S U M M E R
Good girl gone global
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State of the Union
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Good Girl Gone Global
Future Science
Central Bank of Barbados Governor, Dr. DeLisle Worrell reflects on 50 years of Barbadian Independence, achievement and excellence.
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Glamorous, talented and the consummate businesswoman, Robyn Rihanna Fenty, the little girl from Westbury Road, St. Michael Barbados, is now “sitting on top of the world.�
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WWW Generation
The advancement of internet technologies has completely revolutionized how humans interact with the world around them. From consumer patterns to educational requirements to job opportunities to entrepreneurial endeavours, we examine how the internet has shaped the outlook of Barbadian Millennials.
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Internationally recognised as a powerhouse for research and training, we explore the evolution of The Chronic Disease Research Centre (CDRC), which celebrates 25 years of being in existence next year.
A Man for all Seasons
Pioneer Man
Accomplished lawyer, senator, businessman, preservationist, philanthropist, author, and family man – at age 71, Sir Trevor Carmichael speaks about a life without regret and looking forward to the future.
Before Google, before Yahoo and before Bing, there was Archie. We explore the intriguing story of Barbadian Alan Emtage, the inventor of the world’s first search engine.
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With the Tide
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TOURISM! Is a word we hear everyday – but what does it really mean and how do we play our part? Professor Winston Moore attempts to break down the industry and look at how we are all intertwined in this business called tourism.
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Making Money
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Designing monetary notes is a fine art. From the colours palettes, to the portraits, to the often-unseen security details, Sherri Bishop, senior currency officer at the CBB, breaks it down for us.
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xcellence
OUR WATCHWORD
As we celebrate our 50th year of Independence, as Barbadians, we should remind ourselves that Independence means that the future of our country is firmly in our own hands. That future is exceptionally promising, but it will not happen unless we make it happen, and like all worthwhile objectives, realizing the vision will not be painless. Barbadians can be proud of the achievements made by their small island since 1966 and be confident of our future, because our development strategy is founded on policies that have been successful until now, based on the Barbados brand and the sources of competitiveness that we have established and maintained over many years. In going forward we should remind ourselves of the many examples of excellence of which Barbados can boast – world renowned hotels and restaurants, outstanding heritage properties, exceptionally talented and world renowned singers, musicians, writers and artists, highly ranked research institutions such as the Chronic Disease Research Centre, internationally renowned academics and professionals, homegrown international conglomerate firms, and many more. The exceptional achievements to date give us energy to tackle the difficult tasks ahead. Thus, it is with that in mind that we introduce you to this inaugural issue of Economic Insight.bb, a new Central Bank publication aimed at helping Barbadians from
Governor’s Message
all walks of life better appreciate their own and our country’s potential, and how each of us can best contribute to our individual and collective success. Our inspiration is the truly remarkable achievements of ordinary Barbadians, people you and I grew up with, friends we made in primary school, and people with whom we played sports. And so the theme of our first issue is Barbadian excellence. Our focus is on the examples of Barbadian exceptionalism that you may not have heard about, and about the untold aspects of genius of those you know well. The examples we have chosen are far more numerous than can be accommodated in this issue. Many others will be highlighted in future issues, even as the focus shifts to other themes. Economic Insight.bb invites our readers to spend a little time to reflect more deeply on the economic condition and the economic potential of ourselves and our country. The modern world is dauntingly complex and uncertain, and we Barbadians are of little consequence in the global scheme of things. Yet we have no choice but to make our way by selling competitively in that global market, to be able to afford our 21st century lifestyles. We know we can do that with great success, because that is precisely how we have reached our current, enviable level of prosperity. As you reflect on the contents of this and future issues of EI.bb, we trust you will be encouraged to do your part to ensure the prosperous future of our country.
Dr. DeLisle Worrell - Governor, Central Bank of Barbados
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elivering the 1996 Sir Winston Scott Memorial Lecture, Maurice Strong, a Canadian diplomat and famous environmentalist, made this very reassuring observation: “The exceptional achievements of Barbados in its first 30 years as a nation, are the product of the efforts and the qualities of an exceptional people...” Twenty years later, in a far more challenging international financial and economic climate, that quote is still very relevant, the only difference being that we can now proudly replace 30 years with 50 years - and it was with those words ringing in my ears, that I accepted the invitation from the Governor of the Central Bank of Barbados, Dr. DeLisle Worrell, to oversee a new magazine he had conceptualized, to remind Barbadians that the future of their country was “firmly in their hands”. His wish was that the first edition highlight some examples of Barbadian excellence which would remind Barbadians that their island does “punch above its weight” and that our past performance should give us the self confidence to tackle today’s unprecedented challenges. But that’s where the problem arose. There were so many examples of excellence and exceptional performance to choose from - world renowned hotels and restaurants, outstanding heritage sites, exceptionally talented singers, musicians, writers and artists, sports personalities, highly ranked research institutions, internationally renowned academics and professionals, home grown international conglomerate firms, and many, many more. It is the exceptional achievements to date and commitment to excellence together, that Governor Worrell believes, form the corner stone of economic and
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Editor’s Note
social development in Barbados and provide the energy and enthusiasm, that will allow us to tackle the difficult tasks ahead. As we look around, there are many joyful memories of Barbadian champions in various fields. But in the almost frantic ‘busy-ness’ of today, it is easy to miss, or even forget some of the examples of excellence of which we can boast. We obviously can’t capture Barbados’ exceptionality in a single edition, but this inaugural edition of Economic Insight. bb (EI.bb), is merely an introduction to some of those examples that may not be obvious at first glance. It is our examples of outstanding quality and talent that make us a distinctive people - put them all together and we will find that they are like stocks in a diversified and profitable portfolio of assets and investments. In subsequent issues, while we will remind ourselves of people and projects, individuals and ideas that make us stand out as an exceptional people, in the interest of objectivity and accuracy however, we will not ignore the things that have gone awry. Reality wouldn’t permit us to turn a blind eye to them. There are sectors which have gone off the rails and challenges which we have to overcome – but our history of overachievement should give us confidence that these challenges will be met with the usual self-confident and fearless response of the Barbadian people. We want this publication to stand apart – be different from other publications produced by the Central Bank that rely heavily on figures and economic terms. We want to appeal to a mass audience from all sectors – hence the dramatic illustrations. Our creative director Jonathan Reid, working alongside, photographer Jayrd Niles Morris and others, utilized his creative juices to help illustrate the magazine. The editorial team, spurred on by Governor Worrell, left no stone unturned and spared no time or effort to ensure accuracy, easy reading and attractiveness, while paying attention to detail. Without the untiring efforts of the editorial team - Novaline Brewster, Laurie Blackman, Sherri Bishop, Michelle Doyle-Lowe, Professor Winston Moore and Renice Bostic, the dream of this publication wouldn’t be a reality. I also wish to thank all of our contributors and Dale A. Christie Bourne, our production assistant. EI.bb undertakes the role of helping us to remember who we are. What is our true image. Our pride. Our industry. We look forward to your feedback, which is crucial if we are to make the second edition even better. Cheers
Roxanne Brancker
ontributors
PUBLISHER: Central Bank of Barbados
EDITOR: Roxanne Brancker
CREATIVE DIRECTOR: Jonathan Reid
DESIGN & LAYOUT Media Support International
EDITORIAL TEAM: Dr. DeLisle Worrell Novaline Brewster Laurie Blackman Sherri Bishop Michelle Doyle-Lowe Professor Winston Moore Renice Bostic Roxanne Brancker Jonathan Reid
PRODUCTION ASSISTANT Dale Christie-Bourne
PHOTOGRAPHY: Jaryd Niles-Morris Jody Forte
CONTRIBUTORS: Dr. DeLisle Worrell Sir Henry Fraser Professor Winston Moore Novaline Brewster Michelle Doyle-Lowe Sherri Bishop Laurie Blackman Renice Bostic Tony Best Hallam Hope Ricky Jordan Sherie Holder-Olutayo Amanda Lynch-Foster Trevor Thorpe Niel Harper
EI.bb is produced by the Central Bank of Barbados. Every care has been made to ensure that the information contained within this magazine is accurate, however the Central Bank cannot be held responsible for any consequences that may arise from any errors or omissions. Reproduction in whole, or in part, without written permission, is strictly prohibited without explicit permission from the Publisher.
Telephone: 246-436-6870 email: communication@centralbankorg.bb or themsiagency@gmail.com
DISTRIBUTION:
Central Bank of Barbados P.O BOX 1016 SPRY STREET BRIDGETOWN Online: www.centralbank.org.bb
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Inspiration
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CENTRAL BANK OF BARBADOS GOVERNOR, DR. DELISLE WORRELL, EXAMINES 50 YEARS OF BARBADIAN ACHIEVEMENT. 10
BARBADIANS
approach the 50th anniversary of our country’s independence at a very challenging time for our economy, and indeed for the Caribbean and the world economy in general. It is, at the same time, an era of seemingly limitless possibility, thanks to technological breakthroughs and new global electronic communications that have truly made the world everyone’s oyster. Barbadians have every reason to celebrate our country’s extraordinary achievements over the past 50 years and more, not out of a spirit of triumphalism, but because our past performance gives us the self-confidence, the energy and
Analysis
the enthusiasm to tackle today’s unprecedented challenges with a steadfast determination to make for ourselves an even more successful future than what we, as a country, have so far achieved. In the article that follows, which is excerpted from a chapter that will appear in a volume of essays edited by Senator Sir Trevor Carmichael later this year, I document our very considerable economic progress in my lifetime, I speak to the challenges our country faces, I conjure a vision of Barbados’ exciting potential, and I conclude by expressing confidence in our future, so long as we absorb the lessons of our past successes and failures alike.
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BARBADOS 2016 is an internationally competitive economy with a high standard of living, a commendably egalitarian distribution of income, strong financial and commercial institutions, and very sound infrastructure, utilities and communications, by international comparison. Moreover, the country has developed a highly effective framework for economic policy, which has succeeded in maintaining the exchange rate peg through sustainable market-friendly policies, and has contributed to the economic resilience of the country. Barbados has been buffeted by international economic forces to an extent similar to its larger Caribbean and Central American neighbours, but has outperformed them for the most part, thanks to its resilient policy framework. Barbados is second only to the Bahamas in the Caribbean and Central America in terms of our standard of living, as measured by the United Nations Development Programme’s Human Development Report 2014. The report, which is the most comprehensive assessment of standards of living available for most countries, ranks Barbados as having high human development, on par with Trinidad and Tobago and Antigua and Barbuda, on the basis of the purchasing power of the average Barbadian’s income, and our indices of health and educational achievement. The national income per person (irrespective of age or working status) purchases almost US$14,000 worth of products and services each year; for a family of four that amounts to US$56,000 per year in total. Clearly, the majority of families do not earn that much; the average includes the very wealthy as well as the very poor, and there remains a preponderance of single family households in Barbados, so the actual amount spent by the average Barbadian family is much less. However, the average does indicate that the typical Barbadian family has the means for a decent quality of life. Life expectancy at birth in Barbados and the Bahamas is about the same, at 75 years; in Antigua it is a little higher, at 76 years. Trinidad lags in health indicators, however, with life expectancy at birth of only 69 years. By way of comparison, Japan records the highest life expectancy at birth of any country (almost 84 years), Singapore and Canada about 82 years, and the US 79 years. With respect to education, Barbadians are expected to benefit from 15 years of schooling, compared with 13 years for the Bahamas and 12 for Trinidad and Tobago. This compares with almost 20 years in Australia, the highest, 16 years in the US and 15 in Canada. The Human Development Index (HDI) data bear out the common observation that the lifestyles of teachers, policemen, accountants, mechanics and hairdressers are very similar in Barbados, New York and London, and the same is true for any profession or occupation.
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HOUSING
Housing conditions and household amenities of the average Barbadian household are also on par with industrialised countries. The 2010 Population and Housing Census reports that 45 percent of homes in Barbados have five rooms or more, and 93 percent have two bedrooms or more. Overcrowding, where there are more than three persons to a bedroom, was reported in only 6 percent of all homes. There is 100 percent use of gas or electricity for cooking; only one percent of homes lack running water, and only 8 percent do not have a water toilet. Ninety six percent of households own stoves, 94 percent have refrigerators, 69 percent have washing machines, and 49 percent have water heating, which is a luxury in a country where temperatures seldom fall below 24 degrees Centigrade. In 2010, in the early years of cellphones, 47 percent of households were already on the internet, and 74 percent relied on fixed line telephones. Over half of all households (52 percent) owned at least one private vehicle. The economy is very competitive, by international standards. Barbados ranks first among seven Caribbean countries included in the Travel and Tourism Competitiveness Report 2015, published by the World Economic Forum, the body which hosts the famous Davos conference in January each year. The Forum’s measure of competitiveness is a comprehensive one, taking account of all the factors that influence potential investors’ decisions. Barbados’ strongest showing is in the quality of its health facilities and the quality of water and sanitation services. It is an area where the Caribbean scores high marks, by international comparison, and even so Barbados outshines its Caribbean rivals. Barbados has built its reputation on its high end tourism services, going back 100 years or more, when tourism was the exclusive privilege of the very wealthy. This island was among the places the privileged classes of Great Britain and North America spent their winters, and where they came for health reasons. In making the transition to more popular tourism in the past 50 years, Barbados’ tourism services continued to be biased towards the higher income levels, by offering superior amenities at higher prices, with more local value added and greater benefit to the economy.
GLOBAL RANKINGS
Overall, Barbados scores well in the global rankings with respect to the factors that make countries attractive as magnets for inward investment. The World Economic Forum has developed a composite index of competitiveness which takes account of the following factors: the depth and reach of social and political institutions, the development of infrastructure, the macroeconomic environment, higher educational achievement, the efficiency of markets for goods and services, the efficiency of the labour market, the development of the financial market, the country’s readiness
for technological change, the size of the domestic market, the degree of business sophistication, and the degree of innovation. In the category of institutions, Barbados is seen as offering a secure environment where the rule of law is well established, organized crime is low and property rights are well protected. Under the heading of infrastructure, Barbados scores well for its telecommunications, airline connections, and its electricity supply. In the goods market, the report finds evidence of strong domestic competition, a welcoming attitude to foreign direct investment, and relatively few trade barriers. In the financial market space, banks are sound and the securities market well regulated; financial services are widely available. The late technologies are readily available in the island, there is a relatively high degree of technology transfer, and internet usage is high. With respect to the macroeconomic environment, low inflation was a point in the country’s favour, but the Government deficit, the national debt and the country credit rating were all problematic factors. Barbados’ enviable social partnership is a crucial part of the institutional framework that makes the economy resilient. In 2013 it was a national consultation organised through the social partnership that brought the need for strong adjustment to the attention of all parties to the partnership, and helped everyone to understand why fiscal tightening of the order of magnitude instituted was necessary in order to stabilise the balance of external payments and arrest the drain in foreign reserves at the Central Bank.
