The Barbados Advocate

Essentials • Markets • Today's Paper • Business Monday • Subscriber Services

Top News > editorial

Crisis coming closer to home

2/23/2009

WITHOUT pointing the finger at any one group in particular, it would seem that the financial crisis is striking closer to home for more and more of us on a daily basis. We sat and watched the meltdown in the United States. We saw the new President work his way through a number of financial initiatives targeted at stimulating the economy. Economists within the United States have started to have discussions in trillion dollar terms. Nevertheless, we subsequently heard that US$787 billion Economic Recovery and Reinvestment Act would not halt the slide of the American economy into a deeper recession, it would simply slow its progress.

Regional crises

It is still difficult for many of us in the region to fathom what the forecasters around the word have been predicting for some months now. Those of us that are in our own steady job doing our own steady work must be wondering whether there is in fact a financial and economic crisis. We continue to look for the warning signs. Many small business people are already feeling the tell-tale signs of a slowing economy and must be concerned about the events that have been unfolding since the beginning of 2009.

Over the past few weeks we have been discussing the implications of the CLICO financial crisis in Trinidad & Tobago. Now we see that the Stanford Financial Group is under investigation by the United States Securities Exchange Commission. This comes even closer to home as we in the region all witnessed the increasing clout of Sir Allen Stanford with his investment in infrastructure in Antigua & Barbuda; his participation in the regional airline industry and the financial services sector; his investment in West Indies cricket; and last but not least, his Knighthood. Sir Allen managed to have a welcomed hand in many critical aspects of Caribbean life.

Regulation & vigilance

The international financial commentators will no doubt point to lax regulation in the Caribbean as the reason for the concerns with the bank operations connected to the Stanford Group. However, the Central Bank of the OECS may very well reply with the challenge ‘he who is without sin should cast the first stone’. What the United States has clearly admitted, even under the Bush Republican presidency, was that it was lax regulation that precipitated the financial crisis in the United States that has infected everyone else. As a result, the accusations that are usually hurled at regulators for banks that go bad in the Caribbean should ring hollow for most of us that have been paying attention. While all of this was happening, the Four Seasons project in Barbados quietly came to a halt and we have to wait and see on this one. It was only a few weeks ago that we heard how well this project was doing. Hopefully this is not another sign of trouble.

Whether it is within the economy or it is in the financial system, the Barbadian public must continue to be vigilant. One of the most important actions that regulators, economists and business persons should take at this time is to ensure that the public actually understands what is happening around them. Barbadians are a people that have consistently made good choices when they understand the implications of their actions. This is no time to panic; this is a time for proper preparation, solid work and purposeful endeavour.

Indices

as of close 9/15/2009


Local	3404.30	-

Cross-List	1665.14	-

Composite	847.81	-