Self Reliance

Self interest is the best interest when it comes to formulating and implementing policy initiatives. While international aid and technical assistance is valuable it must be treated with caution and judged with a hearty dose of common sense. A prime example of this is the acquisition and installation of the Doppler radar system in Barbados that is part of an EU initiative for the Eastern Caribbean. The project has taken nearly twenty years from inception to completion and seems to be not yet fully operational. Had we determined that this was a project that we could fund and implement ourselves it would have been operational within 3 years.

All economic assistance comes with strings attached that may limit the source of the consulting services as well as the source of equipment and supplies needed to complete the project. Quite often the standards design follow those of the donor country and does not take into account our environment of high humidity, saline water vapor and the threat of hurricanes that requires structural resistance to higher wind velocities.

Similarly, the formulation of policies might be coloured by the given political wisdom of the day that may not necessarily be based on the best empirical evidence but on political expediency and emotionalism. Thus it is with the use of highly subsidized ethanol from corn and other bio-fuels to reduce the consumption of oil. An early critic of this was former President Fidel Castro who recognized that the diversion of massive amounts of corn from the food chain into the production of ethanol would have an adverse effect on the cost and availability of a wide range of food products.

We now learn that former Vice-President Al Gore has belatedly come to the same conclusion. In a recent speech in Greece to a group of clean energy financiers he stated that the benefits of ethanol are trivial. In addition there is a growing body of evidence that the production and use of ethanol has a higher carbon footprint that that of unadulterated petrol.

With all the hype and clamor for the use of ethanol as a “green” fuel, it is still a major plank in our own energy policy. Clearly it is time to rethink the direction that we are taking on this issue.

Far too often we look for a silver bullet to solve complex issues. We wait around for the results of exhaustive studies produced by academics who are unfamiliar with our local conditions or the absorptive capacities and resilience of our society before we initiate action. Our home grown solution for the continued viability of the National Insurance Scheme was developed on a sound actuarial basis and implemented by explaining to the public what was necessary. We now have a graduated move to a retirement age of 70 and an increase of contributions to ensure the health of the fund. Contrast this with the violent protests in France when the government moved the retirement age from 60 to 62.

Similarly, the hand of the IMF was all too visible in the recent budget that sought to make corrections after such a long period of inaction in the face of the worst financial crisis in our lifetime. We need a more sophisticated and nuanced approach to address the economic and social problems that we face due to the global financial crisis and, in the longer term, the impact of climate change. This is not to say that there are not problems of our own making that we need to address. Comments from both sides of the House alluded to that in the budget debate. If we have the ability to identify the problems ourselves surely we can also develop our own solutions. It seems as though we really do have a government that we can no longer afford.

phillip.goddard@braggadax.com

Human Barriers to the Benefits of Technology

New discoveries and innovation continue to create a cascade of remarkable advances in computation and communication technologies. IBM has just revealed a new design for cooling computers that could lead to the development of a super computer the size of a sugar cube within 10 to 15 years. New networks being deployed are delivering speeds of 1 gigabit per second or 500 times the highest speed available in Barbados today. Increasingly the personal computer of choice is a hand held device that is either an Ipad or smart phone.

Radio Frequency Identification chips, RFID’s, continue to drop in price and to be deployed in an ever widening range of consumer products. New developments in chip design continue to revolutionize digital photography.

Sadly, we seem to have difficulty in coming to grips with the use of technology tools to improve efficiency and quality in both products and the delivery of services and to cut cost. It seems as though our ability to discover and invent has outstripped our ability to develop the cultural change necessary to use these tools to change our business processes in a way that would make us all more competitive and greatly improve the quality of life.

The reluctance of senior executives and middle managers to develop a hands on feel for the use of information and communication technologies and the stove pipe organizational structures in both government and the business community is largely responsible for this state of affairs. Far too often the IT staff and the business process management seem to operate in two separate or parallel universes when they should be in close collaboration from the strategic planning to the implementation phase of the business process.

Far too often computerization is seen as transferring a paper based system to a digital environment; a sure recipe for disaster.

There are some companies or departments that have overcome this challenge and have developed a close working relationship between the business process managers and the technical staff. They have achieved remarkable pockets of success by involving all the employees in the development and implementation of new business processes. But these are far too few.

What is needed is the development of a national dialogue that involves a new generation of technically proficient individuals mixed with senior executives to brain storm new concepts for the delivery of services and goods and the creation of new business opportunities. It calls for a cultural change that is open to new ideas and capitalizing on the practical experience of those that have been in business for decades. This will challenge the hierarchical structures and knowledge based power enclaves that have developed over years, but this is necessary if we are to continue to improve the services delivered to the consumer.