ACHIEVEMENTS OVER THE PAST 50 YEARS The factor that has contributed most to Barbados’ international competitiveness since Independence, is the maintenance and enhancement of the island’s reputation for quality. The foundation was the country’s excellent primary and secondary education system, the superior quality of its sugar products, and public administration skills of a high order. The best Barbadian primary and secondary schools were world class, and their graduates proved capable of holding their own against any competition. Although the bulk of Barbadian production was raw sugar for export, the industry was distinguished for its fine golden crystal sugars and liquid sugars (known in Barbados as “fancy molasses”), and for the aged rums produced in small quantities for the connoisseur. A small but efficient and professional public service provided the country with tax collection that was seen as transparent and equitable, quality primary education that was universal, fine health services that were unfortunately not always accessible by poor people, highly regarded services of law and order and well-oiled electoral machinery. Barbadian educators, administrators and law enforcement officers served the entire English-speaking Caribbean, from Guyana and
Bermuda to British Honduras (now Belize). Barbados’ reputation for quality has been upheld in tourism, international business and financial services, and quality rums, as they have emerged to become the leading sources of foreign exchange earnings in the island. In areas like public service and sugar production where we failed to sustain high quality, we have lost competitiveness as a result.
CHALLENGES
A major challenge facing Barbados in its 50th year of Independence is our failing consensus on the extent of social provision of services such as health, education, sanitation and other social benefits. Fifty years ago the argument for universal provision of most social services was strong. Free university education made sense in 1960 when the proportion of the population with any university degree was 0.2 percent for males and 0.1 for females. In other words, among a thousand males in Barbados at that time, you would typically find just two persons with a university degree, and among females, only one. By the time of the 2010 census 29 percent of the population had a post-secondary education, and there is a surplus of graduates in all fields except science, engineering and applied technology, over and above the country’s needs. What is more, the average middle income household is more than capable of providing for their children’s university education, with the help of a subsidy to the university that Government can afford to pay. There is a similar story to be told with respect to the provision of hospital services. Although the cost of hospitalisation is beyond the cash resources of most, the majority of persons in private employment benefit from a company-sponsored health benefit plan, which covers most of the cost of hospitalisation. However, many hospital procedures remain free of cost, and hospital stays are free of cost, unless the patient elects to have a room of their own. Fees, where they apply, have not been adjusted for inflation for a very long time. The hospital is underfunded, and the queues for elective procedures are long. The university and the hospital are used to illustrate the need to re-think the implied social contract in line with our society’s changed circumstances. Barbados is no longer a third world country with no social safety net, only a vestigial middle class, and widespread inadequacy of basic social services and amenities. In the former circumstances universal state provision was very cost effective, because almost everyone stood to benefit from the provision of an essential package of basic services which few could afford from their own resources. Today Barbados is a middle class society where the average household demands a range of social services that goes far beyond the basic, and has the means to buy the services they want, if they are not freely available from the state.
At the start of our 50th year of Independence, the Barbados Government faces a deficit which is larger than the expected increase in the national income. The deficit, the difference between the amount spent and the revenues received, is financed by borrowing. The Government’s debt will therefore once again increase by more than the increase in our GDP, and the ratio of debt to GDP is set to increase, unless expenditure can be cut or revenue increased. A further increase in the debt to GDP ratio increases the cost of borrowing, which is already too high. Another major challenge for the Barbadian economy is the widening gap between labour costs, which have been rising steadily, and worker productivity, which has been stagnant since the turn of the 21st century. The inefficient use of technology plays a part, but in addition a recent employee survey has shown that two thirds of the workforce have no real commitment to their jobs, or to achieving high standards to ensure that the clients of the companies or organisations they work for get good value for the money they spend.
THE POTENTIAL
Barbados’s geographical location, its interconnectivity, its welldeveloped infrastructure and public services, and the attractiveness of living conditions in Barbados all make it a natural focal point of economic activity in the eastern Caribbean, from Suriname to the Virgin Islands. Personal, professional and sporting links, and their common membership of CARICOM, bind the eastern and western Caribbean together, though the western Caribbean (the Bahamas, Jamaica, Haiti, Cayman and Belize) has no obvious common focus similar to Barbados. One foreign bank has established its headquarters for the Caribbean as a subsidiary in Barbados, and other foreign banks run their operations in Barbados and countries of the OECS as a single entity, with headquarters in Barbados. Green energy is an activity that has transformative potential for the Barbadian economy. It has been shown that Barbados can supply 100 percent of its electric power entirely from wind, solar and pump storage (a form of manmade hydro power), all with the use of technology which is in common use in North America and Europe. That would be equivalent to a 20 percent increase in the country’s foreign earnings, in perpetuity, once the needed investment is in place. Contrary to popular belief, emigration is another potential source of growth for the Barbadian economy. The Caribbean diaspora in North America and the UK are an integral part of the Caribbean nation, and the internet and affordable travel have served to cement that bond. Barbadians abroad are a rich potential resource to assist in
Analysis
the growth of our economy: they can market our products and services, expose us to new technologies and useful professional and commercial networks, introduce us to potential clients, provide services and collaboration via telecommunications and periodic visits, and they are an actual and potential source of investment in Barbadian assets, including homes for their retirement. Barbados has a rich historical legacy, and our cultural practitioners are making a name for us in music, film and video, the festival arts, the culinary arts, dance and theatre. We are learning how we may turn these endowments to our advantage, while at the same time enriching the lives of Barbadians and our visitors.
OUR FUTURE
Independence means that the future of Barbados is firmly in the hands of Barbadians. Our future is exceptionally promising, but it will not happen unless we make it happen, and like all worthwhile objectives, realizing the vision will take grit, determination and sacrifice. The first task is to build our capacity to devise and implement strategies that answer to our circumstances, that situate us to take advantage of opportunities as they arise, to avoid the pitfalls that we encounter, and to be flexible in execution, learning as we go what works and should be supported, and what does not work and needs to be tackled differently. The Barbadian growth strategy is realistic and achievable, focusing as it does on tourism, international business and competitive exports, mainly rum and chemical products for household use. They provide the foreign exchange we need to grow our economy. We know we must tighten fiscal policy when necessary to reduce aggregate demand and balance the demand for imports with the foreign exchange inflows from tourism, other services, exports and foreign borrowings. In that way we avoid depletion of the Central Bank’s store of foreign reserves, and ensure that there is always enough to meet the day-today and week-to-week fluctuations in demand and supply. In going forward, we should remind ourselves of the many examples of excellence of which Barbados can boast – world renowned hotels and restaurants, outstanding heritage properties, exceptionally talented singers, musicians, writers and artists, highly ranked research institutions such as the Chronic Disease Research Centre, internationally renowned academics and professionals, home grown international conglomerate firms, and many more. Their exceptional achievements to date give us energy to tackle the difficult tasks ahead.
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Inspiration
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In the last decade, the advancement of Internet technologies has revolutionized how Barbadians interact with the world around them - this is especially TRUE of MilleNnials. Birthed and/or raised in a time of social media, mobile data, WiFi and streaming, Barbadian Millennials are more consumptionoriented, competitive, social, individualistic, less private and have a more broadened world view than previous generations.
Special Feature
Hallam Hope and Niel Harper explore and comment on how technology has transformed how we live, work and learn.
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Figure 1
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DIGITAL NATIVES: NIEL HARPER EXAMINES THE GLOBAL PHENOMENON
In the last 20 years, the world has witnessed phenomenal technological advances and increased ‘connectedness’. Unrestricted flow of data is now at the core of the global economy, with e-commerce, cloud computing, mobile apps and online banking - the science fiction of 20 years ago now part of our daily activities. Such is the meteoric growth of the internet’s impact on the global economy, according to a report by Boston Consulting Group (BCG, 2012) the Internet economy would rank among the top six industry sectors in China and South Korea while it contributes 8.3% of GDP in the UK. Indeed, across G-20 countries, the annual projected rate of growth is 8% over the next five years, far outpacing traditional economic sector in its ability to produce wealth and jobs. Because this rapid technological advancement has coincided with their childhoods, Millennials (those born between 19802000) are ‘digital natives’. Born into an innate culture of connectivity, collaboration, constant communication and content sharing, they largely define the character of humantechnology interaction. One of the standout phenomenon that has come out of Millennials relationship with technology, and ultimately
Special Feature
transformed the global economic landscape, is the development of Hyperconnectivity - the situation whereby the number of network connections exceeds the amount of people utilizing the network. Nowhere is the impact of hyperconnectivity more evident than with Millennials. A survey by the American Press Institute highlights the importance of connectivity to Millennials. 51% stated they are mostly or almost always connected. (see Figure 1). Globally, Millennials see their connectivity as what distinguishes their generation, and thus while technological advances have been the hallmark of successive generations, the vast amount of computational power and access to huge repositories of data available to Millennials is unmatched. It is little wonder that today, some of the world’s most exciting and valuable companies - Google, Facebook, Uber, Airbnb - point to digital data as probably their most valuable asset.
LAY OF THE LAND: HALLAM HOPE COMMENTS ON THE HISTORY OF TELECOMS IN BARBADOS
From the Second World War years when the island was a key communications hub right through to more modern times, the island has benefited from a steady investment in communications infrastructure.
Though, some might argue that the popularity of Barbados as a destination for communications investment is related to the island’s favoured position as a former jewel in the British crown, there is no denying that whether they may be a garbage collector, a teacher, a shop-owner or a nurse, Bajans have one common propensity: they like to talk. This simple reality has led to a continuous trek of service providers within the last decade. In 2004 Digicel was attracted to offer cell phone service in competition to Cable & Wireless (Barbados) and quickly the 100 per cent access to basic telephone service was matched and surpassed with just about everyone having a cell phone or even two. By 2014 according to data from the Government’s Telecommunications Unit, a country with a population of 280,000 had almost two televisions per household, 305,456 post paid and pre paid cell phone subscribers and 135,775 fixed lines, ISDN and pay phones. As this demand for the latest communication technology grew so too has its innovation, as simply placing of calls was expanded to Skype messaging, 3G technology, enabling WhatsApp messaging and calling, Google Hangouts. Such has been the demand and the quality of the infrastructure, that in December 2015, Cable & Wireless (Barbados), trading as FLOW, announced that Barbados had become the first country in the world to have access to a 100 per cent fibre. For such a small island and accompanying economy, Barbados may be described as communications rich.
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THE REVOLUTION WILL BE TELEVISED NIEL HARPER ON THE IMPACT OF THE INFORMATION REVOLUTION
The Information Revolution has and will continue to result in massive employment disruption in the Caribbean and across the globe. Certain jobs will disappear, the nature of work will change, and additional skills will be needed to drive economic growth (see Figure 2). A recent World Bank publication on the quality of Caribbean education underscores the criticality of this skill gap: “As traditional trades and sources of employment disappear, twenty-first century technology is taking their place, but employers regularly complain that school leavers do not have the appropriate skills for a digital workplace.” Though it’s widely acknowledged that skill gaps exist, there is insufficient data to effectively inform policy makers or support efforts to reform the education system. Instead of merely collecting traditional metrics on student performance, deeper insights can be obtained by also aggregating and analyzing data about their home lives, their personal likes and dislikes, and their learning preferences. This provides a holistic view of students, reduces classroom management issues, motivates learners, allows for differentiated instruction, and provides a drastically improved learning experience (especially in the formative stages). This approach would assist in delivering the requisite foundation to support an increase in the number of science, technology and mathematics (STEM) graduates – the makings of an ‘innovation generation’. In addition to changing the way Millennials learn, technology is also changing the way that Millennials work. For one, telecommuting and co-working spaces have become more prevalent; mainly due to the increased employee satisfaction and productivity associated with the flexibility, openness, and greater opportunities for cooperative work. There are also cost savings of 37% to 60% to be accrued in areas such as rent, construction, furniture, cabling, and workplace services. Millennials are high users of video conferencing and computerbased team tools. They are also more reliant on conference calls, put a greater focus on mobile technological support for meeting rooms, and expect greater availability of systems and computing facilities outside of standard working hours. While
most businesses in Barbados have long resisted ‘flexi-work’, the time has come for them to fully embrace ICTs to better meet the needs of a more informed, increasingly mobile, and technologically savvy workforce.
LOCAL OFFICE, GLOBAL OUTLOOK HALLAM HOPE EXAMINES LOCAL INTERNET DRIVEN ENTREPRENEURSHIP
Not many households globally have access to 300 megs of bandwidth. But Lamair Nash, an artist and illustrator working out of a Grazettes, St Michael apartment needs exactly that to download files of illustrations, discuss them with global partners, make changes in real time and “ship” work overseas. “Without modern broadband communications, namely the Internet, my business would be dead,” says Nash. He works mainly for the Los Angeles firm, Petrol Advertising, whose clients include NBC, Disney and prominent gaming companies, Blizzard and EPIC Games. Illustration is a multi-million dollar business internationally. Gaming has taken over the film and music industries in terms of gross revenues. And most of the top films nowadays feature animation and characters that are designed by illustrators. Fortunately not all innovative companies need 300 megs of bandwidth. BeepCab, officially launched in Barbados two years ago by Caribbean Transit Solutions, provides a mobile app that allows anyone to book a taxi from their mobile phones, reducing waiting time and offering a similar option to travellers or residents of Britain, via Kabbee or for some Latin American countries, Easy Taxi. “One of the nice things about Barbados is that we have a really robust telecommunications network,” says Co-founder and Business Development Lead with Caribbean Transit Solutions, Khalil Bryan, a young Barbadian. He says Barbados’ modern telecommunications system is critical and a positive advantage for his firm to operate as BeepCab requires real-time communications so customers can reliably find the nearest taxi in Barbados and request a pickup.
Figure 2
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REGIONAL PERSPECTIVE
NIEL HARPER ASSESSES OPPORTUNITIES FOR REGIONAL IMPROVEMENT Across the region a lot more can be done to encourage the use of ICTs for enhancing competitiveness in tourism, entertainment, cultural services, and agriculture. The legal and regulatory framework is due for an update so that it better facilitates cross border transactions (including the use of crypto-currencies). Greater impetus is needed to develop content, while also ensuring that appropriate protections for intellectual property are available. A tactical shift is urgently required; the time is ripe for innovative approach. Attention must therefore be moved towards an integrated regional approach to telecoms regulation, one that puts development and economic growth, not bureaucracy and limitation, as the essential priorities. Policy decisions and legislative enhancements should target important subjects such as skills training, stronger regulatory powers to prevent monopolies, increased competition, safeguarding net neutrality, and protecting consumer interests.
BRIGHT FUTURE
HALLAM HOPE IS OPTIMISTIC ABOUT THE FUTURE Managing Director of Cable & Wireless (Barbados) Niall Sheehy says Barbados can be proud it has a world class communications infrastructure which many citizens in North America do not have access to. He says some pricing is lower than what is also available in North America. Sheehy says the company supports the marketing of Barbados for high-end inward investment, in areas such as tele-health, tele-education and others, leveraging the island’s modern communications, while paying greater attention to development of local content for overseas markets. Barbadian entrepreneurs are yet to leverage communications in a way that could earn them millions of dollars, but the opportunity is there and many of our young people have begun serious work towards making those millions. The major strides in communications development for this tiny rock of 166 square miles, has provided its citizens with exciting opportunities to develop global skills, sit at home and earn much-needed foreign exchange doing what they love. Entrepreneurs and businesses who understand new skill requirements, in app development, e-finance, and digital art are already tapping into those emerging markets.
