The Government of Barbados has hinted at plans to formally challenge the rating system of Standard & Poor’s.
Using the current investigation by the US Justice Department into S&P’s rating system as a point of reference, Minister of Industry, Small Business and Rural Development, Denis Kellman told today’s launch of a Small Business Smart Campaign in Heroes Square, that Barbados was about to repeat its previous challenges to international institutions.
“I watch with interest, the investigation that is now being carried out by the US Justice Department into Standard & Poor’s over its rating system,” Kellman noted.
“This agency downgraded Barbados in 1999, while it was in a crisis; but in 2004 and 2005, we were told that things had improved, but this was not accompanied by an upgrade. Should we not have questioned those decisions?” he asked.
The Cabinet minister was of the view that the country should thank the current Governor of the Central Bank of Barbados, Dr. Delisle Worrell for challenging the “sentence” meted out to the island for a “crime which someone felt we may commit in the future”.
“As you are aware, we have challenged international institutions before, and it led to them using our model to teach others. The same is about to happen again,” declared Kellman.
He suggested that recently Barbados had been “charged, tried, found guilty and jailed as it were, for a “crime” not yet committed.
“Our response to this sentence can come in two ways, depending on how much we care about Barbados. If we do not care, to use an old analogy, we would see the glass as being half empty and become acrimonious. On the other hand, if we care, we would see the glass as being half full and find ways to have it filled,” argued Kellman.
Standard & Poor’s had recently downgrade Barbados’ foreign currency credit rating to “junk bond” status, which says to the investment community, that Barbados’ foreign debt had become more risky, a position rejected by the central bank governor.
The international rating agency had based its decision on three main planks —