Fool Me Once, Shame On You. Fool Me Twice, Shame On Me

Several months ago, I wrote about some issues to do with the credibility of government and governing (search 'credit ratings', for example, and see Do Good Things Come To Those Who Wait? Economists Talk About Issues?). Much of that concern comes right back and hits me in the eye when I listen to what government spokespersons, mainly the Finance Minister/PM have been saying recently about things economic. I wont spend many words on them, because it appears to reflect much indecision, which has been costly, but just note the to-ing and fro-ing in four particular areas There's a reason to not spend too much time on the details of the Estimates that are now being thrashed over in Parliament, not least because they are estimates (and I know how to do that and it's more art at best than science), but also if the overall picture is a mess and unclear then what clarity can one get from the details that make that up? But looking at the problem areas where clear paths seem to have come and go like day and night.

Asset sales: First it was the plan to sell shares in BNB and ICBL to fund rebuilding/renovation of the QEH. Then it was talking about raising the governemtn ownership of BNB so that it could again become a 'national' bank. Then back we come to planning sell BNB and ICBL shares to fund QEH improvements. Is your head spinning yet. The Exorcist was a horrible movie.

Ratings downgrades and warnings and international borrowing: When Standard and Poor's made its downgrade of Barbados last November, one of the comments from the central bank governor was that Barbados was 'not going the route of borrowing on the international market, choosing to use less expensive sources of funding', and therefore concern about a worsening view from credit ratings agencies could be lessened. But here we are hearing from the Finance Minister yesterday that Barbados will go to the market to raise US$ 200 million at the maturity in June of a US$100 million bond. So, what was not a concern in the mind of the central bank governor may now be a concern as Barbados tests the international borrowing waters. But guess what? Several months ago concerns about high budget deficits and possible sovereign defaults was very muted, Since then, we have had the debacle of Dubai and very recently the greasy pole of Greece's financial and fiscal problems, and renewed talk that so-called solid sovereign borrowers like the UK and USA may see the loss of their AAA rating. Let's see what a welcome there is at the doorway for Barbados. If you want to think about happy ever after in the market place, remember The Beatles song, Oh-bla-di, Oh-bla-da, with 'Life goes on, bra. Lala, how the life goes on'.

CLICO/CL Financial: This is really something that may become a horror movie before our eyes. An unbelievable amount of time has been lost or wasted dealing badly with the affairs of this entity, and with about as much transparency as you get by looking through a wool blanket. During the Estimates debate the FM/PM told Parliament that the proposed sale of CLICO International Life has proven to be very difficult (see Advocate, March 16, page 3). I'm not really going to who has seen the Memorandum of Understanding between CLICO Holdings (Barbados) and the Ministry of Finance. If Parliament has not seen it then we have serious governance issues.

Supervision of nonbank financial institutions: The icing on the cake comes with the belated announcement/decision by the Supervisor of Insurance that CLICO and British American Insurance must now cease and desist from writing new policies and both be put under judicial management (see Nation report). Should have been done a year or so ago. You have a hole and don't know how deep it is and where it will hit water and you keep digging?