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Thursday, November 6, 2008
Thoughts on ethinticity, nationality, immigrants and the Barbados economy
This is a long post. One that deals with, what I consider to be, a few sensitive topics. As such, I ask that readers try to keep an open (and tolerant) mind and always remember that there are two sides to a story (and that is what I'm attempting to present in this post), your side and the other persons side. Comments are, as always, encouraged and welcome.
Ethinticity
Earlier today, I was asked by someone if I had any issue with being called a 'coolie man.' It seemed, or so I was told, that someone else was called that today (because of their 'Indian' appearance) and that person apparently took offence. I almost laughed out when I was asked how I would feel, and when I was told why this person asked me the question to begin with.
The term 'coolie' or 'coolie man', is, from what I've experienced and over-heard over the years, how some Barbadians (and Caribbean people?) sometimes refer to (East) Indians. I've heard the term in passing, and in some instances, it has been directed towards me.
Wikipedia has this, among other interesting things, to say on the term 'Coolie':
"In Trinidad and Tobago the word is used as a slur by the entire population including those of Indian ancestry but is sometimes said self-referentially by some of the Indo-Caribbean population."
as well as:
"A contemporary racial slur for people of Asian descent, including people from India, Central Asia, etc."
My understanding (or misunderstanding), of the term is that it refers to the practice of Indians, who are usually now starting off, or even well established, that make a living by selling clothes, cloth and other items, door-to-door, using either a van, or a car. I know this 'first-hand' because this is how my father first started off when he came to Barbados eons ago. So long ago in fact that his driver's license has a sketch of a man in a top-hat sitting atop a horse buggy waving his whip to indicate the direction of his turn. LOL. As I was saying, these Indians, typically of Hindu and Muslim descent, would travel up and down Barbados (and still do to this day), offering their wares at affordable (i.e., real cheap) prices with attractive lay-away terms.
This is what my father did. He was a merchant. Over time, and with lots of hard work, he slowly progressed, growing the business and earning a good, honest, straight-forward living for himself and for his family. Working for oneself and being an entrepenuer is not the easiest and safest way to earn a living (it's much easier and safer working for someone else, the risks are transferred), but then again, my Dad made a choice to seek out, what he believed, was a far better life than what he (and my mum) left behind in India.
Back to the conversation I had with this person (second paragraph of this post). I said to them that it didn't offend me, because (IMHO) it depends (in some cases) in what context the term is being used, that is, is it being used in a derogative sense or otherwise? I suppose it is somewhat similar(?) to when people of African descent (i.e., black people) take offence whenever the 'n-word' is used towards them, especially when the person using the term is not black, or, of African descent. However, when both people are black, it seems to be okay to use the 'n-word'(?). Again, IMHO, this all depends on the setting of the conversation, i.e., is it being used in a derogative sense, or otherwise?
A long time ago, when I was a young lad and out and about, I'd go to a certain night-club and run into Barbadians (black and white) that I knew. In particular, there was a friend of mine (who happened to be a black Barbadian), and both of us, upon seeing each other, would loudly greet and embrace/shake each other's hand, as 'cousin this, or cousin that' (sometimes to the suprise of people around us, probably thinking how a black and an indian could be cousins).
The point being, I think, was that regardless of our colour, creed or station in life, we were human beings and were (are) good friends.
Nationality, Immigrants and the Barbados Economy
After I explained my position with regards to the 'coolie man' term, the topic drifted (I don't know how) towards the large number of Guyanese workers in Barbados (both legal and illegal) and non-nationals in general. I can't speak with any certainty with regards to actual numbers, but I do know that there are alot of Guyanese here (based on empirical observation).
There was the usual talk and voicing of concerns over the number of jobs that have gone to Guyanese (as well as other types of non-nationals and immigrants). In fact, one of the local blogs, Barbados Underground, writes frequently and passionately on the subject of immigration control. The comments on their blog posts are similar to what I heard discusssed today (i.e., that unchecked immigration is a problem, and that Barbadians are concerned, and rightly so, over their future, etcetera).
My position, I told them (i.e., the people that I was having this conversation with), was that I had little (if any) problem with Guyanese, or any other non-nationals. My fellow Barbadians, before you get upset, allow me to explain why:
0. Non-nationals (legal or illegal) should always try their best to obey and respect the laws of the land and its inhabitants. It is as if you are a guest in my house. You should not dis-respect me, nor my house, and in return, I will do my best to be a good host.
1. It would be hard for me to adopt a hard and fast position against immigrants and non-nationals since both of my parents were from India. Never mind the fact that I was born here, I 'cuss' and speak like a Bajan (the 'r-word' is my favourite) and I enjoy pudding and souse every Saturday. I'm sure there are still people here who would not consider me to be a true Barbadian (i.e., because I'm not black/African descent, or for some similar reason).
2. I asked/mentioned, innocently enough, if we (as Barbadians) adopt the attitude that we don't want non-nationals/immigrants (legal/illegal) taking our jobs, how do you think the rest of the World should treat us when we leave our sandy shores and seek out employment in the U.S., or the U.K. (or any other country for that matter).
3. When non-nationals and immigrants (legal or illegal) work in Barbados, they spend money in our economy. Someone in the discussion mentioned that this was not so, or something similar. Especially with Guyanese. It seems that they spend little money and live cheaply (and in extremely cramped quarters) while in Barbados and, that they send their monies back home.
Fair enough. After all, did Barbadians who worked overseas not send money back home to their families? Why shouldn't the Guyanese do this (or any other non-national?) If you are working overseas in a country where you have no intention of building a life outside of work, what motivation do you have to spend your money there on anything but the essentials? None, IMHO.
Furthermore, Guyanese, or not, you have to spend money while you are in Barbados. Maybe you'll spend it on rent, basic food-stuff, transport (i.e., bus fare), entertainment (bars, clubs, eating out). I find it hard to believe that a non-national/immigrant/Guyanese/Martian, can live in a country that is not their own and not spend a single penny (unless you've got a sugar daddy/momma). It is unlikely.
IANAE, but I think it would be very interesting to see what percentage of GDP(?) is generated by non-nationals. Maybe GDP (Gross Domestic Product) is the wrong economic indicator to look at. Let me use an example to see if I can explain what it is I'm interested in. Imagine you have a store selling items. You have two types of customers: male and female. At the end of the year, I want to know what percentages of males and females make up my total sales figure (this way, I can see who is contributing most to my bottom-line). Now, take that (poor) example and substitute males and females for nationals and non-nationals, and the store, for the economy of Barbados (mind you, there are non-nationals who are working illegally in Barbados and therefore it is difficult to measure their economic activity, heck, it may be difficult to monitor the legal non-nationals as well).
4. It may be a bitter pill to swallow for Barbadians, but like it or not, there are times when outside expertise is required (e.g., large and complex construction projects). Or, in some cases, when multi-nationals setup shop in Barbados, they may have a preference (or requirement) to bringing in one of their own people to manage the local outfit. In both cases, Barbadians may benefit indirectly via knowledge transfer. Workers from other countries may share important knowledge to our local workforce and this may be beneficial elsewhere. There is also the cultural exchange aspect, i.e., we learn something about the non-national's culture and they learn something about ours. This makes everyone better off (well, in theory anyway). Yes, physically we are an island, but intellectually (for lack of a better word), we do not have to be.
5. Barbados is not the only country with a non-national job problem (illegal and legal). Consider Mexico and the U.S., Mexico is a source of cheap and affordable labour. Mexicans go to the U.S. and, in some cases, do the jobs that Americans don't want to do, or, take the jobs because they provide their labour at a cheaper cost (and American businesses, like businesses all over the world, always seek to lower their costs). It's not that much different here in Barbados. Take it one step further. Consider China. They are now factory to the world. Not only are jobs going to China, but whole companies, too! Why? Because it's cheaper to manufacture/produce in China (mind you, the world also benefits from the 'China price' by way of cheap products). Look what happened when the U.S. started off-shoring IT jobs to India (it's cheaper and the workers there are just as skilled as Americans). Other functions are being outsourced as well (i.e., call centres and finances in some cases). Look at our tourism sector, what do you think will happen when the other Caribbean islands jump on this bandwagon and start luring away tourists to their islands (with similar physical environs but cheaper and more friendlier)?
