Barbados on par with Greece; has worst performing debt – Bloomberg

With the latest economic downgrade to Caa3, Barbados has been placed on the same level as Greece and the Ukraine.

The financial watchdog Bloomberg also reported today that the island had joined the beleaguered group of countries whose dollar bonds yield more than ten per cent after Moody’s Investors Service said the island was likely to default.

Yields on over $500 million of notes due in 2035 rose 0.35 percentage points on Thursday to 10.23 per cent, joining securities from Venezuela, Mozambique and the Republic of Congo with double-digit yields, Bloomberg said, adding that the island’s debt was the worst performer this year among more than 60 countries tracked by its USD Emerging Market Sovereign Bond Index, losing 4.7 per cent, while the gauge rose 2.1 per cent.

It noted that Moody’s downgrade followed a cut by S&P on March 3 and the February 24 firing of Central Bank Governor DeLisle Worrell, who had threatened to stop financing Government spending.

“The Governor being fired would have rattled investors simply because it shows some kind of instability there at a policy-making level,” Royal Bank of Canada economist Marla Dukharan was quoted as saying. “The Governor had started to come out about how bad it really is.”

Dukharan said the island’s 2-to-1 peg with the US dollar was starting to show cracks, and an all-out balance of payments crisis a possibility with Government debt now above 110 per cent of gross domestic product at the end of last year and international reserves falling to $682 million, the lowest level since 2009.

However, Minister of Finance Chris Sincker expects the reserves will rebound on inflows from foreign investors. He has also ruled out a currency devaluation “next year or at any other time in the foreseeable future.

“That is simply not going to happen,” he told reporters at a news conference late last month.

However, with only about $56 million in interest payments due, Andrew Stanners, an investment manager at Aberdeen Asset Management, said Barbados was unlikely to default on international debt this year. Instead, he said Government would continue to rely on the Central Bank to print money, adding to levels of domestic debt.

“The risks are mounting,” said Stanners, who manages about $20 billion in emerging market debt. “They probably can muddle through to 2018.”

31 Responses to Barbados on par with Greece; has worst performing debt – Bloomberg

  1. Tony Webster March 10, 2017 at 3:22 am

    BT….cud you do us a favour? Please print this out, and deliver to a BIg Desk on Bay Street, right by the Esplanade. Sorry, TWO Big Desks. The courier should be a teacher capable of explaining this sort of basic Eco-fiscal 101 stuff, to Fifteen-year-olds, studying for their A-levels.
    Please do it today, early in the day, before one desk-warmer gets caught up in rehearsing his next big parliamentary speech, or the other guy nods-off again after lunch.
    Please?

    Reply
  2. Harry March 10, 2017 at 4:59 am

    Venezuela, Belize, Greece, murder but don’t worry we turning “round.

    Reply
  3. sticks and stones March 10, 2017 at 7:11 am

    Barbados debt is high , but barbados socio- economic environment remains in tact , desperation formulated by political ambitions are not solutions

    Reply
  4. Rawle Maycock
    Rawle Maycock March 10, 2017 at 7:31 am

    Stuart doesn’t see anything wrong! doh.

    Reply
  5. sticks and stones March 10, 2017 at 8:35 am

    The politics of trying to captalise on Barbados misfortunes because if high debt is mindboggling and unfortunate especially when the alternatives solutions can be catastrophic and chaotic for a small country economy
    Cooler heads need to prevail instead of knee jerk inflammatory responses triggered by political opportunism.

    Reply
  6. great white March 10, 2017 at 8:45 am

    Why tell so many lies to fool the public when the country is in serious financial issues. We have no serious resources on this island that we can say we can sell to outsiders. Agriculture has made a big fall. Agricultural lands were taken up to build houses and some areas where housing areas were alotted the houses deteriorating cause no one buy them and living in them. There are not that much manufacturing companoes in barbados. They trying to push entrepreneurship in this country and entrepreneurs cannot get serious financing to start their businesses. They pushing tourism but wat will happen to this country if we stop getting tourist coning to our beautiful island. These downgrades are very serious to an investor perspective and has serious negative impact on our beautiful island.