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can be a rare feat for many people, but Sir Trevor Carmichael accomplished lawyer, senator, businessman, preservationist, philanthropist, author, husband and father - has managed to do just that, while maintaining his youthful optimism that has seen him through seven decades of his life. “I’m very happy with all that I’ve done and I wouldn’t want to change anything,” Sir Trevor said from the conference room of Chancery Chambers, the Bridgetown law firm he founded in 1977. “Even if I look back and think of something that I could have done, I’m not going to regret it.” What Sir Trevor has done over his 40-year professional career is nothing short of remarkable. Along with establishing his name as one of Barbados’ foremost legal minds, he has cemented himself as one of the pioneers in establishing the country’s offshore international business sector, attracting major entities to the island from Europe and North America. Along the way, Sir Trevor has seen the fruits of his labour blossom into honours such as the knighthood he received in 2013 for being a loyal, native son for outstanding contribution to his country’s development. His stellar reputation has garnered him international recognition and accolades granting him membership in
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the International Bar Association, the Inter-American Bar Association, the International Tax Planning Association, a Life Fellow of the Institute for Advanced Legal Studies in the United Kingdom and a Life Member of the commonwealth Magistrates and Judges Association. In 2013, he was also sworn in to the Upper Chamber, as an independent senator. Sir Trevor serves as a Panel Member of the International Centre for Settlement of Investment Disputes of the World Bank in Washington, the Founder Chairman of the Barbados Youth Business Trust and the Chairman of the United World Colleges Selection Committee for Barbados. In addition to the numerous organizations and committees he’s taken part of worldwide, he has also authored several articles and books, including Thirty Years of Independence, which he’s currently updating to Fifty Years of Independence to celebrate Barbados’ 50th anniversary in November, this year. However, at 71, Sir Trevor still remains as energetic and brimming with ideas as he was in his earlier years. During his time at Harrison College, he could never have scripted the route that his life would have taken. He knew that pursuing law was definitely in his future, because he had watched his father’s success as a lawyer and wanted to emulate that. But he also credits his parents for instilling in him, an adventurous spirit that provided him with a fearless nature to navigate unchartered territories, and find his own way in the world.
INFLUENCED BY DAD
“I was very influenced by my father as a lawyer, but not merely from the perspective of law alone but from the perspective that law seemed to help him in the nurturing of a very independent spirit. “I grew up feeling that sense of independence and I felt that law would help maintain that independence. But I didn’t feel wedded to law and nothing else. I did not start my tertiary studies in law, I started with a BSc in Economics, specializing in International Relations and as with many things in life, that came by accident”. Little did Sir Trevor know, that his first degree at the University of the West Indies Mona campus in Jamaica, would help to establish the international business framework of his native country. After achieving that first degree he headed to Ohio in the United States to attain his master’s degree at Case Western Reserve. He would go on to receive his doctorate from Wayne State University in Michigan, before attaining his law degree.
“While I was studying law in England, I also worked as a research economist in the Commonwealth Secretariat. I gave up that position when I completed my law studies and I came back to Barbados with a wife, some degrees, training in law and a willingness to have a discerning eye,” he said. “I surveyed the scene and as with so many things, I looked on the bright side and I did virtually everything that a lawyer does. I did criminal cases, traffic cases, and I did a large amount of matrimonial work. But I also saw an opportunity whereby Barbados could develop its international financial services product offerings, even though they were limited in number at that time.” Sensing that the island’s economic and fiscal growth and development would only be enhanced by an international business sector, Sir Trevor set out to lay the groundwork for this initiative. “Government was also beginning to show an interest in this area, but I didn’t wait on that. I travelled first to the Channel Islands and attended a conference there, met with a lot of people and saw what was being done and got connected to people in the international services arena,” he revealed. “Just around that time, the British Virgin Islands also lost their treaty with the US and I traveled to the BVI and took over the portfolios of the two major trust companies in BVI at the time, and with some colleagues in Barbados, we took virtually all of those companies which were no longer able to benefit from the US treaty and brought them to Barbados.” It was his ability to marry the knowledge from his studies in law and international business that helped propel Barbados forward. While achieving a successful law practice was tantamount in his eyes, knowing that he aided in his country’s economic development became a driving passion, even in the face of opposition. “Some fellow practitioners thought it was madness because they couldn’t understand why one would be going and seeking to write letters and bring these companies here. “Lawyers who practiced at the time saw it as a little bit of craziness, and being a bit of a maverick. But I did this along with some non-lawyers. I recognized early that you have to build strategic relationships and friendships and create opportunities.” Creating those business opportunities for Barbados helped Sir Trevor chart new directions for his legal practice. He drafted new double taxation treaties, tax legislation and helped to create the legislative framework that guides the operation of international businesses in Barbados.
International business is not a static arena, it is dynamic and it calls for creativity of thought, the best tax planners, and the best international financial planners, are those who are imaginative and to use this overworked expression - to think outside the box,” Sir Trevor said. Sir Trevor’s ability to think outside the box, his penchant for taking risks and going where others dared not venture, has helped to cement his place in Barbadian history. But it also heartens him to see the growth of the international business sector. That sector employs approximately 4 500 persons and has contributed over $1 billion to the country’s gross domestic product annually. “I think there are a lot of institutions such as BIBA and others, that have been established and more people that are now involved so we have a mature industry. Our legislation has also improved in terms of having a larger suite of legislation dealing with international things. We’ve negotiated a lot more tax treaties, double tax, as well as bilateral investment,” he said. “Just recently we launched the international securities market on the stock exchange and that was spearheaded by Marlon Yarde, the general manager of the Stock Exchange. That was something I’d been involved in back in 1990 because there was always an international securities market albeit in a limited sense to get a seat on the exchange. Now it has come full blown and this is a new pillar for Barbados to hang a lot of its future success on.” While Sir Trevor relishes the success that the island has seen, he acknowledges that there is the need for more work to be done to keep Barbados competitive. “I’m however sanguine in the sense that we have to move things a little quicker. I understand the constraints in terms of manpower, but we need to get new legislation out quicker,” Sir Trevor added. “Then sometimes we seem to rush legislation and we don’t take the time to share it with people who could help. Somehow we need to marry the efficiency in these two approaches so that we get something which is more palatable and effective.” As someone who has spent years building and helping to create things, it is understandable the love he has for preservation. It’s easy to understand then why he was the
Anatomy of Excellence
president of the Barbados National Trust for five years. “I enjoy preservation, that’s a big passion. I’ve been president of the Barbados Museum for the past 30 years. More recently after I gave a speech at the National Trust, I was making a comparison with Roebuck Street and some other areas around the world, and I was talking about the need for a regeneration of Roebuck Street and the benefits that could be derived from that. “Some of my friends who were at that meeting said ‘come you’re talking all of this now, let’s form a Roebuck Street Regeneration Trust and you’re going to chair it. What do I do? Two years ago I took on that we’ve already done wonders in the regeneration of Roebuck Street.”
ECONOMIC BENEFITS OF RENEWABLE ENERGY
For Sir Trevor, it isn’t just about building and creating new enterprises, but he has maintained the importance of preserving one’s history and institutions so that future generations can also take the country forward. One area that he feels will be instrumental to Barbados in the future, is renewable energy. “I was very much in the forefront of the renewable energy movement back in the 1980s and then in 1994. I did the first study on the solar water heating industry. That study was published by the Centre for Sustainable Development at UWI. We looked at the economic benefits of solar water heating in Barbados and they were strong. For many years there was an off and on as whether you could get the income tax benefits and there was no reason for that,” he said. “So we were first with Israel, out of the blocks with this new technology, but we didn’t follow through and go into photovoltaic and we’re now going there. But I tell you if we do it right now, we could be so energy efficient. We could save so much of our import bill that it could transform this country within a matter of two years.” Sir Trevor has already transformed the country he loves so much. Though his myriad achievements speak to his enduring work ethic, it is important to him to know that there are others coming behind who will carry on the work in taking Barbados forward. “There are those especially many of our own generation who are desperate to see Barbados succeed because we know there are so many positive attributes within different areas in Barbados that this could possibly be the best place on earth. In many respects it is already in terms of our financial services and our economy” he said glowingly. “So when I meet a lot of the students now I think our future is in good hands and the tradition will continue in terms of our young people taking important roles, showing their creativity and their passion in pushing the country forward, I’m very optimistic.”
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T’s an intriguingly delightful story about a young man, a computer geek and an academic scholar who gave the planet, not simply a rich country or a small emerging nation, a gift of immense proportions. Actually, it’s a fascinating tale about the creation of the first internet search engine, a revolutionary innovation in the evolution of the internet that helped to spawn a trillion dollar industry. An interesting chapter of the story is that this Bajan’s invention made Yahoo and Google household names in almost every town, village and city on earth and the founders and executives of those corporate giants exceedingly rich and famous, but this Bajan inventor is seldom associated with his ground-breaking work. The irony doesn’t end there; Alan Emtage, the son of one of Barbados’ most highly respected and accomplished families, Sir Stephen and Lady Emtage, and the grandson of Eric Inniss, a revered man of colour in the annals of Barbadian and West Indian cricket administration, could have joined the ranks of the billionaires, Steve Jobs included, for his work in the computer science lab at McGill University in Montreal – but he didn’t. “I have no regrets about that,” Alan said recently while relaxing on the open-air verandah of the comfortable family home in Chelsea, a middle class community that’s less than a mile from the only house in which George Washington, America’s first president, stayed outside of the United States. “It was never about money and as Barbados, my birthplace celebrates its 50th anniversary of sovereignty, I can say with pride and satisfaction that we have made a contribution to human civilisation and that some of what I did back in the 1980s helped to make the planet a better informed and more exciting place,” said the 52 year old internationally recognised computer science expert. Alan who lives between Barbados and Cape Cod, an upscale resort area in Massachusetts that is a magnet for the wealthy, famous and powerful in the US, says he is comfortable with the knowledge that he has played a part in “changing the world.” “I can honestly say I changed the world,” the Barbadian told the Montreal Gazette, a premier English language daily newspaper in Canada. “There are not a lot of people who can say that.”
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The invention was in essence, his and Barbados’ gift to the world. In a real sense, “Archie,” the name he gave to the product of his ingenuity, is a set of scripts that transferred voluminous files to the computers of billions of people, agencies, firms and national and international institutions so they can use the “web” to conduct business, run governments, engage in everyday social life, pursue academic excellence or even find intimate partners. When Alan, a Barbados scholar of the early 1980s, wrote back in 1988 he was a graduate student at McGill, working towards a master’s degree by delving deeper into the computer world, a life-long passion. At that time too, the world-famous Canadian institution was looking for innovative ways to transfer volumes of data across campus and the far flung corners of Canada. “I was a student and an employee of McGill and I had considerable difficulty going through the material that was being transferred via file-transfer protocol,” he recalled. “One of the things I was doing was finding software for use by faculty and students to save time and energy.” What emerged from his efforts was a vital and universal pathway that at first enabled him to avoid going back and forth almost every day to the same computer sites for material. If, as sages say, necessity is the mother of invention, then the scripts, “Archie” was the child, the end product. Actually, the name is a shortened version of “Archive,” the place where public documents and historical records are stored, but without the letter “V.” “Archie created a central card catalogue for people using the internet so that anybody can search for publicly available files,” he explained. “I did it, because, in a sense I was lazy and I wanted to search through the cards without having to go to the voluminous files.”
What’s intriguing is that Emtage didn’t apply for and secure a patent for his ground-breaking work that would have made him a multi-billionaire. “When I created Archie it wasn’t for commercialized use,” he said. “The current and widely used search engines were not in use. Indeed the worldwide web wasn’t in existence back then,” said the inventor.
“We didn’t seek the patent because we felt ‘Archie’ would provide people everywhere with greater access to the material in archives. I don’t regret not seeking the patent, because making a lot of money wasn’t our purpose. “Yes, it’s true that we could have sought it and allowed free use of Archie. And yes, it’s also true we didn’t make much money on it, while others certainly did just that. But I am at peace with myself. I don’t agree with those who believe money measures a person’s success.“ A child of privilege growing up in a home where education was a prized commodity, respect for family values was paramount and where knowledge of Barbados was vigorously pursued, Alan followed in his father’s footsteps when as a teenager at Harrison College, he won a Barbados scholarship, becoming a rare case of parent and child earning such a high academic honor. “My parents were always supportive and they encouraged me to pursue my interests, my dreams,” he said. “I had an early interest in science. I was very good at physics, biology and chemistry. I enjoyed playing with computers from early.” His successful pursuit of higher learning and training, the research and innovation that led to “Archie”, have created a “highly rewarding” career as an adviser to technology firms, especially start-ups across the US and different parts of the world. His partners in that technology venture, Tony Travostino and Michael Rhodes, link arms with him to serve as an incubator for firms looking for technology investment services to launch new ideas. “We link with new start-ups that don’t have the resources to launch their new plans,” explained Emtage. The partners are rewarded with equity in the companies, receive cash in return and end up with great satisfaction. The beauty of it is that they can function technologically from any part of the world. “I am not a corporate person and so it enables me to spend 5-6 months a year in Barbados and to travel extensively,” Emtage said. “I have visited at least 70 countries and I lead an itinerant kind of life, while satisfying my love of photography, dogs and instant communication.” Little wonder, then, he rises at about four or five o’clock in the morning, spends several hours going through posts on Facebook, communicating with partners, working with clients and managing people, much of it through computers. And it allows him to spend time with his parents. “I have led a charmed life, one that was extremely privileged,” he said. “Actually, it has been a wonderful life. “
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If you’ve visited St. Nicolas Abbey in St. Peter, surely you would have seen it. And if you haven’t yet visited the Abbey, then “it” is a must-see when you do – by “it”, we mean the short film which forms part of the guided tour. The film, shot by Lawrence Cave, the son of the Abbey’s former owner, Charles J.P. Cave, who was a renowned meteorologist and prolific photographer, depicts life on the plantation and Bridgetown in the 1930s. Lawrence had received a (movie) camera as a gift and decided to shoot scenes while on a family visit to the Abbey in 1935. Years later, during one of his several family visits, Lawrence’s son Stephen found the film and had it edited into the movie which shows the grandeur of the old plantation house,but also gives an insight into the harsh reality of planation life for Blacks in Barbados at that time. The movie is narrated in an incredulously lighthearted style by the house’s former owner, and hints at how far black Barbadians have come - from being secondclass citizens whose living conditions back then were not much better than when they were as an officially enslaved people up to 1838, to being firm craftsmen of our fate in an independent Barbados. As the home movie depicts, child labour was rampant, with 11-year-old girls and boys working in what was then called the “third class” gangs of plantation workers. With little or no schooling, they spent most of their days taking dung baskets of cane
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From left to right: Photo - Rum being bottled; Photo - Crushed cane being trashed; Photo - Serene Outhouse; Photo Great House Decor; Photo Outdoor Chandelier.
