SHOCKING IT?WILL?HAVE?BEEN to SOME, learning that Barbados has been further downgraded by Standard &?Poor’s (S&P) – from BBB-/A3 to BB+/B, actual junk status.
S&P’s explanation is that the downgrading of our rating was “based on a number of factors” which in its view “reflected the structural deterioration and the weakening of the credit profile of Barbados”. The agency’s Olga Kalinina made it clear the factors were “the weakening of the economic fundamentals”.
Standard & Poor’s position was this was not only a function of the still very weak external environment and its impact on Barbados, but also of the bigger “competitiveness challenges” and the structural shortcomings Barbados was trying to deal with.
“It is going to take a very long time,” Ms Kalinina says, “for the country to overcome those if it is to be successful.”
We are not unmindful that the journey out of our economic dilemma will be painstaking and could require much time – more than some of us might be prepared to accept as needed. There is no quick fix.
Central Bank of Barbados Governor Dr DeLisle Worrell’s sharp criticism of S&P’s downgrading as representing “a lack of understanding of the Barbadian reality” notwithstanding, the fact is the international agency’s altered rating of our status demands more of us all. For while Minister of Finance Chris Sinckler might be overly confident that international investors will continue to regard Barbados favourably in spite of the downgrade, his admonishment that we must not panic is to be heeded.
We are all in it together – the Government and the private sector. Barbadian investors must not shy away from the task of keeping our economy and society secure, when all others outside turn away or significantly reduce their risks.
As Dr Worrell has appropriately proffered: “It is up to us and it is up to our Government, to our private sector, to say what the things are that will drive the future growth of [our] economy, and to invest in those things.”
One redeeming feature of our circumstance is the declaration of the Barbados Chamber of Commerce and Industry that it remains committed to encouraging its private sector partners to hold fast to confidence, so crucial as we face this new challenge.
We may not escape the Opposition politicking, given the adversarial nature of our parliamentary system; but until such time as the Prime Minister calls election day, we all have some duty to do our utmost to contribute to all that will preserve our national status before the world.
Standard & Poor’s is itself not unmindful of our political stability and strong institutions, including our Social Partnership.
We wager that these assets can help us face the challenge of international competitiveness; get us back on the A side.
