Kindling New Tastes

Most people would agree that the past 50-60 years have seen unprecedented technological progress, and most of that has been of the electronic kind. That follows a long period of immense technological progress that was mainly of the mechanical kind, stemming from the Industrial Revolution. The latter period, we tend to characterize as the 'information age', mainly because we have seen the advent of computers as extensions of most aspects of work and home life and with that has come the packaging of large bodies of information that can be transferred without any physical movement of people or things.

After I joined the Bank of England in the early 1980s, I recall the amazement I had when I first came across a fax (or facsimile) machine and the first documents that I received and sent--loan documents to do with Mexican debt and its rescheduling. They were a few hundred pages long and I remember that it took a long time for everything to pass through. At the end, I had a reasonable copy of the blessed thing and could crawl over it at leisure. Then I encountered electronic writing in the form of word processing software and again I was amazed at what could be done with a new machine for me, portable computer--or as it was at the time a luggable computer by Compaq,which for many weeks I would lug between my office and my home (I was very fit and strong in those days). I was quite incredible to see words pop up on the screen and to then edit text and move it around with the click of a few buttons. Man, was I on the cutting edge. Then, documents were still printed out and photocopied, but gone were the days of hours of writing in manuscript, to have it typed to have it edited to have it retyped, etc. My secretary at the time was of course leery of these changes as she could see quickly that only time would stop me from not needing her particular skills of using an electronic typewriter and managing the intricacies of an IBM golf ball.

Time waits for no man it seems, and soon afterwards we moved into another world, that of electronic mail. Now, I could be anywhere in the Bank and I could get messages about all sorts of work subjects, and documents, and offer comments, edit the documents and reply and share all sorts of file. We were still in the late 1980s and my life was moving so fast that I was not sure what more I could handle. In ten years, life moved spending most of my time poring over paper documents and writing on paper, to some scrutiny of paper documents and writing mainly on a machine. We did not have or want at that time documents that were electronically edited, and those who preserved the archives and files were fighting to find ways to manage the new form in which records were being created. From binders with reams of documents we moved to information on diskettes. When there was a fire at the Bank it also showed people the weaknesses of our work practices because many of the new electronic records were never back-up and that meant having to recreate data and documents after the fire.

After I left the Bank and went to the Fund in the early 1990s came the advent of the World Wide Web and Internet pages and searches and spending more hours on the computer rather than just a few, but still having to read through mountains of paper, because the Fund produces documents in reams.

When I was based in West Africa for a few years, while I had all of this technology at my finger tips--with my communications set up by way of a satellite, or a cable connection--I had to watch and work with people who had very little electronic equipment and what was available was limited to certain officials. I had to reacquaint myself with seeing people lugging large bundles of files when it was time to discuss topics, and there I was with a diskette in my pocket.

For someone who loves to write by hand and loves pens, I was thinking the other day how little actual hand writing I now do--mainly jotting notes to myself, writing checks (very few), and signing permission forms for school.

With all of these changes resistance has always been present. People tell funny and sad stories about how some have struggled to make the transition from the world of paper and pen, to computer keyboard, screen and diskettes and now memory keys. People steadfastly refused to use the computers assigned to them and were almost literally hauled screaming and kicking to turn them on and start to work. Word ground down to a halt for some and they began to see the activities dwindle and their participation lessen as they were not following discussions electronically. We know that at the top of many organizations the leaders are not really as au fait with technology as many would like to think. Vice President Biden gave new meaning to that this week when he talked about the 'number' for the presidential web sites to deal with the stimulus package that he will oversee (www.recovery.gov). This VP did not claim to have invented the Internet so I will cut him some slack, but he did look awkward.



We know of CEOs and managers whose computers sit on their desks still covered. By contrast, we have the tech savvies like New York City's Mayor Bloomberg (he of the terminal and who has set his main office up to look like a trading room, and who fired an employee for playing computer Solitaire) and now President Obama (he of the BlackBerry), who appear to be near the front edge.

I was a bit bemused by a conversation I was in last week about reading. Here, an interesting reaction is being played out. Avid readers mainly get their jollies by inhaling the words from a printed page, usually a bookand we can say also newspapers and magazines. Many of these same avid readers spend much working and private time reading documents in electronic form (word processed or now in PDF form). But, somehow, there is a resistance to letting go of the book for an electronic reading device, such as Amazon's Kindle. No one of my generation knows life before books and newspapers, but most of us will know that the printed word was not there many centuries ago. Things were scrawled on stone, on wood, on other materials; if copies were needed then the process had to be started again. We must give thanks to the advent of the printing press, for sure.

But someone protested vociferously that the Kindle is not a book. Well, I can see that. But so what? It contains what I want to read. Those who have moved to this new device will say that by electronically downloading the text that they want they have in the space of a small paper back, maybe 1500 books and a device that will function for two weeks when fully charged. Great for travellers. Imagine being in hospital for a few days or even weeks. Those who are book lovers say "It's not the same". But nor is reading the newspaper online. They will argue that they would prefer to be able to turn the pages of the book, and also a real newspaper, but make a concession with the latter. I know for example that every day I read about a dozen newspapers online before I start work, and they cover the main UK, US, Jamaican, Bajan editions. I also read several periodicals online. My house is only cluttered with the copies of the local papers that are delivered to my house, rather than piles of other papers. One old Bajan wag gave me a reasonable argument this morning: a book is useful if you are in the bathroom and run out of toilet paper. I should really tackle this harder. In terms of the environment, I would have thought that those who urge 'think before you print this e-mail message' and live in the world of the electronic document would be amongst the first to see that buying another printed book has just chopped down the same trees that were about to be saved. I cannot argue with the excited feeling that comes from having a box or packet of books delivered, in a era where so little personal mail is sent. I would think in terms of finances that downloads are usually much cheaper than purchasing a book. I also recall a request sent to me by my wife when I was in Miami airport to look for a particular book. I would have needed to go back through security to find the book shop and perhaps risk missing my flight. It was not bought, after a sales clerk told me that it was not available. But online, it sure is. But I do need too much convincing on this.

The fundamental opposition to electronic readers I am hearing does seem like double-think to me. I was especially bemused to hear the opposition from a doyenne of a book club, and think of the problems sometimes caused because the set book is not available to everyone: "I'll read it quickly and pass on my copy" shouldn't really apply. (I remember the days of a file binder or newspaper making the office rounds and sometimes hitting my desk so long after the events as to be ridiculous.) If everyone had a Kindle texts could be downloaded in minutes, even by those who are off the island on some work assignment in deepest Belize or the jungles of Guyana. Maybe that has not been considered.

I can always handle an argument that is just about a preference, but let's see that for what it is. I am going to try one of these electronic readers over the next few days and will be interested to see if I can read it under the bed covers without a light. If so, that could be worth a year of marriage counselling. I have had a few bad instances with electronic gadgets and water, so would be wary of taking the Kindle to the bathroom, and would be very careful if I am near the swimming pool. But maybe it is less sensitive to damp than say a cell phone. I like it that the size of the typeface can be adjusted. I like it that it can be set to read the book or journal to me: that's so neat as I imagine being tired and having a book read to me. (I could see some parents using that to cheat their kids at bed time, and putting the Kindle on the pillow then walking out while the machine does the 'talking'.) Maybe, there is the 'last bastion' argument at work. True, not all change is good, and certainly not all change is welcome.

