No devaluation

The Barbados dollar will not be devalued.

Minister of Finance Chris Sinckler is making that position clear in the wake of this week’s three-notch downgrade by the international ratings agency, Moody’s.

Moody’s has suggested that the Barbados dollar was facing increasing pressure due, in part, to Government’s borrowing, which, it said, was affecting the country’s currency peg to the US dollar.

But in a statement issued today, Minister Sinckler said devaluation is not even being considered, and he was firm that Government would not allow any ratings agency to drive its policies.

The Government is committed to the fixed exchange regime and will do what needs to be done to protect the Barbados dollar. Neither the Government nor people of Barbados want a devaluation of the Barbados dollar, and as the Government, we are determined to do what is required to maintain the fixed exchange rate and honour our financial commitments,” he said.

The Government is committed to the programme of fiscal consolidation, and we are seeing major signs of renewed economic growth in Barbados. As a Government and a people, we will stand shoulder to shoulder and overcome the challenges we currently face.”

Meantime, the finance minister has confirmed the sale of the Four Seasons property, stating it would contribute some US$250 million to the economy.

Barbados TODAY had earlier reported that the deal involves one of the world’s largest wealth funds based in Qatar, along with a group of local partners.

While the minister did not give any details about the investors, he said this project and others that are earmarked to come on stream within a year, would pump close to US$900 million into the economy.

In the last six months, the Government has entered into an agreement with a foreign firm for the construction of a US$240 million Waste To Energy Plant (all private equity); Sandals Corporation is expending $130 million on expanding one of its properties in Barbados, while agreeing with Government to purchase a second property at the old Almond Hotel site and spend over US$250 million of its own money to rebuild a new 500 room hotel there. With this development, Government will now no longer have to take on debt to finance this operation.

Additionally, Government has recently approved the sale of the former abandoned “Four Seasons Resort Project” to a major international investor and that will trigger another US$250 million in foreign direct investment. All of these projects, plus others, including a new cruise terminal at the Bridgetown Port, are expected to start within the next six months to a year,” Sinckler said.

33 Responses to No devaluation

  1. Angel OfThunder
    Angel OfThunder June 7, 2014 at 7:14 pm

    Best news in Years ..

    Reply
  2. Prince Nick
    Prince Nick June 7, 2014 at 7:16 pm

    When they say no it is yea

    Reply
  3. Angel OfThunder
    Angel OfThunder June 7, 2014 at 7:17 pm

    Wanna might be right don’t let me talk to fast let me see this first…

    Reply
  4. Francis McClean
    Francis McClean June 7, 2014 at 7:21 pm

    If dis is true hallelujah

    Reply
  5. Noel Jones
    Noel Jones June 7, 2014 at 7:24 pm

    So we devaluing next year or later this year cause no is yes with this government

    Reply
  6. Sharon Sealy
    Sharon Sealy June 7, 2014 at 7:24 pm

    Read my lips…… There will be no layoffs in the public sector!!!!!!

    Reply
  7. Ryan Bayne
    Ryan Bayne June 7, 2014 at 7:26 pm

    I agree with you, Prince Nick. Check it out: they only showing you old money instead of monopoly.

    Reply
  8. Prince Nick
    Prince Nick June 7, 2014 at 7:28 pm

    Sharon somebody gone come and cuss u

    Reply
  9. Mac10 June 7, 2014 at 7:33 pm

    Well that’s a worry right there! Anyone remember “No layoffs” Juuust checkin”

    Reply
  10. Addison Cortlandt
    Addison Cortlandt June 7, 2014 at 7:50 pm

    Yet

    Reply
  11. Jay Butcher
    Jay Butcher June 7, 2014 at 8:00 pm

    Yes because we can believe what the Minister of Finance and the government says, because they never lie. Really!

    Reply
  12. Sharon Sealy
    Sharon Sealy June 7, 2014 at 8:02 pm

    @Prince Nick….. For what!!!! speaking the “gospel according to the current government”…….loolollll

    Reply
  13. Bobby Brown
    Bobby Brown June 7, 2014 at 8:03 pm

    And there will be no lay offs and the vat will only be at 17.5 for a while

    Reply
  14. Stephen D Stewart
    Stephen D Stewart June 7, 2014 at 8:15 pm

    If the Bajan dollar IS devalued….they the DLP government must call immediate elections…..because that will be the last straw…..the last lie we should let them get away with…

    Reply
  15. Stephen D Stewart
    Stephen D Stewart June 7, 2014 at 8:15 pm

    If the Bajan dollar IS devalued….they the DLP government must call immediate elections…..because that will be the last straw…..the last lie we should let them get away with…

