Downgrades of Barbados’ sovereign bond ratings cannot downgrade Barbados, and the island is not looking to borrow, so it cannot be affected in the area of loans either, Prime Minister Freundel Stuart has said.
Though the country’s leader did concede that the island may at times find it necessary to borrow, he told a Democratic Labour Party (DLP) mid-year conference that his administration is looking towards Barbados earning its way and not existing on foreign currency loans.
Addressing Saturday’s conference in the Queen’s College auditorium one day after international rating agency Standard and Poor’s downgraded the island from ‘B-‘ to ‘CCC+’, meaning that Barbados’ ability to repay loans is ‘speculative’, Stuart said, “rating agencies can only downgrade Barbados’ credit worthiness, its ability to borrow. They cannot downgrade Barbados itself”.
The downgrade is the 18th suffered in this administration’s eight-year rule of the island, but Stuart told his party faithful, “the most they can do is to say to us that if you want to go and borrow, because we’ve downgraded you, persons who might be inclined to lend you will make the money they want to lend you more expensive.
“But we are not looking to borrow,” he added, explaining, “we’re looking to earn foreign exchange, not to borrow”.
“We’re trying to get away from that habit of borrowing foreign exchange to earning our way in the world,” he said after recalling that the previous Owen Arthur-led administration had also borrowed on the bond market and suffered downgrades.
The Prime Minister did, however, issue a word of caution, “[I’m] not saying that from time to time you may not have to go in very extreme circumstances to the market but that is not any first resort for the present Government.
“We are trying to earn our way in the world.”
The conference featured most of Stuart’s Cabinet ministers reporting on work done and achievements in their ministries.
Wrapping the conference following those presentations, Stuart said that based on what his ministers reported, party members in attendance are now, “better able to understand, not only where we are, but how we got here, and what we are doing to make sure we get away from here”.
He stressed that no international downgrade can contradict the reported achievements.
Stating that his Government has been placing, “Barbados on a much sounder footing than the economy we inherited in January 2008,” he said that by the time the job is done Barbados will be earning foreign exchange through a ‘flourishing’ Cultural Creative Industries sector, a Renewable Energy sector, International Business and Financial Services Sector, all of which will join the Tourism Sector as the main producing industries.
“We have nothing to be ashamed about. We have nothing to feel disgusted about. We have every reason to feel triumphant, and therefore the march of triumph begins today as we embark on our quest to win the next general elections.”
The DLP President added, “we did not come here to ask you to prepare for any march of disgust.
“You are here today because today begins the march of triumph which will culminate in the return of the Democratic Labour Party to office after the next general elections”.