HEALING THE TROUBLED CARIBBEAN ECONOMIES
HEALING THE TROUBLED CARIBBEAN ECONOMIES – BASIL SPRINGER COLUMN WHICH APPEARED IN THE BARBADOS ADVOCATE’S BUSINESS MONDAY ON JUNE 17, 2013
“I am going to bring it recovery and healing; I will heal them and reveal to them abundance of prosperity and security.” – Jeremiah 33:6
The troubled economies of the Caribbean are sure to keep us looking for ways to address all the talk of recession, depression, inflation and currency devaluation in the years ahead.
In economics, a recession is a business cycle contraction, a general slowdown in economic activity. Macroeconomic indicators such as GDP, employment, investment spending, capacity utilisation, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise. A depression is a sustained recession.
Inflation is the general increase in prices. It usually happens when there is a lot of demand for limited supply resources. During a recession, people hold back on their spending (usually because they have lost their job or just fear that they might lose their job). This fall in demand means that there is no excess demand pushing prices up. So inflation falls and prices respond to demand and supply so that equilibrium is reached in the market.
Local currency devaluation implies a decrease in the exchange rate which means that the home currency becomes relatively cheaper for foreigners to buy. Devaluation also means that foreign currency becomes relatively more expensive for locals to buy. If prices in both countries remain the same, devaluation will make foreign goods relatively more expensive to locals, leading to a fall in imports. It also means that, even if prices remain the same, local goods will be cheaper to foreigners. They will buy more local goods and exports will rise.
The way out of a troubled economy is economic growth. In order to have a realistic opportunity for sustained economic growth we must identify passionate entrepreneurs who are promoting innovative enterprises with export potential and diligently feed them with shepherding and venture capital resources as is described in the operational manual or the CBET Shepherding Modelâ„¢. Remember that shepherding is absolutely essential as it mitigates the risk of business failure. The seed/venture capital process is innovative in that it capitalises the pre-investment shepherding costs thus reducing the burden on the cash flow of the enterprise in its embryonic stage of its development. It may be said that the pre-investment shepherding costs are recovered out of future profits, which should be a comfortable concept since shepherding is designed to mitigate the risk of business failure.
One may argue that in a devaluation scenario, because local goods will be cheaper to foreigners and exports will rise, this might be regarded as an economic growth strategy. Theoretically this may be true but the growth may not be without deleterious side effects, since foreign goods will be made relatively more expensive to locals. Devaluation is therefore to be avoided as a means of stabilising the economy. If it becomes a condition of survival then we have no choice.
On the positive side, a country can make a decision to support its exchange rate by diligently introducing appropriate macro-economic policies such as a strategic recovery-oriented prices freeze, and a wages freeze, only to be relaxed in specific cases where an increase in wages can be justified by a commensurate increase in productivity. Barbados has had its exchange rate pegged to the US dollar at $1US=$2BB since 1975. The foreign reserves have been maintained at a sufficiently high level to comfortably cover imports for a large enough number of weeks so as not to cause the Central Bank Governor any concern. The challenge is to grow the economy so that the net foreign reserves position is enhanced.
If the operation of a vehicle leaves much to be desired, if a human body is not well and if an economy is troubled, it means that the systems governing their respective operations are out of balance. In each case, we must introduce a healing process which will radiate health, harmony, wholeness and restore balance. The healing of a vehicle is a relatively simple operation for operators skilled in motor mechanics. The healing of a human body is more complex and it is interesting to note the promotion of the International Conference and Exhibition on Traditional and Alternative Medicine to be held December 9 to 11, 2013 in Hyderabad, India.
Incidentally, I had a brief and interesting meeting with Dr. Harry Ramnarine of the Ishtara Centre in Trinidad recently. He is originally a mathematician, who graduated in medicine from the University of the West Indies and has studied a wide range of medicines. He now practises homeopathy and his practice is booked solid for months with many satisfied patients. He and his colleagues have developed a model and made a patent application. All physical matter is made up of energy and information. As I understand it, the foundation of this model is rooted in the relationships between energy and information which is designed to restore balance in the systems of the human body.
Indeed, the International Academy of Information Energy Medicine studies medicine which is oriented towards the correction of the info-energetic system of the human body. This is by means of informational influence which could be called informational correction of sub-cellular structures, cells, tissues, organs and systems so that the whole body starts functioning harmoniously once again, causing disease to regress until the latter’s complete disappearance.
My interest is in the healing of an economy. The therapy is rooted in the management of business systems which is oriented towards the correction of the “info-energetic” system of an enterprise by means of informational influence which could be called informational correction of the 25 sub-cellular structures of the ManOBiz Matrixâ„¢ so that the whole enterprise starts functioning harmoniously once again, causing disease to regress until the latter’s complete disappearance. Enter sustainable economic growth!
(Dr. Basil Springer GCM is Change-Engine Consultant, Caribbean Business Enterprise Trust Inc. – CBET – Columns are archived at www.cbetmodel.org).