Daily Archives: September 15, 2009

Caribbean Sea Island Cotton brand to be killed by Barbados… as if a name change will solve anything

Does Barbados really have a cotton industry? Really?

If we just change the brand name, everything will be fine. Really.

First, some background

Times are tough and now Barbados finds the cupboard is bare thanks to 15 years of BLP “spend all we got and more” policies. Where to start when talking about the legacy of Owen Arthur and Mia Mottley? The Hotels and Resorts scandal? Hardwood Holdings? Greenland dump? A failed water distribution system? Queen Elizabeth Hospital?

Where does one start? How about at the end… with that monumental failure called Cricket World Cup delivered to the people of Barbados as a parting gesture from the BLP before they were thrown out of office. If you don’t think that CWC mattered, you should remember that Arthur and Mottley wasted about a billion dollars of your money on that fiasco. Remember the empty stands? Remember that Mia Mottley was in charge of setting up the visas and what a nightmare that was? Remember the final game played in the dark because our two hundred million dollar renovation lacked lights for a World Championship?

Hey… that played really well around the world, didn’t it?

And we’re not even talking about systemic corruption at all levels of government that touched everything under the BLP. Hell, even Prime Minister Arthur himself was caught putting a “campaign donation cheque” (made out to him personally! HA! HA!) into his very own personal bank account.

Now we’re not giving Thompson a pass for what has gone on since he was elected, but you might want to remember that the airplane called Barbados was already quite a wreck when Thompson found himself elected as pilot. That said, what’s coming isn’t pretty…

International Monetary Fund says “This is going to hurt”

The IMF International Monetary Fund just told Bajans “You ain’t seen nothin’ yet, folks!” – which was communicated by saying “Barbados is facing severe recession linked to the Global Financial Crisis and the facility has advised the government to cut expenditure.”

How bad is it? You might want to read this…

The International Monetary Fund (IMF) says that Barbados is facing a “severe” economic recession.

It said that the island’s output is contracting, as the global financial crisis has “depressed tourism, brought Foreign Direct Investment (FDI) to a sudden stop, and weakened public finances”.

“Consequently, unemployment has risen to double-digit level,” the Washington-based financial institution said… (snip)

… The IMF, therefore, urged the David Thompson administration to develop a “credible” medium-term fiscal adjustment plan “and start with its implementation, as soon as possible” and cautioned that, if left unchecked, the large fiscal deficits combined with an uncertain foreign financing outlook could result in “a deterioration in investor confidence”.

… from the CBC article IMF Warning

In response to the IMF, Prime Minister Thompson and his government knew exactly what to do:

1/ Make announcements that “We have a plan” and “everything gonna be just fine fine fine!”

2/ Then Thompson explained that he and  his team will go beg investors who abandoned projects in Barbados. Our Prime Minister will ask the investors to please come back and he’ll assure them that this time we really really promise that our government planning and building approval people will not take years to do nothing – which has been the norm in the past and one of the reasons many big investors called it quits.

You have to read a little between the lines, but Thompson almost told it like it is to the CBC as highlighted in their article Investment Plan

“I am going to be visiting the United Kingdom after the twenty-fifth of September. What we are seeking to do there is to go armed with information on each of the projects which had been identified by British investors for which concessions may have been given, for which town planning permission may be outstanding, or whatever, and essentially to sit down with them and see how we can get those projects back on course.”

Now to the Cotton

Our bull manure warning meter spiked though when we read another one of those “Things gonna be just fine!” articles at the CBC – this one about Barbados cotton. Yup, right on schedule every year or so for the past ten years the government of the day announces that our cotton industry is going to be “revitalised” through better marketing. Nevermind that we haven’t the economies of scale to be competitive on the world market. Nevermind that we can’t even find sufficient labour to harvest the sugar crop in a timely manner.

Nevermind the naysayers, says the government to CBC, Barbados will “revitalise” the cotton industry. (Hmmm…. I think I smell a World Bank development grant out there somewhere.)

And how are we going to make Barbados cotton economically viable? How are we going to compete against China and India, the first and second largest cotton producers in the world? How are we going to profit in the middle of a recession where the commodity news services are reporting Recession hits cotton consumption, down 12% ?

How is Barbados cotton going to be profitable when India is using her booming economy to subsidize her cotton farmers so much that world cotton prices are forecast to fall by 6% in the next year?

How are we going to make Barbados cotton viable?

We’re going to make a “new brand”, that’s how! We’re going to sell to “upscale” markets. Yup, that’s what Agriculture Minister Senator Benn told the CBC.

Barbados cotton was viable until the government overruled a court decision by sending in the army!

Barbados cotton was viable until the government overruled a court decision by sending in the army!

The Good Old Days when Caribbean Sea Island Cotton made money

I guess there are a few folks in government who believe that Barbados can re-create the success that we initially had with the Caribbean Sea Island Cotton brand and business implemented by Nitin Amersey back in the early 1990’s. Amersey, who was known the world over as the “Godfather of Cotton” learned a hard lesson in Barbados. As soon as the joint venture with the government was profitable, the government figured they didn’t need him anymore so they seized the company.

When a Barbados court issued an order returning the cotton and assets back to Amersey, the government sent in the army (!) to seize the cotton in direct contravention of the court order. Apparently this Canadian investor and his family were threatened, his house was threatened to be burned down and two Barbados policeman were sent to Montreal to intimidate Mr. Amersey.

After that fiasco, the Barbados cotton industry never recovered and the country was unable to find another sucker investor foolish enough interested in putting money into Barbados cotton.

That is the simple truth about Barbados cotton, so friends you must forgive us if we say that the CBC article stinks of fresh cow droppings.

Further Reading

Keltruth Blog: How the Barbados Government used the Military to Destroy a Canadian Investor, and in so Doing Destroyed the Entire Cotton Industry

BFP: From Hardwood To Soft Cotton – An Expose Of The Disaster That Is The Barbados Sea Island Cotton Company

BFP: Nitin Amersey – Sea Cotton Story: When The Barbados Government Sent In The Military To Overrule The Barbados Courts!

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Filed under Barbados, Cotton, Offshore Investments