A downgrade for Barbados
We now wait with bated breath to see what will be presented in the Budget. I have to say that I do not envy the Minister of Finance. On the one hand, he is faced with preparing a budget that needs to pull the economy from the brink of disaster and will be carefully scrutinized by international agencies, local economists and business people. At the same time, he will be cognizant that this may be the last budget before elections and will therefore be wary of upsetting the electorate.
As Owen Arthur said, it would have been a good thing to have put the National Economic Council in place before the Budget Estimates were prepared so that they could have made inputs into it. I sincerely hope that the Minister of Finance had input from an economist because he and the Prime Minister do not seem to have that expertise. I say that without apology after watching a video by Barbadian economist, Jeremy Stevens, on Facebook in which he clearly and simply explained the consequences of the latest downgrade by Standard & Poor’s (S&P).
Perhaps someone should have explained it to the Prime Minister in the same way, since in his recent speech at the DLP conference, he seemed to dismiss the downgrade as not important, saying that the Government was not planning to borrow. His comments suggest that he does not have a full understanding of all the implications of the downgrade that go beyond Government’s borrowings. It would also be very embarrassing for the Government if it finds itself in a position to need to borrow.
Stephen, in his video, said that we now have the same S&P rating as Venezuela and we have heard of the economic conditions in Venezuela, a country that has oil. What the S&P CCC rating for Barbados means is that it is believed the state of our public finances is such that the likelihood of missing payments to local and foreign investors has gone up and there is also a likelihood of the Government defaulting on debt payments is growing. Who would therefore be likely to lend to a country in that state or invest in a country in that condition?
So Barbados has been downgraded. And if the downgrade is being dismissed by the ostriches in the country, rest assured that the rest of the region is taking note. A friend of mine from one of the other islands took particular pains to send me the S&P article accompanying the downgrade. I couldn’t help but feel as if some pleasure was taken in sending it to me. I hope I am wrong, but we would only have ourselves to blame if the rest of the Caribbean took delight in our downfall.
After all, we have looked down on some as “small islands” and been unsympathetic to the demise of others, thinking it could never happen here. Well, if this isn’t a wake up call for all of us, then I don’t know what is. For years we have allowed both parties to do as they liked with no repercussions. We have many instances of poor governance, overspending, suspicious awarding of contracts etc with this Government, but let us not forget the cost of the prison, the overruns on the ABC highway and other projects that we paid for under the BLP administration.
If this is not an indication that we need an overhaul of our entire political system, with the people having a greater say and better governance in place, then I don’t know what is.
Most of us don’t have foreign bank accounts and houses abroad to act as a buffer if, God forbid, we are forced to devalue. We need, therefore, to hold those who are managing (or mismanaging) the economy to a higher level of accountability.
I would also like to see more information on what goes on in Parliament in the local papers. When I was carrying out my research for my book, Vaucluse, I was able to read in the newspaper of the day, The Barbados Mercury, what the House was voting on, who voted for it (by name) and who voted against. Today, when the average man hears that something was passed in the House, we may assume that it was passed unanimously, but it is usually a case that it was passed because there are enough Ds (at present) to provide the majority required to pass an Act.
That is another reason why I welcome these additional political parties. If some of their candidates get in, voting in the House should become more meaningful and, hopefully, more representative of the desires of the people.
(Donna Every is an author, international speaker and trainer. She is also the Barbados Ambassador for Women’s Entrepreneurship Day (2014 – 2016) and the Barbados Facilitator for the InfoDev WINC Acceleration Programme.
Contact her at email@example.com