The stagnated Barbados economy received a vote of confidence Thursday in the wake of a string of bad news, capped by downgrades by the two leading international ratings agencies within a week.
Two of the Caribbean’s leading investors, local business magnate Ralph Bizzy Williams and Sandals owner Jamaican Gordon Butch Stewart, said they were not fazed by the downgrades and would press ahead with their investments here, despite admitting they were eager to see the economy emerge from the doldrums.
With the country mired in high debt and dwindling foreign exchange reserves, international ratings agency Moody’s today downgraded Barbados’ Government bond and issuer ratings to Caa3, six days after Standard & Poor’s downgraded Barbados to CCC+/C based on its limited financing alternatives and low international reserves.
The latest downgrade came even as the Freundel Stuart Government proposed to increase spending in the upcoming financial year beginning April 1.
However, with both Williams and Stewart currently in the advanced stages of plans for major investments here, they told Barbados TODAY they remained confident that the necessary steps would be taken to turn the economy around, though agreeing downgrades were never a good thing.
Stewart, who is currently carrying out a US$180 million expansion of his Sandals Barbados property in Dover, Christ Church, said he would stick to his plans for a Sandals Beaches property in St Peter.
“If Sandals say they are going to do something they are going to do it,” Stewart said.
“I have a lot of confidence. We are in the middle of one project right now and I plan to start the Beaches project. We are working on that right now and we are going to start it as soon as we can. We do have tremendous confidence in Barbados,” he added.
The Sandals chairman, who operates a number of properties and other businesses in Jamaica and other Caribbean countries, has witnessed several downgrades of his country’s economy over the years.
He said this was not the time to give up.
“I absolutely will see these things and do have concerns, but if everybody gets concerned then Barbados would never come out of the problem. I live in Jamaica and we’ve had upgrades and downgrades for many years. You don’t want downgrades. But when you have them you can’t run away. So we batten down and try to make things better.
“I would give any investor maximum assurance. Barbados has a sterling history of being able for investors to rely upon. