Address to the Barbados Chamber of Commerce and IndustryBy the Hon. Mia Amor Mottley, QC, M.P.

Leader of the Opposition and Political Leader ofThe Barbados Labour Party

November ZG"*"" 2014

Good afternoon Ladies and Gentlemen,

It is great to be here with you again today. I can assure you that for me

these annual attendances are not pro forma rituals.

I want to have a conversation with you not as a matter of style, but as

a matter of respect for your views, feelings and opinions. I must tell you

that not to listen to the people of Barbados, especially at a time of such

anguish and pain, is a huge disrespect.

Conversations are the norm in all healthy relationships, has they

have always been the norm in the conduct of our national affairs. Or at

least we thought it was. Until now.

Well let me assure you that for me tt they still are.

The citizens of Barbados are educated, they are networked, and they

are vigilant. Silence just does not cut it. And there certainly is not

enough wool on our sleek black-belly sheep for any Government to pull

over the eyes of an entire population.

The intangibles of leadership are as critical to any Organization as are

the substantive policies. True leadership is essentially about

communication. And effective leadership is about motivating,

mobilizing, reassuring, inspiring confidence, protecting and

empowering. That is a given, whether you lead a group of people in a

company or the people of an entire country. In modern governance, it

is no longer about the commander on high and the subservient

followers below. It is about participation and partnership. It is about

transparency and trust. It is about honesty and humility.

And so I am here with you today, in that spirit, to renew our

conversation. I assure you that it will be frank, sincere and inter-active.

In that vein, I shall try not to be long, as I want to hear from you.

I know that, incursions from our neighbour to the south

notwithstanding, the Barbados Business Community, like other sectors

of our society is still overwhelmingly made up of patriotic citizens who

love Barbados and are passionately committed to its development. I

see examples of it every day. Our business people, like our solid

middle class, have stayed through thick and thin, helping to build

Barbados, and working to ensure a secure future for their children. You

do so because, like me, you think this Rock is the sweetest place on

God's good earth. And, like me, you want to keep it so.

The strides Barbados has made since Independence have been

remarkable, given its small size and limited natural resources. Much of

our past success, and I do mean past, can be attributed to strong and

astute political leadership and prudent financial and administrative

management in the public sector.

But it is important to acknowledge that much, equally, has sprung from

the efforts of a responsible and committed private sector and Labour

Movement, both willing to stay the course, literally For Love of

Country. Ours is a private sector which is quintessentially Barbadian

in character: pragmatic; practical; thrifty; sometimes complacent; often

risk-averse, but ultimately reliable and responsive when it really

counts.

It is a private sector that deserves to be engaged with seriousness and

respect, not shouted at, threatened, lectured to and insulted.

Ladies and gentlemen, you know as well as I do that we have now

reached a juncture where for the first time in our history as a nation we

are truly in danger of losing the beloved Barbados that we used to know

- what we had come to take for granted. We who once punched above

our weight are now described as junk. Indeed, as I indicated a few

weeks ago. this Government has been gutting all that is precious and

critical to our Barbados DNA.

A former British Prime Minister, Harold Wilson, once famously said that

a week is a long time in politics. But how long is a year in the life of a

country? Does this one not seem to you like an eternity? For, without

doubt, 2014 will live in infamy as the most painful and traumatic year

Barbadians have had to endure since Independence. And 2015

threatens to be the same or worse.

I have seen at close quarters the anguish and despair of ordinary

Barbadians; the growing pauperization of the middle class; the

desperation of the businessmen, both the small and the not so small,

frantically struggling to keep their enterprises afloat and their staff

employed - to ward off insolvency.

I have heard your horror stories. You want to stay the course, but many

of you do not know if you can manage to hold out. You want to be

rescued from this nightmare. You want solutions. And you need them

now!

I have listened and I have reflected at length.

But what the country is asking of me you know full well that I cannot,

at this stage, deliver. We can certainly give you all the ideas you could

want - but with the caveat that much depends on the true state of our

affairs. We are building, a strong innovative team with the capacity, the

vision, the technical know-how, and the energy to take Barbados back

from the brink and restore the hope of Bajans.

We are ready and waiting to do the job this present Government has

defaulted on, but we are powerless to intervene on your behalf until the

people of Barbados decide to give us the mandate.

Understanding that a Government needs the support of the people to

boost confidence to regain economic recovery, the Prime Minister of

Japan dissolved Parliament last week and has gone back to the people

of Japan for a fresh mandate. This is how business is conducted in

countries that are serious and want confidence to return, to give their

country a chance for success.

It is a lesson Barbadians would do well to study.

Ultimately, my friends, there is only one formula to get Barbados back

on track: DEFREUNDALIZE HER!

For you and I both know that there is nothing wrong with Barbados that

a strong dose of real leadership will not cure. Just as many Barbadians

are suffering from Chikungunya, our economy is suffering from

Freudelgunyal Both are equally debilitating. It has not escaped me that

many Bajans pronounce it as Chicken Gotcha - maybe that is the more

appropriate pronunciation in this instance for the economy - Freundel

Gotcha.

Now that I have placed my caveats on the table and you are fully aware

of the limits of my real authority, let us talk about Barbados and what

we can possibly do to extricate ourselves from this unbelievable mess.

The business-as-usual status quo model offers little comfort. The real

question we must ask ourselves is do we, as a nation, have the

courage and the determination to undertake the profound

transformation of how we do business and how we govern ourselves

so that we may transition to a modern 21®* century Barbados?

I am convinced that, with focused and committed leadership at all

levels of society, we do.

We must however understand that transformational change of this

magnitude requires the meaningful participation of each and every

sector, each and every citizen. It requires that we all share ownership

of and responsibility for the project to move Barbados to the next level.

But it also requires astute change agents, motivators and mobilizers

who can restore a people's belief, our people's belief, in their own

potential and that of their country.

So how then can we get there? By doing things differently, doing them

better, doing them smarter, and above all, doing them together.

The evidence of our current reality is most poignantly captured in the

World Economic Outlook for October 2014 published by the IMF. In

this publication, there are only 7 countries out of 189 countries that are

projected to perform worse than Barbados in 2014. As if the number

was not staggering enough, the real reality check comes in the names

of those 7: Libya, Iraq, Syria, Ukraine, Equatorial Guinea, Argentina

and Cyprus. This is not the Barbados that we knew or the one that we

want to know. This is not a Barbados that can continue to claim that

the international economy is responsible for its economic woes - not

when 181 countries are likely to perform better than us in terms of

economic growth this year.

Where confidence has deserted us, tinkering with economic policy will

not work. Nor is there any economic solution for the patent lack of

strong and decisive leadership from our Government.

We know it instinctively. And every year we continue the conversation

- deeper in the hole as a nation, weaker as individuals, households

and businesses to meet the challenge of 6 debilitating years that have

sapped our savings, our resilience, our confidence and now on our

courage.

Doing things differently is as much about psychology and trust as it is

about economics. Amazing things can happen when a people are

motivated and inspired, when self-confidence and the can-do spirit are

nurtured, and when a society pulls together in one direction towards a

common goal that they understand and support.

So in the final analysis, it is not simply about WHAT needs to be done,

but about HOW it is done, and WHO we entrust with the responsibility

to lead the way.

Let us not delude ourselves.

Getting Barbados back on track will not be an overnight process.

Clear priorities will have to be set after a national conversation. These

priorities must be followed with focus and discipline. As a starting point

we will need to do a careful examination of those aspects of our current

business and economic life that we ALL know must change. AND WE

MUST BE DETERMINED TO MAKE THOSE CHANGES - NOT JUST

SPEAK TO THEM IN FAILED PLAN AFTER FAILED PLAN.

SO WHAT MUST WE DO?

We must strategically address 3 matters:

1. The Barbados Government must unlock access to affordable

capital once more.

2. Apply a laser-like focus to restoring our economy to growth.

3. Change HOW we govern - how we do things - how we relate to

each other and who we involve in the equation.

1. THE BARBADOS GOVERNMENT MUST UNLOCK ACCESS TO

AFFORDABLE CAPITAL ONCE MORE

This requires access primarily to two things

a. Access to Concessional capital from the international financial

institutions and regional development Banks, especially for

Budget Support through Policy Based Loans. (We welcome

entry to CAF but the circumstances surrounding our payment

of our dues - borrowing to borrow to borrow - must cause

concern along with the absence of the appropriate legislative

framework underpinning our relationship. Yet another

agreement entered in our name that we have not seen).

b. Restoration of Investment Grade to Barbados' sovereign

borrowing to allow us to borrow at affordable rates in a low

interest international environment. This will remove the

sovereign related risk premium that is negatively affecting our

companies which are seeking to raise money internationally

as well.

HOW WILL THIS HAPPEN?

We will not achieve either of these 2 objectives until such time as

there is stability in our macro-economic framework - our public

finances are put back on a sound footing and our international

reserves return to a state of health.

This is NOT based on what the Government tells us - or indeed

the Governor of the Central Bank. This requires the independent

perspective of the credit rating agencies and whether we like it

or not, that of the IMF.

These agencies have all told us what has triggered their negative

commentary and their multiple downgrades.

We are earning just under $2.2 billion and still spending over $3.8

billion. There is no entity - country, company or household - that

can survive this type of deficit spending. Every family, every

bread winner, everyone knows that you can't spend 38 cents for

every 22 cents you earn. And of greater concern, this does not

include all of our liabilities nor the substantial arrears which we

understand are back in the vicinity of $800 million - and seriously

affecting the viability of many of your businesses.

The efforts set out by Government that have occasioned

significant pain already are not bringing us closer to resolving our

problem. We are yet to receive a comprehensive score card on

the latest plan.

The Government has absolute control over only one thing.

Expenditure. But you cannot wield a cutlass and not expect

carnage. A surgeon must use a scalpel. Broad arithmetical cuts

will leave the Government less able to deliver the services it must

for stability and the triggering growth. There must be a

comprehensive review of our public expenditure.

It IS about hard choices. What must inform those choices is first

and foremost the commitment that the burden must be shared

FAIRLY. THAT IS WHO WE ARE - THAT IS WHAT HAS MADE

US A RESILIENT AND COHESIVE SOCIETY. And that is why

there must be a conversation nationally about what we value and

what we need to move to the next level - about what makes us

distinctive in the world, about the competitive edge we must

maintain to convince people to visit and invest, or buy our goods

or do business with our people.

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Any analysis of our expenditure takes us to where we must focus

our efforts. We spend the same amount on our debt service as

we do on wages and salaries in central Government and our

statutory corporations. We must bring this down. And we can do

so through refinancing - seeking lower interest rates and longer

maturities where appropriate. This can and should be done

without any defaults or haircuts.

Equally, the area of transfers and subsidies has grown at an

alarming rate. There are myriad opportunities for restructuring

that we have avoided.

Then there is the need to seriously consider a policy for the long-

term leasing of assets owned by the Government of Barbados

to allow us to use the proceeds to reduce our debt. There will

always be a Government and hence long leases will allow a

future Government of Barbados to get a return once again from

the assets. There is hardly ever sale of freehold in London for

the same reasons.

Any sales must follow an absolutely transparent process which,

to date, this Government has ignored. The perfect example is

that of the intended divestment of BNTCL. We have already

indicated that the divestment of this asset is likely to lead to an

increase in energy prices since the rate of return which

Government has accepted as shareholder will be unacceptable

to ANY private sector player. What is of more concern is the

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failure to adhere to a public process that gives all interested

players, especially those in Barbados, the chance to bid for these

assets. Desperation for funds cannot be an excuse for failing to

be transparent.

Similarly, refusing to bring supplementaries to Parliament may

assist in the cosmetics of meeting a deficit target. However,

unless you change the terms and conditions of the goods and

services, which Government is accessing, the liability still

accrues to Government. Ultimately Government must still pay for

the goods. Only you, the suppliers, will have to wait even longer!

Finally, we cannot tax our way back to growth. And in relation to

the IMF Tax Review, it is clear that the mandate, which was given

to them was narrow and short term - one of raising revenue

without appreciating the impact that the measures will have on

medium term growth. Government's revenue will only recover

when the Gross Domestic Product increases - when growth

returns. Households and Companies earn and trigger growth and

ifthey cannot survive there will be no growth. Simple. There must

be a return on assets and capital employed.

2. APPLY A LASER-LIKE FOCUS TO RESTORING OUR

ECONOMY TO GROWTH

a. We must carefully target expenditure in ways that will unlock

growth in the productive sectors and the key sectors that

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protect our distinctive advantage in social capital - our people.

