ECONOMIC PROBLEM SHOULD BE CORRECTED
Thursday, March 4th, 2010DENIS KELLMAN’S COLUMN – THE DEBATE
AUGUST 16, 2007
Last Friday, we had our session of Parliament before the Summer Recess. We discussed new legislation pertaining to the energy sector also a vesting at Barbarees Hill and the raising of the local Loans Limit.
These issues looked simple at face value, only to hear the Minister of Energy outputting enough energy to create hope for all in Barbados. The impression created was strengthened by the passing of laws to deal with the taxation aspect of our new industry which we have not tested.
This is a breach of two fundamental principles, the principle of objectivity and conservatism. We are now counting our chickens before they are hatched and worst of all, we are taxing without realization.
This might have surprised most persons in Barbados. However, one would have thought that with the introduction of the Accrual System, this type of expectation would not be created. It is clear that we need to expose more senior persons to the accounting profession, because it is this lack of accounting knowledge that is allowing ministers to treat projections as actual. We have seen the effect of this during World Cup and yearly during Estimates. This type of estimation can create a feel good syndrome for the populace of Barbados. A year after, when the outcome is known, everyone will pretend that it was not known.
I have already forewarned the country about this behavior where ministers give projections much higher creating a revenue base that is not realistic. This over expectation has been done in every ministry and can create frustration for the public. We have to be very careful when dealing with minds that are now fickle because of over expectation.
The news about our new industry was not a surprise for me, because I always knew that it has nothing to do with flying fish, but oil. This Government would not have spent $12m on a fishing agreement.
I told the House that we need not worry about the Flying Fish, because I always thought that eventually they would return home. We saw this prediction fulfilled last season and the Tobagonians having to fish in our waters. It was a bountiful season for all. The friends from the South had a suggestion that they did not utilize and could have been in a better position by offering our boats the right to fish, providing they bought some of their supplies from them. This would have been accepted by the fishermen due to the high costs they have to endure.
It is interesting how a couple months ago, we had to deal with our brothers being imprisoned for a few flying fish and we are now expected to ignore this for foreign reserves.
The economic problem facing this country cannot be corrected by the sale of our fixed assets, but must be cushioned by the productive sectors responding to policies that can appreciate the social climate of Barbados.
This country has to correct it s economic problems by having faith in its people. Barbadians have always been known for their resilience and we must stop providing incentives for outsiders which we do not provide for our own. We have it all wrong. We expect our own to be jealous of outsiders. The reverse must occur, causing investors to see the need of being part of the system instead of them believing that we are trying to bribe them. This causes us to offer incentives for the wrong reason.
The sale of BS&T can create serious social problems for Barbados. The Government sees it otherwise and is keeping its mouth closed. The foreign exchange that will come in will be added to the amounts received previously and then shipped out of the island. This will happen because persons who previously operated as investors and had control would not want to live in an environment where they will be dictated to.
The offer by the William’s brothers will save BS&T from being sold and I think that if we were to retain Barbados Farms, we will not have to worry about BS&T. but to ensure it is fully protected, we have to make sure we keep banks local also. I am sorry that Jordan’s Supermarket owners did not offer to take over Banks. Whatever is good for outsiders are better for us and we need to stop and think about those things that we are freely giving to others.
The new find in this industry cannot be allocated to a too few by the issuing of shares. If this process is done then those persons with available disposable income will take advantage of this new situation. Government has to understand that any new oil finds must be used to expand the productive sectors.
If oil is found, and Government forms a company to issue shares, then all it is doing is sanctioning off the profits to the fittest. These revenue should go straight to reduce the tax demand of the country or provide cash flow for Government to add to the productive capacity of the country. Ministers must understand that the masses need to increase their disposable income to do some of the things that the rich have already done.
This Government has been fortunate to have more than one opportunity to restructure the taxation system and should not be allowed to continue to punish the productive players of the economy.
Government has been fortunate in getting the public to criticize the William’s brothers while they will be offering the profits from the oil find to one and sundry. The decision to take over Barbados Farms could be seen as a brilliant move to keep productive land in production. This decision if accepted will keep more land in production for a long time. We have to stop looking at persons with jealousy in our eyes and ensure that we have a proper land usage policy. The more Rab lands that are available the greater the opportunity for housing solutions without interfering with productive lands. They could have developed their agricultural lands, instead of seeking to increase their Rab lands for housing.
We have to stop seeing everything as a negative. We must appreciate that if we are to focus on the negative, we can only achieve what we set about to accomplish. What we should be doing is ensuring that our productive lands remain productive. If the reverse occurs, then those persons who own land will be forced to destroy good agricultural land for housing solutions.
It is easier for us to ask our own to think country than to expect outsiders to appreciate our argument. It is clear that policies are changed to suit outsiders more so than locals. If the land is sold to outsiders, we can say goodbye to agriculture land. We must stop bashing our own in this globalised world. We must first understand what is happening in the world and help build our own to compete.
We find it hard to build our own, but are quite prepared to support anything that is foreign to give advantage to our competitors. It is important that we appreciate local investment and local workers.
Another issue discussed was the raising of the Local Loans Limit which had a balance of $38m. This figure is considerably low and it is clear that what the DLP was accused of in the nineties has occurred under this Government. The ways and means account was clearly under pressure and one would have to ask how many times it has been breached? I wonder what would have been said about this occurrence if the spokesperson was on the other side.
After the discussion on Barbarees Hill, I am sure that squatters will finally get their day. I was told during the vesting that only five persons out of fifty were legal tenants. Which means that the others had to be squatters and that their cases have been finally acknowledged? I now expect Government to deal with the other cases.
This week I want to thank those persons who have used their resources to put a happy ending to a sad occasion. Unity is strength. We offer our sympathy to the relatives of those who have lost their lives in the tragic situations. Friday and Saturday will always be remembered by the Depeiza’s family. On these days, we will see family, friends and well wishers offering their sympathies.
Peace, love, unity, humility, Kellmanomics, wisdom and understanding.