The question is, how can Barbadians become more competitive, and, how can we sustain that competitiveness?
6. If we can't work out this immigration issue and come up with solutions (in terms of a better immigration/economic policies?), how can we ever expect the CARICOM and CSME to work? How can we have free movement of labour? Barbados is a small country, maybe there are other Caribbean countries where we Barbadians would like to work, but if we look at non-nationals in a negative light, how will they look at us when we go to work in their country? The tables may very well turn against us.
Points 0 through 6 looked at why I don't have much of a problem with non-nationals, however, permit me to try to consider the other side of the coin (remember, there are always two sides to an issue):
0. Despite the points above, it's a fact that non-nationals take jobs away from Barbadians. While there are some cases where this may be justified (i.e., experience and qualifications), there are others where it isn't.
1. Consider the brain-drain effect on Barbados if jobs go mainly to non-nationals. If I know that it is unlikely that I will find, what I consider, to be a good, decent job in Barbados (because I sense that the majority of jobs are going to non-nationals), I will do whatever it takes to go elsewhere and work (this includes studying and staying overseas). Why bother working here if there are no/little jobs available?
2. The un-checked influx of non-nationals (legal and illegal) also affects our society and culture. Negative and immoral beliefs, values and norms may be introduced into, and may spread through-out our Barbadian society. This has tremendous social impacts and may threaten our way of life. We may very well lose our identity as Bajans (Barbadians). Consider for a moment: in this day and age, have you ever wondered about what it means to be a Barbadian?
3. I mentioned this a few points above. We as Barbadians need to become more competitive. We need to take more risks. We need to look at our working lives as more than just working for someone else, or having a job for life. There's a time for that and there are also people who are content with that. To each his/her own. However, we need to encourage homegrown business leaders and be in charge of our own destiny. In this respect, I have the utmost respect (sorry for the redundancy) for the coconut water vendors plying there trade in the Warrens area. I'm sure it wasn't the first choice they had when they thought of running their own business, but the journey of a thousand miles begins with a first step (or something like that, right?).
4. What are we going to tell our children? How about: sorry, the jobs that you could've done are now being done (in some cases, cheaper and better) by non-nationals.
5. An interesting comment was made during the discussion (the original discussion that started all of this). N.I.S. contributions made by Guyanese (and therefore other non-nationals as well), will go with them if they return to to Guyana (or from whence they came). Is this the case? If so, doesn't it mean money leaving our country, and if so, I'd be interested to know in what currency it will be leaving Barbados in.
The pros and cons are numerous. The subjects of immigration and non-nationals are complex. The few items that I have listed above do not even even begin to scratch the surface, but it is a humble attempt at providing both sides of the issue(s).
In conclusion, I'd like to leave Barbadians with a question (and a rather fitting one considering that it is November, the month that Barbados celebrates its independence): where do we, as Barbadians (black, white, yellow, pink), want to go and what legacy do we want to leave behind for our children and their children?
Ethinticity
Earlier today, I was asked by someone if I had any issue with being called a 'coolie man.' It seemed, or so I was told, that someone else was called that today (because of their 'Indian' appearance) and that person apparently took offence. I almost laughed out when I was asked how I would feel, and when I was told why this person asked me the question to begin with.
The term 'coolie' or 'coolie man', is, from what I've experienced and over-heard over the years, how some Barbadians (and Caribbean people?) sometimes refer to (East) Indians. I've heard the term in passing, and in some instances, it has been directed towards me.
Wikipedia has this, among other interesting things, to say on the term 'Coolie':
"In Trinidad and Tobago the word is used as a slur by the entire population including those of Indian ancestry but is sometimes said self-referentially by some of the Indo-Caribbean population."
as well as:
"A contemporary racial slur for people of Asian descent, including people from India, Central Asia, etc."
My understanding (or misunderstanding), of the term is that it refers to the practice of Indians, who are usually now starting off, or even well established, that make a living by selling clothes, cloth and other items, door-to-door, using either a van, or a car. I know this 'first-hand' because this is how my father first started off when he came to Barbados eons ago. So long ago in fact that his driver's license has a sketch of a man in a top-hat sitting atop a horse buggy waving his whip to indicate the direction of his turn. LOL. As I was saying, these Indians, typically of Hindu and Muslim descent, would travel up and down Barbados (and still do to this day), offering their wares at affordable (i.e., real cheap) prices with attractive lay-away terms.
This is what my father did. He was a merchant. Over time, and with lots of hard work, he slowly progressed, growing the business and earning a good, honest, straight-forward living for himself and for his family. Working for oneself and being an entrepenuer is not the easiest and safest way to earn a living (it's much easier and safer working for someone else, the risks are transferred), but then again, my Dad made a choice to seek out, what he believed, was a far better life than what he (and my mum) left behind in India.
Back to the conversation I had with this person (second paragraph of this post). I said to them that it didn't offend me, because (IMHO) it depends (in some cases) in what context the term is being used, that is, is it being used in a derogative sense or otherwise? I suppose it is somewhat similar(?) to when people of African descent (i.e., black people) take offence whenever the 'n-word' is used towards them, especially when the person using the term is not black, or, of African descent. However, when both people are black, it seems to be okay to use the 'n-word'(?). Again, IMHO, this all depends on the setting of the conversation, i.e., is it being used in a derogative sense, or otherwise?
A long time ago, when I was a young lad and out and about, I'd go to a certain night-club and run into Barbadians (black and white) that I knew. In particular, there was a friend of mine (who happened to be a black Barbadian), and both of us, upon seeing each other, would loudly greet and embrace/shake each other's hand, as 'cousin this, or cousin that' (sometimes to the suprise of people around us, probably thinking how a black and an indian could be cousins).
The point being, I think, was that regardless of our colour, creed or station in life, we were human beings and were (are) good friends.
Nationality, Immigrants and the Barbados Economy
After I explained my position with regards to the 'coolie man' term, the topic drifted (I don't know how) towards the large number of Guyanese workers in Barbados (both legal and illegal) and non-nationals in general. I can't speak with any certainty with regards to actual numbers, but I do know that there are alot of Guyanese here (based on empirical observation).
There was the usual talk and voicing of concerns over the number of jobs that have gone to Guyanese (as well as other types of non-nationals and immigrants). In fact, one of the local blogs, Barbados Underground, writes frequently and passionately on the subject of immigration control. The comments on their blog posts are similar to what I heard discusssed today (i.e., that unchecked immigration is a problem, and that Barbadians are concerned, and rightly so, over their future, etcetera).
My position, I told them (i.e., the people that I was having this conversation with), was that I had little (if any) problem with Guyanese, or any other non-nationals. My fellow Barbadians, before you get upset, allow me to explain why:
0. Non-nationals (legal or illegal) should always try their best to obey and respect the laws of the land and its inhabitants. It is as if you are a guest in my house. You should not dis-respect me, nor my house, and in return, I will do my best to be a good host.
1. It would be hard for me to adopt a hard and fast position against immigrants and non-nationals since both of my parents were from India. Never mind the fact that I was born here, I 'cuss' and speak like a Bajan (the 'r-word' is my favourite) and I enjoy pudding and souse every Saturday. I'm sure there are still people here who would not consider me to be a true Barbadian (i.e., because I'm not black/African descent, or for some similar reason).
2. I asked/mentioned, innocently enough, if we (as Barbadians) adopt the attitude that we don't want non-nationals/immigrants (legal/illegal) taking our jobs, how do you think the rest of the World should treat us when we leave our sandy shores and seek out employment in the U.S., or the U.K. (or any other country for that matter).
3. When non-nationals and immigrants (legal or illegal) work in Barbados, they spend money in our economy. Someone in the discussion mentioned that this was not so, or something similar. Especially with Guyanese. It seems that they spend little money and live cheaply (and in extremely cramped quarters) while in Barbados and, that they send their monies back home.
Fair enough. After all, did Barbadians who worked overseas not send money back home to their families? Why shouldn't the Guyanese do this (or any other non-national?) If you are working overseas in a country where you have no intention of building a life outside of work, what motivation do you have to spend your money there on anything but the essentials? None, IMHO.
Furthermore, Guyanese, or not, you have to spend money while you are in Barbados. Maybe you'll spend it on rent, basic food-stuff, transport (i.e., bus fare), entertainment (bars, clubs, eating out). I find it hard to believe that a non-national/immigrant/Guyanese/Martian, can live in a country that is not their own and not spend a single penny (unless you've got a sugar daddy/momma). It is unlikely.
IANAE, but I think it would be very interesting to see what percentage of GDP(?) is generated by non-nationals. Maybe GDP (Gross Domestic Product) is the wrong economic indicator to look at. Let me use an example to see if I can explain what it is I'm interested in. Imagine you have a store selling items. You have two types of customers: male and female. At the end of the year, I want to know what percentages of males and females make up my total sales figure (this way, I can see who is contributing most to my bottom-line). Now, take that (poor) example and substitute males and females for nationals and non-nationals, and the store, for the economy of Barbados (mind you, there are non-nationals who are working illegally in Barbados and therefore it is difficult to measure their economic activity, heck, it may be difficult to monitor the legal non-nationals as well).
4. It may be a bitter pill to swallow for Barbadians, but like it or not, there are times when outside expertise is required (e.g., large and complex construction projects). Or, in some cases, when multi-nationals setup shop in Barbados, they may have a preference (or requirement) to bringing in one of their own people to manage the local outfit. In both cases, Barbadians may benefit indirectly via knowledge transfer. Workers from other countries may share important knowledge to our local workforce and this may be beneficial elsewhere. There is also the cultural exchange aspect, i.e., we learn something about the non-national's culture and they learn something about ours. This makes everyone better off (well, in theory anyway). Yes, physically we are an island, but intellectually (for lack of a better word), we do not have to be.
5. Barbados is not the only country with a non-national job problem (illegal and legal). Consider Mexico and the U.S., Mexico is a source of cheap and affordable labour. Mexicans go to the U.S. and, in some cases, do the jobs that Americans don't want to do, or, take the jobs because they provide their labour at a cheaper cost (and American businesses, like businesses all over the world, always seek to lower their costs). It's not that much different here in Barbados. Take it one step further. Consider China. They are now factory to the world. Not only are jobs going to China, but whole companies, too! Why? Because it's cheaper to manufacture/produce in China (mind you, the world also benefits from the 'China price' by way of cheap products). Look what happened when the U.S. started off-shoring IT jobs to India (it's cheaper and the workers there are just as skilled as Americans). Other functions are being outsourced as well (i.e., call centres and finances in some cases). Look at our tourism sector, what do you think will happen when the other Caribbean islands jump on this bandwagon and start luring away tourists to their islands (with similar physical environs but cheaper and more friendlier)?
The question is, how can Barbadians become more competitive, and, how can we sustain that competitiveness?
6. If we can't work out this immigration issue and come up with solutions (in terms of a better immigration/economic policies?), how can we ever expect the CARICOM and CSME to work? How can we have free movement of labour? Barbados is a small country, maybe there are other Caribbean countries where we Barbadians would like to work, but if we look at non-nationals in a negative light, how will they look at us when we go to work in their country? The tables may very well turn against us.
Points 0 through 6 looked at why I don't have much of a problem with non-nationals, however, permit me to try to consider the other side of the coin (remember, there are always two sides to an issue):
0. Despite the points above, it's a fact that non-nationals take jobs away from Barbadians. While there are some cases where this may be justified (i.e., experience and qualifications), there are others where it isn't.
1. Consider the brain-drain effect on Barbados if jobs go mainly to non-nationals. If I know that it is unlikely that I will find, what I consider, to be a good, decent job in Barbados (because I sense that the majority of jobs are going to non-nationals), I will do whatever it takes to go elsewhere and work (this includes studying and staying overseas). Why bother working here if there are no/little jobs available?
2. The un-checked influx of non-nationals (legal and illegal) also affects our society and culture. Negative and immoral beliefs, values and norms may be introduced into, and may spread through-out our Barbadian society. This has tremendous social impacts and may threaten our way of life. We may very well lose our identity as Bajans (Barbadians). Consider for a moment: in this day and age, have you ever wondered about what it means to be a Barbadian?
3. I mentioned this a few points above. We as Barbadians need to become more competitive. We need to take more risks. We need to look at our working lives as more than just working for someone else, or having a job for life. There's a time for that and there are also people who are content with that. To each his/her own. However, we need to encourage homegrown business leaders and be in charge of our own destiny. In this respect, I have the utmost respect (sorry for the redundancy) for the coconut water vendors plying there trade in the Warrens area. I'm sure it wasn't the first choice they had when they thought of running their own business, but the journey of a thousand miles begins with a first step (or something like that, right?).
4. What are we going to tell our children? How about: sorry, the jobs that you could've done are now being done (in some cases, cheaper and better) by non-nationals.
5. An interesting comment was made during the discussion (the original discussion that started all of this). N.I.S. contributions made by Guyanese (and therefore other non-nationals as well), will go with them if they return to to Guyana (or from whence they came). Is this the case? If so, doesn't it mean money leaving our country, and if so, I'd be interested to know in what currency it will be leaving Barbados in.
The pros and cons are numerous. The subjects of immigration and non-nationals are complex. The few items that I have listed above do not even even begin to scratch the surface, but it is a humble attempt at providing both sides of the issue(s).
In conclusion, I'd like to leave Barbadians with a question (and a rather fitting one considering that it is November, the month that Barbados celebrates its independence): where do we, as Barbadians (black, white, yellow, pink), want to go and what legacy do we want to leave behind for our children and their children?
Labels: Barbados, business, Caribbean, economy, ethinticity, life, thoughts
Friday, October 24, 2008
Thoughts on OPEC and petrol prices in Barbados
A long, long time ago (feels that way, doesn't it?), the price of a barrel of oil dominated the news. Then, the sub-prime/financial/economic crisis hit. Fears of a slowdown in the business/economic climate reduced demand for this commodity, and the price of oil fell from a high of $147 to around $63 (at the time of this post).
In Barbados, where petrol is pumped by the litre, prices are now $2.20 BDS per litre (1 USD = 2 BDS). This is the third drop in fuel prices in two weeks.
Low oil prices are obviously a 'bad thing' for OPEC (and oil companies as well). So, what does OPEC do? They cut back on oil production.
OPEC's position:
"The prices at this time, being affected by the financial crisis, (are) very low," OPEC Secretary-General Abdalla Salem El-Badri said. "We have to bring the prices up."
OPEC ministers decided to cut production by 1.5 million barrels a day because that is the amount of oversupply in the market, he said. The cartel's current production ceiling is 28.8 million barrels a day.
In announcing the cut, OPEC President Chakib Khelil said member countries had no choice but to slash production.
"What choice do they have -- see the oil price go down to the lower levels?"
OPEC cuts oil output to halt price collapse (CNN.com)
He may be right, but for the rest of the world, it's a bitter pill to swallow. Like it or not, they (i.e., OPEC and others), are operating 'for-profit' businesses.
Over the years, I learnt that businesses existed to make a profit (unless it's a non-profit organization where profit may not be the only/final goal). If the business (or any other activity), is not generating a positive return (not only in terms of money), for the person involved, then he should take his time, money and resources and invest them elsewhere.
This thought of mine was refined further during my finance classes and is essentially now: 'to create or maximise shareholder value.' Any activity in the business, no matter how small or large, be it directly or in-directly related to revenue generation, should adhere to this.
Back to OPEC. I am not defending OPEC, nor any other country, or commercial entity that produces/distributes oil. They have a product which is essential, in demand and, for the time being, doesn't face any major threat from substitutes (i.e., solar, bio-fuel, wind, etcerta).
Members of OPEC earn money from the sale of their oil and use it for, among other things, the development of their respective countries (i.e., infrastructure, education, health, security, etcetera).
On a related note, I wonder how much trade these OPEC members engage in with the rest of the world? In other words, they export/sell oil for money, this money can be (is) used to purchase goods and services that they themselves cannot produce (or don't want to).
So if you take away OPEC's oil revenues, or reduce them, it should, I think, reduce the amount and monetary value of trade that occurs between OPEC members and the rest of the world.
If this happens, could this not cause a problem for those countries that benefit (via trade), from OPEC's wealth? I mean a slow-down in business for the companies that produce and sell goods and services that end up (directly or in-directly), in OPEC member countries.
That's not good for the shareholders and employees of those companies. Nor is it good for the other businesses that provide services to those companies (the ones that depend on sales to OPEC members), nor is it good for the governments that depend on taxes revenues from those companies (and individuals) that then use those taxes to provide services (i.e., health, infrastructure, education, etcetra) to its citizens.
I'm grateful for the reduction in prices at the pump (it means I can spend my money on other things, which in turn generates business activity and benefits the local economy). Also, tourism is a major foreign exchange earner for Barbados, and here is where low oil prices help: there are only two ways to get to Barbados, either by sea, or by air. Both methods require fuel and high oil prices make it more costly for tourists to get here. High oil prices translate into high ticket prices and tourists may end up staying at home, or spending their money elsewhere.
In conclusion, I'm mindful that while high oil prices may not be good, there are usually two sides to any issue and in this case, I have to also wonder what 'high' is, and who is it not 'good' for? Everything, it seems, is relative. But what do I know? After all, IANAE (I Am Not An Economist). ;-)
In Barbados, where petrol is pumped by the litre, prices are now $2.20 BDS per litre (1 USD = 2 BDS). This is the third drop in fuel prices in two weeks.
Low oil prices are obviously a 'bad thing' for OPEC (and oil companies as well). So, what does OPEC do? They cut back on oil production.
OPEC's position:
"The prices at this time, being affected by the financial crisis, (are) very low," OPEC Secretary-General Abdalla Salem El-Badri said. "We have to bring the prices up."
OPEC ministers decided to cut production by 1.5 million barrels a day because that is the amount of oversupply in the market, he said. The cartel's current production ceiling is 28.8 million barrels a day.
In announcing the cut, OPEC President Chakib Khelil said member countries had no choice but to slash production.
"What choice do they have -- see the oil price go down to the lower levels?"
OPEC cuts oil output to halt price collapse (CNN.com)
He may be right, but for the rest of the world, it's a bitter pill to swallow. Like it or not, they (i.e., OPEC and others), are operating 'for-profit' businesses.
Over the years, I learnt that businesses existed to make a profit (unless it's a non-profit organization where profit may not be the only/final goal). If the business (or any other activity), is not generating a positive return (not only in terms of money), for the person involved, then he should take his time, money and resources and invest them elsewhere.
This thought of mine was refined further during my finance classes and is essentially now: 'to create or maximise shareholder value.' Any activity in the business, no matter how small or large, be it directly or in-directly related to revenue generation, should adhere to this.
Back to OPEC. I am not defending OPEC, nor any other country, or commercial entity that produces/distributes oil. They have a product which is essential, in demand and, for the time being, doesn't face any major threat from substitutes (i.e., solar, bio-fuel, wind, etcerta).
Members of OPEC earn money from the sale of their oil and use it for, among other things, the development of their respective countries (i.e., infrastructure, education, health, security, etcetera).
On a related note, I wonder how much trade these OPEC members engage in with the rest of the world? In other words, they export/sell oil for money, this money can be (is) used to purchase goods and services that they themselves cannot produce (or don't want to).
So if you take away OPEC's oil revenues, or reduce them, it should, I think, reduce the amount and monetary value of trade that occurs between OPEC members and the rest of the world.
If this happens, could this not cause a problem for those countries that benefit (via trade), from OPEC's wealth? I mean a slow-down in business for the companies that produce and sell goods and services that end up (directly or in-directly), in OPEC member countries.
That's not good for the shareholders and employees of those companies. Nor is it good for the other businesses that provide services to those companies (the ones that depend on sales to OPEC members), nor is it good for the governments that depend on taxes revenues from those companies (and individuals) that then use those taxes to provide services (i.e., health, infrastructure, education, etcetra) to its citizens.
I'm grateful for the reduction in prices at the pump (it means I can spend my money on other things, which in turn generates business activity and benefits the local economy). Also, tourism is a major foreign exchange earner for Barbados, and here is where low oil prices help: there are only two ways to get to Barbados, either by sea, or by air. Both methods require fuel and high oil prices make it more costly for tourists to get here. High oil prices translate into high ticket prices and tourists may end up staying at home, or spending their money elsewhere.
In conclusion, I'm mindful that while high oil prices may not be good, there are usually two sides to any issue and in this case, I have to also wonder what 'high' is, and who is it not 'good' for? Everything, it seems, is relative. But what do I know? After all, IANAE (I Am Not An Economist). ;-)
Labels: Barbados, business, economics, economy, life, oil, OPEC, thoughts, World
Thursday, September 18, 2008
Thoughts on Wal-mart, America and a poem
From 'China Inc' a book by Ted C. Fishman:
"Wal-Mart does not pay as well as many other retailers, but it is an embracing employer. Workers in the Pekin store range from the elderly to young people who have just entered the workforce. The company is famously forgiving of its workers' personal tastes outside work, and some of the younger clerks have rebel hairdos combed and pinned into a semblance of responsibility, their multiple piercings sparingly adorned. Some clerks are missing teeth, and some are unhealthily obese. The company is even known for taking on the mentally handicapped. In the aisles one meets workers who seen not to belong either because they are too bright or to slow, too antsy or too old, but Wal-Mart finds a fruitful place for them."
After reading that, I was reminded of a few important words that I had once read or had heard of elsewhere. A quick check via Google discovered what my mind was trying to connect Fishman's words with:
'The New Colossus' a poem by Emma Lazarus (Bartelby.com):
"Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed, to me:
I lift my lamp beside the golden door."
If one were to only read what Fishman and Lazarus said above, it almost sounds like Wal-Mart is America (in a very odd sort of way), doesn't it?
"Wal-Mart does not pay as well as many other retailers, but it is an embracing employer. Workers in the Pekin store range from the elderly to young people who have just entered the workforce. The company is famously forgiving of its workers' personal tastes outside work, and some of the younger clerks have rebel hairdos combed and pinned into a semblance of responsibility, their multiple piercings sparingly adorned. Some clerks are missing teeth, and some are unhealthily obese. The company is even known for taking on the mentally handicapped. In the aisles one meets workers who seen not to belong either because they are too bright or to slow, too antsy or too old, but Wal-Mart finds a fruitful place for them."
After reading that, I was reminded of a few important words that I had once read or had heard of elsewhere. A quick check via Google discovered what my mind was trying to connect Fishman's words with:
'The New Colossus' a poem by Emma Lazarus (Bartelby.com):
"Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tossed, to me:
I lift my lamp beside the golden door."