We have already spoken in detail about our plans for tourism

and about our absolute commitment to preserving the critical

role that education and health must play in guaranteeing our

competiveness and stability. On another occasion we will

expand on the other productive sectors,

b. We will ensure that Government will do more than tax and

spend. Government has other powers to legislate, regulate,

facilitate and empower. Even in this fiscal crisis more can be

done. What do I mean?

i. We can make it easier through the use of technology

and the simplification of rules for both citizens and

businesses to conduct their affairs. (Public Transport,

Town and Country Planning, Licences and Certificates,

Corporate Registration, Police Reports, Health

Records, Law Courts, Port Clearance, Customs,

Immigration to mention a few). Firstly, our citizens

deserve better as they go about their day-to-day lives.

And equally we must set ourselves the systematic

goal of being the easiest place to do business in the

Americas. This judgment will ultimately be the market's

and that of internationally recognised indices. Being

106*^ is simply not good enough especially as we will

soon lose some of the remaining vestiges of

protectionism that have guided our development thus

far.

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ii. We must prioritise the delivery of VAT and Income Tax

Refunds to maintain confidence in the integrity of our tax

system. Some of you need the refunds to survive,

having exhausted your savings. We must also adhere

to the law and not seek to introduce by policy edict new

requirements like Tax Clearance Certificates for the

conveyance of properties or the refusal to allow rebates

for Land Tax where the law provides for the same.

Equally, there must be no arbitrary application of rules

in respect of Customs Tariffs and the applicability of the

Value Added Tax. These will only lead to an inability of

businesses to properly plan and budget. The end result

is a further erosion of confidence.

iii. We can and must reduce energy pricing especially at

this time when oil prices have declined by more than

20% internationally since August of this year but

Barbadian businesses and consumers have seen no

evidence it. The truth is that Government has been

using BNOC as one of its bankers, having made

available $15 million in bonds to statutory corporations.

This along with ill-timed decisions for administrative

facilities and the loss of over $7 million on the inefficient

exploration of a well at Society has compromised

BNOC's cash flow, such that the Government has

reinstated a cess of 20 cents per litre on both

gasoline and diesei. Barbadians need the benefit of

relief here to stay afloat.

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iv. We must move to a 24-hour workday, including some

critical Government services. This is imperative to

improving our competitiveness and ensuring that we are

a modern world-class economy open for business.

V. We will facilitate the development of new financial

instruments for the easier mobilisation of our national

savings to finance, either by way of equity and/or debt,

private and public sector investments that are critical to

our development,

vi. We will solemnly protect the integrity of the National

Insurance Scheme both in terms of clearing its arrears

and enhancing its operational independence. We

cannot continue with the Government owing the NIS

$180 million or more. Similarly, there must be an urgent

recapitalisation of the Unemployment Benefit Fund as it

has been paying out twice what it has been collecting.

Regrettably the reduction in purchasing power

nationally that we are seeing is likely to lead to more

unemployment and greater claims on the Fund. There

is need for a review of the Investment Guidelines to

ensure that there is a greater diversification of its

portfolio such that its exposure to the Government of

Barbados does not exceed 60% in the medium term. It

is now at 74%. There will be a need for greater level of

investment in both equity and mezzanine financing to

assist Barbadian companies in building back out this

economy.

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vii. We will establish clear monitoring mechanisms,

including Electronic Dashboards, so that at any time of

day or night we can know where we are in the

implementation of projects, whether infrastructural or

reform of departments and systems, whether private or

public sector. We must know whether the blockages are

legal, funding, acquisition, personnel or otherwise. That

is the only way we can improve our implementation of

projects and policies. And the buck MUST and WILL

stop in the Prime Minister's Office.

viii. Advancing the work on the CSME Project especially in

the areas of harmonisation and mutual recognition of

corporate registration and investment rules; the

completion of the Protocol on Contingent Rights for

persons moving across borders and the creation of

single regional regulatory entities instead of multiple

national agencies to oversee financial services,

competition and our telecommunications regulation.

The CSME still offers us the best opportunities for our

export of services, goods and yes, capital. We need to

encourage Barbadian companies to diversify their

investments so as to help our people and businesses

mitigate the risks of one country against another.

ix. We must mandate separation of garbage and facilitate

recycling and composting to reduce the costs to

Government but to also play a catalytic role for

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businesses in this area, while protecting our physical

environment.

These are but a few of the many things that Government can do

even as we navigate our way through these turbulent waters. The

good thing is that they have the benefit of making us more efficient

and involving more people in the battle for the return of

competitiveness and growth.