Well, I will play with this device for a few days, loaned to me by a friend, and see if it can rekindle my love of reading.

Cadogan, You're At It Again. Want To Buy A Bank?*

Every body's doing it. Governments around the world are getting their hands on banks. But why? Most of them are doing it because the banks, big and small, are going belly up after another wave of selective memory: excessive risk-taking, bad lending, poor oversight, related lending, conflicts of interest, overpaying people for what they do, etc. If governments are looking to take control of banks then they go for the major ones and let the minnows flounder and fail, believing that the system can lose the small and weak but not the big and weak. Governments are not looking to put their fingers in the pie of banks that are doing well. Why should they? Look at Citigroup, where the US government raised its common equity stake in a third bail out attempt (see Bloomberg report). Banks should really be private institutions and people in capitalist economies get nervous when they see government wanting to raise its stake. If the government wants control of things in the financial sphere they should rely on the central bank and finance ministry to set the right policies. So, why the rush in Barbados for the government to get its hands dirty again by repurchasing a majority stake in Barbados National Bank (BNB), which was sold off in 2003?

It's all in the name? So, the bank that was sold has 'Barbados' and 'National' in its title and these represent legal property. Of course, those words have value not least because everyone in Barbados knows them, loves them, and maybe trusts them with a lot of money. The bank carries the colour of the national flag--blue, yellow and green--in its logo. When Trinidad's Republic Bank bought BNB, a change of name would have raised more hackles than were necessary. The bank did not get an image make over to look like its Trinidadian parent. If it had been Citibank as the buyer, then they would have come with a bigger name and with a splash that many would regard as "Yes, we reach, now, Iyah!" Well, that would have been true up until a few months ago, now Citibank's name stinks.

Not a Bajan bank? Well, I don't know what a Bajan bank is. BNB has the colours of Barbados, is located in Barbados, has mainly Bajan customers, and more.Yes, it is run by Trinis. But so what? When it was run by Bajans it went into emergency care. When BNB was put up for sale, it was taken up by a foreign entity because the infamous risk aversion of Bajans meant that not enough of them wanted to stump up and take pieces of the bank that were on offer. So, one could say "You had your chance, and you decided that you had better use for your money."

The bank is not serving the people's needs? Seems that the bank has been ripping ahead as far as shareholders are concerned and they probably give wider service than their local competitors. When the original pieces of the bank were established they were there to meet certain needs, namely, Barbados Savings Bank – 1852; Sugar Industry Agricultural Bank – 1907; National Housing Corporation (Public Officers Housing Loan Fund) – 1958. As the bank developed from the mid-1970s, it continued to meet these needs. Into the early 1990s, the fact that the bank was failing became apparent and then over the next decade its balance sheet was cleaned up, and provisions and write offs were made, the bank moved from losses to profits and the bank improved its capital base. Like it or not, an 'unholy alliance' of the Government of Barbados, the Central Bank of Barbados, the Inter-American Development Bank, and the IMF was instrumental in showing the bank's bad loanss problems and setting out a way to get over them. All of this was happening at a time when Barbados' economy was at a modern nadir.

Balls of confusion and political football? When PM David Thompson made his Budget speech in July year, this is what he had to say about BNB (see Budget text):

• The Barbados Government owns a substantial number of shares in both the Barbados National Bank and the Insurance Corporation of Barbados, but in both companies, the Government is a minority shareholder, and so is in no real position to direct the strategy of either company.

• At the same time, Government has been advised that the value of its shareholding in those two companies is approximately $200 million and that the rate of the cash dividend that Government receives on an annual basis on these shares is less than the rate of interest thatGovernment pays on its borrowing. Since these shares are no longer useful in determining the strategic direction of either of these companies, Government has taken the decision to offer these shares firstly to Barbadian individuals, theNational Insurance Board and local companies and then, if necessary, to the current majority shareholders of the two companies, if Barbadians do not take up all of the shares.

• The proceeds of these sales will be used to fund part of the upgrading and expansion of the QEH.
  

So, less than a year ago, the government felt no need to want to be the majority owner of BNB. What has changed to make for a reversal of a clearly stated policy? In current circumstances, some would speculate that the government smells trouble for the bank and cannot feel comfortable that the ultimate parent and its national government will stand up and assist if needed. So, it may be a pre-emptive strike.

Governments have a bad track record in running businesses? If governments go into owning a bank, many would suspect that its performance would deteriorate. A government can step in to stop a certain rot setting in or going too far, but that should be a temporary state. When government-owned banks exist they often end up being an extension of government policy. Loans get directed to individcuals, companies and projects the government prefers (see research report). Business decisions are always tinged with political consideration, as shown by some empirical research, which summarized that:

• State-owned banks charge lower interest rates than do privately owned banks to similar or identical firms, even if the company is able to borrow more from privately owned banks. State-owned banks mostly favor firms located in depressed areas and large firms. The lending behavior of state-owned banks is affected by the electoral results of the party affiliated with the bank: the stronger the political party in the area where the firm is borrowing, the lower the interest rates charged.

Fear of CL Financial/CLICO fall out? This is the one thing that may make some sense. CL Financial Group is due to sell its holdings of Republic Bank. That puts a cloud over BNB. However, that has to be resolved. Republic Bank, meanwhile, says it has no intention of selling BNB. So, this will be an interesting wrestling match. Think of it. Bajans did not want BNB. The Barbados governments it wants to buy bank controlling shares in BNB. The onwer of the majority of BNB says it has no interest in selling them. Hee-hee!

Undermining the Central Bank of Barbados? One big concern is that the Governor has been saying repeatedly, even yesterday, that the banking sector is secure. The system is 'sound'; banking system liquidity has not been a problem; the banking sector has performed well. If all of that is correct, why does the government feel the need to be involved with the major bank? It is curious and even a bit baffling.

Who will pay for it? If the bank is to be bought there needs to be financing. The government said it needed money from selling the bank to implement a certain health policy. If it does not sell the bank it will need to fill that financing need--philanthropic capital has been mentioned. If funds are to be found to buy BNB, where will that come from? Barbados can borrow, but would borrowing to buy a healthy and profitable bank be the best use of such funds? What of other needs on the government's agenda--stressing again that there is already a set of policies laid out in the 2008 Budget. That higher borrowing will need repaying and I cannot see how owning the bank is going to address that future need. How will the new fiscal situation fit with other economic policy objectives?

The government's flip has come as a surprise and many will see nationalism or patriotism in this somersault. But those are not good reasons for making financial policy.

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*To understand the role of Cadogan see previous post, Follow Fashion Kill Cadogan.

As If We Knew Each Other

I love the familiarity that Americans try to create with all and sundry. Within seconds of a first meeting, we are 'buddies'. First names flow like between good friends. US politicians are not known to bother with formality, and President Bush just refers to 'Tony" (Mr. Blair) and now 'Gordon' (Mr. Brown) and 'Nicolas' (President Sarkozy) and 'Angela' (Chancellor Merkel). Americans are not burdened by the rules of 'the old country' so do not fall over when they meet certain dignitaries, for example, such as will soon be the case with former Senator John Warner, who will have bestowed on him the title of 'honorary of the Knight Commander Most Excellent Order of the British Empire' (KBE) by Her Majesty Queen Elizabeth II. He should NOT be referred to as 'Sir John', as this is an honorary title not a real one. Whatever else is done, he should not be referred to 'Sir Warner'; that kind of appellation would apply if he had been ennobled, and become Lord Warner of Virginia, let's say. It's a bit complicated, but pretty clear, really. But none of this will bother most Americans, who will still refer to 'John', though I suspect that the novelty of the knighthood may lead to a few uttered "Sir John".

