Barbados Chamber of Commerce and Industry’s new President Responds to Moody’s latest Downgrade
Moody’s downgrade of Barbados’ government bond rating to B3 from Ba3 with the outlook remaining negative comes as no surprise to the business community. It certainly gives cause for even greater concern since the Barbados Chamber of Commerce and Industry (BCCI) has noted that there has been no improvement in the economic fundamentals of the country in the last 6 months. Even in view of the recent increases in the debt ceiling, future borrowings, should they even be available to us, will become more difficult to secure and more costly with this further slide in the rating.
The BCCI is concerned that as the Government has more difficult access to external debt, internal borrowings through both NIS and direct Government financing by the Central Bank have the potential to completely undermine other efforts like the recent retrenchment exercise to improve public financing. The last IMF report on Barbados and now this Moody’s report have noted the impact that direct financing potentially has on the currency peg which we cannot afford to have face this level of risk. Given Barbados’ position that for every dollar we earn as a country, we are spending $1.60, every citizen understands what that means in the long term for economic and social development in this country.
New BCCI President Tracey Shuffler contends that growth through foreign and local investment can only pick up to the level required when impediments to investment have been removed and all incentives offered are fully accessible through supportive regulations and business facilitation. She adds that Barbados needs to find a way to collectively advance the pace of a programme of divestment, both partial and complete, of select Government businesses through private/public sector partnerships or outright sale.
She urges Government to speak to the public more openly on their plans to address this dire situation! While she believes that not every detail must come into the public domain, frequent and open communication remains a fundamental part of managing through an economic morass. Updates are critical and both the business community and individuals need the timely facts of the economy’s state to be shared with us, she added.
Ms Shuffler notes that in times past, the functioning of the Social Partnership has been cited by ratings agencies as support to the county’s economic framework. “We need to ensure its continued relevance and effectiveness as we face these economic times. National goal setting, timely implementation and collective monitoring of our progress must underpin our Social Partnership functioning. It is essential to our survival”.