3. CHANGE HOW WE GOVERN - HOW WE DO THINGS - HOW WE

RELATE TO EACH OTHER AND WHO WE INVOLVE IN THE

EQUATION.

As I said, it is not simply what we do but HOW we do it, and who we

choose to get it done, and get it done right.

Barbadians want Barbados to succeed. They want to play their part

but they don't know how. The opportunities are circumscribed by a

system that grows more adversarial by the day. We need to do

things differently.

We have to create opportunities for more Barbadians to participate

in the stabilisation and transformation of this country. The Barbados

Labour Party does NOT have all the answers. We never will and

neither will any group. We must be confident in our skin to listen -

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to broaden the discussion and involve more persons in our mission

to stabilise and transform.

In that vein, we need to review the structure and governance of

many of our statutory corporations to allow for the necessary skills

to be made available. This is critical. We have already as a Party

committed to having a public private sector structure for those

Boards that are crucial to the performance of the private sector to

lead growth in the economy. The timing of appointments to Boards

must also be addressed as we can ill-afford having a new Board

every time there is a new election, or worse, a change of Minister.

It hinders progress in good times far less in a recession.

We must also involve NGOs and communities in the management

of public spaces to broaden involvement and reduce the cost to the

taxpayer.

Our public servants are demoralised and the systems they operate

are archaic. More of our most experienced and skilled public

servants have taken early retirement than under any other

Government since Independence. Theirs is not a culture of whistle-

blowing - they quietly leave.

In addition Senior Public servants are traditionally trained and

expected to offer policy advice and manage basic administration in

vertical silos, rather than in a cooperative approach that focuses on

completion of the mission and the needs of the client. This has got

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to change. We must train and mentor our public servants to develop

strategic leadership skills and project management and mission-

oriented capacity. This transformative approach will significantly aid

in boosting both efficiency and accountability to the benefit of all

taxpayers.

We must change how we facilitate critical investments, and I do not

mean only large ones but also those of ordinary Barbadians. We

must bring together in one process the relevant regulatory entities

to facilitate quick but efficient decision-making without

compromising the public interest. This must become the norm and

not the exception.

Above all else, we need to hold people and entities accountable -

in the public and private sector. We need transparency in all of our

affairs, especially in our procurement practices and in the manner

in which we pay our bills as a Government. There can be no cherry

picking as to whose bills are being paid by Government or as to who

receives Income Tax Refunds and VAT Refunds.

We live in a world of change that requires adaptation and flexibility.

This requires critical and creative thinking in the resolution of problems

and a "can- do" attitude. This must be reflected from the highest to the

lowest office in the land. The Barbados Labour Party understands that

this will be the critical difference in our leadership of Barbados.

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CONCLUSION

The simple fact is that we have a fundamentally different approach to

the leadership of Barbados, both as an economy and a society. Ours

has been pro-growth; theirs has been to shrink. You now know,

through painful experience, which approach has delivered successfully

for you.

The Barbados Government is not short of pride, it is short of industry.

Barbados is not short of ideas, it is short of execution by its Executive.

Barbados is not short of savings, it is short of confidence to invest those

savings.

Barbados is not short of the desire for us to do better, it is short of

courage.

There Is nothing wrong with Barbados that cannot be resolved by

a strong dose of leadership and inspiration.

The 19*"^ Century American abolitionist Frederick Douglass reminded

us that "Power concedes nothing without a demand... Find out just

what any people will quietly submit to and you have found out the exact

measure of injustice and wrong that will be imposed upon them, and

these will continue till they are resisted... The limits of tyrants are

prescribed by the endurance of those whom they oppress". The

question is: are you prepared to acknowledge your role rather than

waiting for events to unfold beyond your control and probably beyond

your imagination?

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Our country has been good to us - we need to return the favour and

stand up for it, even if it causes us some inconvenience and sacrifice.

We are on the road to creating a New Movement for Barbados.

Barbados does not deserve to be keeping company with war-ravaged

countries for we have not gone to war - we have just lost our way!

But just as we lost it - we can find our way back - you know the formula

- we know the direction. DO not, I beg of you, give up on Barbados.

We can do it differently, we can do it better together - we can rally

round the Broken Trident and rise yet again! But it will not happen until

there is a fresh mandate that boldly confronts the reality of Barbados

in 2014.

Only the people of Barbados have the power to demand that this be

done.

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