The Standard & Poor’s downgrade of this country’s long-term credit rating and its posting a negative outlook on our economic performance is just the kind of news that we would not wish to hear at this time. And, we are equally unhappy to hear that another downgrade may follow in a year, if we are not able to get the economy growing.
Our country may be in the throes of economic disequilibrium but we are positive people and our history shows that sometimes we may have been shaken by economic or other forces of nature but that we emerge with our heads held high; bloodied, perhaps, but definitely unbowed.
For while the opinions of the rating agencies are nothing more than opinions, and these agencies too can be mistaken sometimes; their opinions matter, and borrowing on the international financial markets is an occupational hazard of every developing country.
We cannot ignore the reality that we are part of the global community and how we are seen by others, especially those in influential economic and financial circles, matters a great deal; for if we are assessed as less creditworthy, then every man woman and child in this country is affected.
Recessions are a fact of life, but as we have heard before, the policy responses to recessions may help to ease the impact of such recessions and get the country growing again. Now therein lies the rub; because the point has been made by Standard & Poor’s and some local economists too; that the Government has failed to take those measures which it said it was going to take; to get our economy growing again.
Efforts have been made to get tourism moving, but controversy attends the recent concessions made to the Sandals Group and an unsettled business atmosphere is not conducive to growth. What we need right now is a concerted effort to grow our economy and move forward together.
Our position is not helped by the industrial relations problems at the Water Authority where the Barbados Workers’ Union is flexing its muscle in an ongoing battle with the authority.
A country’s credit rating depends greatly on financial fundamentals but political stability and harmonious industrial relations are always very important factors. Hence the problem at the Water Authority is very bad news especially at this time. We hope for an early resolution and that escalation of that strike beyond the Authority will not be necessary.
We note that the Minister of Finance is planning a Ministerial Statement during the first week of December; and we look forward to hearing it. We cannot expect any bag of goodies but realistically we expect to hear of measures designed to help us get back on track.
Recently, we withdrew a bond offer from the market. No sovereign country is happy to do that, because whatever the facts, it may be interpreted as a sign of dwindling confidence by the market in our bonds, and on the heels of that we have this downgrade.
Our country is faced with a serious and challenging situation, but our history has shown we can draw upon our natural resilience to put wrong things right. We have done it before. We can do it again.