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plants to the more senior cane-cutters and trash heapers, while teenaged boys worked daily in oven-like conditions ladling the boiling cane juice from one cauldron to another in St. Nicholas Abbey’s sugar factory. Also depicted in the movie – which includes a few heartwarming scenes of girls bedecked in their white Sunday best and toddlers playing on windmills – are the black Barbadians - wheelwrights and millwrights - doing backbreaking, dangerous work where a mistake could cost a limb or a life. Two years after the filming of that movie came the now famous “1937 riots” - black Barbadians rioted by burning down and looting the capital and centre of the island’s British-controlled sugar-based economy. More than 75 years later, Barbadians of all hues are welcomed and encouraged to return to St. Nicholas Abbey with its majestic precincts that immediately transport you to a time when slavery was official – and when great houses were exactly that – Great! Today, the graveled driveway of the Abbey, lined by human and mahogany sentinels, leads to this Great House of Jacobean architecture with its perfectly preserved outdoor bath-houses and stables. Step into the Abbey’s living room and get lost in the old world charm of Wedgewood tea sets. Smell the aroma of an imaginary feast on a massive dining table, and any thoughts of those “bad old days” will temporarily subside. Step further into this 350-year- old family-owned mansion and find yourself staring in childlike wonder at the large James Thwaites of London grandfather clock, which has been keeping correct time since 1759, and at the perfectly preserved sash windows which were installed in 1746. A priceless, throne-like chair with intricate carvings dates back over a century, and in the corner of the room is an antique wall-hung toilet complete with pull chain, while an 1825 map of Barbados, pistols and daggers safely encased in glass, and a selection of men’s hats – including those worn by planters up to the middle of the last century – add to the old-world décor, lending an aura of mystery while titillating the imagination. The affable Simon Warren, senior guide at the Abbey, explains that the whiff of dampness emanating from the walls is due the fact that the house has no foundation to speak of, thus the walls are paneled with the best cedar, so as to absorb the humidity. Simon’s father Larry Warren and mother Annabelle purchased the property in 2006 from James Petri, a relative of the Cave family who had owned the mansion and its grounds for almost 200 years. Since taking over St. Nicholas Abbey ten years ago, the Warrens and their sons Simon and Shae have spared little expense in restoring its deteriorating wooden roof beams, and reinforcing the walls with limestone from Kensington Oval when the cricket mecca
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was partly demolished and rebuilt for the 2007 ICC Cricket World Cup.
COTTAGE INDUSTRY
The Warrens have also created a cottage industry in rum, marmalades, molasses cookies, pepper sauce, sugar and mango cheese, among other treats. Simon explains to visitors that the original St. Nicholas Abbey rum was made via the ancient method – not blended, but produced in single barrels – bottled and labeled using a modern sandblasting technique to give each product individuality. Imagine having one’s own name – or that of a loved one – inscribed on a bottle of rum, lasting throughout and beyond that individual’s life. What a legacy! It can be done at St. Nicholas Abbey. “We have tried to maintain as much of the originality of St. Nicholas Abbey as possible,” Simon says, pointing to portraits of the Cave family across generations, and the several cabinets including one which holds intricate seashells and other artifacts. Even Mother Nature seems to have conspired with the owners to retain the old world charm, since the gully below features old and stately royal palms, chandeliers and lanterns which hang from trees, sugarcane stalks which sway in the breeze and an array of fruit trees, all overlooked by a massive sandbox tree that is older than St. Nicholas Abbey itself. “It’s a sustainable investment, and the philosophy of my family has always been that once you do it well at first, St. Nicholas Abbey should last another 350 years,” says Simon as he enters the one-time stables and blacksmith area which today houses the sandblasting and bottling plant for St. Nicholas Abbey’s original rum, along with the 1890s steam mill. One method introduced in the 1800s was utilizing a steam mill to extract juice from the sugar cane – it increased production and thus St. Nicolas Abbey installed a steam engine in 1890. The Abbey was considered one of the most successful plantations on the island, but overtime competition from other regions made it increasingly difficult to sustain profitability and in1947 the plantation stopped operations. In 1983, a similar mill was brought to the Abbey where it remained until 2006. By this time, the Warren family had restored the mill and resumed grinding as it had done throughout history. Today, The Abbey grinds sugar cane into the most refreshing cane juice.
WHERE DID IT BEGIN?
So where did this fascinating gem in the northeastern heart of Barbados begin?
In the mid-17th century, planters Benjamin Berringer and John Yeamans, partners in real estate speculation, owned two adjacent properties. Encompassing over 365 acres, the collective property led to several disputes over where the property lines fell. Berringer, who had come to Barbados in 1624 from Britain, hailed from an influential aristocratic family. He built the Jacobean great house, at what was then known as Berringer Plantation, in 1658 as the family home for his wife, Margaret, the daughter of a local reverend, and their three children; while, Yeamans, a Royalist Army colonel and widower, immigrated to Barbados in 1650. It is said that Yeamans competed with Berringer for Margaret’s affections, and in January 1661, the Berringer couple had a heated argument, leading Benjamin to leave the plantation for Speightstown where, it is also said, Yeamans arranged for someone to poison him. Berringer subsequently died in the house of his friend, Mr. Dickinson, while Yeamans and Margaret were married just ten weeks later. Upon their marriage, the two plantations merged into one property which was called Yeamans Plantation. Yeamans himself sailed to America in 1669, accompanied by Margaret and the younger children, and built a plantation house in Charleston, on the site of what is today known as Yeamans Hall Country Club. Though thousands of miles away from Barbados, Yeamans’ past haunted him. Initially perceived as an esteemed and competent leader when he arrived in Charleston, he quickly fell from grace as his greed and lust for wealth overcame him, and rumours of his involvement in Berringer’s death further tarnished his reputation. Weak and dying by the early 1670s, Yeamans returned to Barbados with Margaret and lived at Yeamans Plantation until his death in August 1674. Margaret married a third time to William Whaley, and on her death the plantation passed to her eldest son, John Berringer, who died a month later. Yeamans Plantation was then passed to John’s daughter, Susannah, and her husband George Nicholas, but Susannah so hated Yeamans, her grandfather’s reputed killer, that she refused to keep his name on the property, and thereafter called it Nicholas Plantation.
FROM HAND TO HAND
Nicholas Plantation passed from hand to hand – to Joseph Dottin in the 1720s, then to his daughter Christian and her husband Sir John Gay Alleyne in 1746. After Christian and her husband died the property officially reverted to the Dottin family, but it was nigh-impossible to track down the
Anatomy of Excellence
Dottins who by then were residing in several different countries, so the property gradually incurred major debt and was taken by the Chancery Court in Bridgetown in 1810. It was eventually purchased by brothers Edward and Lawrence Trent Cumberbatch for £20 500, and was passed to Edward’s daughter Sarah and her husband, Charles Cave, who in 1834 renamed it St. Nicholas Abbey – a combination of Nicholas Plantation, St. Nicholas Parish where the Cumberbatch family lived in England, and ‘Bath Abbey’ where Sarah and Charles were married. The Cave family were largely absentee landowners until Lieutenant Colonel Stephen Cave, who inherited the house in 1964, became the first owner to live there full-time. Upon his death in 2003, the property was passed to his nephew James Petri, who sold it to the Warrens three years later. The rest is history, but while the old style of the place has been preserved, much of its functionality is based on modern systems, including solar powered lighting, recycled water and sandblasting which, in a curiously harmonic way, work in tune with the old systems of grinding cane and manufacturing rum. As Barbados celebrates its 50th anniversary as a sovereign nation, St. Nicholas Abbey is a veritable museum and sightseer’s haven, with a breathtaking view of the East Coast, lots to discover and admire, guided tours for adults and children, and the opportunity to watch the 1935 home movie. So popular and multifaceted is the architectural gem that is St. Nicholas Abbey that its original rum has copped the Distillery of the Year 2012 award and other international prizes, while its reputation as a tourist hub has forced the owners and staff to recommend that groups of ten or more persons should book tours long in advance. A bid has been made in recent times for St. Nicholas Abbey to obtain status as an international site of importance in United States history. This, the Warrens say, will provide greater recognition and support in the expensive undertaking of maintaining the property for future generations, and would add to Barbados’ iconic international status following the UNESCO designation of Bridgetown and its Garrison as a World Heritage Site in 2011. “It is the Warren family’s utmost goal, with the assistance of both private and public support, to restore and maintain St. Nicholas Abbey as an historic legacy for us all. We believe our architectural heritage is part of who we are as a people; that buildings and landscapes provide us with an in-depth view of the craftsmanship, trade and culture of their time,” stated owner Larry Warren, himself a renowned architect. St. Nicholas Abbey, truly one of Barbados’ hidden treasures and examples of excellence.
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Singer Actress Pop Star Music Icon Philanthropist Model Fashion Icon Entrepreneur Mogul Designer Influencer Ambassador Bajan
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Cover Girl
Christian Dior
MAC
Kodak
Manolo Blahnik
Stance
Vita Coco
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Nivea + Puma
Armani
W
Samsung
Optus
Centerfold
hile much has been written of Rihanna’s incredible numbers as an artist: 14 Billboard #1 Singles, 8 Grammy Awards, 8 American Music Awards, 6 NRJ Music Awards, 7 People’s Choice Awards, 4 MTV Music Awards, 2 BRIT Awards, 23 Billboard Music Awards, 54 million albums and 210 million tracks sold worldwide - the first and only artist with a RIAA 100 million platinum and gold certification; the numbers of Rihanna, the business woman are not too well known. With over 80 million facebook fans, 50 million twitter and 27 million instagram followers, Rihanna was recently named the “most marketable of all big-name celebrities” by NPD Group’s BrandLink database. Major brands across the world certainly agree, with Rihanna’s hefty portfolio of endorsement deals, including brands from Los Angeles to Brazil to Seoul and products ranging from Perfume to Coconut Water to Telecoms. One of the most fashionable celebrities of all time, the 2014 recipient of the Fashion Icon lifetime achievement award from the Council of Fashion Designers of America (CFDA), a special prize reserved for “an individual whose style has made a significant impact on popular culture on an international stage” - has leveraged her penchant for style to create partnerships with iconic names like Armani, Mac, Manolo Blahnik, Puma, Christian Dior and River Island. Add in her global tour revenue, an eight figure deal with Samsung, her ownership stake in Tidal streaming, the launch of her style agency Fra8me, the launch of her own record label and it’s clear to see that this woman from Westbury Road is now a global mogul.
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hen t h e Reverend Griffith Hughes published his Natural History of Barbados in 1750, he literally launched the Age of Enlightenment in Barbados. Newspapers proliferated, theatre flourished and three major schools - Combermere, Harrison College and Lodge - were established. Eminent physicians such as Dr. William Hillary carried out and published ground breaking research in the 1750s, and Barbadians were making a name for themselves in Britain and North America. The Chronic Disease Research Centre has helped to bring Barbados back to international attention as an academic centre. By the 1980s it became obvious that Barbados was experiencing a huge epidemic of chronic non-communicable and lifestyle-related diseases, costing a fortune in health care and compromising development of the nation. With the support of Professor Sir Ken Stuart in Britain, funding from the Overseas Development Agency of the United Kingdom and the collaboration of the Ministry of Health, the UWI was able to open the doors of the Chronic Disease Research Centre (CDRC) in 1992, with Professor Fraser as founding director. Our mission was to do the research that would inform policy, planning and programmes, to address the growing epidemic of chronic diseases. The site was a 14 room,abandoned historic house close to the Queen Elizabeth Hospital, restored at modest cost. In 2017 the CDRC celebrates 25 years, and it has grown from strength to strength to become an internationally recognised power house for research and training, and a star of the University. Beginning as a small unit with a part time director whose initial task included fund raising for its operations in the first eight years, it became a part of the Tropical Metabolism Research Institute of the University in 2000. Its early work was epidemiological, on obesity, diabetes and hypertension;the National Institutes of Health funded collaborative study of Hypertension (ICSHIB); the PAHO funded collaborative seven country study of ageing - The Survey on Health, Well-Being, and Aging in Latin America and the Caribbean (Project SABE);the definitive Barbados study of prostate cancer in men of African descent; outcomes of diabetes in pregnancy on teenagers; a collaborative asthma study with Johns Hopkins University; a definitive population study of lupus; the Barbados Stroke Study, leading to our Stroke Unit at the QEH;Centenarians in Barbados, the
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CIB Study; the Wellcome Diabetes amputation Study and the famous Barbados Eye Studies (BES). The Wellcome diabetic foot study, led by Professor Hennis, measured the burden of diabetic foot amputation in Barbados, with five- year mortality follow-up led by Professor Ian Hambleton. The most important message to come out of it has been the protective steps to avoid a limb amputation: to perform a daily foot exam and to avoid high risk footwear – a huge risk factor. The BES was a flagship programme of the CDRC during its foundation period. It was a collaboration with the Ministry of Health, State University of New York at Stony Brook and Johns Hopkins. It set out to learn more about major eye diseases in westernised African-descent populations, with the aim of reducing or preventing visual loss. The studies were sustained by 15 years of continuous NIH funding (1988–2003) and yielded some 70 scientific publications. They confirmed the highest population-based prevalence and incidence rates of glaucoma to date anywhere, and identified related risk factors in the Barbados population. Findings have been utilised in the USA to inform eye care policy for African Americans. Research outputs also included the discovery of a NEW gene for glaucoma. The BES were funded by the NIH and led from 1995 by Professor Anselm Hennis, who was Director from 2004 until 2014, moving to PAHO (Pan American Health Organisation) as Director of Chronic Diseases. The Edmund Cohen Vascular Research Laboratory was added in 2004, led by Professor Clive Landis, (Director 2014 – 2015) with ongoing funding from Mr. Edmund Cohen and the Edmund Cohen Trust. The lab has established itself as the leading vascular research centre in the Caribbean, with considerable international funding and 50 plus peer reviewed papers over 10 years. The lab also serves as an Immunology training hub, delivering undergraduate medical and PhD programmes for UWI, publishing HIV research with the National AIDS Program, and acting as regional co-ordinating centre running
accredited H I V / AIDS training workshops across the Caribbean. Research is focused on the role of inflammation and its resolution, improving the surgeon’s understanding of inflammation and haemostasis, and it has impacted patient care in ways that will continue to be felt for many years to come. Under Professor Hennis partnerships were strengthened with the Ministry of Health, including the creation of the Barbados National Registry of Chronic Non-Communicable Diseases (BNR). This is a ministry-funded active surveillance registry for stroke, heart attack, and cancer. Established in 2008, the BNR was highlighted in 2011 during Prime Minister The Honourable Freundel Stuart’s address to the UN High Level Meeting on Non-communicable Diseases. It provides prospective incidence and mortality rates for the leading causes of death in Barbados: from heart attacks, strokes, and retrospective estimates for cancer. The BNR report for 2013 recorded almost two strokes and one heart attack per day. These data helped inform planning for the Acute Stroke Care and Cardiac Units recently constructed at the Queen Elizabeth Hospital. The latest evolution in the CDRC development is a functional merger with the Public Health Group (PHG) in the Faculty of Medical Sciences, working towards a common vision and goals to translate research into effective population health interventions and prevention policies and practices, with a mission statement: To see the Caribbean leading the world in wellness. The merged departments have already combined on important joint research projects such as the Health of the Nation study (2015) and Barbados Diabetes Reversal Study (BDRS). The Health of the Nation (HoTN) study is a national survey, in collaboration with the Ministry of Health and the Statistical Service, coordinated by Christina Howitt under the supervision of Nigel Unwin, Professor of Public Health, and Angela Rose, Director of Surveillance at the CDRC. It was carried out between 2012 and 2013, to identify risk factors and chronic disease burden in the adult population. It revealed a mixed picture on risk factors, with little smoking offset by high levels of obesity, poor practices in diet and low physical activity. The burden of diabetes and hypertension was high, affecting one fifth and two fifths respectively of the adult population,
Anatomy of Excellence
and half of the over 65s. The BDRS is funded by Virgin Unite and was launched by Sir Richard Branson in December. The Diabetes Association and the Barbados Diabetes Foundation are key partners. The pilot study has examined the acceptability and transferability of a very low calorie diet, plus structured long-term support to the setting of Barbados. This research was published as a special highlight in the WHO’s Global Report on Diabetes, on April 06, 2016, and it is clear that remission and potentially the reversal of Type 2 diabetes can be achieved in this way. The PHG is leading the monitoring and evaluation of the landmark “Port of Spain 2007 Declaration on Non-Communicable Diseases” by CARICOM Heads of State. This evaluation, funded by the Canadian International Development Research Centre (IDRC), began in April 2014, with the aim to assess progress within CARICOM countries towards developing and implementing policies on the prevention and control of chronic non-communicable diseases. The project is led by Professors Unwin and Samuels with partners including the CARICOM Secretariat Health Desk, Caribbean Public Health Agency (CARPHA), the Pan American Health Organization (PAHO), the Healthy Caribbean Coalition and others. The CDRC / PHG is a powerhouse for advanced training in research and public health, with seven Ph.D. and five Dr.PH registrands, under the supervision of Professor Landis, Professor Hambleton, Professor Nigel Unwin and Dr. Samuels. The CDRC has sourced millions of dollars in foreign exchange in grants, provided many jobs and hugely boosted the research reputation of Barbados and the UWI. The CDRC is internationally competitive in raising grants and holds three current grant awards from the National Institute of Health (NIH), USA. The total amount of grant money raised since 1992 exceeds US$90M, typically in multi-centre grants, an average of US$4M per year. The estimated total remitted to the Cave Hill Campus is US$20M, or approximately US$1M per year. The majority of the CDRC’s operational budget is in fact derived from external grants, providing a continuous stream of training and employment opportunities for Barbadians in cutting edge research disciplines. In its 24 years of operation it has published some 230 peer reviewed medical and scientific papers, with increasingly high impact factors. It has had significant impacts on health care, both locally and internationally. And its mission is beautifully depicted in the mural,“Physicus – the Art of Healthy Living” by Barbadian artist and muralist Don Small, on the Western wall of the building. The CDRC is a dynamic, rapidly growing Centre, and a major star and powerhouse of the university, thanks to the vision, commitment, hard work and team work of many.