If one were to only read what Fishman and Lazarus said above, it almost sounds like Wal-Mart is America (in a very odd sort of way), doesn't it?
Tuesday, September 16, 2008
Thoughts on why the taste of your next Mudslide may be sliding
DISCLAIMER: IANAE, IANAB (I Am Not An Economist, I Am Not A Bartender)
(Mudslide picture from A cat in the kitchen blog)
Recently, after a weekend out in 'The Gap,' a friend of mine mentioned that the taste of his Mudslide wasn't what it used to be. For the record, I'm a beer (Heineken) and soft drink (Coca-Cola) man myself. Another friend joked that I might try to correlate high gas prices and the change in taste of said Mudslide.
I did, here's my theory:
High gas prices result in high prices in general (this we already know, e.g. increased costs of living). High costs of living force people to cut back on the 'non-essentials.' A cut back in the 'non-essentials' is as a result of people having less discretionary income (which is money left over after the essentials like food, clothing and shelter have been taken care of, as per this Wikipedia article).
Less discretionary income may mean that businesses including: nightclubs, bars and hypothetically, academically and purely for the sake of this arguement, Club ABC123 (not the real name of the establishment where the Mudslide was served), may face a slowdown in business.
A slowdown in business may result in Management of Club ABC123 seeking to cut costs and to reduce expenditure. One way of doing this is to reduce the amount of any 'expensive' ingredients used in my friends' mudslide (or to seek inferior but cheaper, substitute ingredients).
Any reduction in quality ingredients and/or a switch to inferior ingredients all result in a reduction in the taste/quality of my friends' mudslide (from the point of view of my friend).
But what do I know? Remember, IANAE & IANAB.
:-)
P.S., I'm planning to do a little 'research' which, if I can get my hands on the data, will look to discover if any relationship exists (or doesn't exist) between the amount of spirits (i.e., alchohol) sold by distributors/manufacturers, and the performance of the economy, in Barbados.
(Mudslide picture from A cat in the kitchen blog)
Recently, after a weekend out in 'The Gap,' a friend of mine mentioned that the taste of his Mudslide wasn't what it used to be. For the record, I'm a beer (Heineken) and soft drink (Coca-Cola) man myself. Another friend joked that I might try to correlate high gas prices and the change in taste of said Mudslide.
I did, here's my theory:
High gas prices result in high prices in general (this we already know, e.g. increased costs of living). High costs of living force people to cut back on the 'non-essentials.' A cut back in the 'non-essentials' is as a result of people having less discretionary income (which is money left over after the essentials like food, clothing and shelter have been taken care of, as per this Wikipedia article).
Less discretionary income may mean that businesses including: nightclubs, bars and hypothetically, academically and purely for the sake of this arguement, Club ABC123 (not the real name of the establishment where the Mudslide was served), may face a slowdown in business.
A slowdown in business may result in Management of Club ABC123 seeking to cut costs and to reduce expenditure. One way of doing this is to reduce the amount of any 'expensive' ingredients used in my friends' mudslide (or to seek inferior but cheaper, substitute ingredients).
Any reduction in quality ingredients and/or a switch to inferior ingredients all result in a reduction in the taste/quality of my friends' mudslide (from the point of view of my friend).
But what do I know? Remember, IANAE & IANAB.
:-)
P.S., I'm planning to do a little 'research' which, if I can get my hands on the data, will look to discover if any relationship exists (or doesn't exist) between the amount of spirits (i.e., alchohol) sold by distributors/manufacturers, and the performance of the economy, in Barbados.
Labels: Barbados, business, drinks, economics, fun, funny, humour, life, random, thoughts
Wednesday, September 10, 2008
Thoughts on OPEC, Oil and Economics
DISCLAIMER: IANAE (I Am Not An Economist)
(Image from Mr. Downling's Arabian Oil Page)
"So since the price of oil has finally dipped below $100, the OPEC group has decided to slow production of oil again. Thereby driving up the demand and making themselves more filthier rich than they already are..."
A snippet of an e-mail sent by a friend. His comments were in response to news of OPEC cutting output by 520,000 bpd (Yahoo! News)
And my response (anyone with an opinion or an economics background is strongly encouraged to leave a comment):
*DISCLAIMER: This is a lengthy e-mail.*
According to various business articles/publications, the fall in in the price of oil was largely attributed to the slowdown in the global economy (which I believe is still happening for a variety of reasons, including the subprime fiasco which was a result of bad/risky lending practices by financial institutions).
The same slowdown may have caused some (many?) businesses to cut back, or shelve plans for expansion, or to do without additional staff and so on, and so forth. Part of this expansion may be partly responsible for driving the demand for oil and its by-products. Less expansion may result in less hiring, which may result in less spending and consumption (by businesses and the public alike). This may end up coming full circle to less expansion all over again as businesses suffer due to an economic slowdown.
I believe, in general, that oil may/cannot keep on climbing in terms of price. It will be expensive, yes, in relation to previous prices, but there's a limit to how high it can go. If it gets very expensive, then demand will fall (taking price with it) and substitutes and/or alternatives may become more attractive (i.e., solar, bio, electric, or by simply reducing demand by reducing consumption through driving less and car pooling more).
To summarize (and bastardize) the Law of Demand: all things being equal, the higher the price of a good or service, the lower the demand for it. Of course one also has to figure in PED (Price Elasticity of Demand) and maybe YED(?) (Income Elasticity of Demand).
If demand doesn't change much for a product when the price increases, then the product can be said to be price inelastic (this product may be an essential item, like bread, oil, or even the newspaper, so even if the prices go up, people still buy the product because they consider it to be essential, like oil). If price changes (increase/decrease) and demand changes as a result (increaes/decrease), then the demand of this product is said to be price elastic, e.g. consumers may find another product, or do without it (e.g., if butter prices go up then, all things being equal, people may switch to margarine, if I remember an example I read somewhere correctly).
Getting back to OPEC, I *personally* think that if they wanted to get more for a barrel of oil, they should've increased production. An increase in production may, I believe, temporarily result in a price drop (as a result of the increased supply of product in the market). A cheaper price may cause an increase demand, which drives up prices and removes the excess supply until an equilibrium price is reached. Put in more practical terms (I think), The World (businesses, industries, people) upon seeing that oil prices have fallen (from an increase in product on the market) *MAY* rush back to their old levels of consumption (having forgotten the lessons of high oil prices to begin with).
In doing so, the World may end up shooting themselves in the foot. Increased demand for a product, especially one as scarce as oil, may drive up its price. A related example (maybe not the best) is the stock market in the U.S. and those tech/dot-com stocks. High demand drove the stock prices up to insane/unheard of levels (then the bubble burst and prices dropped). Real-estate (in Barbados for example), may also be similar. Prices are high because the market supports high prices (and obviously because land is finite, scarce resource). Take away the demand or whatever is causing the demand (say for example the culture that Barbadians must own a piece of the rock for financial security, or to pass on to their kids) and prices may very well drop (but not by an amazing amount because remember, land is a finite resource).
But what do I know? Remember, IANAE.
:-)
(Image from Mr. Downling's Arabian Oil Page)
"So since the price of oil has finally dipped below $100, the OPEC group has decided to slow production of oil again. Thereby driving up the demand and making themselves more filthier rich than they already are..."
A snippet of an e-mail sent by a friend. His comments were in response to news of OPEC cutting output by 520,000 bpd (Yahoo! News)
And my response (anyone with an opinion or an economics background is strongly encouraged to leave a comment):
*DISCLAIMER: This is a lengthy e-mail.*
According to various business articles/publications, the fall in in the price of oil was largely attributed to the slowdown in the global economy (which I believe is still happening for a variety of reasons, including the subprime fiasco which was a result of bad/risky lending practices by financial institutions).