The presidency does not hold the same awe for Americans as does the monarchy for the English. So, Americans feel fine referring to the president as POTUS (president of the United States of America). Indeed, it goes further to cover the first family. So, Michelle Obama is often referred to as FLOTUS (first lady of the United States of America, who is now like a flowering lotus of the USA). I have not seen it used but I would like to popularise two additional acronyms. FICUS, for first children of the United States. Then, as from April, if news reports are right, FIDUS, first dog of the United States. Michelle's mother does not lend herself easily to acronymization, but FOGUS might work, first and only grandmother of the United States.

The new president is creating a lovely familiarity in the way that he deals with people. There he was in Congress on Tuesday evening, ahead of his speech, giving man hugs (they look like regular hugs, but because men are involved it seems that we need the adjective), and whispering invitations to the White House (for those who could hear or lip read). Michelle too (see, I have already dropped her full name), who hugs and kisses everyone she meets at formal occasions just as if they are visiting in her own real home.

People feel so at ease with the current first couple that it is not uncommon now to see a lot of touching of these often distant individuals, as could be seen by at least one female politician giving the POTUS a back rub as he entered Congress the other evening and was stopped for a few words with a politician. Too sweet!

This kind of public 'love in' will no doubt bring forward invidious comparisons with the current president and his predecessors, but it should not. Each person is different and the level of comfort in social settings in not prescribed. However, I personally like the warm, fuzzy, feeling that POTUS is giving at least some of us.

Trapped By Your Past?

I was asked a question on the radio yesterday about economic policy choices, in this case between letting the exchange float or to keep it fixed. In truth, the question was posed more pointedly as it looked at why some Caribbean countries had devalued their currencies while Barbados had maintained a fixed rate against the US dollar. What struck me about my reply was the nagging question, "Would I have chosen to devalue if I knew then what I know now?" Unfortunately, it is hard to experiment with certain elements of economic policy.

I saw an interesting article in today's Gleaner that looks at the varied economic experience of Barbados and Jamaica (see article). What it highlights for me is how a country gets trapped by a decision: you develop institutions and ways of thinking that are geared to that choice, and it is very hard to break away from that choice. For example, Jamaica has experienced much higher inflation and lower economic growth than Barbados--a deadly combination in economic terms, as you usually want to avoid each of these and often experience one, but to suffer both is terrible. People have developed expectations of prices rising fast and of economic activity floundering, even to the extent that when data suggest that prices are not rising or even falling, or that growth is not slow or negative, people have a hard time believing the data. That reluctance may be justified to the extent that those who think they are feeling the pain really are feeling some pain. What it suggests is that Jamaicans may need to experience a bigger positive shift for people to be convinced that things have moved forward.

By contrast, Barbados has developed a mindset that seeks to keep prices under control (even price fixing) and wage negotiation arrangements that do not allow for a lot of large increases. The country may be more sensitive to small movements in prices and growth so reacts more speedily if it appears to be headed in the wrong direction.

Now, if a politician or technician wanted to make the case for a major change in economic policy, for example, to change the exchange rate policy, it would not be a series of arguments that would stand or fall on their technical merits. An economy is full of moving parts and where it stands now is where it has reached after adjusting to the various winds of policy changes (domestic and international, determined by humans) and natural events (originating within the country or outside). Even if you looked at the outcome of those two types of things you can see that there are many possible positive and negative outcomes. Also, people's experience with a floating exchange rate tends to lead them to believe that a fixed rate cannot be sustained--the country has had a hard time holding the rate stable for any sustained period. Those who say that the movement of the exchange rate is reflecting the real economic situation may also believe that the rate has a way to go before it can reach a stable level. Those who are committed to a fixed exchange rate will show all the merits and benefits that seem to have flowed from having that.

Because experimenting with policy is difficult, we often have to look at the experience of those who made different choices. So, for Barbados and Jamaica, people often look across the Caribbean and see a 'success' (Barbados) and a 'failure' (Jamaica) and attribute that to a certain policy stand.

But good policy choices can also turn out bad. I worked in two of the Baltic countries--small countries with no natural resources but highly educated populations--some 15 years ago (Latvia and Estonia), when they were moving from being a part of the Soviet Union to become independent nations in the mid-1990s. Put simply, each country decided to fix its exchange rate; one decided to do so in a fairly conventional way (Latvia using the Special Drawing Right [SDR] as its peg, initially), the other (Estonia) decided to have a currency board, whereby the rate is fixed and the country holds at least an amount of foreign exchange to cover a certain amount of domestic currency that is in circulation. Each choice depended on following some rules about how policy should be conducted, and relied much on controlling the government budget. Both countries wanted to become members of the European Union within a decade. Each liberalized its economy and made it easier for foreign investors. Both started to borrow abroad. Both grew very fast and saw inflation at relatively low levels.

I remember the discussions with each country in those early days. The Latvians thought that ' IMF policy proposals were 'too soft' and wanted to see more fiscal adjustment and faster; the mission urged caution. The Estonians were often told that a currency board would not work and the budgetary discipline was hard for a fledgling economy with many development needs; they would have none of that. Both countries tried to simplify their tax regimes, with single rates but rigorous enforcement, hoping to discourage evasion, and that broadly worked in raising government revenue. Both countries gained accession to the EU in 2004 (in the process, Latvia changed its peg to the Euro). They were viewed as economic 'rising stars'.

Then the world changed, and if we fast forward, we now see these countries on the brink of economic collapse and financial sector crises. The heavy reliance on foreign capital and borrowing is now turning sour. Investors in the form of western European banks are pulling out and the costs of borrowing have risen dramatically; the large deficits on the balance of payments current account are now becoming a major burden.

The economic problems have quickly been complicated by political crises and major protests by citizens in general and workers in particular as wage restraint policies were resisted. One of the countries, Latvia, has had to turn again to the IMF in recent weeks for emergency support of their 'stabilization' policies (see IMF press release). As is said clearly, 'The program is centered on maintaining Latvia’s exchange rate peg while recognizing that this calls for exceptionally strong domestic policies and substantial international financial assistance.' Latvia wants to maintain its currency peg and eventually adopt the Euro, but will have to endure some harsh measures for that to be possible. These include a tough incomes policy. The country will also try to protect social spending. Put together, the need for fiscal tightening brings the possibility that recession could be protracted. Then to add insult to injury, Standard & Poor's, the credit rating agency, downgraded the country's bonds to 'junk' status today (see report) – rare for a sovereign state – and said it may reduce its creditworthiness ranking for sister republics Lithuania and Estonia. It also said it may further cut Latvia's credit rating later this year or in 2010. Talk is now rife that the country may default on its debt. The PM resigned earlier this week. The EU is talking about needing to bail out the country. Aie, caramaba!

Estonia has so far not had to turn to the IMF but faces similar economic policy challenges (see IMF press release). It too wants to retain its currency peg and currency board, but will have to make some tough decisions in its 2009 budget as the current fiscal position is not viewed as sustainable, given a desire to adopt the Euro.

Both countries believe that they adopted the right path nearly 20 years ago, and so far discussion has not focused on reverting to another policy regime.

