&C Leather Care/Leather Land International told patrons at GuyExpo last evening that if they can have the sandal seen in this photo if it fits.

After a one-year break due to last year’s Carifesta celebrations, GuyExpo returned to the National Exhibition Site at Sophia. This year’s event is being held under the theme ‘Promoting Business in a Low Carbon Environment.’

During the feature address, President Bharrat Jagdeo emphasized the need “to see opportunity even in the most challenging of times” as this was one of the keys to long-term entrepreneurial success. Emphasizing the importance of the partnership between the government and the private sector, Jagdeo said that his government remained committed to the view that there was “no incompatibility between a strong, vibrant private sector and a compassionate, active government.”

The key to this partnership is set out in the National Development Strategy (NDS), which

President Bharrat Jagdeo (second from right) assists two girls in cutting the ribbon last evening following the Opening Ceremony of GuyExpo. Looking on are co-Chairmen of the event Derrick Cummings (second from left) and Trade and Commerce Minister Manniram Prashad (right). (Photo by Jules Gibson)

later led to the National Competitiveness Strategy (NCS), Jagdeo said even as he pointed out that the latter included updated parts of the NDS. He emphasized that these two strategies were the “bedrock” of his government’s economic plans for the country.  He said that the NDS presented an overall strategic framework and the NCS the more detailed set of policy initiatives.

Jagdeo noted that one of the aspects of economic development that his government did not fully understand when the NDS and the NCS were drafted was the “potential transformational impact that Climate Change would have on our country, on our economy and our people’s well-being.” Identifying the negative impact that climate change had already had on the country, he said that it was an area in which the government has since taken great interest.

Speaking about the Low Carbon Development Strategy (LCDS) he said that it was not intended to replace the NDS or the NCS but to augment them to enhance national development and also to provide a means to work with other territories to address the critical issue of climate change.

Mini beauties: the dolls in this photo are dressed in custom made clothing representing the various cultures present in Guyana. They were being display for sale at GuyExpo 2009 last evening.

He emphasized that persons needed to move beyond seeing climate change solely as problem but as an issue that needed a solution, while adding that smaller countries had to lead the charge as they stood to suffer the most from the effects of Climate Change.

Hailing the event as “the most important event on the calendar of trade and investment in Guyana,” Trade and Commerce Minister Manniram Prashad promised that this year’s event “would be a far more enriching experience.” He said that this year’s exhibition included representatives from various countries including Brazil, Venezuela, Suriname, Peru, Barbados, St Lucia, Canada and the USA.

Stating that the private sector is the engine of growth and development, he said that it needed to work together with other entities “to build a low carbon economy where national development and combating climate change are complementary.” He said that business persons must take advantage of the investment opportunities in a low carbon environment.

Prashad, who is also co-Chairman of this year’s Guy Expo, while highlighting some of the efforts the government has made to aid the business community pointed to the Small Business Act which was passed. This is meant to assist small and medium sized businesses.  He said that this involved the establishment of a Small Business Council, Bureau and Fund. He said that the Council has already been set up and that the fund will soon be operational, since the Small Business Bureau is now being established.    He also pointed to the matching-grant initiative as another positive achievement.

The Competitive Commission which is a requirement of the Treaty of Chaguaramas has also been established, he noted.  He said that this ensures that no local or foreign company doing business in Guyana acts in a manner that is harmful to another or against consumer interest in the market place.

He also stated that reforms are underway to make significant reform in the operation of customs and the licensing agents to make ease “to import and export with less red tape.”

The Minister said that the country just became a member of the Trade Point International and that by the end of the year Trade Point Georgetown should be established.  This will link buyers and sellers to the internet in a virtual market place. He said that they are exploring via the National Competitiveness Strategy the possibility of having the Caribbean Development Fund link Guyana into a trade network, even as he pointed out that St Lucia is already benefitting from this initiative.

In his brief address, Chairman of the Private Sector Commission (PSC) Capt. Gerry Gouveia called on entrepreneurs to conduct businesses with “a high level of  corporate  social responsibility and urged  them to “embrace good and responsible environmental practices.”

He noted that this would include minimizing the emission of dangerous gases.

In highlighting the importance of climate change to the lives of everyone, Gouveia said that in the future renewable energy sources needed to be pursued and stated that it is imperative that the nation pursue hydropower.

