As my friends know, I have not suddenly changed nationality, but I will now ride with this new appellation for a while and see how it is to write and comment as one of 'us' not one of 'them'.
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Warning signs were present of downturn
BARBADIAN Economist, Dennis Jones believes that while for the most part the global financial crisis caught many people by surprise, there were warnings that such a downturn was very imminent.
In a recent interview with the Barbados Advocate, Jones, a former employee of the International Monetary Fund (IMF), said that warnings were sounded at least five years ago and that those making the predictions were considered as doomsayers.
“There were people who having analysed the financial situation in the middle of this decade, predicted that there would be a financial crash, and not everyone paid attention,” according to him.
He told the Barbados Advocate that these people, including economists and financial market analysts felt the crash was imminent given the way the world economy was moving along.
“However, the general feeling in the world back then was that such views were not the ones that foretold the future,” said Jones.
“So that when things started to go bad in 2007 for most people, it came as a surprise whereas for others who predicted the downturn it was a case of we told you so,” according to the Economist.
Jones pointed out that while some people in the financial world protected themselves while most people had protected themselves others saw the unfolding events people as a surprise.
“The majority of news reporting on financial situations tended to be positive since people preferred positive news to bad news,” according to him.
Several analysts including representatives of the International Monetary Fund (IMF) had cautioned that the large twin deficits -fiscal and current account – which had dotted the American economy were unsustainable.
However, the crash came when the two large housing market players Fannie Mae and Freddie Mack ran into financial crisis. This followed a number of other key financial institutions either folding or being propped up by huge capital injections and the rest is now history. A number of countries have fallen victim to the crash deemed as the worst since the global depression of the the 1930. Barbados is among them.
As to how long the crisis will last, Jones said he does not know. However, he acknowledged that that the tendency in “Barbados is for people to suggest that we endure some pain but not too much and not too long.”
According to him, “You cannot predict how long this is going to be because Barbados is not the master of its destiny.” (JB)
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