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Anatomy of Excellence
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as anyone ever heard of this place?” “Is this centre up to US standards?” “There is this place in Barbados I was checking out, but then I saw that the doctor was from Ireland, so I guess it must be ok.” “I believe that the doctor was from Australia, so I guess she is well educated!” The above - all comments from an internet message board where the topic of discussion was the Barbados Fertility Centre. Little did those discussants know that “yes”, the centre is up to US standards; and “no” – the doctor is neither from Ireland nor from Australia – she is from Barbados and she is very well educated! Dr. Juliet Skinner, head of and co-founder of the Barbados Fertility Centre smiles at comments such as those, because she knows well enough that any of those considering a visit would be more than satisfied – that Barbados would sell itself. “We always knew Barbados would sell itself. We just had to put a really good centre in place. So we didn’t have to market Barbados, what we just had to be was really good.” And it was with that in mind that Dr. Juliet Skinner and nurse Anna Hosford set out in 2002 to do what had never been done before in Barbados - establish an IVF centre. But not just any centre – from the start, the duo aimed to create a world class centre good enough to bring visitors from around the world. While there may be no box to check for it on local immigration forms, hundreds come to Barbados every year for the chance to have a longed-for baby of their own. The Barbados Fertility Centre was set up with medical tourism in mind as Dr. Skinner and Hosford knew that would be necessary in order to make the centre financially viable. “The vision if you like, was that Barbados did not have a fertility service, but in terms of when you look at fertility services, you generally need a population of three-quarters of a million to justify a high level IVF unit. So clearly at a quarter million we were too small to imagine that we would have an IVF unit that would work here,” explained Dr. Skinner. However they knew that whatever Barbados lacked in size, it more than made up for in its attractiveness as a holiday destination and this became part of their model of excellent fertility care in a stress-reduced environment. Infertility and stress are bitter siblings – in fact research has shown that women struggling with infertility have the same levels of anxiety and
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depressionas those with diagnoses of cancer or HIV. Hence for their clients, 85% of whom come from outside of Barbados, BFC helps alleviate some of that stress by crafting an holistic experience that combines their fertility procedures with a holiday. This dedication to relaxation can be felt as soon as one enters the centre which is located right across the road from a beautiful beach on the south coast. Soft music, soothing colours and a warm and friendly staff lend it the peaceful aura of a spa and in fact, the centre also includes its Life Wellness Centre which offers acupuncture, reiki, reflexology and aromatherapy massage to patients. Hosford’s face lights up as she describes the experience, saying: “We see it in our patients and on all their review forms, they say what a relaxing experience it was - so different from their last centre and they feel so individually cared for and so relaxed. On a first visit to the centre, especially when they come from overseas, they’re sitting here and they’re all hyped on adrenaline. Then we say ‘ok everything is going really well, take your meds and we’ll see you back in two days.’ They come back two days later and they’re a little bit sunburnt and they’re in their bikinis and they’re asking ‘how long is this appointment going to be because we’re going swimming with turtles’,” she says, bursting out in laughter, adding: “You can see they actually look like different people.” Creating the best experience possible for their patients is evidently something they take great pride in and both Hosford and Dr. Skinner readily identify this as one of the most important things which distinguishes BFC. In fact, it was this “patients first” philosophy which brought the two together as business partners in the first place. While the centre’s origins officially go back to 2002, they arguably go back further to the late 90s when Dr. Skinner, a 1988 Barbados Scholar was residing in Ireland, where she had done her undergraduate medical studies at Dublin’s Trinity College and then specialised for several years. A mutual medical colleague introduced her to Hosford, an Irish native who had worked at the Pacific Fertility Centre in California for many years. “To work with somebody, you have to have the same medical ethos [and] the connection that we had was that we both believed that the patients’ care
came first and you don’t always find that in medicine. We were committed to getting Barbadians pregnant and helping them. We had a joint dream,” explained Hosford. This ethos guided not just their origins, but informs their staff selection to this very day. After starting out with just 3 staff members, they now have 21 between Barbados and their satellite centre in Trinidad. Dr. Skinner explained that while qualifications are important for the specialised field of fertility medicine, equally important is “finding someone with the ethos, that believes in the patient… they have to see things in the same light – that care of the patient is premier.” Hosford adds:
“Our embryologist might stay sometimes until 7 or 8 o’clock at night just trying to find one single sperm down the microscope because we’ve put together a team that cares about the patient and [understands that] every one counts and they’re looking for that one sperm. It’s not just ‘oh well we can’t find that and it’s 4 o’clock and we’re going home.’ We go the extra mile for the patient and that’s what makes a difference between success and failure for some patients.” This passion is coupled with something incredibly important to
Anatomy of Excellence
couples seeking a child of their own – success. The BFC’s clinical pregnancy rates are up to twice the UK average where restrictions on the numbers of embryos that can be transplanted and the length of the culture period for the post egg retrieval mean lower success rates. Their success rates are equal to and in some cases slightly higher than what obtains in the USA, but despite this, their pricing remains competitive. In fact, the BFC’s IVF costs are about a third of those in the United States and so even with flights and accommodation for two weeks factored in, it still works out cheaper for American couples to do the procedure here. Besides their success stories and passion for patient care, another thing which sets BFC apart is its standing as an internationally accredited fertility centre. The centre is accredited by Joint Commission International, the US. based health facility accreditation programme which sets health care industry standards. Dr. Skinner noted that it “became obvious that if you were going to be serious in medical tourism it was very important to have a quality assurance mechanism” so in 2007, they underwent JCI’s rigorous process to get the centre accredited. They are the only such institution in the Caribbean that is accredited and have undergone inspection every three years to be able to maintain their standing. A broad smile crosses Dr. Skinner’s face when she speaks about their accreditation which is clearly a point of pride. She points out that it aligns with “the core of this vision [of] treating people from all over the world” as accreditation, was key in helping to give their international clientele a measure of comfort in crossing the ocean to come to Barbados for their fertility needs. “We knew if we were going to be treating people from all over the world and to make this work, we had to be accredited. It’s a tremendous feather in our cap.” The same could be said of the business which she and Hosford have nurtured and which has proven that the world will come to Barbados if world-class quality service is offered. The BFC is indeed a feather in Barbados’ cap.
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TREVOR THORPE AND RICKY JORDAN EXPLORE HOW WORLD-RANKING MOTOR SPORT HELPS TO MAKE BA R BA D OS CO M PE TITI V E
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mong the many advantages that make Barbados an exceptionally competitive international tourist destination, the variety of first class sporting facilities is prominent. Visitors to the island may choose among world class facilities and amenities for sports fishing, diving, surfing, yachting, golf, polo, horse racing, swimming, cricket and motor sport. Our sporting offerings complement all the other advantages that make the tourist experience in Barbados so unique and rich in potential: our famous white sand beaches, our equitable climate, the cooling trade winds, convenient international connections, quality accommodation to suit every pocketbook and preference, exciting and varied cuisine, fine infrastructure, a care for heritage and the environment, and the storied Bajan hospitality. It is the entire package that cements Barbados’ competitiveness as a tourist destination, and helps our tourist industry to rebound after every setback. Motor sport is a relative newcomer to the list of high quality sporting attractions in Barbados. This article chronicles the history of the sport, and says a little about the direct impact on the economy of recent activity such as the Sol Rally and at our newest world-class facility, the Bushy Park racing circuit. Equally important is the contribution that the development of this facility makes to embellishing the high quality of the Barbadian brand.
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T HE GROWTH OF AN INDUSTRY From humble beginnings starting with the formation of the Barbados Rally Club (BRC) in 1957, motorsport is fast developing into a major industry for Barbados. There was a time when one could easily say that cricket was ‘king’ in Barbados, now, one can argue that motorsport may be heading toward that position and at great speed. The roots of local racing stretch back as far as Barbados’ Independence itself, with go-karting being a popular event at Lowthers, Christ Church in the early 60s. The late Trevor ‘Bookie’ Gale was a member of the Rally Club’s first committee of management, taking over as chairman in 1963 and he remained in the post, with Bill Mallalieu as vice-chairman, for more than a decade, before the club’s restructuring elevated them to the newly-created positions of president and vice-president. Gale’s desire to create challenging events resulted in a great deal of innovation and in the early 1960s, he was the man behind the first road closures which, as he remembers, “opened up the whole business of speed events.” At the time, the Ministry of Highways & Transport would post notices at the Garrison on race days, making the perimeter road temporarily one-way; noting this, Gale approached the then Minister Edwy Talma to request that something similar be arranged for motor sport. That approach was eventually successful. Gale’s innovations also included the first long June Rally and the introduction of a Hill Sprint Series, using five venues around the island; Spa Hill and Turner’s Hall, which had already been used as tests within the June Rally, were combined with Bath, Greenland to Farley Hill and Thickets to Stewarts Hill, to make up the calendar. As Chairman, Gale oversaw the club’s expansion into circuit racing, first at Chancery Lane, in the late 1960s, then Bushy Park, before an adventurous enthusiast, Ralph “Bizzy” Williams, created the Barbados footprint for international racing on his father’s property at Bushy Park, St. Philip. When the Rally Club prepared a dirt track for racing at Chancery Lane in 1971, Williams, then a rally driver, had nothing to race, so he decided to remove the body off his girlfriend’s Volkswagen. “Some friends and I were at my home (in Bushy Park) one night having a party, and we had drunk a bit too much. I had
built a Volkswagen vehicle called ‘Foolishness’ and we raced it through the canefields that night. Next day we got up and looked at the track we had driven, and that turned out to be the track at Bushy Park. “For 40 years it remained the track. We decided to make it into a dirt track. After the canes were harvested, we bulldozed the dirt track and motor racing started then,” Williams recalled. Bushy Park was opened as a dirt track on Independence Day, 1971 with the hosting of the Hilton GT Championship and was paved by Easter the following year. “The island turned out in force (for the Easter event). Estimates suggest 20 000 people and Prime Minister (now National Hero) Errol Barrow arrived by helicopter to officially open the first tarmac raceday – “less of a stunt, more of a necessity, such was the weight of the traffic!” wrote Robin Bradford in the book, 0 To 50: The Barbados Rally Club 1957-2007. It was therefore not long before Williams, among others, started single-seater racing and actually went into a 50-50 joint venture with a British author and manufacturer. By 1972, Barbados’ first racing car manufacturing business, Terrapin Racing and Developments Ltd., was registered. The rest is history, as some local racing cars competed in Jamaica, St. Vincent and Trinidad and Tobago, before Terrapin Racing and Developments Ltd became locked into union negotiations, profits dipped and the company was closed. By that time, Williams had been forced to close the Bushy Park track because of the oil crisis, but some of Terrapin’s former workers formed a company called Barbados Metals and ventured into steel fabrication in the Bushy Park clubhouse. This was the foundation for Williams Metals and Structural Systems, which evolved out of building cars and today constructs steel-based buildings around the region. But that’s another story. “You cannot look backwards. It was that time when the price of oil shot up in the air, and there was a lot of concern in Barbados about the future. Those were rough times, so we voluntarily closed down the race track,” Williams told EI.bb. When Ward Simpson and Simon Defreitas reopened the track a few years later, again race-hungry thousands flocked to the venue. Simpson emigrated and Williams and Tiny Harrison restarted racing in the 1980s under the banner of the Barbados Auto Racing League (BARL). The league mainly comprised young, talented, black drivers who could not afford fancy cars for rallying and each Sunday BARL, under the effervescent Harrison, made Bushy Park the place to race, and to lime. And not only did Williams Industries sponsor an international
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meeting every year for 17 years, but local car racing became so popular that drivers came from across the region and Britain with their vehicles to participate. “Some English drivers used to come here with their entourages and take a whole wing at some hotels. Ronnie Peterson, when he was the fastest man on wheels, also used to come to Barbados,” Williams recalled. The Bushy Park track attracted attention as far as the Middle East, and the Federation Internationale de L’automobile (FIA) offered funding to worldwide racing bodies, including Barbados’, to help develop their facilities; giving Barbados $800 000, while Williams and the Maloney family contributed $100 000 each. Bushy Park was now an international track, with Government compulsorily acquiring the land and Mark Maloney taking over the project and fine-tuning the newly designed track and facilities. Bushy Park is now a world-class track, which is now fully certified as an international Grade 3 circuit. The Bushy Park Circuit Inc. (BPCI), the new owners of the St. Philip racing facility, has in recent years, hosted major events including Top Gear in 2014, the Race of Champions (ROC) and Barbados Festival of Speed in May 2016. With World Formula I champion Lewis Hamilton as the major attraction at both the Top Gear and the Barbados Festival of Speed, thousands flocked to that venue. Sol Rally Barbados, one of the largest motorsports events in the south Caribbean, also has the most popular front line drivers and benefits from international coverage from SKY television and other major sports channels. The Barbados Rally Club (BRC), organisers of the event, report that in 2015, the year of the 25th anniversary of the international event, it is estimated that the rally event added more than $3Million to the economy. More than 370 visitors, representing a total of 4654 tourist nights travelled specifically for Sol RB15. The highest percentage came from Britain and Ireland, with smaller groups from Canada, New Zealand and North America, along with strong regional contingents from Jamaica, Trinidad & Tobago and the Turks & Caicos Islands. Most stayed in hotels, nearly 200 rooms were booked, although a number of repeat visitors now stay in villas. In 2016 91 cars were listed on the provisional entry list for the Sol Rally, with drivers, or co-drivers from a record-equalling 17 nations, including Barbados, along with 42 overseas crews.
