Govt looking for investment, not to borrow, says leading officials
The Barbados Government is on an international shopping trip seeking to woo foreign investors, but its two leading economic officials have denied that major foreign borrowing is immediately in store.
Minister of Finance Chris Sinckler and Governor of the Central Bank Dr Delisle Worrell are now in the United States meeting with potential investors after a similar road show in the United Kingdom this week.
On Wednesday, the finance duo was at the Borrowers and Investors Forum in London to put this country’s case regarding the true state of the economy and what Government is doing to achieve an economic turnaround.
Speaking during an interview at the forum, Dr Worrell said: “One of the reasons why we are going the road show, is so we can communicate directly to our investors, the reality [of the economic position], because that is not well understood by the international markets and particularly it is not well understood by the rating agencies.”
He also said Barbados did not want to go to market to make financial deals “until we have a better understanding by all the market players, all the realities that face small, open economies”.
In addition to the road show, he said the country had other information it wanted to share with the investment community.
Minister Sinckler, who was also involved in several meetings in the UK, said investors there now had a better understanding of the island’s situation and appreciated that they had travelled there to consult with them. He suggested that a lot of the information which was made public about the economy was distorted and did not paint the correct picture of Barbados.
“Our motive is not only to get an understanding of what is happening in the market from them [investors], but also to give a better understanding of what is happening in Barbados and how the two can coalesce in the interest of both the investors and clearly of Barbados and what our requirements are, rather than collide.”
He stressed that “when we have interlockers in between, such as ratings agencies, sometimes that message can get distorted.”
However, he was satisfied that the response from the UK investors was very good.
“They are very happy to hear of some of the developments, the new investments that are happening in the economy, particularly in our main productive sectors; they are also interested to learn of interest of coming to market.
Sinckler, whose trip has been clouded with speculation that Government was preparing to embark on major borrowing, said, “in addition to what the Governor has said, there are a lot of other things that decide if we go to market, what are the interest rates, how are they behaving, the state of the market in terms of stability and ease, the issues pertaining to what size of issuance you are planning to do; all of these are taken nto consideration,” he said.
The Minister of Finance also pointed out that at the end of the road shows, he and the Governor would meet with their senior economic officials and external advisors and determine whether Government needed to borrow from the international market or not.
“We absolutely only go to market when it is required and when the conditions are favourable for doing so,” he assured.
Sinckler also stated that Government was pushing to attract investors interested in buying high-end properties on the island.
He said the decline in the upscale property market had now changed and there was an increase in demand for such investments.
Meanwhile Governor Worrell addressed the economic prospects for Barbados over the next year to 18 months. He was of the view that this island had “turned the corner” to recovery and predicted 2.5 per cent growth by the end of that period.
However, he made it clear, that Government was more interested in sustainable growth, rather than any quick fix for 2014.
“What we are concerned about is sustainable growth. The corner has been turned. We know that because we have maintained the foreign exchange reserves. That’s the thing that tells us we have kept the economy stable and continues to be stable in the face of challenges. But in terms of the resumption in growth, it’s not a short-term business,” Dr Worrell cautioned.
The two top officials are due back home tomorrow.