Why the fuss?
Sinckler: No formal offer has been made by british billionaires
It is not a done deal.
This assurance today from Minister of Finance Chris Sinckler in response to what he has described as unnecessary hysteria surrounding an offer by two British bond traders to assist Barbados in securing $1 billion worth of funding.
Sinckler said that while he had met with Andrew Stewart and Stuart Fordham, no formal proposal had yet been made to the Government. Thus, in response to local concerns raised about the offer, the Minister of Finance said he was not clear on what all the recent fuss was about.
“This [proposal] is no different from the other things that we have seen and heard, and therefore this big amount of hysteria from people and suggestions that ‘it will be horrible’ and that ‘it doesn’t make sense’ [is unjustified].
“I mean, we have not said to anybody that we are going anywhere to borrow anything. It is just their [the British billionaires’] way of showing their commitment and interest in, and hope for Barbados to be successful,” he said.
In an interview with Barbados TODAY, the Minister of Finance also lashed out at critics of the offer, which came as a direct response to last week’s Standard & Poor’s (S&P) downgrade.
“The important thing is that we have very good and powerful friends who hang around in Barbados, who live in Barbados, who come to Barbados, who have invested in Barbados, and who want Barbados to do well,” declared Sinckler, who quoted Stewart as saying that “Barbados is not one of the best countries in the Caribbean, it is the Rolls-Royce of the Caribbean”.
“These are essentially expatriates who are saying that on Barbadian soil about Barbados; and I think that some of us can take a lesson from that and try to say something useful about the country, rather than always finding an opportunity to be negative, and to tear the country down, and to put it in the worst light imaginable, including to people who come here to do assessments, like S&P and the IMF [the International Monetary Fund] and so on . . . .
“. . . All those people who believe they are doing the Government damage by lining up and saying the most negative and the worst things they can about Barbados and about the Government, and about the future, and then pretend they are surprised or affected by downgrades and other negative reports when some of them have contributed to them.
“They can take a lesson out of the book of some of these people who have come here and expressed their views, like Andrew Stewart and Mr Fordham . . . and see something positive that is happening in Barbados; and that not everything is negative and this is the worst place in the world and the worst Government, and all of that rubbish that you hear people putting out because it suits their purpose politically and otherwise to say so,” Sinckler suggested.
As for the loan offer, he said it could take the form of a bond or foreign direct investment.
“They are not only saying, ‘Come and let’s go and borrow $1 billion’.”
In fact, Sinckler said, Barbados would not go on the commercial market to borrow $1 billion, unless it was in support of a project that was going to give a return on investment; “and we know where to go for those types of capacity-building projects. We normally go to the institutional lenders like the IDB [Inter American Development Bank] and CDB [Caribbean Development Bank] and so forth, because you get the money at a reasonably low cost –– way below the commercial market”.
The minister made it clear that unless the terms and conditions were favourable, Government had no immediate plans to float any bond on the international market.
“We believe that those terms and conditions could only be favourable in an environment where our message about our fiscal actions has taken root; that that process of achieving those targets has been largely complete or completed and that the market conditions, including the size of the loan that we are seeking to borrow, are of such value and note that would allow us to get a reasonable rate on what we are asking for,” he explained.
The Minister of Finance also made it clear that Government was not in the business of simply dismissing foreign investors, least of all persons with the track record of “these two gentlemen, in particular Mr Stewart, who has been around Barbados for many, many years”.
“This is not somebody who is just a bond trader in the market or running an asset management fund who turns up and says, ‘I am a fairy godfather, I can do this’. This is somebody who has invested money in Barbados, actual dollar bills, millions of dollars actually, in Barbados; who has bought a second home here; who has no real interest in participating in Barbados’ issues and has never participated in Barbados’ issues beyond the investments which he has done.
“He [Stewart] has basically said, ‘I have seen this S&P thing and the Moody’s and I’ve have heard about the IMF and stuff. If Barbados wants to go to the market, if you are having problems because you are not investment grade, we have a clientele that we service who might be interested in investing in an emerging economy like yours, and we can vouch for Barbados and we can vouch for what the Government is doing’.”
However, in the absence of a formal proposal, Sinckler acknowledged that “the proof of the pudding is in the eating” and that any decision on the offer would be based on “what is formally submitted on paper, interest rates and other terms and conditions”.