The time has long passed for us to continue to use the 19^th Century tools in the 21^st Century and the only hurdle is a rigid mind set and a reluctance to change.

Phillip.goddard@braggadax.com  

Fresh Pasteurized Milk

Over many decades the Barbados dairy industry and Pine Hill Dairy have built up an enviable record in the Caribbean by developing a self sufficiency in the supply of milk products to the consumers of Barbados. The path has not been an easy one, but successive management teams have continued to improve the product and distribution system to meet broad acceptance of the consuming public. In recent years the Dairy’s profitability has come under pressure due to several issues including an ageing plant. Something had to change, but what? Without any consultation or public involvement it was decided to change the processing of fresh milk from the refrigerated pasteurized product to an ultra-pasteurized product.

Having applied an accountant’s and engineering solution to a sensitive consumer product with disastrous results, Pine Hill Dairy is now seeking Government’s protection by asking for a firewall against imported fresh pasteurized milk. Despite a whopping 140% import duty the imported milk has been flying off the shelves at Emerald City Supermarket. This is the ultimate taste test for Pine Hill Dairy and a repudiation of their unilateral decision to implement a milk processing system for the convenience of the company without regard for consumer taste.

When the dairy processed and distributed whole pasteurized milk there was never any thought of importing the same product unless there was a serious shortage. Consumer demand for fresh milk was adequately served by Pine Hill Dairy’s product and met the quality taste test of Barbadians and visitors alike. The current demand for imported fresh milk despite a significant price barrier because of the astronomical import duty is a clear indication that the Pine Hill Dairy long life milk does not meet the taste test.

Dairymen themselves recognize the problem and have reported a significant increase in direct sales to the public. This has resulted in plans by individual dairies to install small pasteurization plants to meet the growing consumer demand for an alternative to the Pine Hill Dairy ultra-pasteurized milk.

It seems clear that the market place is sending a clear message and one that the Dairy would do well to heed.

It is also interesting to note that BS&T’s Supercenter chain has not engaged in the direct importation of fresh milk despite the adverse consumer reaction to the Pine Hill Dairy product. Once again it seems that corporate interests trump consumer demand and now the Government is being asked to apply a final solution by totally blocking the importation of fresh milk.

What next? Will the Dairy request that individual dairies be prohibited from setting up their own pasteurization plants to meet the demands of the Barbadians consumers? Where will protectionism end? Will we all be condemned to suffer the results of bad corporate decisions as a result of Government fiat or will consumerism finally trump corporate interests?

Phillip.goddard@braggadax.com

Alternative Energy for Barbados

Sunday, October 31, 2010

When discussing alternative energy we must first define the energy needs of Barbados and the reasons for developing energy sources that are not derived from fossil fuels, that is, oil, natural gas or coal. The environmentalists would say that our prime reason to develop alternative energy would be to decrease our carbon footprint or the carbon dioxide emissions that we produce to generate electricity. Economists view the problem as a dangerous threat to our foreign reserves as the price of oil escalates. Dreamers see alternative energy as a free source of energy supplied by wind, sun or the sea seldom counting the capital cost and the Co2 emission cost of the production of solar panels, wind turbines or other energy convertors and ongoing maintenance cost.

Our energy requirement, to ensure economic growth and improved quality of life, is a consistent stable source of electrical power generated at the least possible cost. With that as a given, fossil fuel is our best bet at the current price structure though that is likely to change as the world’s economy improves and increased global demand drives up the price of oil.

The alternative energy solutions are only partial solutions that provide energy at high cost relative to the current generating cost and only provide energy either during daylight hours or when the wind blows. This means that conventional generating capacity must always be available to provide demand in hours of darkness or when the wind velocity is insufficient. Additionally, because of our small land mass and high population density, there are significant physical constraints to the establishment of industrial alternative energy generating capacity. As a result our solar and wind generating solutions will be of necessity small scale solutions that will at best only partially reduce our reliance on oil to generate electrical power.

Given our need to develop long term plans for the replacement of generating capacity and to provide for increased consumption we need to define the core generating needs over the next 25 years and plan for the acquisition of the appropriate generators of power that will deliver reliable 7/24 electrical power at the best predictable cost while reducing our carbon footprint.

With the price of oil forecast to reach $200 or $300 a barrel in the next 5 years or so, the equation for Barbados becomes radically altered. Clean coal solutions exist that can provide the generating capacity that we need at a more stable price than oil though with an increased capital cost. Alternatively we must consider nuclear energy with new generation mini reactors with low levels of nuclear waste. Now is the time for us to discuss the pros and cons of our energy future based on the best scientific and economic analysis. There is an urgent need for us to act swiftly as it will take years to develop and install new generating capacity as well as hone the technical skills to manage whatever technology we decide upon.

Phillip.goddard@braggadax.com