Gouveia also underscored the importance of the partnership between the public and private sector, saying that it was integral if the country was to advance.  Meanwhile, he said that the PSC will welcome any foreign investor who was willing to invest in Guyana.

Speaking about the performance of the private sector as the world went through a global financial crisis, Gouveia said that a recent study done by three economists from the University of Guyana showed that the impact of this crisis on local businesses was minimal. He said that the few businesses that suffered would have done so because of failure to be innovative and creative.

Hence, he underscored that the private sector had to be innovative as they looked to the future.

GuyExpo was launched in 1995 by the Guyana Office for Trade and Investment (GoInvest), the Guyana Manufacturers’ Association and the Ministry of Tourism, Industry and Commerce as a bi-annual event to showcase locally produced goods and services. The event became an annual one in 2004.

LOS ANGELES – Karibbean Expressions Webstage is the latest online international platform promoting Caribbean talent.

The Web site is the brainchild of a former Jamaican journalist and is aimed at promoting and integrating Caribbean talent on a world stage. The site specifically targets creative and performing artistes from the Caribbean and its diaspora. The much anticipated webstage is set to launch in mid November.

“This will be the global platform on which Caribbean talent is discovered,” Wendy Spence-Christie, the site’s founder said.

“The Caribbean and its diaspora have a plethora of undiscovered talent and this will be the medium through which the world discovers these talents,” she maintained.

We are looking for fresh, unique, undiscovered artistes to share their stories. This is a global casting call for everyone from musicians to models, promoters to painters, cooks to creative geniuses. We are seeking to showcase the innate creative and distinct skills within the Caribbean peoples. Ultimately, we want to create networking opportunities for both artistes and talent scouts, she said.

According to the site’s founder, the idea to create the webstage came about from a combination of her passion for all things Caribbean, homage to her early Caribbean influences and her desire to highlight the reservoir of unique talent amongst the Caribbean peoples. The Internet is the perfect medium to reconnect people and rediscover raw talent, she said.

Karibbeanexpressions.com is now accepting biographies for inclusion on its webstage. Submissions are open to Caribbean nationals as well as descendants of Caribbean nationals around the world. Each month, the site will highlight and feature a selection of different talented artistes. Additional submission information is available on the Web site at www.karibbeanexpressions.com.

Antigua Sun

Certain privileges afforded to government ministers may soon be the subject of a review with the view of either eliminating or reducing them.

Finance Minister Harold Lovell, speaking on the Voice of the People programme on Observer Radio yesterday, said certain measures are being considered as part of the government’s efforts to cut spending.

In response to questions from the host of the programme Winston Derrick as to whether ministers were prepared to sacrifice their free utilities privileges, Lovell stated firmly, “I believe everything should be on the table.”

But he said any such move should be placed in the context of what is afforded to other workers in the public sector.

“We have to look at the question of ministers and the benefits that ministers get. But I think this is something we have to look at in relation to all contracts that are entered into with the government with workers. There are other persons who get as part of the benefits package in a contract maybe free use of telephones,” Lovell said.

He was of the view that there shouldn’t be a problem with a minister getting free local telephone calls and overseas calls but with an appropriate cap that would prevent abuse.

“As far as water and electricity are concerned, I think these are matters that have to be discussed. I know the prime minister has asked me to look at those matters because he is of the view that these are things that we need to put on the table for discussion,” the finance minister added.

Lovell stated it was incumbent that the right signals are sent to those people who will have to bear the brunt of the sacrifices in government’s cost cutting measures.

“So I can tell you that as far as privileges and perks and benefits are concerned, everything is on the table and that’s because if we are to ask everyone to buy into the proposals that are being put on the table, then people must be satisfied that the sacrifices are being shared,” he stated.

The minister stated among the areas where government sees it can reduce its spending is in the area of overtime. He stated they are hoping to slash some $15 million from the $20 million that was spent last year.

He said the natural attrition programme will be enforced. He explained where it is found that individuals have attained the age of 60, they will be asked to proceed on retirement, unless it is absolutely necessary to keep them.

“I mentioned outsourcing. Some of the things that government is now doing could save money by having a small group of persons organising themselves in a way that they could deliver that service and deliver it more efficiently at a better cost to the taxpayers of Antigua and Barbuda,” Lovell said.