The same slowdown may have caused some (many?) businesses to cut back, or shelve plans for expansion, or to do without additional staff and so on, and so forth. Part of this expansion may be partly responsible for driving the demand for oil and its by-products. Less expansion may result in less hiring, which may result in less spending and consumption (by businesses and the public alike). This may end up coming full circle to less expansion all over again as businesses suffer due to an economic slowdown.
I believe, in general, that oil may/cannot keep on climbing in terms of price. It will be expensive, yes, in relation to previous prices, but there's a limit to how high it can go. If it gets very expensive, then demand will fall (taking price with it) and substitutes and/or alternatives may become more attractive (i.e., solar, bio, electric, or by simply reducing demand by reducing consumption through driving less and car pooling more).
To summarize (and bastardize) the Law of Demand: all things being equal, the higher the price of a good or service, the lower the demand for it. Of course one also has to figure in PED (Price Elasticity of Demand) and maybe YED(?) (Income Elasticity of Demand).
If demand doesn't change much for a product when the price increases, then the product can be said to be price inelastic (this product may be an essential item, like bread, oil, or even the newspaper, so even if the prices go up, people still buy the product because they consider it to be essential, like oil). If price changes (increase/decrease) and demand changes as a result (increaes/decrease), then the demand of this product is said to be price elastic, e.g. consumers may find another product, or do without it (e.g., if butter prices go up then, all things being equal, people may switch to margarine, if I remember an example I read somewhere correctly).
Getting back to OPEC, I *personally* think that if they wanted to get more for a barrel of oil, they should've increased production. An increase in production may, I believe, temporarily result in a price drop (as a result of the increased supply of product in the market). A cheaper price may cause an increase demand, which drives up prices and removes the excess supply until an equilibrium price is reached. Put in more practical terms (I think), The World (businesses, industries, people) upon seeing that oil prices have fallen (from an increase in product on the market) *MAY* rush back to their old levels of consumption (having forgotten the lessons of high oil prices to begin with).
In doing so, the World may end up shooting themselves in the foot. Increased demand for a product, especially one as scarce as oil, may drive up its price. A related example (maybe not the best) is the stock market in the U.S. and those tech/dot-com stocks. High demand drove the stock prices up to insane/unheard of levels (then the bubble burst and prices dropped). Real-estate (in Barbados for example), may also be similar. Prices are high because the market supports high prices (and obviously because land is finite, scarce resource). Take away the demand or whatever is causing the demand (say for example the culture that Barbadians must own a piece of the rock for financial security, or to pass on to their kids) and prices may very well drop (but not by an amazing amount because remember, land is a finite resource).
But what do I know? Remember, IANAE.
:-)
Labels: business, economics, life, oil, OPEC, politics, thoughts, work, World
Monday, August 4, 2008
Four day weekend
In case you weren't aware, Friday (Emancipation Day) and today (Kadooment Day) were/are holidays in Barbados.
Monday, July 7, 2008
Competition in the distribution sector of Barbados: Good, bad or both?
DISCLAIMER: Insert usual IANA-type (I Am Not A...) disclaimers here as I'm in a rush (going to see Hancock tonight) and I want to post this before I forget.
By distribution sector of Barbados, I mean the companies that import the foodstuffs, groceries, etcetera, that we see on the shelves of our major supermarkets as well as the smaller shops.
In some(?) cases, these distribution companies also own and operate the supermarkets (an example of vertical integration at work here, folks).
After watching a bit of the budget this eve, it seems to me that The Government, as a result of the high cost of living, appears to be receptive and open to the idea of allowing foreign competitors to setup shop in Barbados. In addition, ownership of these outfits is to be kept independent from local entities in an attempt to, perhaps, avoid collusion/cartels(?). The aim here is that by allowing foreign entities into the market, competition will ensue and therefore drive down prices, thereby giving Barbadian consumers a 'break' or an 'ease.'
Now I'm a consumer, and I'm all for a 'break' and an 'ease.' No harm at all, none whatsoever. Or is there? This measure, I think, could very well be a double-edged sword, one that must be wielded carefully (or how about: there are two sides to every coin, or two sides to every issue, or the lesser of two evils? LOL).
Very quickly (as I'm running late for the show at the drive-in):
The Good:
Foodstuffs et al should be available (in theory), at competitive prices and in a wider variety, to the average Barbadian consumer. I for one am always happy to pay less. After all, I'm a Barbadian, we like that sort of stuff, but not at the expense of quality ofcourse. ;-)
The Bad:
Existing distribution & supermarket entities now faced with stiff competition from overseas competitors (who enjoy economies of scale), may be forced to compete on price in one way by reducing their costs.
Labour is a cost. Local companies may be forced to lay-off, or reduce staff levels (i.e., Barbadian employees) in order to reduce their costs, which in turn will (hopefully) allow them to offer competitive pricing in line with the overseas players. Alternatives to lay-offs may involve: reducing their profit margins or finding ways to increase the efficiency of their businesses so as to drive down costs.
Another negative aspect of foreign entrants is that if these foreign entities are a hit with the Barbadian public, and they start to make a profit for their overseas owners, where do you think these profits are going ? I'm no expert, but I guess that our Government will probably see a 'little something' in the form of taxes, duties, etcetera, but I think that the bulk of it will be heading overseas, to a parent company somewhere.
I'm sure that there are plenty of arguements and counter-arguements to what I've said, but this is simply a little food (pardon the pun) for thought. Remember, what do I know? IANA... ;-)
In conclusion, if I may offer one slight, insignificant, tiny, suggestion from little ol' me: If you're going to allow these foreign firms to setup shop in Bim, make sure that the majority of all staff hired (even the Management team), are Barbadians.
By distribution sector of Barbados, I mean the companies that import the foodstuffs, groceries, etcetera, that we see on the shelves of our major supermarkets as well as the smaller shops.
In some(?) cases, these distribution companies also own and operate the supermarkets (an example of vertical integration at work here, folks).
After watching a bit of the budget this eve, it seems to me that The Government, as a result of the high cost of living, appears to be receptive and open to the idea of allowing foreign competitors to setup shop in Barbados. In addition, ownership of these outfits is to be kept independent from local entities in an attempt to, perhaps, avoid collusion/cartels(?). The aim here is that by allowing foreign entities into the market, competition will ensue and therefore drive down prices, thereby giving Barbadian consumers a 'break' or an 'ease.'
Now I'm a consumer, and I'm all for a 'break' and an 'ease.' No harm at all, none whatsoever. Or is there? This measure, I think, could very well be a double-edged sword, one that must be wielded carefully (or how about: there are two sides to every coin, or two sides to every issue, or the lesser of two evils? LOL).
Very quickly (as I'm running late for the show at the drive-in):
The Good:
Foodstuffs et al should be available (in theory), at competitive prices and in a wider variety, to the average Barbadian consumer. I for one am always happy to pay less. After all, I'm a Barbadian, we like that sort of stuff, but not at the expense of quality ofcourse. ;-)
The Bad:
Existing distribution & supermarket entities now faced with stiff competition from overseas competitors (who enjoy economies of scale), may be forced to compete on price in one way by reducing their costs.
Labour is a cost. Local companies may be forced to lay-off, or reduce staff levels (i.e., Barbadian employees) in order to reduce their costs, which in turn will (hopefully) allow them to offer competitive pricing in line with the overseas players. Alternatives to lay-offs may involve: reducing their profit margins or finding ways to increase the efficiency of their businesses so as to drive down costs.
Another negative aspect of foreign entrants is that if these foreign entities are a hit with the Barbadian public, and they start to make a profit for their overseas owners, where do you think these profits are going ? I'm no expert, but I guess that our Government will probably see a 'little something' in the form of taxes, duties, etcetera, but I think that the bulk of it will be heading overseas, to a parent company somewhere.