    Reply
  16. Stephen D Stewart
    Stephen D Stewart June 7, 2014 at 8:15 pm

    If the Bajan dollar IS devalued….they the DLP government must call immediate elections…..because that will be the last straw…..the last lie we should let them get away with…

    Reply
  17. Stephen D Stewart
    Stephen D Stewart June 7, 2014 at 8:15 pm

    If the Bajan dollar IS devalued….they the DLP government must call immediate elections…..because that will be the last straw…..the last lie we should let them get away with…

    Reply
  18. Stephen D Stewart
    Stephen D Stewart June 7, 2014 at 8:15 pm

    If the Bajan dollar IS devalued….they the DLP government must call immediate elections…..because that will be the last straw…..the last lie we should let them get away with…

    Reply
  19. Stephen D Stewart
    Stephen D Stewart June 7, 2014 at 8:15 pm

    If the Bajan dollar IS devalued….they the DLP government must call immediate elections…..because that will be the last straw…..the last lie we should let them get away with…

    Reply
  20. Stephen D Stewart
    Stephen D Stewart June 7, 2014 at 8:15 pm

    If the Bajan dollar IS devalued….they the DLP government must call immediate elections…..because that will be the last straw…..the last lie we should let them get away with…

    Reply
    • John Nicholls
      John Nicholls June 8, 2014 at 8:08 am

      They did not have a mandate for this so they would most definitely have to return to the people.

      Reply
  21. Anna Lawrence
    Anna Lawrence June 7, 2014 at 8:42 pm

    If the dollar devalues the country will too, and that is what they want, stay strong. If Barbados don’t import what they can grow, pay off the debt, they will fart an expression.

    Reply
  22. David Hall June 7, 2014 at 8:55 pm

    Just a lot of fancy words to cover the true state of affairs: Let’s dissect sections of the ministerial statement and see what it says while comparing it with the evidence: In my review I will quote areas of the speech followed by my responses.
    The Ministry says: “failed to adequately take into consideration the nuances of the Barbados economy, and essentially undervalued the commitment of the Government and people of Barbados to make any necessary adjustments to protect our exchange rate and meet our financial commitments”
    MY Response: would the Ministry tell us what are the nuances (subtle differences) within the Barbadian economy, which make it so different from other economies relative to sound accounting principles, which do not redound to income and expenditures and therefore are indicative of benefits which are not apparent to Moody? Secondly- The so called “commitment of the government –not the people, is severely lacking. The continued spirals in senseless spending speak volumes and demonstrate that Indeed Government is lacking in any such commitment to make appropriate cuts in a timely manner. The people are making hard sacrifices.
    The Ministry: “due to the fact that, as it prepared to embark on a more aggressive fiscal adjustment programme, in finalising the financial statements for the 2013/2014 and locking in a short-term strategy for dealing with arrears owed to suppliers to Government, we took a decision to bring to book a number of outstanding payments…………………. was a one-off exercise”.
    MY Response: However what this statement conveniently ignores is that there is a practice of this administration, to delay in bringing to book a number of liabilities so as to paint a more rosy than real picture of the state of the economy. Thus for all the accounts payable which the government is arguing it has fast forwarded, explanations needs be given and proof presented regarding those expenses being delayed off book. . Readings of the Auditor General reports will give some indication of the vast sums owed by government, which are not necessarily addressed by this statement.
    The Ministry: “The credit opinion also appears to have ignored the cuts in current spending and additional revenue raising measures, as well as the improvements in the external accounts.”
    My Response: Pray tell me, how, In the face of layoffs, loss of investor confidence, closing of businesses, which all result in a shrinking of the taxable base; will these additional revenue raising measures work, given that they did not work back in 2012 when the economy was somewhat better than now?
    The Ministry: “The drastic change in credit opinion has been interpreted by some as evidence that the economic situation in Barbados has gotten worse over the last six months since the last Moody’s review. In the last six months, there have been a number of positive developments in the Barbados economy, which are difficult to reconcile with the notion that the economic situation in the country has gotten any worse”.
    MY Response: Without merely stating it, it would be good for the government to show the areas in which things in Barbados have gotten better or improved. Show us how the lives of Barbadians have gotten better or is it merely to say that at least we aren’t no worse. The loss of in excess of 3500 jobs in the public sector and possibly others in the private sector cannot be interpreted as improvement; Again this is why I am contending that this statement simply is a mere exercise in semantics/play with words.
    The Ministry: “Barbados’ foreign exchange reserve position has stabilised significantly following major losses last year, even with the injection of the 150 million dollar external loan. Reserves now stand at around 15 weeks of imports, above accepted international minimum standards. There is simply no empirical evidence to suggest that the dramatic changes experienced in 2013 will be sustained through 2014 and into 2015.”
    My Response: The insistence on empirical evidence before Moody makes a prediction regarding the Reserves is flawed. Empirical evidence as we all know comes after the fact. However, because, economic management is based on projections and averages etc., speculation is permissible; in fact the government itself relies on it almost entirely in making any budget decisions. The fact that Government’s overall position has not improved from when the fall in reserves first occurred and given that revenues are declining and given that we were forced to accept a loan on draconian terms and given that our debt service ratio is increasingly high; how long will it be realistically before we have to again dip into the reserves? Or does the ministry propose getting some of the Money from Dubai? If so, then tell the country, and Moody will have to include such is in analysis.

