IDB: We’re cool!
It is business as usual between Barbados and at least one major international funding agency, despite global rating agency, Standard & Poor’s recent altering of the island’s investment grade.
The Inter-American Development Bank’s representative in Barbados, Joel Branski told Barbados TODAY, this afternoon, that the multilateral financial institution was working normally with the country.
“There is no official opinion on that. It’s a matter that is being analysed by the Barbados Government and by the agency. We are working normally with Barbados,” Branski pointed out.
Pressed on whether there were any problems between the IDB and Barbados as a result of the downgrade to “junk” status by S&P, the bank’s local spokesman replied: “No, no.”
Economic commentators have been painting a picture gloom and doom, suggesting that S&P’s downgrade of the island’s credit rating to “junk” status, would turn away investment and also make borrowing very expensive. But the Governor of the Central Bank of Barbados, Dr. Delisle Worrell has given the assurance that he had been speaking directly with investors and financial institutions and they were aware of the facts regarding the local economy.
Worrell said private investment should strengthen in the coming year, supported by Government’s initiatives that would layi the foundation for future growth.
In fact, he made the point that major ongoing investment in the tourism sector realise over $100 million in private capital inflows.
The Government’s principal economic advisor however held out the possibility of this country’s exchange rate being threatened, if any alternative to the current Medium to Long Term Fiscal Strategy was introduced.
That strategy, he is insisting, would serve to reduce the debt to GDP ratio, which was one of the major issues which prompted the downgrade in the first place.
However, while the Government was boasting that the fiscal gap was closing, the President of the Economic Society of Barbados, Ryan Straughn described the cut in expenditure as artificial.
Standard & Poor’s in the meantime, is worried about the impact which the competitive challenges in tourism and international business was having on the Barbados economy. Its downgrade, which says to the investment community that Barbados’ foreign debt had become risky, was also motivated by the rating agency’s concern over the effects of the difficult external environment on the island. (EJ)