    Reply
  7. seagul March 10, 2017 at 8:52 am

    What happened in 2008 was a worldwide economic disaster. This stupid partisan sweetbread politics keeps us unwise and deeper in the ditch. The selected politicians are beholden to the gold cup sandy lane owners etc, this we know but…. the business minded environment need more than ever to support each other and stay off the kool aid. At this moment Greece is in turmoil again with demonstrations in several places. We were force to terminate our one week stay in Athens to four days. It’s time for us island wide to be more conservative in general and utilize our land. Our socio-economic environment remains in tact, but now we must build from this….

    Reply
  8. sticks and stones March 10, 2017 at 8:55 am

    it is unfortunate that barbados misfortunes would become fuel for political gladiators at the highest order.. Even some in media houses cannot resist the temptation of inflammatory knee jerk reaction

    Reply
  9. Lynette Warden
    Lynette Warden March 10, 2017 at 8:57 am

    Greece is much larger than Bim

    Reply
  10. Randolph March 10, 2017 at 9:19 am

    I weep for my country.PM Stuart please call election.

    Reply
  11. Peter March 10, 2017 at 9:29 am

    CALLING CARSON C GADOGAN and ZEUS !!! SAY SOMETHING PLEASE. What happen? Cat got your tongues? You better tell DEM to name Richard as the new leader quickly and sanitize the whole of George Street. Too many spies.

    Reply
  12. Brewster March 10, 2017 at 9:30 am

    Greece is in a state and continues to default. Remember the situation that they had where ATM machines were emptied by those who could withdraw. People are struggling to fee d themselves, lost homes and and many islands sold to rich Russian oligarchs. Bajans wake up plant a kitchen garden, stop partying and buy what you need and not what you want. Start to brace yourself for a tough road ahead and make sure the current government do not win again. Where are all the young intelligent people that studied in the US and in UK? We need the young people to take Barbados out of this mess and onto another level. Those currently serving supposedly had experience, but have no interest in the people. We need young bajans committed to fighting to make Barbados a better place socio-economically.

    Reply
  13. Arthur Collymore
    Arthur Collymore March 10, 2017 at 9:31 am

    Don’t tell Freundel, he wouldn’t believe although the evidence is clear for all to see.

    Reply
  14. seagul March 10, 2017 at 9:59 am

    Let’s hope it doesn’t take a fatal crash to arouse the sleeping Bajans. If we continue to organize this society around protecting the privileges of people that are already rich, not prosecuting politicians, allowing people to avoid taxes, then ordinary people would and should revolt.
    Executive power should be exercised by the government and a federal administration. Not in one person…Unity.

    Reply
  15. Kevin March 10, 2017 at 10:23 am

    From the time Kofi Annan said little Barbados was ‘punching above its weight’ these 1st world countries and entities begun to place pressure on this island hoping it would fall from being the no 1 developing island. Do not let the IMF take over our country Mr Sinckler. Hear them out but dont let them take over.

    Reply
    • Leroy March 10, 2017 at 10:39 am

      “these 1st world countries and entities begun to place pressure on this island hoping it would fall from being the no 1 developing island.”

      Do you really believe that?

      That is craziness to the fullest!!!!

      We caused our own downfall with debt lack of planning management and direction and greed from politicians and business people.

      Reply
  16. jrsmith March 10, 2017 at 11:59 am

    Things in barbados would change , when the people change. Politicians need to be held accountable to the 99% of people of barbados publicly…..
    We cannot expect people who dont really care , to behave in a trustworthy manner …
    What or who is most dangerous, the guns on our streets or our politicians ????????????????????????????????…….