While you cannot set up an experiment with economic policy it is always a living experiment.

Rough days ahead are for these particular countries, but also rough days are ahead for Jamaica, Barbados and most other countries whatever choices had been made in the past.

Howzat? That's How It Is.

Test cricket is coming back to Barbados, and so too is a bit of chaos when trying to buy tickets. Today's Nation captures it well in words and pictures (see report):

'Three days before the start of the match, hundreds of fans turned up at the ticket booths at Kensington Oval, but many left annoyed after having to spend more than two hours in the line.'

So was it necessary for the scene to be the following? Long lines at Kensington Oval; multiple lines that then had to become one--with some ensuing disagreements; opening times not those advertised; 15-20 minutes to deal with each customer; etc. The reactions I have seen and heard from the cricket authorities suggest that they had one view about how many and who would buy tickets and will not accept that there was another way things could have been done. They are not having any responsibility for disorganization and not being prepared for a large demand just ahead of the matches. But why not another outlet for sales (the malls at Sheraton, Warrens, somewhere on the west coast, somewhere out near the east cost)? Why not the possibility of buying online or by mail for locals well ahead of the matches? They mentioned that arrangements had been made with tour operators to make tickets available in the UK ahead of travel, so that English fans would be ready to watch. But even a visit now to a web site showed the following:

• At the time of printing ticket prices have yet to be finalised by the West Indies Cricket Board. As soon as our ticket allocations have been confirmed we will contact everyone who has booked to advise the cost of your Test/ODI tickets. Test match tickets are sold to international supporters on a ‘season ticket’ basis, with no refund for unused tickets. One Day tickets are sold on a per match basis.

So, it seems that in the best circumstances, English fans would have been possible to commit funds for Test matches, on a see-or-lose basis, or buy for one-day matches. But I would be surprised if people were accustomed to buying this way.

Some friends told me how they endured two days of this chaos to get tickets for an uncle from Grenada. They are not cricket fans themselves and the last time they went to a match a riot broke out. These ladies have full time jobs. Why was the ticket sale window at Kensington closed at the weekend so that locals could more easily try to shop for the matches? When people talk about low productivity in the country they need to think about activities that waste working people's time. We the lessons of Cricket World Cup too hard to learn?

Many local people like to suggest that when things are done here they are far superior than if done elsewhere in the region. Oh yea? Why is the system so easily bowled out by these easy-to-read deliveries? I'm stumped that the 'planners' can drop the ball so easily. Time to go back to the nets and have a bit more practice. The mantra for things like this has been "That's how it is." Someone tried to tell me that it's part of the charm of living in the Caribbean. I retort "That's how you allow it to be."

Not Rumours Or Baseless Statements

The discussions about economic and financial issues is heating up, and it's getting very political very quickly. Some local commentators, notably The Barbados Advocate, has had a beef about remarks that it implies are reckless and baseless. People here are struggling to get a good handle on what is going on, and that is a recipe for heightened, not lessened, concerns. Almost on cue, comes a Lone Ranger.

The IMF is often reviled but one thing it does is look at economic and financial issues in depth and tends to do that for every member country, so has immense international expertise built up over decades. The IMF made its annual check-up visit to Barbados soon after the change of government last year (March-April 2008). Part of its mission's work was to prepare a 'Financial Sector Stability Assessment' for Barbados, and this was published in a 'timely' manner last week, on February 20 (see report). We need to note that the assessment was completed last summer, since when economic financial developments worldwide have worsened, and the region has been hit by two major financial headwinds with CL Financial's Trinidad operations needing a bail out and Antigua-based Stanford International Bank and its owner Sir Allen Stanford facing US$ 8 billion fraud charges by the US Securities and Exchange Commission.

Readers of the report will focus on different things. But, for me, the report flagged a pertinent problem as seen some 9 months ago. The reports says 'Barbadian financial system has proved to be resilient and, so far, has not been affected by the turmoil in mature financial markets'. But it sent out a salient warning for the insurance sector:

• The lack of adequate supervision of the insurance sector exposes the sector to material risks. Profitability and capital adequacy in this sector are difficult to assess due to incomplete and inadequate data. Single negative events may significantly damage the reputation of a jurisdiction in an increasingly regional and global market. Although the mission noted the introduction of on-site inspections, the sector remains largely self-regulated owing to continuing shortages of qualified staff, inadequate regulation, and out-of-date financial reporting. Greater cooperation and exchange of information, particularly with the authorities in Trinidad and Tobago, are necessary to facilitate effective assessment of financial soundness and the protection of Barbadian policyholders by the supervisor.

Key recommendations for the financial sector included:

For the banking sector:

• Strengthen cross-border consolidated supervision, including establishing a clear legal framework for the consolidated supervision of banking groups and enhancing home/host cooperation.
• Strengthen regulation and supervision for large exposures and related-party exposures, including setting up the regulatory aggregate limits on total large exposures and related-party exposures on a consolidated basis.

For the insurance sector:

• Develop standards on corporate governance, market conduct, internal controls (including asset and derivative controls, particularly in the case of the offshore market), asset and liability valuation, and a solvency standard for life insurers with a view to enhancing the observance of the IAIS principles.
• Improve the timeliness of supervisory returns, and redesign processes for onsite inspection, and offsite analytical support.
• Collaborate with the Trinidadian authorities in the supervision of larger cross-border groups.
  

In IMF-speak, they saw major problems in the fact that supervision was inadequate and that collaboration was weak between national authorities concerning enterprises that worked across their borders. Put a little less nicely, things were not really being taken as seriously as they should be and there was a certain parochial coziness that could facilitate some major problem.

I will let this report percolate a few days and see what is made of it.

Stormy Weather

I am going to tread lightly around the subject of financial calamity--though I guess that my choice of words already suggests that I have more concerns than feelings of comfort. Sunday's 'Brass Tacks' on VOB radio had a discussion about the regional and national impact of recent financial difficulties faced by financial enterprises in the region, particularly, CL Financial and Stanford International Bank. As I said on the radio, there are many things to discuss, and I kept my intervention to aspects of economic consequences that come from the importance as employers of the two financial groups and their significance also as lenders and takers of deposits to/from within the Caribbean and further afield. My good friend, Avi, had offered me some thoughts about the need for regional coordination and I left him to throw those out rather than steal his thunder. Some friends here, who are entrepreneurs, asked me some questions during the day about the level of understanding I believe politicians have about some of what is going on. I had to say that I thought that many did not have much of an idea, and that was not meant to be belittling; the area is fraught with aspects that even so-called experts find baffling. I have had a long career in international finance and I am discovering things everyday, and old understandings are constantly being challenged.

The early indications are that CL Financial's problems in Trinidad are local in origin to the extent that they are not a direct result of association with the problems with sub-prime mortgages or residential lending in the US or Europe but come from the impact of lower international energy prices on local projects financed by the group (especially in ethanol production). On the face of it, the CL Financial's balance sheet does not suggest that the financial problems swirling around the world's biggest banks are not the same as those rearing their heads in for that institution. Nonetheless, the implications for the local and regional financial scene are immense because the group has its hands and feet in many aspects of financial and industrial life and is intertwined in various forms throughout the region. It would be naive to ignore the importance of the group in financing government, not least through tax payments. What happens to it must be important and avoid its failure is understandable. If there is wider fallout than in Trinidad the situation could get very messy. The actions taken to date are meant to stave off the most obvious problems, but because of gaps in supervision and lack of certain timely data the real impacts may not become apparent for a while. It's with that optic that one should recall the recent indication from Trinidad's central bank governor that things are worse than initially suggested.