I'm sure that there are plenty of arguements and counter-arguements to what I've said, but this is simply a little food (pardon the pun) for thought. Remember, what do I know? IANA... ;-)
In conclusion, if I may offer one slight, insignificant, tiny, suggestion from little ol' me: If you're going to allow these foreign firms to setup shop in Bim, make sure that the majority of all staff hired (even the Management team), are Barbadians.
Monday, June 2, 2008
Article: 'Will Soaring Transport Costs Reverse Globalization?'
A snippet from the article...
"Globalization is reversible. Higher energy prices are impacting transport costs at an unprecedented rate. So much so, that the cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today. In fact, in tariff-equivalent terms, the explosion in global transport costs has effectively offset all the trade liberalization efforts of the last three decades. Not only does this suggest a major slowdown in the growth of world trade, but also a fundamental realignment in trade patterns."
Sources:
Will Soaring Transport Costs Reverse Globalization? (CIBC World Markets)
"Globalization is reversible. Higher energy prices are impacting transport costs at an unprecedented rate. So much so, that the cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today. In fact, in tariff-equivalent terms, the explosion in global transport costs has effectively offset all the trade liberalization efforts of the last three decades. Not only does this suggest a major slowdown in the growth of world trade, but also a fundamental realignment in trade patterns."
Sources:
Will Soaring Transport Costs Reverse Globalization? (CIBC World Markets)
Labels: business, China, economics, life, news, oil, U.S., World
Wednesday, March 26, 2008
Monday, January 21, 2008
The Economist mentions elections in Barbados
The Economist, a publication (and website), that I try to read as often as possible, had the following to say with regards to the recently concluded elections in Barbados: (In bold are the bits that I found especially interesting, which as it turns out, made up the majority of their article)
"Barbados
Sweet success
Jan 17th 2008 | PORT OF SPAIN
From The Economist print edition
A change of power in one of the Caribbean's best-run and most stable democracies
IT WAS an all-night party in Barbados after the island's general election on January 15th. “Plenty change,” a Bridgetown bar-owner grinned, and he wasn't just referring to the mounds of cash he was counting. After 13 lonely years in opposition, three election defeats and a series of long-running party-leadership squabbles, David Thompson led his Democratic Labour Party (DLP) triumphantly back to power, with 20 of the 30 parliamentary seats. In the previous election, in 2003, it won just seven seats.
By American standards, the campaign was blissfully short. The election was called on December 20th, leaving just two lively weeks after the Christmas and new-year break to get the voters in. There is no great ideological gulf between Mr Thompson's party and the outgoing Barbados Labour Party (BLP). But from time to time Barbadians like to shake up the political scene. Although Owen Arthur, the BLP leader, was regarded as a good manager, people felt that he had become a little arrogant after his 13 years in power, and some of his party rather too comfortably settled.
Voters also fretted over rising food prices, cost overruns on a road project and property prices jacked up by villa-buying foreigners. Then there was a row over claims by the BLP that Taiwan had funded Mr Thompson's campaign in exchange for a promise of diplomatic recognition. This was hotly denied by the DLP, anxious to avoid a rift with China.
Barbados is one of the Caribbean's oldest and most stable democracies, consistently getting top-drawer rankings for its political and civil liberties. From 1639 an elected House of Assembly—not the British-appointed colonial governor—controlled the island's cash. The first mixed-race member, Samuel Jackman Prescod, won a seat in 1843. Universal suffrage eventually followed in 1951, and independence 15 years later. On a visit to the island in 1859 Anthony Trollope, a British novelist, found it irritatingly well run.
Barbados also tops all other Latin American and Caribbean countries in the UN Development Programme's human-development index. Transparency International, a corruption watchdog, ranks it second cleanest in the region, just behind Chile. In September unemployment hit an all-time low of 7%, down from a peak of 27% in 1993 when the DLP was last in power.
“Change” (of leadership) was the DLP's campaign watchword. The new government, which inherits an uncomfortably big public debt, equal to 88% of GDP, will have other changes to deal with, too. Important business decisions are increasingly likely to be taken in neighbouring Trinidad rather than Barbados. Many big local firms are already majority-owned by Trinidad shareholders. Now two Trinidad companies are fighting for control of Barbados Shipping & Trading, the island's biggest conglomerate.
Sugar, the economic mainstay until the 1960s, will lose its guaranteed European market by 2015, and is already suffering EU price cuts. Costs are among the world's highest, but cane keeps the landscape in good order. Shutting down sugar would dent the country's confidence, too. Mr Arthur had proposed a new $156m sugar factory, using cane for electricity and biofuel, and exporting pricey premium-brand Plantation Reserve sugar. The DLP called the plan a “mishmash”, but has yet to come up with a better one.
Meanwhile, the island's medium-sized independent hotels, the backbone of its tourist industry, are facing rising costs and increasing competition from cruise ships; some have closed. High oil prices will push up air fares this year. Further ahead, global (over)warming may cut the pulling power of Barbados's tropical beaches, now attracting over half a million tourists a year.
On the upside, there may be oil. In 2004 Barbados faced down Trinidad in a dispute over their maritime boundaries, and two years later won a big slice of seabed, which America's Geological Service believes may contain some generous deposits, though the waters are deep and the geology complex. A bid round for exploration rights, which has already sparked interest from several big oil companies, closes in April. Over to you, Mr Thompson."
"Barbados
Sweet success
Jan 17th 2008 | PORT OF SPAIN
From The Economist print edition
A change of power in one of the Caribbean's best-run and most stable democracies
IT WAS an all-night party in Barbados after the island's general election on January 15th. “Plenty change,” a Bridgetown bar-owner grinned, and he wasn't just referring to the mounds of cash he was counting. After 13 lonely years in opposition, three election defeats and a series of long-running party-leadership squabbles, David Thompson led his Democratic Labour Party (DLP) triumphantly back to power, with 20 of the 30 parliamentary seats. In the previous election, in 2003, it won just seven seats.
By American standards, the campaign was blissfully short. The election was called on December 20th, leaving just two lively weeks after the Christmas and new-year break to get the voters in. There is no great ideological gulf between Mr Thompson's party and the outgoing Barbados Labour Party (BLP). But from time to time Barbadians like to shake up the political scene. Although Owen Arthur, the BLP leader, was regarded as a good manager, people felt that he had become a little arrogant after his 13 years in power, and some of his party rather too comfortably settled.
Voters also fretted over rising food prices, cost overruns on a road project and property prices jacked up by villa-buying foreigners. Then there was a row over claims by the BLP that Taiwan had funded Mr Thompson's campaign in exchange for a promise of diplomatic recognition. This was hotly denied by the DLP, anxious to avoid a rift with China.
Barbados is one of the Caribbean's oldest and most stable democracies, consistently getting top-drawer rankings for its political and civil liberties. From 1639 an elected House of Assembly—not the British-appointed colonial governor—controlled the island's cash. The first mixed-race member, Samuel Jackman Prescod, won a seat in 1843. Universal suffrage eventually followed in 1951, and independence 15 years later. On a visit to the island in 1859 Anthony Trollope, a British novelist, found it irritatingly well run.
Barbados also tops all other Latin American and Caribbean countries in the UN Development Programme's human-development index. Transparency International, a corruption watchdog, ranks it second cleanest in the region, just behind Chile. In September unemployment hit an all-time low of 7%, down from a peak of 27% in 1993 when the DLP was last in power.
“Change” (of leadership) was the DLP's campaign watchword. The new government, which inherits an uncomfortably big public debt, equal to 88% of GDP, will have other changes to deal with, too. Important business decisions are increasingly likely to be taken in neighbouring Trinidad rather than Barbados. Many big local firms are already majority-owned by Trinidad shareholders. Now two Trinidad companies are fighting for control of Barbados Shipping & Trading, the island's biggest conglomerate.