    Calling an election is that the answer, we need to find a group of people with the relevant skills to manage barbados, we are no way near to Greece ….. lots of countries around the world which they had our way of life………..

    Reply
  17. jrsmith March 10, 2017 at 12:01 pm

    This group of politicians ,need to be charged with treason how they are ruining Barbados……….

    Reply
  18. Milli Watt March 10, 2017 at 1:09 pm

    bubbling nicely……..can’t wait till it BOIL OVER!!!!!! ahhhhh a bit more salt, pepper, chives dash a angostura NAH I change my mind smells to good. going lower this heat, just a little.

    Reply
  19. sticks and stones March 10, 2017 at 1:44 pm

    Bloomberg assessment is nothing new has been making the same pronunuciations and predictions since 2010 about barbados however what is new is that after nine years Bloomberg predictions has yet to come true and barbadis economy has not collaspsed like Greece. a country like Barbados is resillent and will withstand the test of time

    Reply
  20. tsquires March 10, 2017 at 1:59 pm

    One of the principle mistakes we have made in tourism, is that of trying to pander to the tourists taste buds, without recognizing most people coming here really wish to taste our culinary delights,
    therefore let us resuscitate agriculture and reduce our import bill. This alone can provide jobs and bring in additional finances.

    Reply
  21. Professor Gilbert NMO Morris March 10, 2017 at 1:59 pm

    Professor Gilbert NMO Morris March 10, 2017 at 1:42 PM #
    Almost 3 and a half years ago, I wrote in this space with a heavy heart for Barbados: here is what I said:

    Professor Gilbert Morris December 13, 2013 at 7:40 PM #
    “The Minister of Finance for Barbados has issued a comprehensive Short Term Growth & Sustainability programme. It will not work.”

    I am constrained to say I TOLD YOU SO!

    The difficulty for Barbados – as with the rest of the Caribbean – is that we inherited a command and punish economic model, that was meant for controlling ostensibly brainless people of whom nothing was expected. Our innovation across the region was to add cronyism and the facilitation of lackeys at the expense of our bright young entrepreneurial minds. As such, across the region, we have produced an economic model that is scloretic, for which our politics have become the tribal art of attempting to defend obvious nonsense.

    Our people know now that their chance of becoming their best selves and living their best lives is not at home, where – in Barbados as much as anywhere else in the region – successive governments have succeeded in cultivating a caste system, incompatible not only with the moral imperatives of our relevant histories, but also with the yearning, ambition and native genius of our peoples.

    Barbados has lead the world in Literacy Rates, but to what purpose?

    Bajans regale themselves with their comparative successes in the mark book, but where is the “silicon valley”?

    Barbados needs a comprehensive rethink.

    It’s future lies NOT a stale inert economic model that has produced one billionaire and a host of rent-seeking lackeys in 40-odd years.

    HERE IS WHAT TO DO:

    Start over. Rescind all oversight commissions!

    Appoint My good friend Sir Courtney Blackman and 16 others to a National Steering Committee and manage this crisis for the next 6 months with a maximum of transparency, with the power to subpoena persons and papers for public testimony on all fiscal and economic issues

    Hold National Public Discussion about the current and Future of Barbados; deal with structural issues that limit or prevent Bajans from achieving their best lives in their own country.

    Cut government spending now!

    End all feckless liberal-minded enterprise projects, which just pay lackeys at the expense of efficiency and true achievement (Compare Singapore, which seeds parastatal corporations and then let’s them sink or swim and if they cannot produce financials they are foreclosed immediately by the Treasury).