Stanford International Bank's problems appear to be the result of a man doing some dishonest things and pretending to be investing but doing nothing much else than fleecing people locally and internationally and putting up a great front as a financial hotshot who was doing safe things with people's money. But a scam of sorts was being played and many were suckered in by those good old con tricks: the good looks, the smart dress, the apparent fancy life style, etc. For Antigua, the immediate impacts run the risk of being as devastating as a major natural disaster. The Stanford group, both as a local banking presence and as an international banking operation was the main private sector employer. Stanford came to personify Antigua, not least because all of his 'belly' was out on show as you arrived at the airport. The known links with the government were very close and personal. What the freezing of Stanford assets may mean for government finances will soon become apparent; the taking over by the East Caribbean Central Bank of the local bank, Bank of Antigua, and reportedly consolidating the operations of other Stanford banks in its jurisdiction may be a shoring up operation but I wont guess where that may end. Already, those local or regional activities financed by Stanford are feeling the cold wind of clothes being blown to shreds: cricket (and whoever heard of a Texan who was crazy over cricket?) will be the immediate casualty and those who were responsible for getting into bed with Sir Allen may have many awkward questions to answer. Others who got political contributions, such as US politicians, are running fast to shed any sign of that money, and charities will be the immediate beneficiaries, though one has to wonder if they will have to repay the money after the SEC's fraud investigations are over.

I mentioned yesterday that some fall out from the wider international financial crisis is only now beginning to have its impact on Barbados and perhaps more of these effects are going to filter through in coming months. A Bajan tourism project has reportedly run into financing problems that may curtail or halt permanently its progress and reports indicate that two major banks that are in real trouble, Britain's Royal Bank of Scotland and Iceland-owned Kaupthing Singer and Friedlander, are behind the financing (see Caribbean NetNews report of February 21). The implications are not rocket science and should be no surprise. Once it has become clear that there is problem with a financier, for example, alternative sources are going to be approached and may come forward, but if they do not, then the reality has to be accepted. Governments have a tendency to feel that they have to fix everything, so in no time, they are stepping into business when they have no business in business. Politicians love taking credit but they also hate being pointed to as 'the problem', so intervention often happens too often as a form of butt protection, and few people like being the butt of criticism or the person to whom people point and say "But he/she could have done something."

The scurrying to shore up local and regional financial institutions shows that things can change fast. Barbados' central bank governor said a few weeks ago that problems would surface later rather than sooner; but later can arrive quickly (see Caribbean 360 report from September 2008). Winds can change rapidly, as we know this past weekend when they ripped the island.

Local financial officials face a huge challenge in the next few weeks to shore up financial institutions, retain public confidence, not wastefully engage public funds, let businesses work out their problems, and keep their political shirts on. We live in very interesting times.

All Together Now

One of my readers living in the UK wrote to me over the weekend lamenting the 'treatment' he was getting from an arm of the Barbadian bureaucracy. He got my attention not because of the honey that he poured all over me by saying how he loved my 'articulate blogs' (meaning that they meander or that they are wordily wise?), and that he woke every morning "looking forward to reading my] latest pearls of wisdom...from half a world away". Come on, now. Is this the stuff or what? Booyaka!

He had a fresh memory from my blogs about how difficult it was to get people in Barbados officialdom to give 'service'. He wants to do the decent thing: he has a job; he's got the girl; he's got the ring; he's got good intentions; he has the desire to make it a romantic occasion and 'seal the deal' in the lovely Caribbean--Barbados, to boot. He knows that there may be a few administrative hurdles to clear. But does he have what it takes to jump through the hoops of fire presented by 'Bimbu' (my term of endearment now for Bajan bureaucracy)? Does he have great balls of fire?

He has tried to inform himself of what needs to be done and knows that two people, hoping to get married, should present themselves at the Ministry of Home Affairs. With the power of the Internet at his finger tips, he asked them a simple question : "Do you need to make an appointment or do you just turn up and wait?" The poor boy: he got everything back, except the answer! So, in good polite fashion, wrote again: "Is it possible that someone could answer the questions I posed please?" He should have added 'pretty', but let's hope that that omission wont get him kneecapped. He could be forgiven for thinking that this experience was the written equivalent of encountering one of those interminable voice mail loops where you get taken for a long ride, accompanied by terrible music, when all you want to do is speak to a representative: "For English, press 1. Para espanol, dos. To hear your balance, press 3. For enquiries about payment, press 4. For all other enquiries, press 5. ... I do not understand your reply. For English...."

Well, he has that strong British phlegm and hopes to get married next time he visits Bim, probably in a month's time, when he hopes to continue his role as 'a great supporter' of the Holders Season. His hopes, however, now rest in the arms of the authorities, not those of his betrothed! If I could give him a wedding present, it would be to present the couple with the head of the official who sent him that useless reply.

People talk about the life blood of an economy and how in Barbados there is a need for that to flow better, in the sense that the country needs a greater appreciation of what it takes to satisfy the tourists or foreign visitors. Encourage them to have a great time here, and to spend freely and fully. But, like we taste on a near daily basis, those who visit often fall foul of the fact that the team is not all kicking the ball in the same direction. Part of the problem is that normal management headache, whereby parts of the organization do not see their objectives as the same as other units. We see it in the international financial crisis: banks need government bail outs, but their personnel departments are still spending money on junketing. Hello! I imagine that in Home Affairs the staff do not have a vision of themselves as 'tourist ambassadors'. But they are, and here is an example of how unwittingly the door to better tourism can be firmly slammed. Our man is an exception in that he WILL be coming, whatever.

Another way to look at what is going on, and needs to be appreciated, is to consider the rest of my reader's thoughts. He shared with me his concern about the economic downturn in the UK: "...people who should know keep telling me that the UK is about to go 'belly-up' ... I keep wondering why I didn't emigrate to Australia when I had the chance, although I might by now have got more than my fingers burned (if you'll forgive the cruel joke)...Well I'm still in the UK and I suspect that my next visit to Bim will be my last for some time, because of the way the financial winds are blowing..." A trip from England to Barbados is a luxury, and it is the sort of thing that people are thinking of chopping out of their lives, at least for a while. People love being in the Caribbean's warm water, but they are not going to put themselves into hot water to get that.

Further, I cannot speculate that this man ever wanted to come to live in Barbados, but as a regular visitor, there is a strong likelihood that in the right circumstances he would consider it. His frequent visits mean something. But, general financial considerations in his home country mean that he may become a permanent loss to these shores. He reflects what some of us have been warning: that the UK's economic woes will have significant effect on Barbados' tourism. But he also represents a possible permanent loss as someone who could have been a bigger economic player by coming to live and work here. Both things represent big losses. Thinking of 'Bajans first' when it comes to jobs misses the very simple point that an economy will grow with jobs of all types provided and taken by people of all types. This man is an entrepreneur and if he were captured then things could look better for a range of Bajans. You have to have a very odd view of economics to think that only 'national' things are of value.

