DLP – ‘Downgrades like peas’
I want to apologize, firstly, for the absence of this column over the last month. I forgot to mention in my last column that I was taking a few weeks holiday in order to get a little rest and relaxation. During my absence, much has happened in Barbados that caused me certainly to ask myself some very basic questions.
Back in April of this year after the downgrade to Caa1 by Moody’s on April Fools’ Day of all days, I questioned what I learnt at university and thus far in my professional career as an economist. It was prompted by a realization that Government’s definition of fiscal consolidation is completely opposite to anything known in the field.
I even wondered also whether the kind taxpayers of this country had in fact wasted their sacrifice in educating me. That moment of melancholy, however, passed very quickly. Readers may recall that Moody’s indicated at the time of the All Fool’s Day downgrade what could move the rating up or down.
On the upside, it explained: “Upward pressure on the rating could build if the Government accelerates its fiscal consolidation efforts, and puts the Government debt-to-GDP ratio on a sustainable downward trajectory, and the economy maintains higher growth rates. These developments would likely be accompanied by reduced reliance on short-term debt and financing from the central bank, and a rebound in international reserves.”
On the downside, the ratings agency said: “The rating may come under additional downward pressure if the Government’s ability to service its debt worsens, or it faces challenges in rolling over maturing short-term debt. Renewed pressure on foreign exchange reserves and sustainability of the peg may also trigger a downgrade.”
This brings me to the latest downgrade by Standard & Poor’s. The president of the Barbados Economics Society commented and suggested that it was inevitable. The Minister of Finance said the ratings agencies were moving the goal posts. Now nothing in life is truly inevitable but one thing for certain is that if your football team (in this case, the DLP Government) is hell bent on scoring own goals, then the home fans (we the people) have to do two things – shift the goal posts to avoid certain defeat until such time as the entire team can be substituted.
One of the bizarre things that has happened during the tenure of the Democratic Labour Party is that Barbadians have come to expect downgrades as part of their everyday lives. Collectively, our expectations have been lowered so significantly that we are now so numb and therefore cannot seem to process how it is possible for circumstances in Barbados to get any worse.
The truth is that Barbados has been downgraded so many times over the past seven years that some of you may have lost count. One of the major excuses offered by the DLP Government is that the island is facing the worst recession in history. Every country in CARICOM has faced the same harsh international environment but yet Barbados is the only country to be downgraded 17 times in the last seven years. What could possibly make Barbados so special?
Whilst a lot of the focus has been on the credit ratings downgrades, almost every aspect of our lives has experienced some sort of downgrade. In our 50th year of Independence, citizens in our northern most parishes are consistently without water. Back in the day, our citizens could readily access water through a network of stand pipes that worked.
In 2016, the lives of residents have been downgraded where not only there is no running water in people’s homes but the community tanks are empty. In addition, the quality of water coming through citizen’s taps in St Lucy and other parts of the country makes me question the ability of the BWA to provide access to clean water.
Basic sanitation collection services to which Barbadians have become accustomed is now routinely a problem across the country. Whilst I acknowledge that waste management is a national issue that requires serious examination, certainly we must have thought that we at least had solved at a fundamental level the collection problem.
Communities across the length and breadth of Barbados have been reduced to collection of refuse every three to four weeks. This state of affairs has contributed to an increase in flies which are humbugging the place. No amount of insecticide seems capable of alleviating the fly problem induced by the quantum of garbage. Yet, another aspect of our lives that has been downgraded!
Barbados is known regionally and internationally for its education system. It is the one area in which we are globally competitive. The introduction of tuition fees by the DLP at the University of the West Indies has had a very negative impact not only on enrolment due to affordability issues but also on institutions like the Barbados Community College (BCC) and the Samuel Jackman Prescod Polytechnic (SJPP).
Students displaced from UWI are enrolling at BCC and those displaced from BCC are enrolling at SJPP. Now this clearly has an adverse effect on regular SJPP students because there is nowhere for them to go. This education policy, coupled with the DLP policy of reducing business activity in Barbados, means that there is a large proportion of young people who have left educational institutions over the past eight years and have not had the opportunity to get a job.
This is now further compounded by young Barbadians being denied access to education which has always been the means through which we have lifted ourselves out of poverty. Another downgrade of the hopes and aspirations of the very people we need to take the country forward.
I see things for what they are and conclude that the acronym, DLP, should no longer be seen as referring to the Democratic Labour Party but instead be etched in the hearts and minds of Barbadians to stand for ‘Downgrades Like Peas’.
(Ryan Straughn is a UWI Cave Hill and Central Bank of Barbados trained economist. He is the endorsed Barbados Labour Party (BLP) candidate for the constituency of Christ Church East Central at the next general election. Email: email@example.com)