tag:blogger.com,1999:blog-5498961727602805543.post45459875561140122..comments2024-02-18T04:34:40.897-04:00Comments on Living in Barbados: Bread prices rise. So does hot air.Unknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5498961727602805543.post-5664899367391393652008-04-27T08:18:00.000-04:002008-04-27T08:18:00.000-04:00Not sure I would put a sports stadium in the same ...Not sure I would put a sports stadium in the same social goods basket as a hospital. I would hope that the decisions were well based in terms of cost-benefit analysis. I would also feel more comfortable if the decision makers shared what that analysis looked like so that over time we could see how it holds up.<BR/><BR/>On favourites, I really am trying to put out what I know not what I feel.Being an insider does not stop a critical outlook.<BR/><BR/>Countries like Barbados, who are not under programs so do not have to meet certain targets to get financial support from the IMF or World Bank have a lot of latitude to ignore advice.<BR/><BR/>We cannot go back and ask what might have been done by BLP had they won the election and were still in power. They now have the luxury of taking some free shots. That's politics so it's part of that game.Dennis Joneshttps://www.blogger.com/profile/07500715553200132089noreply@blogger.comtag:blogger.com,1999:blog-5498961727602805543.post-87215400395123281472008-04-27T07:15:00.000-04:002008-04-27T07:15:00.000-04:00Distinction in para 1 noted. I am not at all sure ...Distinction in para 1 noted. I am not at all sure that its being mindful of political context is perfectly aligned with the options menu the IMF sometimes offer patrons. But, as you say, à la carte decisions are for local policy makers to come up with.<BR/><BR/>Still, despite its apolitical aspirations, the IMF is already highly political. Like S&P and the WB, the organisation is widely held in such high, unquestioning regard by many Barbadians that when it says "reduce public utility supports" (for example) it is making a political statement - whether it likes it or not. Voters do take it into consideration and, depending on the prevailing political atmosphere may act accordingly. <BR/><BR/>Small aside on infrastructure. Why should the utility of stadia be judged primarily on its revenue generating capacity? Roads are not (yet). Nor are hospitals or libraries or museums or the police service etc etc.<BR/><BR/>But even casting aside social utility argument there is a (not readily quantifiable) case that Kensington has already indirectly generated significant revenues; and that over its life will continue to do so (particularly if WI manage to win more often).<BR/><BR/>The stronger case against it, I think, is really one of opportunity cost - bats vs butter.Adminhttps://www.blogger.com/profile/00276353486684443523noreply@blogger.comtag:blogger.com,1999:blog-5498961727602805543.post-85877646556732627652008-04-27T06:19:00.000-04:002008-04-27T06:19:00.000-04:00There is a popular misconception that the IMF does...There is a popular misconception that the IMF does not take politics into concern. It does. But that is different from trying to be political or influence politics in offering economic advice. The political context is very much in the minds, but it's a dimension for local decision makers to work with, and in that sense they have options to choose from.<BR/><BR/>There's a common adage, which is that it's better to borrow for investment than to support consumption. So, plying borrowed funds into a viable project should make more sense than using those funds to keep personal spending in tact. So, in principle: international airport (probably good); Kensington Oval (probably bad, as there seem to be few plans to make it revenue generating); cushioining oil price increases (probably bad).Dennis Joneshttps://www.blogger.com/profile/07500715553200132089noreply@blogger.comtag:blogger.com,1999:blog-5498961727602805543.post-68405686331731721622008-04-27T05:11:00.000-04:002008-04-27T05:11:00.000-04:00Hi Dennis. Love the blog, discovered via a friend....Hi Dennis. Love the blog, discovered via a friend.<BR/><BR/>Due respect etc but must chuckle a little at your last para. No political favourites but possibly a professional one: on leave or otherwise an IMF man is unlikely to publicly push back greatly on the quotes cited from his own institution.<BR/><BR/>Politics goes to the heart of the debt issue in Barbados (as it does in most things). And a frequently valid criticism of the IMF (and not only in Bds) is that it either ignores or under weighs these considerations when writing its prescriptions. It looks too often, rightly or not, concerned only with ends and not means.<BR/><BR/>Governments, of course, frequently go the other way - too much focus on means and not ends. <BR/><BR/>Now it may be that the prescription is this time the "right" one economically (insofar as there are rights and wrongs). Certainly it is one that, with a change of government, is politically implementable - the incumbents have enough electoral cover to place the pain-blame on the other side.<BR/><BR/>Yet the question I would ask (because the answer is usually an assumed positive) is was the debt taken on a Bad Thing and incurred with little thought of its consequences (as I think the delicate thread of argument running through your post suggests)?<BR/><BR/>Frequently the yes camp use the 'tomorrow's generations do not necessarily want to be carrying the debt created today' you refer to. Yet tomorrow's generation will be wanting good infrastructure (without getting into the politics - again - of what kind of infrastructure, sporting or transport). <BR/><BR/>And, although this is too frequently a concept spat out, it is right, in terms of both accounting and natural law, that the cost of a major capital investment is spread over its useful life such that its users (regardless of their generation) all pay their fair share.<BR/><BR/>One may have strong 'reflex' reservations about debt levels (albeit that but a third is externally owed): on that count the consensual electoral trigger has been pulled. And that is a good thing - which I say that firstly as a Barbadian, secondly as a BLP man.<BR/><BR/>But context is everything.<BR/><BR/>Cheers,<BR/><BR/>RawdonAdminhttps://www.blogger.com/profile/00276353486684443523noreply@blogger.com