    Give EVERY Bajan who wants a business license to establish a business aimed at export, licensee fee and tax exemption for 10 years

    Move all government routine processes – drivers & business licenses, government fees and other processes to eGovernment platform immediately

    Convert all government payments to blockchain using Bitcoin or other electronic alternatives

    Place all government owned infrastructure and land into a sovereign fund, 60% held by Bajan citizens, then JV with a global strategic partner

    Eliminate the Ministry of Tourism

    Convince all CARICOM nations to withdraw from the WTO

    Open Harrison as to a South Americans for Boarding school

    JV with Guyana to fund a super trade highway into Brazil, to provide a staple of Brazilian products to the Caribbean, to compete with Florida

    Set up Barbadian International Business Centre with Arbitration and commercial services for South American business

    Establish a 100 acres area as a tax free zone for international data storage and management

    The first options must be to reduce government expenses, and reduce the cost of doing business in Barbados, which has one of every tax in the history of mankind.

    Reduce governments tax share of GDP to below 18%

    Use timing options for initiatives, which allows government to maximize policy options squeezing out efficiencies, then switch to more sustainable programmes.

    Professor Gilbert NMO Morris

    Reply
  22. Loretta Griffith March 10, 2017 at 4:17 pm

    Barbados should not be where it is at. There were many lessons to be learned from those countries which failed before, yet we fell into the morass because of inertia.
    I feel very hurt for my Country. I also think they are too many unelected persons in cabinet who have nothing to lose, especially the ones who are holding ministries for two terms and have not offered themselves to the electorate. Apart from not being accountable to anyone, show me what have they brought that is tangible to government.
    It is time persons put Country before self and stop being egotistical. To think that the few who invested their hard earned cash to gain a seat in parliament and then to let some of these so-called alleged opportunist destroy them, I am sorry.
    Even at this late hour there is time for a radical shakeup. LETS THINK COUNTRY !

    Reply
  23. Loretta Griffith March 10, 2017 at 4:34 pm

    I have nothing personal for Chris, but there is not another organization that would accept such alleged failure without calling for resignations. Persons have resigned for less. Forget ego.

    Reply
  24. L King March 10, 2017 at 4:52 pm

    Like I said before. If the government had encouraged children of Bajan parentage to invest in their mother country things wouldn’t been like this: There are a lot of us that would have took up the opportunity but sadly the foolish government believed that pandering to tourist for two weeks of their stay on the holiday would bring in the money.

    And like a poster has said what about the Bajans who have studied and trained overseas! Surely they are helping develop the economic structure of their host countries whereas their skills and experience could have been utilised on the island after they had completed their studies and experience – but no the government offered them no incentives. Oh boy.

    Reply
  25. Heather March 10, 2017 at 9:24 pm

    In all seriousness start again. When we say that we have to have something to start with like our good manners, our kindness and our faith in God and respect for each other and above sll kindness and consideration. Wealth does not always deliver health and contentment better we love our neighbours give charity where we can and humble ourselves to God’s good grace than concern ourselves with money. Consider the birds of the air, the fish of the sea and stop getting on as if we’ve made ourselve, such huff up, puff up people we’ve become. Forget the razza ma tazz and bottom twitching twots and those who embrace technology to the point of rediculousness which really does nothing but make the mind redundant and our pockets empty as we have no jobs because of a robotic world and sunshine dont sell like before because people who once visited have been hit by world resession due to the robots. And those who once helped with the finances are turning out now empty pockets .

    Reply
  26. Mack March 10, 2017 at 10:56 pm

    I was starting to get excited about these new political parties. Until I noticed that the first thing on their agenda is to legalise weed.

    Reply
  27. Brewster March 11, 2017 at 7:32 am

    Professor Morris has my vote!

    Reply
  28. Joan Worrell March 11, 2017 at 9:36 pm

    When I was a little girl, a magician ”Professor La Hah” visited schools and bamboozled the students with his tricks. Reading Professor Morris’ post reminded me of those days. lol

    Reply
  29. Dewayne yetman March 12, 2017 at 1:07 am

    I love my country bim, but we have too much pride. After pride there is a big fall. We always pump our chest high as if we are better than the other Islanders. Remember on our way up be careful of the little guys cuz on our way down we are going to see them. God destroys all PRIDE!

    Reply

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