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DEFINITION The UNWTO definition: “Tourism is made up of a collection of diverse activities, services and industries that are focused on delivering a travel experience to individuals travelling away from home”. Under this definition there are various different categories of tourist activities including: Domestic tourism - Activities of residents in their home country; Inbound tourism - Non-resident activity with a particular region; Outbound tourism - Activities of residents travelling to other regions; In transit tourism - Activities of visitors undertaken while they pass through a particular region; National tourism - Sum of domestic and outbound tourism; Internal tourism - Sum of domestic and inbound tourism; International tourism - Sum of inbound and outbound tourism.
E MPLOYMENT AND INCOME Given the large number of activities covered by tourism, most national statistics do not have a single statistic for “tourism”. It is normally implicitly included in various areas of economic activity (e.g. distribution, transportation, restaurants, among
other areas). The category Accommodation and Food Service, however, is most directly associated with tourism and is usually taken as the direct measure/contribution of tourism to economic activity. The Accommodation and Food Service industry is one of the largest employers in Barbados. At the end of the second quarter of 2015, the Barbados Statistical Service estimated that this industry provided employment opportunities for 15,200 persons, or approximately 12% of all employed individuals in the island. The industry is particularly important for females, with 15 percent of all employment opportunities for females found in the Accommodation and Food Service industry. Additionally, the tourism industry is also responsible for the generation of a significant share of national incomes. In 2014, the direct contribution of the tourism industry was BDS$1.1 billion, or approximately 15 percent of total incomes generated in the island.
services consumed by the tourist. When, for example, an individual travels to Barbados, they might take a taxi or coach from the airport or cruise terminal, stay at a hotel in St. Lawrence Gap, visit St. Nicholas Abbey and purchase souvenirs and other items from stores around the island. This simple illustration suggests that the activities of the tourist touch a large number of industries beyond just accommodation and catering, including transportation, distribution and places of interest. In addition to the direct spend by tourists, the tourism industry also contributes to other industries as a purchaser of inputs. For example, a hotel that is refurbishing its property will purchase building/construction materials, as well as furniture from domestic manufacturing companies. Once the hotel re-opens its doors, the kitchen in the hotel would be expected to be stocked with local rums and other beverages and would normally use fresh fruits and vegetables in the preparation of meals – fruits and vegetables purchased from farmers.
SPILLOVER EFFECTS The direct contribution of the tourism industry discussed above, significantly underestimates its importance. Since the activities of tourists touch so many spheres of activity, when one considers the indirect/spillover effects, the overall contribution is significantly larger. Tourism activities should be considered as a basket of goods and
THE MULTIPLIER EFFECT This multiplier effect of the industry is not limited to only the expenditure of tourists and the purchase of inputs by accommodation and foodservice establishments. What about when an individual who was previously unemployed finds a job in the industry? When this individual spends his income
Figure 1: Contribution of Hotels and Food Service Industries to Total Value-Added (Source: Barbados Statistical Service)
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Figure 2 Barba : Employm e dos S tatist nt by Indus ical S e t r vice) r y (Source : on goods and services, this also generates additional income and economic activity on the island. This additional expenditure then creates further economic activity resulting in additional jobs and spending. Through multiple rounds of income and expenditure resulting in further economic activity, the so-called multiplier effect of tourism can be quite large. The World Travel and Tourism Council (WTTC) attempts to provide statistics of these ‘wider impacts’ of tourism and in 2015 estimated that the total contribution of travel and tourism to economic activity was BDS$3.5 billion. Relative to overall GDP, the total contribution to GDP of the travel and tourism industry in 2015 was just under 40% of total economic activity.
REDUCING THE LEAKAGES While the contribution of the tourism industry is already quite
significant, policymakers remain quite interested in reducing the leakages associated with the industry and therefore increasing the local contribution. Tourism leakages largely refer to the imports of goods and services into the industry. For example, each time a hotel purchases imported beer or wine, these products must be paid for from the foreign exchange earnings that the industry would have contributed to the local economy. One of the means of increasing the contribution of the industry to the domestic economy is to reduce the size of leakages from the industry, largely through greater linkages with domestic businesses. For example, if more local agricultural produce were utilised within the tourism industry, this would enhance the sales of farmers and increase employment in the industry. While such linkages are easy to form, it is important that such business relationships are beneficial for both parties involved. For hotels, they require consistent quality and quantities to provide for their guests, while farmers would require forecasts of likely demand to ensure that they can meet the demands of the hotels. Barbados already has some excellent examples of innovations to reduce leakages associated with the tourism industry. One such example is the
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Oistins Fish Fry. This attraction uses locally caught fish, prepared by small businesses in a local fishing community. Initiatives such as the Oistins Fish Fry, reduce the industry’s dependence on imported inputs and can therefore enhance the domestic contribution of the industry by reducing leakages.
CONCLUSION The tourism industry touches almost every sphere of economic activity in Barbados, either indirectly or directly. It is estimated that almost 40 cents out of every dollar of economic activity generated is due to tourism. With such a large share of activity being driven by the industry, there is almost no area of economic life on the island that is not either directly or indirectly associated with tourism. In addition, given that we are operating in a competitive environment for visitors, it is incumbent on all Barbadians to play their part to facilitate the industry - by helping the industry, we are certainly helping ourselves.
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Central Bank Governor Dr. DeLisle Worrell, Explores the bright side of a Green Economy WE used to think that the greatest windfall that a country could experience was to find oil in commercial quantities, and we all envied Trinidad’s status as CARICOM’s only oil exporter. However, technology has now evolved to the point where the entire Caribbean, and sunny countries everywhere, have much better prospects than oil producers do: we can produce all the power we need from renewable energy sources, and, unlike oil, supplies will never run out. In Barbados’ case we can generate all the electricity the country could possibly need from solar and wind energy.
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eteorologists tell us that Barbados enjoys eight to nine hours of sunshine daily, all year round. That sunlight provides every home in the country with more energy than it could ever use for all our needs for electric power, cooking and transportation. Unfortunately, most of that energy comes in the form of heat, which cannot be easily converted to a form that is useable for any purpose other than heating water. As recently as five years ago, it was so expensive to convert sunshine to electricity that the average middle income household could not seriously contemplate doing so.
PHOTOVOLTAIC SYSTEMS However, the prospect has changed dramatically in the last few years, with the introduction locally of affordable photovoltaic systems for households. You can now buy a system that will supply your entire electricity needs, reducing your average monthly payment to The Barbados Light & Power Co. Ltd. (BL&P) to zero, for less than half the price of a new standard-sized four door family sedan. You can obtain financing from banks, credit unions and other financial institutions for the purchase, on terms that are affordable. You will be able to claim a rebate on your income tax for the expenditure on your system. From the time your system becomes operational you will never have to pay another monthly electricity bill, and once you have fully repaid your loan, you will be supplying your own electricity from our abundant sunshine, free of cost. I am exaggerating, of course, but only a little. Your system will come with a guarantee of perhaps 20 years, but you will eventually need to upgrade or replace it, so you will need to set aside amounts for depreciation. You will also have maintenance costs and the cost of additional property insurance, to ensure your system is covered in the event of disaster. There is an additional cost that householders will have to bear. The systems that middle income households can afford are linked into the BL&P grid. In the daylight hours they produce more electricity than they need, and they sell the surplus to BL&P. At night and on cloudy days BL&P sells that surplus back to the household. There are more than a dozen commercial suppliers who can design your system so that, on average, those two amounts balance out. However, for the overall system to remain viable as more and more consumers install their own systems, each one will have to pay BL&P some amount for providing this storage capacity. The power company is happy to receive this payment in kind, so households would need to supply more than they buy back, to break even.
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SAVINGS IN THE MILLIONS If the necessary solar and wind generation had been in place last year, Barbados would have saved $208.7 million in fuel imports. If, in addition, all cars, buses, trucks, construction machinery, etc. were powered exclusively by electricity, we would have saved another $182 million, and in all we would have reduced our import bill by 15 percent. (In 2014, with higher oil prices, fuels were 20 percent of all imports.) The money we would have saved could have been used to invest in new hotels or infrastructure. It would have increased investment by over 50 percent and might have created hundreds of new jobs. The overall impact on the economy would have been to raise our economic growth rate from about one percent (Central Bank’s revised estimate) to more than 5 percent. In the Caribbean growth league tables, Barbados would have been number one last year. What stands between us and this beckoning future is the investment that must be made in solar photovoltaics, wind generators, storage facilities and power distribution. In addition, all gasoline and diesel powered vehicles would need to be phased out in favour of electric vehicles. This requires Government to commit fully to the 100 percent renewable energy strategy, and provide the incentives and support needed to accelerate the required investment. We have already made a promising start in the direction of energy independence. Individuals and businesses have taken advantage of fiscal incentives to install solar PV systems in increasing numbers, and the BL&P has broken ground for a solar farm in St Lucy. They also plan a wind farm at Lamberts in St Lucy.
ELECTRIC CARS ON A ROLL More than 100 electric cars are now on Barbados’ roads, thanks to the remarkable enterprise of Megapower, and that company has installed charging stations conveniently located across the island. Permission is awaited for the installation of wind generators by private companies and options are being actively considered for storage of energy sufficient to drive the grid at night and when there is no wind. All this can be done with systems that are tried and proven, and we have studies available which demonstrate how these systems can be combined in a way to satisfy 100 percent of our country’s needs, with fuel that is in abundance, free of cost, and that will never run out. A remarkable economic opportunity is now ours for the taking, but it will call for a firm commitment on the part of Government and all Barbadians. (Taken from remarks made by Dr. DeLisle Worrell, Governor, Central Bank of Barbados, at the Barbados Employers’ Confederation Green Energy Open Forum on May 12, 2016).
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TRACKING and reporting debt is critical to monitoring the obligations of the Government and the wider public sector. The debt statistics compiled by the Central Bank of Barbados therefore aid in this process by providing accurate information that is consistent with international standards. Understanding the derivation of these statistics also ensures transparency, not only for technocrats, but for the wider public. The definitions of debt used by the Central Bank are guided by the 2011 Public Sector Guide for Compilers and Users, as stipulated by the International Monetary Fund. These definitions include Gross Government and Public Sector Debt, as well as Net Government and Public Sector Debt. • Gross Government Debt (D) takes into account all the liabilities that Central Government has contracted from both the private sector, as well as government entities. Debt held by the National Insurance Scheme (NIS) is not
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included since NIS is considered part of General Government (i.e. Central Government, as well as any non -market institutions controlled by Central Government). • Gross Public Sector Debt (I) however encompasses the debt not only of Central Government but also that of public corporations i.e., Central Bank and other statutory bodies. It is important to note that government debt held by Central Bank is removed (H), since it is already captured in Gross Government Debt. • Net Government Debt (F) is calculated by removing government assets from Gross Government Debt. These assets include deposits held at the Central Bank, commercial banks, the assets of NIS and other Government departments. • Net Public Sector Debt (K) is further derived by subtracting any assets owned by the public corporations.
By Michelle Doyle-Lowe
$8,336M
Net Government Debt
95% of GDP
I
+
Data as at March 31, 2016
$8,089M
What Government owes to Banks, Insurance, other Private and Foreign Companies
92% of GDP
A $9,434M
108% of GDP
Gross Government Debt
D
$1,341M
What State-Owned Enterprises owe to Domestic and Foreign Banks and Finance Companies
15% of GDP
E
+
+
–
$4,515 M
52% of GDP
–
–
What Government owes its Entities
B $1,341M
What State-Owned Enterprises owe to Domestic and Foreign Banks and Finance Companies
15% of GDP
E $9,434M
108% of GDP
Gross Government Debt
$3,170M
Government Debt held by NIS
36% of GDP
C $1,128M
Central Bank Holdings of Government Securities
13% of GDP
F $1,098M
13% of GDP
Government Liquid Assets
H
– D
J
28% of GDP
State-Owned Enterprises Assets
$2,416M
–
$1,128M
Central Bank Holdings of Government Securities
13% of GDP
F
=
=
=
=
$9,434M
108% of GDP
Gross Government Debt
D
$9, 647M
Gross Public Debt
110% of GDP
G
$8,336M
95% of GDP
Net Government Debt
I
$6,133M
69% of GDP
Net Public Sector Debt
K
67
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We Barbadians love to debate political, economic, social, and sporting or any other issues. From social gatherings to rum shop conversations, we are happy to engage each other on the issues of the day. Do we ever reflect on how our central bank informs these conversations? In its 44-year history, the Central Bank of Barbados has contributed to the national and private conversations through its eclectic series of public lectures, seminars and workshops, all components of its education and information arsenal. And in 2014, current Governor Dr. DeLisle Worrell instituted the Distinguished Visiting Fellowship programme. It was the vision of founding father of the Bank, Sir Courtney Blackman, to expose Barbadians to the foremost international intellectuals in economics, finance and an array of other disciplines germane to our sustainability as a nation. These discourses, Sir Courtney advocated, expanded our education, sharpened our insights, encouraged debate, and contributed to domestic policy decisions. Subsequent governors, cognisant of the gargantuan benefits of these fora have sustained a robust agenda of stimulating conversations, featuring international experts.
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Because of Sir Courtney’s vision, the Bank remains the host of the oldest lecture series on the island: the Sir Winston Scott Memorial Lecture. This lecture, now in its 41st year, celebrates the life and work of our first native Governor General Sir Arleigh Winston Scott, and like Sir Winston, presenters in the series are all trailblazers in their respective fields. In similar fashion, the Bank’s conferences, seminars and workshops showcase some of the most accomplished scholars, theoreticians and experts whose ideas and work are helpful to the country’s situation. In just the past three years, through the Distinguished Visiting Fellow programme, Barbadians have savoured the unique opportunity to interact with three internationally recognised economists who have influenced international public policy and initiatives. Dr. Fred Bergsten and Dr. Simon Johnson of the Peterson Institute in Washington DC, and Dr Peter Blair Henry, Dean of the Stern School of Management of New York University, and a member of President Obama’s transition team in 2008, all got to understand Barbados’ economic situation, while sharing ideas in their specific areas of research and work, and focusing us on new trends and thoughts impacting global economics and finance. The many guest lecturers and fellows spend from a few days to a few weeks on the island, engaging in meetings, courtesy calls with top policy makers and full scale public fora. They, and other visitors who have come since the 2008 global crisis, have reiterated that countries are facing a tough, complex, uncertain global environment that requires rigorous analysis, determination, hard decisions and new approaches. In 2015, Per Callessen, former Governor of the Central Bank of Denmark presented a lecture on “Experiences with Fixed Exchange Rates and Economic Performance in Small Open Economies”. Like Barbados, Denmark has maintained a fixed exchange rate for decades. Per Callessen told his Barbadian audience that the two countries’ social and economic successes are partly attributable to the maintenance of such a rate. He argued that devaluation for small economies like Barbados or Denmark leads to imported inflation, which negates any of the benefits that such a measure was intended to provide. Callessen posits that the first devaluation signals further devaluations in the future and that this, and exchange rate fluctuations in general, have a destabilizing effect. In his opinion, devaluation for a small economy
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will result in “permanently high inflation, high uncertainty and lower prosperity”. So against all odds and international pressures, Barbados has maintained a parity of $US1.00 to $BD$2.00 since 1975. Denmark, on the other hand, has pursued a fixed exchange rate regime since 1982 - first against the D-Mark and from 1999 against the Euro. The Danish, like us here in Barbados, defend the peg vehemently because in our view devaluation is not the right option for small open economies like ours. Fred Bergsten, the first Distinguished Visiting Fellow and Founding Director of the Peterson Institute, also commended Barbados for defending and maintaining its fixed exchange rate. He said he was “enormously impressed” by the national consensus that Barbados’ currency should not be devalued, noting that while there is debate about how to tackle the country’s economic woes, no one - not the opposition or intellectual leaders - had suggested devaluation. He noted that everyone agreed that our policies should be aimed at maintaining the foreign exchange reserves and protecting the peg. He praised the country’s record since independence to defend the exchange rate and was optimistic that despite the debate about the current economic strategy the prospects for Barbados were very strong. He was on the island in early 2014, when debate was raging about government’s fiscal adjustment measures to curb the slide in the foreign reserves and in so doing protect the value of the Barbados dollar.
