The private sector has expressed “grave concern” over the latest Moody’s downgrade of Barbados’ issuer and bond ratings to Caa1 and has called for a “national dialogue” to craft solutions to the country’s economic ills.
In a statement issued today, the Barbados Chamber of Commerce and Industry (BCCI) compared the economy to a sick patient who needed urgent care.
The BCCI also used an analogy of a weather forecast, predicting turbulent times, punctuated by occasional periods of “glorious sunshine”.
The private sector grouping quoted its president Eddy Abed as saying that time was “no longer a luxury” and that the stability and growth of the economy required all stakeholders to participate in a brainstorming exercise to “truly problem solve” on a national level.
“The solutions will require buy-in from all members of the Social Partnership and a strict adherence to abide to the agreed prescription until the patient is well,” the release quoted Abed as saying.
“Time is no longer a luxury that we have to fix the economic problems of our country and sadly we recognize that the road to recovery will be overcast at best with intermittent periods of glorious sunshine,” it added.
The BCCI said that Moody’s reference to significant fiscal challenges over the horizon was a matter of “grave concern” to the local business community.
It added that the BCCI was also “very concerned that the two major reasons for this recent downgrade” were the high debt to GDP ratio and the low foreign exchange reserves, which has declined by 19 per cent since 2013.
“In achieving 50 years of independence we have reason to pause and reflect on the many sacrifices and pride of our citizens and the good governance from both political parties. We must build on this to ensure that the dreams and aspirations of the young are achievable in a sustainable economy,” the BCCI statement said.
“In the coming weeks, we intend to invite the stakeholders to a national dialogue so as to seek consensus on bold, short and medium term solutions,” it concluded.
The BCCI’s call has received the backing of Opposition Member of Parliament Kerrie Symmonds who said such a gathering needed to take place urgently.
Symmonds explained that the Moody’s downgrade would deal a serious blow to Barbados-registered businesses.
“Those businesses registered here which, as part of their operations, also seek to raise loans or alternatively to secure investment partners in other jurisdictions are likely to be further compromised as a result of that downgrade, and as such therefore, local businesses are finding themselves starved of financial options,” he told Barbados TODAY this afternoon.
He said there were other serious implications that needed to be considered and therefore the national consultation was warranted.
Of particular concern he said was the island’s ratings as it related to the ease of doing business. He said he was also concerned that the international business and financial services sector “is now attracting significant and potentially severe negative scrutiny” from international regulators.
“So in those circumstances I think a national dialogue is also needed in order to help to promote better understanding and awareness across this nation about the problems that the international business sector is facing, but also to identify an adequate response in order to protect our local banking and non-banking financial sector as well as the international business sector itself. But above all of that, there is a need to protect Barbados’ reputation as a jurisdiction in which to do business. So I wholeheartedly agree with the Chamber of Commerce’ suggestion and I would urge that Government move swiftly to implement it,” Symmonds said.