He said with the IMF on board, the area of debt servicing will be a much easier road to travel.

Lavern Clarke, Business EditorHit by low revenues which have fallen below seemingly too-ambitious targets, and a spending bill that has resisted all efforts to be tamed, finance minister Audley Shaw has amended the fiscal deficit target, adding more than three points.

Shaw on Wednesday said the deficit has been recast to 8.7 per cent of GDP to fit more realistically with underperforming tax intake and problematic wage and debt servicing.

“The original budget presented in April 2009 saw central government targeting a fiscal deficit of 5.5 per cent of GDP, equivalent to $65.4 billion.”

If divestment proceeds are not factored, it would have been $78.3 billion, or 6.6 per cent of GDP.

The good news is that the currency is stable at around $89 to the USD and headline inflation - currently running at an annual 6.1 per cent - is a fraction of the 26 per cent annual inflation rate registered in August 2008. Fiscal inflation this period is projected to close at 10 to 12 per cent, tracking with the 12.4 per cent at fiscal year end March 2009.

Growth projections

Economic growth projections, however, remain at negative three to four per cent, but Shaw says he expects a turn in the country’s fortunes starting gradually in the latter part of FY2010/11.

“Economic growth is expected to be moderate over the next four years,” he told lawmakers in the debate on his revised Budget that adds $6 billion to spending this year.

Much of Jamaica’s hope for a recovery over the medium term rests, the minister admitted, on help from the International Monetary Fund (IMF), which is to pronounce on a US$1.2-billion borrowing facility in November.

An IMF review team is due in mid-October ahead of the expected decision of the fund’s executive board on Jamaica’s request for help.

Jamaica’s technical team was in Washington for negotiations last week.

Shaw called those talks “fruitful”.

Jamaica’s inability to tame its wage bill, budgeted at $125 billion this fiscal season, plus $10 billion more for travel and subsistence, and its monumental debt-servicing charges that were $16 billion more than originally estimated, make an IMF deal imperative.

The added interest charges have been linked to the hike in interest rates by the BOJ ahead of the current fiscal year. The central bank has since cut rates four times to 17 per cent on its benchmark open-market security.

Chronic burden

Prime Minister Bruce Golding labelled Jamaica’s mounting debt a chronic burden in his presentation Wednesday, saying in the past decade the funds needed to finance it have consistently outdistanced central government income in the past decade.

“So burdensome is the total debt that for the last 10 years our interest costs and principal repayments have exceeded our total revenues,” said the PM.

“For this year, our interest costs and principal repayments total $325 billion, while our total revenue is estimated at $310 billion.”

The total debt stands at J$1.26 trillion.

For the fiscal year to date August, tax revenues fell $8.4 billion short of target at $100 billion. Spending, too, was down, by $7.6 billion of programmed levels to $169.5 billion, but it came at a cost to capital projects that were spliced by 24 per cent in the April-August period.

The fiscal deficit climbed to $61.6 billion, or $2.86 billion more than programmed in the original budget.

Revise targets

“Within the context of these deviations, it has become necessary to revise targets and the Supple-mentary Budget as presented reflects this revision,” said Shaw.

The new $561.4-billion budget is split $411.2 billion in recurrent spending and $150.2 in amortisations, he said.

The new 8.7 per cent deficit target reflects an expected shortfall of $94.5 billion between operating revenue and spending.

The causes of the deviations in the fiscal deficit target are, Shaw said:

i) Tax revenue which is projected to decline by $13.4 billion, or 1.1 per cent of GDP;

ii) Delay in divestment of $12.9 billion, or 1.2 per cent of GDP;

iii) Interest costs are projected to increase by $16.2 billion, or1.5 per cent of GDP; and

iv) The downward revision in nominal GDP (lower growth and inflation) resulted in a 0.6 per cent deviation in the fiscal deficit.

“These changes resulted in an adverse deviation of 4.2 per cent of GDP,” he told lawmakers.

“In light of these deviations, non-debt expenditure had to be cut by $10.5 billion, or 1.0 per cent of GDP.”

Recurrent programmes were cut by $4.7 billion, or 0.43 per cent of GDP, and capital expenditure by $5.8 billion, or 0.53 per cent of GDP.