On our economic strategy, Dr. Bergsten offered this advice: Government should limit its spending to what it can afford, get its own house in order and then create a facilitating environment for the private sector. He believed the solution to the current economic woes is a combination of fiscal responsibility and structural reform - incentives to investors and labour markets. Also needed, he thought, was more foreign direct investment.
Barbados’ livelihood relies on a few sectors: tourism, agro-processing, International Business and Financial Services and we are now reigniting the renewable energy industry. While there have been calls for greater diversification, Dr. Bergsten disclosed that it is not easy for a country like ours to concentrate on a larger number of sectors. He acknowledged that while it is important not to become over-reliant on any one sector (e.g. sugar, tourism), “small economies like yours...really do have to focus, I think, on a relatively small number of economic niches” or “they run the risk of doing nothing well”. According to Bergsten, countries like Barbados should focus on areas where they are globally competitive and have comparative advantages instead of over-diversifying: “do more of what you do best”, was his advice. To weather the economic and financial storm of 2008, our Government crafted its own recovery strategy. It implemented a medium-term plan to effect fiscal reform and fuel economic growth. That plan is built on cost cutting and revenue raising measures, including the change in financing to tertiary institutions and job cuts in the public sector. There was much debate about the island’s ability to prescribe and administer its own medicine at the time, but Michael McGrath IMF Alternative Director, Canada, Ireland and the Caribbean supported such a remedy during his presentation at the 2015 Annual Review Seminar. In his view, home grown strategies, even if they are informed by international expertise, are more likely to receive cooperation from citizens. Such cooperation is imperative for recoveries and reforms to be successful. McGrath was at the time sharing his personal experience as one of the principal architects of Ireland’s medium-term and multi-year plan, which was crafted largely by the Irish, with assistance from the International Monetary Fund (IMF). That programme included slashing long-held social programmes and a healthy dose of communication to inspire public confidence in the strict austerity plan. He explained that another reason for Ireland’s economic recovery was the country’s early introduction of short-term measures to prevent further decline. These initial measures were soon buttressed by medium to long-term plans that led to true reform. Dr. Peter Blair Henry, the Bank’s second Distinguished Visiting Fellow, in weighing in on Barbados’ current economic strategy cautioned that Governments must be willing to forego quick fixes that produce instant
results. He explained that the best strategies offer more enduring outcomes, even if that success is not immediate. It was against this background that he commended the Sandiford administration for implementing the austerity measures in the early 1990s to address the deterioration of the fiscal situation and safeguard the peg. An eight percent cut in public sector wages was at the heart of the Sandiford adjustment strategy. Henry’s assertion: hard times require tough policy initiatives that put country above any other interest. He further explained that this plan to avert devaluation of the Barbadian dollar succeeded because it showed the three elements critical to successful leadership during a crisis: discipline, clarity and trust. The government showed the willingness, and courage, to pursue a necessary course of action, it was clear in its commitment and about its rationale, and in so doing it engendered the trust of the social partnership - an arrangement among government, the private sector and trade unions - which ultimately agreed to the measure. Dr. Henry’s advice to the current administration in light of the ongoing economic challenges is to again make difficult choices. While acknowledging that Barbados has been a standard bearer in the Caribbean for the provision of social services, he argues that the government cannot continue to offer free healthcare and education to those who can afford them. “Government cannot be everything to everyone”, Dr. Henry asserted. Paul Volcker, the former Chairman of the Federal Reserve Bank who spoke at the Frank Collymore Hall in 2012, was a sobering reminder that Barbados was not the only country experiencing low growth, high deficits and generally slow economic activity after the 2008 financial meltdown. The United States was at the time in the throes of economic difficulties as well. Volcker revealed that the United States, once an economic powerhouseaccounting for more than half of the world’s GDP had seen that figure slip to 20% as compared to the so-called “emerging markets”, which now enjoy 50%. These markets, particularly China, but also India and Brazil, have managed to lift hundreds of millions of their citizens out of poverty, as a result. In contrast, the USA, while still being richer, had not experienced any real economic growth. He also spoke of the trade imbalance between the US and China, where the US was buying and consuming products from China and paying with treasury bills and in so doing, running up large debt. According to Volcker, the financial crisis of 2008 was in large part the result of financial institutions becoming too interconnected, complicated, opaque and risk prone. A look at the US housing market leading up to the collapse provides an example
of the types of risks these financial institutions were willing to take: decisions were based on speculation that the price of housing would go up and there was little to no vetting of applicants for mortgages, who were then required to pay little, or no down payment on their properties. Volcker said that post-crisis, some changes have been made, such as Dodd Frank, which allows the US government to take over a bank that has been deemed “too big to fail” without having to go through the usual bankruptcy procedures and then run it for a time before merging it with another entity, breaking it up or selling it. While these measures exist, Volcker is skeptical that this will happen. He further believes that as long as large corporations know there is a safety net, the risky behaviour will continue. He also spoke of the “boom and bust” cycle, where low interest rates led to cheap loans that kept the economy afloat before the inevitable collapse. Ireland, Greece, Portugal, Spain and Italy, have experienced similar fates. Over-borrowing, high domestic deficit in most instances (10% in the USA) and lack of discipline, are contributing factors. Volcker concluded that there was a lack of “disciplined financial policies” that could lead to growth. Simon Johnson, former Chief Economist at the IMF and the Bank’s third Distinguished Visiting Fellow, advocates breaking up big banks as a critical component to effecting international banking reform following the 2008 crisis. He shared his insights on the “too big to fail” debate, as well as on the global economy, economic policy and the United States General Elections. His focus though was on the revolution taking place in the currency market: the emergence of digital currencies. He revealed that the blockchain technology, on which Bitcoin is built, supports the production of other digital currencies, either by the private sector or by central banks. He predicted that digital currencies will be as penetrative as the Internet and that very soon they will be widespread. Digital currencies will transform economic activity by facilitating and simplifying electronic payments and they will facilitate and simplify payments and settlements; transactions and records will be updated in real time and managing economies and financial activities,will be easier.
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Professor Johnson therefore encouraged us to think of creating a digital Barbados dollar, saying this initiative could be undertaken by local telecoms companies and commercial banks. Should Barbados undertake such an initiative, it would be a world leader in digital currencies because very few countries are conducting projects in the usage of digital currencies. In Mexico, a project to pay welfare is under way and the Bank of England is exploring a payments system. At a Financial Stability Board (FSB) meeting in Tokyo, FSB chairman and Governor of the Bank of England, Dr. Mark Carney, noted that FSB members had seen “actually quite exciting opportunities” associated with the application of the technologies. Bitt.com, a Barbadian company, launched a digitized Barbadian dollar on the Bitcoin blockchain and has announced plans to digitize the entire fiat currencies found in the Caribbean and place them on the blockchain so they can be easily traded among the islands. Overstock.com has invested $16 million in Bitt.com. Dr. Johnson suggested two other possibilities – permissioned Block chains for the transfer of assets, including potential money or the Central Bank Issued Digital Cash (CBDC), in which everyone has an account at the Central Bank. The experts whom we have shared with all of our publics and stakeholders are on top of global finance and economic matters. “Giving Barbadians the perspective of international economic luminaries has… been a positive,” a domestic publication commented. The visitors have all reminded us that there are no simple fixes to the economic challenges that we confront, but we have some of the prescriptions, including maintaining our fixed exchange rate. Moreover, they have underscored that we do not stand alone in our experiences: the difficulties are global and that we are but a small dot in a highly interconnected world. Many of us, in our private and social discussions, recognise that when the world coughs, Barbados is infected. Our lecturers and fellows have reiterated that the infections are serious, requiring strong medication and patience with respect to the recovery period because it can be long. It’s a message that some of us get and are spreading in our private and our social discourses.
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A MAJOR RESEARCH project involving a team of economists from across the Caribbean has taken a critical look at the size of the Government deficit and its relationship to economic indicators such as GDP, government debt, foreign exchange reserves, levels of imports as compared to exports, and others. The results are contained in the recently released book, Fiscal Sustainability and Debt in Small Open Economies: An Application to the Caribbean. The research team argues that while the traditional indicators are important, some are given undue significance when predictions about a country’s ability to pay its debts are being made - or when interest rates are being applied, or when credit ratings are being set by the international ratings agencies. While the book’s data and research models focus on the Caribbean experience, the insight gleaned can be applied to all other small open economies, whose dependence on foreign exchange is something they can’t change over time. According to Team Leader Governor Dr. DeLisle Worrell of the Central Bank of Barbados, that was one of the motivations for this study, to do a documentation based on experience, based on theory and based on empirical testing – so that arguments are linked to ‘lived experience’ and not abstract theories.
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The data presented maintains that the ‘crisis’ label should only be applied if the pressure on the foreign exchange reserves is such that the country can no longer service its debts. More simply put, making the debt-to-GDP ratio the linchpin on which most other assessments hang is misleading. And somewhat unfair. But why shouldn’t the debt-to-GDP ratio be the main indicator to watch? How significant are a country’s fiscal policy, socioeconomic challenges, or foreign exchange reserves to the credit rating it is branded with? The book maintains that these are good tools, but can make a slippery situation worse if used inappropriately by the international financial market, and the wrong conclusions drawn as a result. We are given examples of how countries with similar debt-to-GDP ratios are sometimes assessed to have radically different sovereign risk profiles, according to such conventional analyses as the IMF’s Debt Sustainability Analysis methodology. In these cases, the researchers assert that the assessment process is counter-intuitive. For example, the fiscal and debt profile of the UK is currently similar to that of Spain, but whereas there is a general perception that the Spanish fiscal policy is unsustainable, the UK fiscal policy is deemed to be sustainable. As a result, the UK is able to avoid the punitive debt service costs which the market imposes on Spain. Similarly, a Caribbean country such as Barbados has a debt-to-GDP
ratio of the same magnitude of some industrial countries and is recognized as having strong policy-making institutions, yet Barbados’ debt is judged not to be of investment grade, while that of their larger counterparts is. Rather than following a knee-jerk prescription of debt restructuring or currency devaluation, this research encourages regional governments to first explore all other options. For international lending agencies to recommend debt restructuring as a first option is a flawed strategy, the book argues. Debt restructuring is to countries as declaring bankruptcy is to individuals say the researchers and once that step is taken, creditors are likely to shy away from you for the future, or create scenarios where going back to the market becomes prohibitively costly. This book should be recommended reading for all who want to gain greater understanding of sovereign debt ratings, the fiscal sustainability issues facing small open economies and of recent Caribbean experiences with structural adjustment programmes, devaluation and debt restructuring. Data and analysis highlight the experiences of Aruba, Bahamas, Barbados, Belize, Jamaica, Trinidad and Tobago, Suriname and the Eastern Caribbean Currency Union.
THE term “printing money” always conveys intrigue and mystery among those who take it literally. In fact however, when properly examined, one will find that “printing money” is really not quite what we expected. Here is an explanation. According to the March 2016 Economic Press Release from the Central Bank of Barbados, in the fiscal year that ended in March 2016, the Government collected almost $2,600 million in revenue, while spending some $3,440 million. That difference, some $840 million, had to be borrowed. Approximately 108.5 million was raised by way of Savings Bonds and from private pension funds, insurance companies and others; the NIS subscribed $71.2 million from revenues in excess of its payments; and commercial banks contributed another $238 million directly or indirectly. There was no net funding from abroad for the period. That left approximately $190 million of Government spending for which there was no financing available from any domestic source. In order to avoid a buildup of arrears of this amount, the Central Bank made advances to Government, sufficient to cover the remaining expenditure. This is the amount that is properly to be regarded as an injection of additional spending power into the economy, which for reasons which are obscure and uninteresting, most economists refer to as “the printing of money”, or new money creation. The printing of money is problematic precisely because it is an injection of additional spending power, and it is in Barbados dollars.
BY
LAURIE
BLACKMAN
All AND DR. DELISLE WORRELL other Government revenues and financing are in effect a recycling of revenues earned by individuals or companies. In the case of taxes, this is obvious. It is also the case for savings bonds and purchases of Treasury Bills and Government bonds by individuals, banks, insurance companies and others. These are funds that were accumulated, in excess of the expenditures by their owners. The amounts advanced by Central Bank are different: they are new money, which is not derived from any previously earned income. That creates a major problem, because this new money goes to fund spending -- on wages, goods and services, and other areas. Those who receive this money will in turn spend it, at the supermarket, at restaurants and bars, and elsewhere. The sellers now need to import more to restock, but no additional foreign exchange has been generated to fund these imports. The upshot is an additional demand on the Central Bank, to provide foreign exchange from its reserves. That is the reason that the term, the printing of money is to be avoided: it results inevitably in a loss of foreign exchange reserves. It is also clear from the above what must be done to avoid the printing of money or new money creation: Government expenditure must be reduced to the amount that can be financed without resort to the Central Bank. It is not the “printing of money”, but the lending to government that is referred to by that term, which is to be avoided.
