product, and sell it at a premium price, to a discriminating clientele. effective policy coordination is needed in all foreign exchange activities, between government and private sector, with respect to objectives, financing, monitoring, and feedback. we have to monitor how new initiatives are being implemented, and whether the intended goals are being reached. there must be feedback to ensure corrective action if results are not being achieved. for this purpose we may use existing institutions, such as the barbados chamber of commerce and industry and the social partnership, through information sharing and minor reorganisation in some cases. barbados is rich in institutions, and it is therefore better to bend existing institutions to our purpose, than to create new ones. growth is not about starting with a clean slate, but rather about building on the foundations that have proved to be solid. we do have to develop new products and services, and to explore new markets, but we should use the things we know well as a point of departure. surely we should have learned by now that if you can ’ t make a success of business that you know better than others, chances are pretty slim that you will succeed with something that other people have been doing for years, and know far more intimately than you. we have everything we need to revive the economy : • we have at our disposal innovation and entrepreneurship, at home, in the diaspora, and among those who have chosen to make their homes here ; • we have examples of success in tourism, international business, agro - processing and alternative energy ; • we are in the top 1 / 3 of global competitiveness, as measured by the global forum ; • barbados has become legendary as a tropical resort destination ; and • government and the well established private enterprises have access to domestic and foreign funding. we know where improvement is needed, and what we must focus on in order to improve our competitiveness : • we must intensify efforts to identify the sources of government inefficiency, and to devise practical ways of achieving lasting gains in efficiency ; • appropriate financing arrangements are needed for innovators. this is the one area where we need greater clarity on what may be the best way forward. many of our previous notions clearly cannot work, and we must seek out alternative arrangements, rather than flogging the old dead horses. bis central bankers ’ speeches • every worker and every business owner must focus primarily on what each of us can do to give unsurpassed service and excellent value for money,

the dollar, in southern africa the rand, in the indian sub - continent the rupee. it is the notion of flexible exchange rates that is ridiculous, not the acceptance of the superiority of pegged exchange arrangements. we should remember that the notion that flexible exchange rates are an acceptable way to manage the international economy has risen to ascendency only in the last 3 decades or so, a period i believe will be seen by history as a dark age of economics. prices have not been set by markets since the end of the agrarian economy a second example of economists ’ misrepresentation of the world is the notion that prices are determined by an equilibrium of supply and demand in a market. this notion is so fundamental to economics that it is accepted without question, and not only by economists. a visitor from mars would find this quite strange, because when he looked around him, he would be hard pressed to find anything resembling a market in which buyers and sellers negotiate the price of things bought and sold. in real life retail prices are always predetermined by the seller, and wholesale, producer and other prices are determined by contract. this was not always the case. economic history is not my specialty, but my understanding is that in the agrarian economy economic transactions typically took place via markets. the farmer would till his fields and raise his livestock five days a week, and on the sixth day he would load his produce on some form of transportation and take it to the nearest market town, where he would trade it with artisans, fishermen and other farmers who had products that he needed and that his household did not produce. in many african societies, i am told, the marketing is done by women. the seventh day was often the day of rest and recuperation, at least in the western societies from whom we draw our traditions. in this economy, sellers will adjust their prices over the course of the market day to ensure that they dispose of the entire supply that they have brought to market. this was the world in which the early economists like adam smith grew up, and these were the arrangements which they reflected in their models of the economy. it was a quite literal description of the behaviour they experienced every day. the overwhelming proportion of the populations lived in villages in the countryside, their daily activity for most of the week was production and consumption. trading, that is, economic exchange, took place only on a single day, in a discrete space, for a specified time. it made sense to think of