    The Ministry: “available liquidity guards against presumed domestic credit events by Government”
    MY Response 🙁 Does this mean that government will be printing a lot more money or spending more from National Insurance schemes (NIS)?

    The Ministry: “US$240 million Waste To Energy Plant Sandals Corporation is expending $130 million on expanding one of its properties in Barbados, and spend over US$250 million of its own money to rebuild a new 500 room hotel there. …Government has recently approved the sale of the former abandoned “Four Seasons Resort Project” …….to a major international investor and that will trigger another US$250 million in foreign direct investment…., plus ..a new cruise terminal at the Bridgetown Port, … expected to start within the next six months to a year. economic sectors and in growing new ones, from the exciting work in tourism specialty events such as Top Gear, Gospelfest and the upcoming CPL, to positive expansion in the Alternative Energy sector”
    My Response: The list of proposed economic rescue indicators listed above demonstrate one thing and one thing only, that drowning men clutch at straws- as government has placed virtually all its remaining eggs in one basket, ‘Foreign Direct Investment’, even though recent deals have shown that Government has virtually no negotiating muscle. Unfortunately it is a habit for us in Barbados to count or chickens even before we know how many eggs the hen has under her, and if she those eggs were laid because of a cock or if they were simply laid by natural generation, in which case they won’t hatch no matter how optimistic we are. Concerning these proposed projects no confidence is generated given this government’s record of execution of big projects since most don’t seem to materialize. Only two days ago the minister of international business is proposing to meet with members of the judiciary to try to sort out delays which have slowed projects over the past few years. Even though we are hoping for the best, the cruise terminal, four-season restart, the time line of any prosed development project is always nebulous. From start to completion, there is always a prolonged period of uncertainty thus, the absence of a partial home based initiative in the area of agriculture which reduces dependence on foreign food imports is saddening in this rebuttal to Moody.
    The Ministry: “… a number of experts, including some in the ratings agencies, seem to have decided that a devaluation of the Barbados dollar is required and to want to drive policy in this direction. The Government is committed to the fixed exchange regime and will do what needs to be done to protect the Barbados dollar. Neither the Government nor people of Barbados want a devaluation of the Barbados dollar, and as the Government, we are determined to do what is required to maintain the fixed exchange rate and honour our financial commitments. The Government is committed to the programme of fiscal consolidation, and we are seeing major signs of renewed economic growth in Barbados. As a Government and a people, we will stand shoulder to shoulder and overcome the challenges we currently face”
    MY Response: I regard to be the government escape and soul saving clause. THEREFORE if there is ever DEVALUATION it is not because we are RESPONSIBLE in any way, RATHER it is because it was forced upon us by those who hate us. Look out BLP your name may be called as hater.

    Reply
  23. David E Hall
    David E Hall June 7, 2014 at 9:06 pm

    In my view, truthfulness and transparency have fled from any utterances by this minister.

    Reply
  24. Shaun
    Shaun'El Brathwaite June 7, 2014 at 9:24 pm

    Who these people trying to fool? The dollar already devalued, cause it can’t do much these days.

    Reply
  25. Di-sharon Boyce
    Di-sharon Boyce June 7, 2014 at 9:28 pm

    We wait and see DEM does lies

    Reply
  26. Lion-Of Hearts
    Lion-Of Hearts June 7, 2014 at 9:42 pm

    It already happening. Open wunna eyes people. I really hope Barbados don’t end up in the IMF hands

    Reply
  27. Janette Reifer
    Janette Reifer June 7, 2014 at 10:06 pm

    You all better not. Other wise you would be also. So watch out !

    Reply
  28. Princess Tiny Neferua
    Princess Tiny Neferua June 8, 2014 at 12:29 am

    #NOTYET as soon as they scrape the barrel dry so deep that when we will open our windows and see china next door…that is when…

    Reply
  29. Daniel Polonis
    Daniel Polonis June 8, 2014 at 6:38 am

    Even if it the dollar is not devalued….that makes everything OK..how much more pressure can we take..gas at 3.60 a liter, VAT, TAx this tax that…..layoffs..closures…elections NOW before its too late!

    Reply
  30. Lois Mcclean
    Lois Mcclean June 8, 2014 at 10:19 am

    Good

    Reply

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