Sugar, the economic mainstay until the 1960s, will lose its guaranteed European market by 2015, and is already suffering EU price cuts. Costs are among the world's highest, but cane keeps the landscape in good order. Shutting down sugar would dent the country's confidence, too. Mr Arthur had proposed a new $156m sugar factory, using cane for electricity and biofuel, and exporting pricey premium-brand Plantation Reserve sugar. The DLP called the plan a “mishmash”, but has yet to come up with a better one.
Meanwhile, the island's medium-sized independent hotels, the backbone of its tourist industry, are facing rising costs and increasing competition from cruise ships; some have closed. High oil prices will push up air fares this year. Further ahead, global (over)warming may cut the pulling power of Barbados's tropical beaches, now attracting over half a million tourists a year.
On the upside, there may be oil. In 2004 Barbados faced down Trinidad in a dispute over their maritime boundaries, and two years later won a big slice of seabed, which America's Geological Service believes may contain some generous deposits, though the waters are deep and the geology complex. A bid round for exploration rights, which has already sparked interest from several big oil companies, closes in April. Over to you, Mr Thompson."
Saturday, November 17, 2007
Coming soon to an airport near you: Williams Air(?)
(DISCLAIMER: IANAE, I Am Not An Economist)
(DISCLAIMER: IANAAIE, I Am Not An Airline Industry Expert)
(DISCLAIMER: IANAA, I Am Not An Accountant)
(DISCLAIMER: IANAP, I Am Not A Politician)
I'm going to go out on a wing here (a wing, get it? LOL) and make a bold prediction. I predict that within ten years (maybe less), the Williams brothers (Sir Charles O. Williams and Ralph 'Bizzy' Williams) will provide an airline service to Barbadians and eventually, Caribbean citizens as well.
What am I basing this prediction on? Have a look at today's Nation newspaper and you might see why (and possibly disagree with me). The front page headline, 'SIR CHARLES' WINGS,' gives details on the Williams' brothers plans to purchase their own plane to transport them and their employees across the region (for business meetings, etcetera).
The newspaper article starts off by landing a powerful blow square on LIAT's jaw. After all, when you have two of the region's most successful entrepreneurs identify and complain about the service and performance levels of your company, what do you expect to happen next?
Simple. They find a solution. In this case, they bought their own plane. Where some see problems, others, in particular the Williams' brothers, see opportunity. With their own plane, they and their staff should, in theory, be able to get around a lot more efficiently.
As for the costs, I'm sure they've done all of their homework. The plane, and associated expenses, will probably payback for itself within a few years in terms of the time and money saved in having to NOT depend on LIAT. Else, why bother purchasing a plane in the first place?
Savvy business people do not (usually) throw good money behind bad money, and if they do, it's only for a very short period of time. A airplane purchase is not a 'short time' kind of purchase. It's a major investment.
I'm also guessing that they will not treat the plane as a 'company vehicle,' so to speak. They'll setup a new, seperate company, let's call it Williams Air Inc., for the purpose of this article. This new company will charge the other Williams' companies for the use of the plane and related services.
For example, if Sir Charles wants to travel to St. Lucia, Williams Air will bill C. O. Williams Construction. Williams Air probably won't make a lot of profit (running a plane isn't cheap), if any at all, so it won't be paying a lot of taxes, but then again, remember, IANAA (I Am Not An Accountant).
Over time, WA (Williams Air) may not do as much travelling as it used to in its earlier days. Maybe the business interests of the Williams' brothers across the Caribbean may decline (doubtful). So, what to do with the airplane and all of the related bits? Ante up lots of cash, buy (or lease) another two planes and start a public airline.
In the past (if I remember correctly), Ralph 'Bizzy' Williams has spoken about an island-to-island ferry service. Why bother with a ferry service when you can offer an airline service? And with the Williams' brothers running the business as a PRIVATE concern (that is, no Government ownership) you can be quite sure that there will be no wastage, red tape and inefficiencies. It will be profit driven, as most private sector based enterprises usually are. It may even end up being a 'no frills' type airline, or one geared for executive travel only.
CSME (or the advent of it, as I'm not well versed on the subject) and the free movement of labour throughout the region may also be an incentive for a new, privately owned, airline. If, in theory, there is an increase in the flow of labour (and I mean skilled as well as unskilled) between the islands, then an efficient and affordable airline service will be an important requirement.
But then again, what do I know? I'm certain that there are dozens upon dozens of factors that I haven't even considered. As I stated at the begnning of this post: IANAE, IANAAIE, IANAA and IANAP.
:-)
(DISCLAIMER: IANAAIE, I Am Not An Airline Industry Expert)
(DISCLAIMER: IANAA, I Am Not An Accountant)
(DISCLAIMER: IANAP, I Am Not A Politician)
I'm going to go out on a wing here (a wing, get it? LOL) and make a bold prediction. I predict that within ten years (maybe less), the Williams brothers (Sir Charles O. Williams and Ralph 'Bizzy' Williams) will provide an airline service to Barbadians and eventually, Caribbean citizens as well.
What am I basing this prediction on? Have a look at today's Nation newspaper and you might see why (and possibly disagree with me). The front page headline, 'SIR CHARLES' WINGS,' gives details on the Williams' brothers plans to purchase their own plane to transport them and their employees across the region (for business meetings, etcetera).
The newspaper article starts off by landing a powerful blow square on LIAT's jaw. After all, when you have two of the region's most successful entrepreneurs identify and complain about the service and performance levels of your company, what do you expect to happen next?
Simple. They find a solution. In this case, they bought their own plane. Where some see problems, others, in particular the Williams' brothers, see opportunity. With their own plane, they and their staff should, in theory, be able to get around a lot more efficiently.
As for the costs, I'm sure they've done all of their homework. The plane, and associated expenses, will probably payback for itself within a few years in terms of the time and money saved in having to NOT depend on LIAT. Else, why bother purchasing a plane in the first place?
Savvy business people do not (usually) throw good money behind bad money, and if they do, it's only for a very short period of time. A airplane purchase is not a 'short time' kind of purchase. It's a major investment.
I'm also guessing that they will not treat the plane as a 'company vehicle,' so to speak. They'll setup a new, seperate company, let's call it Williams Air Inc., for the purpose of this article. This new company will charge the other Williams' companies for the use of the plane and related services.
For example, if Sir Charles wants to travel to St. Lucia, Williams Air will bill C. O. Williams Construction. Williams Air probably won't make a lot of profit (running a plane isn't cheap), if any at all, so it won't be paying a lot of taxes, but then again, remember, IANAA (I Am Not An Accountant).
Over time, WA (Williams Air) may not do as much travelling as it used to in its earlier days. Maybe the business interests of the Williams' brothers across the Caribbean may decline (doubtful). So, what to do with the airplane and all of the related bits? Ante up lots of cash, buy (or lease) another two planes and start a public airline.
In the past (if I remember correctly), Ralph 'Bizzy' Williams has spoken about an island-to-island ferry service. Why bother with a ferry service when you can offer an airline service? And with the Williams' brothers running the business as a PRIVATE concern (that is, no Government ownership) you can be quite sure that there will be no wastage, red tape and inefficiencies. It will be profit driven, as most private sector based enterprises usually are. It may even end up being a 'no frills' type airline, or one geared for executive travel only.
CSME (or the advent of it, as I'm not well versed on the subject) and the free movement of labour throughout the region may also be an incentive for a new, privately owned, airline. If, in theory, there is an increase in the flow of labour (and I mean skilled as well as unskilled) between the islands, then an efficient and affordable airline service will be an important requirement.
But then again, what do I know? I'm certain that there are dozens upon dozens of factors that I haven't even considered. As I stated at the begnning of this post: IANAE, IANAAIE, IANAA and IANAP.
:-)
