BY HARRY RUSSELL

ALTHOUGH I am not in the habit of kissing men (except my sons and grandsons who I kiss all the time) I could kiss that Guyanese gentleman Mr Byron Blake.

"They should be making the case: Don't offer us any more loan money; we have to find a way to make resources available to us which would allow us to keep our debt situation." He was speaking to our New York correspondent on the matter of debt increase.

Caribbean countries have moved from fiscal surpluses in 2007 to large fiscal deficits in 2009. Here in Barbados we are caught between the devil and the deep blue sea - eight per cent of GDP. If we borrow in Barbados dollars eventually it becomes a burden on the taxpayer and a lessening of the support for needy cases, transfers and employment. If we borrow in foreign currency we face an even stiffer task.We chance not being able to service the debt or borrowingat high rates because of downgrading.

Jamaica is now in a fix. Much of its foreign debt is owed to the private sector. Is this a problem with the International Monetary Fund? While at one time this presented opportunities, it now is a worrying factor especially as they face the IMF. Private sector debt used to be sold ata discount when it was not serviced and the buyers were entitled to come to the Central Bank of Jamaica having bought the US$1 for say 60 cents, and demand the Jamaican dollar equivalent to the full debt. With this advantage they could operate at a huge profit in Jamaica. But now this is not an attractive prospect with Jamaica facing so many internal difficulties.

Barbados, on the other hand, never went into this typeof borrowing, and so was not an attractive place from that point of view to invest cheaply acquired dollar loans. However, in our present situation borrowing ateight per cent and prospectively over, gives us Hobson's choice. The quotation from Mr Blake above has to be seen against the threat of marginalising our offshore industry.We must, like the Right Excellent Lion of EthiopiaHaile Selassie, carry our case to the World Court wherewe have a say. But would this be any good? We do not sitat the G20 conferences and calling for an attendance will only meet on deaf ears. It is called G20 because it consistsof 20 countries, not whosoever will.

It is as if a country, armed with nuclear weapons, were invading us and we had to fight with sticks and stones.Cuba expressed an unfairness about the American embargofor over 40 years (187 to 3 against) - no resolution.

Minister Maxine McClean, speaking at United Nations House on Monday, October 26, argued for a change in the policy of grading our country through its per capita and GDP. This will not carry much weight even though present events exacerbate the situation. So many countries are poorer than us and are not able to get sufficient help that this argument will be ignored.

How can we argue for cheaper services and access when people in Indonesia, Africa, Pakistan, to name a few, live in squalor? We have to paddle our own canoe. The premise is laudable but the reality of the situation is far-fetched.

Mr Blake's prediction that developed countries mightstill be willing even as they make the excuse(often justifiably) to downgrade us, to lend to usat exorbitant rates so that we can buy their goods and pull them out of a hole leaving us in a well.

Local economists are beginning to see the light andto speak out on the issue of the fiscal gap. They seem to be now aware of the danger. Fiscal deficit and borrowing will impact on our social services and force an already high cost of living even higher. Of course while it has not been said, Barbados, which is a high cost destination, will have to price its hotel industry to a profitable degree.

The fact that Jamaica's Minister is dilly-dallying about the CSME (shades of the Federation) does not help in facing 2010 with a united front. In any case, joining CSME is the least of Jamaica's worries. Each of our Caribbean countries has its devil and while the people have federated long ago, our leaders are still arguing in the starting blocks as to who false started. Barbados, Antigua and Trinidad are all concerned about Guyanese when there is a bigger picture.

Jamaica's Central Bank governor and its Ministerof Finance parted company on the verge of IMF negotiations! Was it a case of political expediency versus economic commonsense? Playing to the gallery? Whose egowas bruised?

Any comments may be directedto Harry Russell at quijote70@gmail.com