As we reflect on the closing year, we can’t but acknowledge 2012 as being most challenging, with, among other unpleasantries, Barbados’ credit rating being downgraded by two international agencies – reaching their conclusions at different times, but essentially sending us the same message.
Our bonds are now rated as non-investment grade, and any issued by us now in return for loans are subject to all the pejorative connotations associated in financial circles with junk bonds. This expresses the view that there are clear and present dangers to our national economy, and that the outlook is negative. Yet all is not lost.
Our Minister of Finance declared he was not surprised by the downgrade. Quite frankly, no thinking Barbadian should have been surprised, given the finding of Standard & Poor’s earlier in the year, and the almost barren domestic economy and austerity and other measures taken by our major international trading partners.
The downgrades are the considered opinions of two of the world’s most influential rating agencies – Moody’s is the other – and we have to respect their assessments, even though we do not have to bow to their ever insistent demands of or advice on policy changes.
At the same time, we may have to select such pearls of wisdom as are contained in the evaluations of our economy. The Minister of Finance, for example, drew attention to the fact that whatever else may have befallen our economy, “our foreign reserves levels remain adequate to satisfy our current and immediate future needs”.
This is most reassuring, because it means that so long as the foreign reserves remain adequate, we can keep the International Monetary Fund and other such last-resort lenders and their draconian policies at bay.
Still, we must be more than concerned that the foreign reserves have fallen by half in the past five years and action must now be taken to generate an increase in them, since a business-as-usual approach will inevitably lead to further falls. Concurrently, paying greater attention to increased economic activity on the domestic front, while bringing our fiscal fundamentals into better shape, must rank as a challenge of the first order.
These are daring tasks, but the Government’s duty is to boldly and steadfastly take those steps it has determined will put right what is wrong with our economy; and it is entitled to expect every man to pull his weight. At the same time, our democracy demands of the Opposition that its opinions and constructive criticisms of the Government’s plans be canvassed before the electorate, so a healthy public opinion can be formed about the way forward.
The new year will not be without its fresh challenges. Employment in the public service has been maintained, but the spectre of job losses in the private sector threatens.
A country best prospers when its political structures work and when tough decisions are taken to confront and abate the storms. The policies of the politicians may make things better or worse, but the options must be available for public discussion. For once choices are made, the people are directly affected – for better or worse.
A blessed New Year to all!
