If you thought Prime Minister Freundel Stuart was in any way moved by last week’s Standard & Poor’s downgrade — the 18th suffered by the island since his Democratic Labour Party (DLP) Government came to power nine years ago – – well you had better think again.
Today, Stuart all but called the name of the international ratings agency, while warning that Barbados had long passed the days when it needed external validation from “metropolitan capitals”.
And while likening the grading of an economy to the marking of an examination, the Prime Minister also made it clear that he was not about to let anyone from outside — let alone any external marker — “shame” Barbados into thinking it had failed.
To do that, he said, would belie the country’s proud boast of 50 years of Independence and take it back to a day when approval was needed from outside.
“We seem now to be working ourselves back into a frame of mind where once again we want to sit exams for people outside of Barbados and wait on them to grade us and if they tell us we have passed we are supposed to feel good that we have passed, and when they tell us we have failed we are supposed to hold our heads in shame and think that we are failures,” Stuart told the gathering for a presentation of $10 million in equipment by the Chinese Government at the Ministry of Education this morning.
Just last Friday S&P downgraded Barbados to ‘CCC+/C’ based on its limited financing alternatives and low international reserves.
The New York based agency also issued a negative outlook for the island, while warning that the sustainability of the Barbados dollar was now under threat, amid Government’s continued reliance on the Central Bank to finance its deficit.
“As a result, we are lowering our long-term foreign and local currency sovereign credit ratings on Barbados to ‘CCC+’ from ‘B-’.
“We are also lowering our short-term foreign and local currency sovereign credit ratings to ‘C’ from ‘B’,” the ratings agency said.
Addressing a midterm conference of his DLP last weekend, Stuart had initially warned that “rating agencies can only downgrade Barbados’ credit worthiness, its ability to borrow. They cannot downgrade Barbados itself.
“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 said then, emphasizing that his Government was looking to earn foreign exchange and not to borrow money.
“[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,” said Stuart, whose comments attracted heavy criticism from a wide cross section of Barbadians, who vented over his response on Barbados TODAY’s Facebook page.
However, in rejection of those criticisms, the Prime Minister appeared even more strident today, while maintaining that his administration had nothing to be ashamed of in terms of its economic management.
Without making any mention of the word downgrade either, Stuart, who met only last Friday with the island’s Social Partnership and mandated that two committees report to him on the economy in two weeks’ time, further warned that it would be a backward step for the island to subject itself to external markers.
“That is not what we should be doing 50 years after independence. We have a project here that is working quite well; that project receives validation and support from countries like the People’s Republic of China. And I think wherever we can find good, decent and collaborative relationships, we should let slip no opportunity to build and consolidate those friendships,” he said.