The lessons of this episode are clear to me. There will be a happy ending. The man will get the bride and they will sail off into the sunset. I will make an effort to persuade the couple to visit Barbados again after their wedding, and I will put to them the idea of relocating here. I will paint as positive a picture of daily life as I can, and try to coax them that with several daily flights to Blighty they could be 'back home' quickly for a weekend's football watching or tennis at Wimbledon. It may be a hard sell to tell them that their money will go further here than in the UK. But, I will try to show that here is a better option than Oz. I wont suggest that the government offer the man some land to build a house or anything like that, but if is money is good and plentiful, someone might want to sweet up the boy a little. As Jamaicans say, "Dis a no likkle man we a talk bout. Is a big money man."

Government and public officials need to see better the big economic picture. Doing a job is fine but you have to figure out how bread gets into your mouth. Sitting behind a desk and tapping computer keys and shuffling paper is not what is really making this economy turn around. It's foreign visitors and foreign financial companies that drive much of the money flows. Sugar is sweet for the economy but it does not provide a lot of real juice. A broader set of people in the country need to realise that 'those foreigners' are their friends and providers. It may not be an easy message to put across, but keep discouraging the foreigners and see what will happen. If you want to believe that all the Bajans in all the world have enough money to keep this country afloat then dream on.

I Want To Be Me.

Yesterday an acquaintance posed to me her dilemma. She is a married woman of UK origin, who gained the privilege of Bajan citizenship several years ago. She married a Bajan. She has a Bajan identity card that carries her married name (let's call it 'Holding'), which is different from her maiden name. Most of her basic identity documents are in her maiden name (let's call it 'Petrovic'). She has a Bajan driver's license, that is now expired and needs to be renewed; it is in her married name. She tried to renew the driver's licence and have the name changed to her maiden name. Guess what? "Sorry, madam, we cannot do that because then the driver's licence would not match your ID card."

My solution was to just apply for a new driver's licence. My guess, and I am always happy to be proved wrong in such things, is that the ID card, but this time using older documents like the UK passport to have the maiden name recorded. Then, go and get a new driver's licence, which will carry the maiden name and match the ID card. My guess, is that there is not a record that will show that she has an ID card already and a match of her photo (and that can always differ from the person presented due to the grace of time).

I wont go on here about the social silliness of women changing their names when they marry, and also arguing that they are not 'property'. I like places like Scandinavia where a woman rarely changes name due to marriage. Or places like Iceland, where names are patronymic (or sometimes matronymic) and they reflect the immediate father's (or mother's) given name and not the historic family lineage. So, a boy may be Jan Petersson (his father was Peter), and a girl carries the father's name and the fact that she is a daughter, so Ingrid (Peter's daughter) is named Ingrid Petersdottir. When Jan marries, his children will be Jansson or Jansdottir; when Ingrid marries her name does not change but her children will probably carry their father's given name (though it could be her given name). The Icelanders, living on an island of only 160,000 people, seem to be able to survive this. First names that have not been previously used in Iceland must be approved by the Icelandic Naming Committee before being used. In Iceland, directories of people's names, such as the telephone directory, are alphabetised by first name, not by surname. To reduce ambiguity, the telephone books go further by also listing professions. Icelanders tend to refer to each other by first names, even formally. To many non-Icelanders this may be a real challenge, and of course, Icelanders face a range of problems when they travel abroad. But, it is forever clear who you are and what you are called.

Those of us who have tried to move from certain social traditions with family names and have wives who sought to compromise by having double-barrelled names know the fun and games of a mother having a certain surname and child carrying a different name: eyes roll, and questions get asked such as "Are you married to the father of the child, madam?" Some of us got cute by including the mother's maiden name as the child's last given name so that their name sounds the same as the mother's double-barrelled name. For example, I may be called Brian Smith. My wife, Sandra Fuller when I met her, could be called, Sandra Fuller-Smith after marriage. Our son could be named Colin Fuller Smith (or C.F. Smith).

In the Caribbean, the obsession with family names makes so little sense for those of us with African origins given that we had these given by slave owners and overseers, and they have little bearing to any true family lineage. All of those Innises who band together and think they are different from Worrells and Holders, without having little idea if indeed their ancestors might all have sprung from the loins of a common mother some 400 and more years ago. We so love taking what the Europeans told us to take and running with it as if it is our own, and doing little that really makes sense for who and where we really are.

But, we know that bureaucrats love rules and we often fall foul of rules not meeting the simple needs of people.

Have a blessed and wonderful day.

I Spy Strangers

You know that you have an audience when one of the readers complains that you have not written about their latest doings. Well, blow me down if this morning I did not get a nice rollicking from an unexpected quarter, when my older daughter asked "Why have you not featured my pending visit to Barbados on your blog?"

Well, consider it done, dear, as you now wing your way from the ice pack known as Canada, through the new promised land of Washington DC, and on again via the Big Apple. You're coming for 'study leave'? I am not sure what you will study in the few days here.

When you arrive you will get a swell welcome: there are high winds and red flags have been posted on many beaches to tell us that it is not safe for swimming or bathing. Surfers
are coming out of the woodwork like skiers in Washington when there is an inch of snow. "Hang ten, dude!" When I talk about "flipping Barbados" I will mean for the next few days the topsy-turvy life of riding the waves not a new set of angst about life here.

The plans for the visit are my usual seat of the pants affair. You can have Jamaican patties for lunch--chicken, as the beef variety have to be registered or left at customs. Don't ask me why US raw beef can be imported and Jamaican cooked beef cannot. We will plan to have pudding and souse
and a nice lime later today. That should set you straight for the night. On Sunday we will try for jazz brunch at Naniki,which will make you feel that you are in the land of your grandfather in the Jamaican hills. Monday we will have lunch at Apsara--Thai or Indian, as suits your palette. As your other parental unit is off in the land of conch salad and sky juice, you will have to imagine her and that.

After that you will be ready to fly off again, like the other snow birds and get back to the hard grind of your degree.

Your little sister has decided that she cannot wait for your arrival so has gone off to play with a friend and will find you later this afternoon. She sends her kisses and wishes you a safe flight.

See you soon, Chick.
******
Editor's Note: The picture of souse is credited to Tarik Browne (see link back to the source page(http://www.flickr.com/photos/tarikb/36289445/).

Allegations, Allegations. Show Me The Allegators.

The past few weeks have been ones full of allegations, mainly about some sort of financial scandal, even if laced up pretending to be polititricks. Just from memory, we have had ex-Governor of Illinois, Rod Blagojevich, alleged to have tried to sell the vacant Senate seat of now-President Obama. The man, who prefers to be called "The Rod" not "A-Rod" is innocent until proven guilty.

Racing ahead, we have the current Senator of Illinois, Roland "The True" Burris alleged to have had conversations with at least the brother of then-Governor Blagojevich regarding the seat and being asked, and trying 'unsuccessfully' to raise funds for Governor Blagojevich. Now, Senator Burris testified under oath and everyone believed him, and he does not want his words turned into sound bites so is now refusing to speak to the press. It's alleged that "The True" was so besotted by the idea of becoming a Senator that he lost all consciousness of what was right and wrong and what he was doing while planning to storm Capitol Hill: "I will not be denied", he is alleged to have said. Allegations, only mind you.

We heard of a certain Bernard Madoff allegedly running a massive Ponzi scheme and fleecing investors of some US$50 billion. The latest news alleges that no trace of investments could be found for the last 13 years relating to how Bernie made off with the money. It is alleged that the US Securities and Exchange Commission (SEC) regulate many aspects of investment in the USA. Only an allegation, mind you; it's not necessarily true.

