Leader of the Opposition Mia Mottley is demanding that Minister of Finance Chris Sinckler comes clean on the state of the economy in the wake of yesterday’s Standards & Poor’s downgrade of Barbados’ long-term credit rating.
In fact, she wants the minister to answer 15 questions on issues, ranging from the S&P downgrade from BB+ to BB- to the likely effect of the 40-year concessions granted to Jamaican hotel chain Sandals International, when he delivers his promised Ministerial Statement in Parliament next month.
The S&P rating is in response to the island’s persistent current account deficit and a high fiscal deficit.
Mottley stated during a Press conference this afternoon that the country’s fiscal deficit now stood at about 10.8 per cent of the gross domestic product, some $153 million worse than indicated during the August 2013 Budget.
She also claimed that Government’s debt to creditors had mushroomed to more than $750 million, requiring far more money to close the fiscal gap and stabilise foreign reserves.
The Opposition leader warned against printing money in the current economic environment and suggested this would endanger the economy and risk the monetary stability of the country.
And in light of the downgrade in ratings, Mottley queried the impact this would have on the competitiveness of some Barbadian companies that rely on the international capital market.
“Will the minister indicate what is the anticipated increase in the cost of borrowing to the Barbados Government given this downgrade by Standards & Poor’s?
“What will be the increased cost of borrowing for Barbadian companies and Barbadian projects who rely on access to the international capital markets, since they cannot borrow financing at a cheaper cost than Government in the international capital markets?”
“Will this increased cost of borrowing affect the competitiveness of Barbadian companies and the viability of Barbadian projects which he is relying on to restore growth?” she questioned.
Speaking on the extensive concessions granted to Sandals, Mottley called for full disclosure in Parliament, adding that the arrangement runs counter to Sinckler’s first budgetary revenue initiative that was designed to save $14.4 million in revenue this year.
“Is he [Sinckler] also aware Government faces the real prospect of a further loss of revenue through having to agree to the legitimate requests of hoteliers in similar circumstances for similar concessions?
“How will the minister assuage the legitimate concerns of the hoteliers, tour operators and restaurateurs for their survival?
“Will the minister finally make public the two MOUs signed on October 18, 2013, between the Government of Barbados and Sandals public by laying them in Parliament so that level playing field (so necessary for the restoration of confidence) may be had in the tourism sector which must lead Barbados back to growth?” Mottley questioned.
Hoteliers have already called for similar concessions, saying the deal with the hotel chain could wipe them out of business.
The Oppositon Leader also urged Prime Minister Fruendel Stuart to break his silence on the state of the economy.
Up to newstime, there was no reaction from the Minister of Finance to the S&P report or Mottley’s demands.