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By Dr. DeLisle Worrell
T
he Barbados dollar has remained unchanged in value, at 50 US cents, ever since the currency was first pegged to the US dollar in 1975. Barbadian policy makers have been able to maintain the rate even though our island is as exposed to international economic influences as any of our neighbours, and even though we have had to negotiate through similar changes, such as the impact of fuel and commodity prices, international financial crises, and other international events. How have we managed to do this, can we continue to defend the value of our dollar? Forty years ago no-one believed that countries as small as those of the Caribbean could sustain domestic currencies that were independent of the US dollar or sterling, which were then considered the two international reserve currencies. At inception, all our currencies were pegged to sterling, and later switched to the US dollar, in acknowledgment of the predominance of dollar transactions in our economies. However, imbalances emerged in the 1970s between the amount of foreign exchange receipts and the amounts needed to pay for all the goods and services our citizens wanted to import. The differing policies that were adopted in response to this excess demand for foreign exchange, have largely determined the varying fates of Caribbean currencies. Throughout the Caribbean in the early 1970s there was a focus on stimulating production, rather than consumption, on the argument that increasing production would create more jobs, while consumption did not. Stipulations were made on consumer credit, including high down payments and short repayment periods, to
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discourage consumption. They did not work, because people soon found ways around them. Efforts were also made to control spending on imports directly, including putting higher tariffs on goods that were considered luxuries, prohibiting the importation of certain items, and rationing the importation of others. It was argued that the available foreign exchange should first be allocated for essential items, and that local production should be protected from competition from abroad. Controls on foreign exchange transactions were not new to the Caribbean. They were a feature of the monetary systems which preceded the establishment of central banks, when currencies were issued by currency boards and backed by foreign reserves held in sterling. The Caribbean was then part of the sterling area; money could be transferred freely within the sterling area, but there were controls on transactions outside the area. When Caribbean countries set up central banks to issue their own currency they kept the exchange controls and adapted them for their own purposes. It soon became apparent that, whatever beneficial effects exchange controls may have had, they were not having a sufficient effect on total import demand. It was at this stage, in the latter years of the 1970s, that economic policies in the English-speaking Caribbean began to diverge. Trinidad and Tobago, Jamaica and Guyana all intensified exchange controls to a greater or lesser degree, including, in some cases, elaborate attempts to budget total foreign expenditure. Guyana’s policies were the most extreme, going to the extent of
global bans on most categories of import, even basic consumption goods such as rice and flour. The exchange controls failed in their intent, which was to contain the demand for foreign exchange. Instead, transactions which were not allowed through formal channels were soon being accommodated on informal markets, and much of the foreign exchange inflow that previously went to the banking system was now diverted to that market. What is more, the US dollar commanded a premium on the informal market, a premium that grew larger as the exchange control regime grew more restrictive. Eventually, Jamaica and Guyana were obliged to abandon their US dollar pegs because so little foreign exchange flowed into the formal market, compared to the size of the informal market. Understandably, given this experience, the enforced exchange rate flexibility is seen as a symptom of policy failure. In contrast to central banks elsewhere in the Caribbean, the Central Bank of Barbados recognised that so long as our population had the ability to spend on imports, there would be no prospect of inhibiting the total amount of spending. To limit imports it would be necessary to contain the ability to spend, that is, the total spending power in our economy. Whenever more foreign exchange is being spent than is being received, imports must be reduced; and in order to reduce imports, the total of all incomes in the country must be cut by a sufficient amount. The Government has a dependable tool for imposing the needed cut in spending power: the fiscal target. What is required in these circumstances is a reduction in government expenditure and/or an increase in taxation, to secure a sufficient improvement in the overall fiscal balance. This strategy has worked repeatedly for Barbados, in the late 1970s, in 1981/82, in 1991/92 and most recently in 2013. Anyone who lives in a small open economy appreciates that a peg to an international reserve currency is the best way to control inflation. That way you avoid the impact of devaluation on prices, which can be overwhelming. What is more, the peg removes the spectre of exchange rate uncertainty, which can detract from the attractiveness of investment in the domestic economy. However, these benefits depend on the credibility of the exchange rate peg. People will continue to worry about devaluation, and investors will continue to shy away, if they are not convinced that the authorities have the wherewithal to defend the peg. The authorities must have the tools to defend the value of the currency in all circumstances. Small open economies which have abandoned their exchange rate pegs have not deliberately chosen to do so; rather, they lost control of their currency values because they failed to develop and apply credible adjustment tools. In contrast, Barbados
has been able to maintain the exchange rate anchor precisely because we have the tools, and we have hitherto been willing to apply them when necessary.
HOW BARBADOS
SUCCESSFULLY DEFENDS THE PEG
The key to successful defence of the exchange rate anchor is to recognise that policy must be applied directly to reduce the amount of foreign exchange people want to buy, and to increase the capacity of the country to earn foreign exchange. In order to reduce the demand for foreign exchange you have to reduce the total spending power in the economy; people will then spend less on imports because that is as much as they can afford. The way to cut total spending in the economy is to raise taxes, cut government spending, and reduce the size of the fiscal deficit. Fiscal tightening in tough times is a hard sell, but the Barbadian public has always been prepared to accept austerity, because the exchange rate anchor is so highly prized. A major reason to maintain a currency of your own is that protecting its US dollar value provides a strong motivation for adopting necessary, but unpopular fiscal adjustment measures. We require a lead time of several months to craft the fiscal adjustment required, and have the measures agreed and fully implemented. Early detection of the foreign exchange shortage is required. For this the Central Bank of Barbados uses a daily chart of foreign reserves which is illustrated in Figure 1. If you look carefully at Figure 1, you will immediately see that a persistent shortage in the foreign exchange market emerged in April 2013. Day after day banks came to purchase foreign exchange from the Central Bank. Were this to continue unchecked, the Bank’s stock would be depleted, and the Bank would no longer be able to defend the value of the Barbados dollar. Urgent fiscal action was needed, and as we all know, adjustment budgets were introduced in August, and when that proved insufficient, again in December 2013. Subsequent developments, reflected in the daily record since January 2014, show that the adjustment was almost, but not quite sufficient. The imbalance between the supply and demand for foreign exchange was largely eliminated, but the adjustment was a bit short of what was required. The analogy is of a household with monthly income of $5,000 a month, whose monthly spending has been reduced from $5,500 a month to $5,100 a month, for a monthly deficit of $100 instead of $500. It is a major improvement, but more adjustment is needed. Cutting back on people’s ability to buy imports is a temporary fix, until such time as additional capacity can be created in tourism and other activities that earn or save foreign exchange. In all of these
activities Barbados is a bit player on the global stage, and we can sell as much as we have the capacity to produce, at the ruling US dollar prices for our tourism and other products and services. Therefore, to grow foreign exchange we have to increase our capacity to produce. As was recently reported, tourist arrivals are on the increase, and this has begun to spur an overall increase in the national output and income. This increase will not depress foreign reserves, because the new imports can be financed from the increase in tourist receipts.
A WATCHFUL EYE
The value of the Barbados dollar is protected through coordinated action by the Central Bank and the Minister of Finance. Every day the top economic policy makers review the foreign exchange chart. Should they detect persistent pressure on the foreign reserves, as in 2013, the size of the adjustment needed is calculated, and the Minister of Finance secures approval for implementing the required measures for fiscal tightening. That process takes some months, and in the meantime the Central Bank keeps imports flowing by selling foreign exchange from its reserves. The lesson is that foreign exchange reserves are not ordinarily used to pay for imports, any more than you would ordinarily use your rainy-day savings to pay rent. However, should you lose your job, you would use savings to pay rent; that’s what they are for. Similarly, foreign reserves are to meet normal requirements for an interim period, while measures are being put in place to correct the imbalance between demand and supply. Can Barbados continue to defend the exchange rate indefinitely? The answer is clearly yes, provided we are always prepared to take timely measures to limit import demand to what we can afford, via taxes or cuts in Government spending. But of course spending cuts are not the end of the story. We really want to increase the amount of foreign exchange we earn from tourism, international business, rum, chemicals and other exports, so that more imports can be bought. Fiscal policy may be used to strengthen incentives to build new hotels and tourism facilities, and to stimulate additional capacity in other activities that earn foreign exchange. Government policies may also be used to support growth in solar and wind power generation, which saves on foreign exchange for imported fuels. It will take some time, perhaps two to three years, before the initiatives to increase foreign earnings begin to bear fruit. The pattern of successful adjustment to a persistent shortage of foreign exchange is first to apply fiscal contraction and restore the balance of supply and demand for foreign exchange. Once that has been achieved, a sufficiently tight fiscal regime should be maintained, until earnings of foreign exchange begin to increase.
Figure 1
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By Novaline Brewster
Dr. Nicholas Brathwaite, Silicon Valley Technology Entrepreneur, speaking at the 40th annual Sir Winston Scott Memorial Lecture.
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Nicholas Brathwaite (Jr.), who hails from Grenada, is an icon in technology. His philosophy to always be the best underpins this phenomenal success and worldwide prominence. With a solid foundation at Intel Barbados and later at Intel in California, Brathwaite went on to excel in the software capital, Silicon Valley. From the Valley, he built hugely successful entities in chips and microchips, pixels and modules, as well as imaging, to name a few of his preeminent achievements. Buoyed by the resolute support of his dad, Nicholas Brathwaite, the former Grenadian Prime Minister, the younger Brathwaite took on a risky wager at the time to launch nChip Inc., a venture capital funded start-up, shortly after he left Intel. At nChip, he was Vice President of Operations and Assembly Technology, and under his watch, the manufacturer of advanced electronic modules for computers, aerospace applications and semiconductor tests equipment soared. His performance at Flextronics, the successor to nChip, was equally as legendary. He created a world leader in cellphone ODM, the design of camera modules and power supply units. Under his leadership, Flextronics earnings skyrocketed from $100 million to $36 billion. He established operations in 35 countries and employed 240,000 people. Owing to these extraordinary performances, Braithwaite’s reputation for excellence and superiority in technology has been embedded across the globe. He continues to create numerous other high earning technology businesses, to help develop several of our everyday gadgets, including the first Palm–Pilot, the first Microsoft X-Box, the first miniaturized chargers for the Apple iPhone, the Amazon Reader and many more. He’s now Chairman and Chief Executive Officer of Riverwood Capital, a global investment company, with $2.3 billion under management. Riverwood invests in growth technology companies in need of financial and intellectual capital on a global scale. As a private equity investor, his smallest investment is $30 million. Brathwaite’s extraordinary aptitude manifested itself from very early, he explained to talk show host, Toni Thorne, while in Barbados to deliver the 40th Sir Winston Scott Memorial Lecture in November 2015. A graduate with degrees in Applied Chemistry and Polymer Science Engineering from McMaster and Waterloo in Canada, respectively, he
said of his stellar educational accomplishments: “I did not go to university just to get a degree; I went hoping to be the best student. When I attended graduate school, it was the same thing. When I started working as an engineer, we were all placed in the same bull pen type of thing with all the new engineers and my goal was to excel.” Now, as a world leader in technology and startups, Brathwaite argues that the hallmark of great leaders is reflected in the relationship with their employees. He affirms that employees rally around the right kind of leadership. He believes that great leaders demonstrate respect, passion, fairness and trust; engage and empower employees, and allow followers to save face in the midst of adversity. For him, outstanding leaders help their employees to understand their specific roles in realizing a company’s vision. “People act differently if they have a big understanding of the vision and they think of their job as bigger than just the mundane things that they are doing. In every business I started and every technology I developed, I had a strategic objective document where every member of the team understood the objective.” On business success, Brathwaite promotes hard work, relentlessness, speed in solving problems and setting goals and realistic and achievable plans. He also boasts of hiring the best expertise and shared his experience of pursuing and luring the Chief Technical Officer (CTO) of the biggest power supplier to his start-up power supply entity, as an example of how he builds the best teams, and guarantees success. He’s also known as the ultimate influencer. His colleagues and peers marvel at how he expertly utilizes the unique combination of business insights, vision, and leadership to inspire persons and aspirants in the high tech business world. His influence extends to his homeland Grenada and the Caribbean, where his philanthropy, generosity and mentorship are well known. “In Silicon Valley one comes across many smart individuals with each one professing to know technology. However, only a handful truly understand how to create a vision, bring people together and challenge the team to generate value, while keeping the joy and spirit intact in them. “Now Nick is one special person that is able to do all that so well. This is the reason why I admire him immensely,” Dr. Srinivas T. Rao
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of Eir Phoenix Venture Partners summarized Nicholas’ extraordinary leadership capability and capacity. Brathwaite readily admitted that occupying the premier spot in business is not easily accomplished. He explained that along the way to an extraordinary career, he has forfeited much, especially at the personal level. “I often say that if I had gotten married young, my wife would have left me because when we were building companies like NChip, I was never home.” Lessons from Nicholas Brathwaite Passion, hard work, self-belief and tenacity are at the heart of optimizing one’s potential as Brathwaite and other successful persons featured in this magazine exemplify. But as they have all shown, being the best is a main “chip”. While sharing with Barbadians the secrets to his personal success, he offered some advice to small countries like Barbados and its Caribbean neighbours. He suggested that Caribbean islands must employ technology to pioneer economic excellence and transformation. The effective and efficient use of technology, he said, would improve our productivity, reduce costs, and augment our global competitiveness to bridge skills gaps and create new business opportunities. He said innovation is also important to igniting economic activity across the region. While many of us believe that to innovate, we must be the first to market, Brathwaite stoutly disagrees. He says what’s more important with innovation is being the best. In support of this argument, he cited the success of Google, Facebook and Apple, which were not the first to develop a search engine, to create social networking or to develop the MP3 player, but they were the indisputable best. Brathwaite, by his words, actions and accomplishments, demonstrates that excellence and extraordinary achievement are fundamental to astounding success. So what are the lessons in Brathwaite’s story for each of us and Barbados? Simply imagine if we could live his philosophy of being the best in our personal and professional endeavours and conscientiously and systematically perform at our best in all spheres. We could perhaps leapfrog Barbados to a position of prominence and dominance. Won’t we? Simply by being our best.
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Banknote design is an art. It tells the story of a nation’s history on a very small canvas. Colour, layout, design motif, are all carefully selected to capture the essence of its issuing country. For decades, notes with borders and portraits with frames were in fashion, but in the 2000s, open concept designs and bold colours have become the trend. Banknotes no longer have to be viewed horizontally – vertical designs have become an interesting and attractive alternative. Abstract images are now featured alongside, or instead of, traditional depictions of real world images. Compare the look of the United States dollar, whose design has remained largely unchanged for more than a century, to that ofthe Kuwaiti dinar or to the award-winning Kazakhstani tenge. Banknote design is a science. It creates a highly secure
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document masquerading as a piece of pretty paper (or plastic). With the advent of cheap yet sophisticated printing technology, anti-counterfeiting efforts require the incorporation of more advanced security features. And in a note processing industry that is increasingly mechanised, the relative placement of individual features is measured in fractions of a millimetre. Banknote designers have the difficult task of melding form and function as they produce one of the few products that truly crosses all demographics – cash. We all use it. We all claim not to think too much about what it looks like. But any change in that look is often met with a backlash. “Monopoly money” is a common criticism whenever a country alters the design of its banknotes in any significant way: it was cited when the USA introduced colour into their iconic “greenbacks” in the early 2000s,several Canadian series have been likened to it, as has the Euro, New Zealand’s polymer bills, and, in 2013, Barbados’ redesigned banknotes. This negative reaction has little to do with the look of the new notes. People have specific expectations of what money should look like, based on what is familiar. Americans often consider other countries’ polychrome banknotes garish, while much of the world considers their notes bland. Many people also mistakenly view design changes as arbitrary or as exercises in vanity. This is far from the case. A banknote redesign project is often a multi-year exercise involving a great deal of research, consultation and testing. Issuing authorities, working in conjunction with banknote designers, strive to ensure that the notes that ultimately go into circulation have achieved the right balance of aesthetic appeal and usability. Not an easy task, for a product that is universal.
THE COAT OF ARMS, BROKEN TRIDENTS, MAP OF BARBADOS (WITH CAPITAL IDENTIFIED): IDENTIFY THE NOTE AS UNIQUELY BARBADIAN.
WAVES AND MAP: IDENTIFY BARBADOS AS TROPICAL. MASKS MACHINE READABLE SECURITY FEATURES
THE PORTRAITS (RETAINED FROM THE ORIGINAL SERIES): HIGHLIGHT ICONIC BARBADIANS
BOLD, COLOUR SHIFTING THREAD ($20 $100) AND HOLOGRAM ($50, $100): EYE-CATCHING SECURITY FEATURES FOR EASY IDENTIFICATION
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