The same SEC are now riding like the Lone Ranger hunting for more badmen and accelerated their investigations into the alleged 'massive fraud' of some US$ 8 billion perpetrated by a certain Sir Allen Stanford, know to us in the Caribbean, especially Antigua, as "Al Our Pal". No criminal charges have been made against Sir Allen, once he was served papers in Fredricksburg (population about 20,000), alleged to be the Zurich of Virginia. Alleged, I stress. With Sir Allen's alleged billions and access to a fleet of private jets, one has to wonder why he holed up in the shadow of the Blue Ridge Mountains rather than hot tailing it to the island he owns or some other hard to find place.

With all of these allegations flying around some of the alleged wrong doers or unfortune ex-'masters of the universe' have found that even after allegedly pocketing billions of dollars after steering their companies to billion dollar losses, have found themselves lost for word. Some very funny statements have been overheard or allegedly overheard in recent weeks. Hence, one powerful man was heard to say, "Many claims have been made, and I know who are the allegators..." I am not sure if he was the same person who said "I have had a lot of sleepless nights in the past 24 hours..." But, it is alleged to be the same person.

The Caribbean islands have had more than their share of headlines in international news during this wave of allegations. It is alleged that a major financial institution, CL Financial Group, is in serious trouble. That allegation seems to have legs with the assets being taken over by the Government of Trinidad and Tobago, and exceptional support being offered by the Central Bank of Barbados. It is alleged that the problems besetting the group's Trinidad operations will not affect those in other parts of the region. Allegations, mind you.

We have heard that American sweet boy singer and dancer, Chris Brown, reacted badly to being told "Shut up and drive" and mistook the face of his 'friend', Rihanna (aka Robyn Fenty, born and raised in Barbados) for a punchbag and also bit his way out of that little bind. The pictures released (see TMZ site), if they are to be believed, leave no doubt about who is the alleged victim. Chris' face when last seen was still pretty and sweet; he is alleged to have booked a holiday in the island to make a 'get to know y'all and kiss and make up' tour. Alleged, I say.

And so it has been. The world is a zoo, sometimes, and now the allegators are running the show.

I Gine Help Wunna

I had to giggle today, when for not the first time someone heard me on the radio then commented that they could not understand easily how I spoke, saying that I "had an accent or something in my mouth". I have to admit that each time it sounds like, "Hoo dis ejyat, hoo cyan speek lik we?"

Now, given that the way I speak is more common than the way that most locals speak, the idea that I have an accent is amusing. However, I know that the reaction comes in part because of a lack of exposure to different modes of speech, and certainly not many different languages. When you live among a population of less than 300,000 you are unlikely to meet many very different accents, even if you have significant amounts of tourists visiting. It may be even harder to figure out what you are hearing if it does not sound like one of the nearby islands or countries with whose intonations you are familiar (say Trinidad, Guyana, St. Lucia or even Jamaica). It would sometimes be better if I spoke French because that way people would just accept that I speak a different language--if they realised that I was not speaking another variant of English--and if I said in English that I had spoken French they would probably shrug and think I was visiting from Guadeloupe or Martinique.

I have not mastered Bajan by any stretch of the imagination, and though I love saying things like "cheez on bred", I am picking up phrases as I go. I do a pretty bad imitation of a Bajan accent, and when I do it with my little daughter, she corrects me terribly.

Bajan is quite distinct from the dialects of other English-speaking Caribbean islands and countries. Many of the other Caribbean dialects are based on Irish- or Scottish-based English pronunciation mixed with West African words and phrases, and reflect the forced learning of a new tongue. Bajan, however, has the lilt of the dialects of the English West Country (Cornwall, Devon). Bajan has some similar traits with other Caribbean dialects, such as the dropping of the final t or d, so that words like 'what' end up sound like 'wha', but it nevertheless sounds different. It has a different cadence or melody, and to my ear always sounds like words are clipped short. That said, one of its endearing characters to me is the rounding and extending of certain words that would otherwise be short, so that 'pie' (apple or macaroni; pronounced as "peyi" by many English speakers) ends up being pronounced as "po-i-yee".

Anyway, as I am the newby, it's important that I understand the local ways of speaking and the phrases. I already wrote earlier this week about my close encounter of the vendor kind in Spry Street (see The Joys Of Urban Life And Art For Art's Sake). I wont offend by mimicking them too much in public, though.

Why We Need To Know About Politicians' Assets

A very good reason to argue for politicians to disclose their assets is to remove as much as possible the taint of possible conflicts of interest. I stress possible. More generally, one should have complete confidence that a politician's decisions are as neutral as possible. I hope that we are not so naive as to believe that politicians are not capable of being influenced. They are humans, not gods, and they have personal feelings that are both good and bad. They have friends and enemies. But, we want to feel a sense of assurance that these things come to bear as little as possible. Now, we know that politicians can be very partisan and it's bad enough to see a politician working to favour his/her party supporters in the constituency, while doing things to discriminate against those who favour or voted for the opposition.

The recent financial troubles befalling CL Financial Group's Trinidad operations and now the levelling of fraud charges amount to US$ 8 billion by the US Securities and Exchange Commission against Allan Stanford and his Antigua-registered Stanford Financial Group point to one aspect of the possible conflicts in our own back yard. To what extent are politicians personally tied to the ailing institution or those who run them? To the extent that such ties exist, how has it affected or will it affect political and policy decisions? The Antiguan government was very cozy with Mr. Stanford, and with elections now set for next month, that may have a very bad bearing on the outcome for the ruling party. Barbados' former central bank governor,is on the Board. With Mr. Stanford going AWOL (reportedly in St. Croix, US Virgin Island), the trail to find him and his assets may lead to some unwelcome doors. The parallels with the Madoff scam are immediate: steady returns (though by offering a 'certificate of deposit' such steadiness is less odd); using an obscure accounting firm (three men and no dog), called CAS Hewlett--originally run from Antigua--to check his books; claiming substantial analytical and research backing for investments, etc. Stanford's bank, fittingly some would say, lost money in the Madoff scam.

The public can ask legitimately the question, "If my politician is/has been the beneficiary of payments from company X (or its head), can I expect that politician to deal impartially with issues to do with company X (or its head)?" Or, very simply, "If my politician has substantial investments with company X, how do I determine that his/her actions are not motivated by self-interest?" In places like the US and UK, politicians are obliged to distance themselves from their investments or controlling interests, or at least be seen to do. This could come in the form of 'blind trusts', for example, which handle investments while the politicians' hands are supposedly freed of such control.

Former US Vice President, Dick Cheney, is an interesting study. He was Chairman of the Board and Chief Executive Officer (CEO) of Halliburton, a Fortune 500 company and market leader in the energy sector. Mr. Cheney resigned as CEO of Halliburton on July 2000, when he became vice president; he argued that this step removed any conflict of interest. Mr. Cheney's net worth, estimated to be between US$30 million and US$100 million, is largely derived from his post at Halliburton, as well as the Cheneys gross income of nearly US$9 million. However, Mr. Cheney had headed President Bush II's vice-presidential search committee in 2000, while still head of Halliburton. President Bush then surprised some by asking Mr. Cheney himself to join the Republican ticket. Halliburton's contracts with the US government during the Iraq war always raise questions about the links with Mr. Cheney, remembering that he had also been Secretary of Defence under President Bush I (in the 1990s). Awkward to say the least. Time (and the disclosure of currently classified information) will tell to what extent Mr. Cheney and his connections had a bearing on important decisions of the last Bush administration.

If I understand the workings of many administrative and legal processes, decision makers can recuse themselves when their discussion or decision has a bearing on a related company (or person). This is good, but is not easy to monitor if one does not know of asset ownership or relationships. Facts may come out later that could embarrass the decision maker. In the Stanford case, the list of political contributions has already led Congressman Charlie Rangel to offer to pay over US$ 10,000 to a charity, representing a contribution he received from Stanford. That gesture alone does not do all the washing needed to make Mr. Rangel clean, because there is still the question of what did Mr. Rangel do for Mr. Stanford, if anything, as a 'sign of appreciation' for the generous contribution?

As the Madoff and Stanford cases unfold many will try to be wise after the event and a host of actions will now seem to be clear signs of fraud or other wrong doing, but at the time they were either seen and ignored or not seen (see Bloomberg report on some of the 'creative' marketing of Stanford).

Americans, who were the main target as customers, are now alerted to the problems of investments with Stanford. For them, a good system exists for getting information disclosed and investigative procedures are very well developed. Very little will not be uncovered. In the Caribbean we are not so blessed. We have lots of sunshine but we rarely get good light to shine on controversial issues, especially if 'big people' are involved. Our deference is legend and our unwillingness to make people answer to obvious charges of wrong doing or irresponsibility is also legend: we will wait to see what comes from another Antiguan debacle in the form of the botch up over the cricket test match that had to be abandoned. A Japanese politician resigns for being accused of drunkenness at a recent press conference. Imagine a Caribbean politician doing the same. We do not see 'wrongness' the same as others.

As we in the region look at images of people in Antigua lining up to withdraw deposits from Bank of Antigua we may say "Oh, Lord, thank you for keeping my money safe." The indications are that our region's BoA (domestic bank) is not directly linked to Standford International Bank Ltd. (offshore), which is the focus of the US authorities' charges. The East Caribbean Central Bank's Governor was quick to state that BoA is 'sound' and warned depositors to not precipitate problems by hastily withdrawing their funds (see Barbados Advocate report). Nevertheless, fear reigned and long lines formed to do just that, according to reports I have seen and heard. People reportedly flew to Antigua to hastily try to get their hands on their money. No Internet banking? An acquaintance of mine in Antigua, who is in property development, told me that he managed to get out all of his money; he was a lucky one as an asset freeze is supposed to be in place. In his words, "Waited from sunrise - 7 hours at Scamford bank to get money. I was one of the few that got through. This has been a long time coming, for those that watch international news it comes as no surprise, interesting that my actions were alerted from UK, and my exact dress was described in real time from those in UK. Scary! But thankful. Best n Bless."

It is interesting that the Venezuelan government was quick to take over the Venezuelan arm of Standford's bank as line formed of hopeful depositors wanting their money. Other Latin American governments have done the same and more may follow, given about half of the investors in Stanford were from that region, and Venezuelans alone invested some US$3 billion (see Wall Street Journal report). The drug money laundering charges now surfacing may be one factor behind this.

Who knows what really goes on in 'smoke-filled rooms' or gets discussed at the golf or tennis club, or is resolved in the bathrooms between people who are closely connected. When a friend who is also in a position of power calls a politician late at night, or any time, it is rarely just to check on what was eaten for dinner or what shirt is being worn. It's about something felt to be substantial. Where you have extensive record-keeping of officials' actions, as in say the US political system, there is a record of almost everything, so it's a wonder how a politician can hope to keep anything untoward hidden. We, again, do not have all of that paraphernalia. So, we need a lot more of the 'honour system'. Part of that is a willingness to say openly and honestly what is owned and how was it obtained; what is earned and for doing what, etc. Tom Daschle, who recently had to withdraw from nomination as President Obama's Secreatary of Health over unpaid taxes raised questions about himself too when people heard about the money he earned from consulting and speeches after losing his Senate seat. Former President Clinton had to disclose a lot of information about the funding of his foundations and his income sources in order for his wife, then Senator Hillary Clinton, to pass muster as nominee for Secretary of State. Was there a possible risk of the links with Bill being seen as intruding on American foreign policy?

Caribbean people like to keep their business private. We tend to bridle at what we see as 'meddling with our things'. Just look at the disgusted reactions when we are searched at Immigration and our distaste for people rummaging through our belongings. Cricket World Cup was as much a failure because of a lack of understanding of our intolerance for being searched, especially when we are 'convinced' that we are not hiding anything. That view tends to extend to a tolerance of our leaders keeping their business private, even if much of it is publicly known: "Yes, that's the big man's house. He built it for his sweetheart. Sure, his wife knows about how he's always fooling around with that other woman; look how the children have his nose. But you know how it is, man."

No politician should have anything to hide from the populace. If such a thing exists, then it must be a threat to the politician's good judgement. If he/she messes with underage boys/girls in public bathrooms and that is illegal then he/she better look out. If he/she consorts with prostitutes or criminals then he/she better be prepared to explain why there is unlikely to be any undue influence exerted by these nefarious relations. If moneys earned are for anything other than legitimate billable hours then let's hear why they are alright. No one should be immune from such questioning if they are public servants, and no amount of high dudgeon and running out of radio studios instead of answering the question will cut it. Sure, the declarations can be false, and we should do whatever we can to make that possibility less. Poor old Senator Roland Burris now has to reconcile what he said under oath with what he is now saying openly. The law will work its way, but the politician should avoid that having to be the only way that the public gets to see what is behind the person. Usually, if it gets to the legal stage then things are already sour. So, keep things sweet.

Jazzing It Up In Barbados

A Bajan expatriate living in London, England, John Stevenson, was made aware of this ‘informative’ blog by one of his Bajan mates and former classmates at UWI Cave Hill. John is a music journalist among other things. He was in Barbados last month for the jazz festival and thought that readers might want to have access to links to his articles on the festival.

The first piece, in the Daily Express, entitled 'Blunt Rocks Barbados!' (see http://www.express.co.uk/posts/view/83356/REVIEW-Blunt-rocks-Barbados-)is a brief general overview of the festival showing the Bajan audience reaction to British 'pop sensation', James Blunt.

The second article is part of his blog contribution to the 'excellent' Caribbean jazz blog, "The Woodshed" (see http://woodshedec.wordpress.com/2009/01/29/barbados-jazz-festival-2009-%e2%80%93-jazz-and). It argues, by way of a more detailed review, that festival organisers exposed the audience to the best of Bajan and West Indian musical talent this year.

I asked John to let us have an idea of his experiences as a Bajan living in Britain. He divides his time between freelance writing mainly about music for the Daily Express, eJazzNews.com, and Middle East magazine and occasionally broadcasting for the BBC World Service among others. He has been living in England since 2000 after stints as a radio show host, music journalist, and public relations associate in Barbados.

He also has a review piece coming out shortly on the memoir of Cuban American, Carlos Moore. He and his book 'Pichon' are now doing the rounds in the US press. The book argues that Cuban society is and has been institutionally racist toward its African-derived majority, and that for true transformation to take place there, the Castro administration must acknowledge this fact and institute genuine structures that establish racial democracy.

John is also doing a BBC Caribbean interview with Moore next week. In the 50th anniversary year of the Cuban revolution such a book is not only timely but quite sobering indeed.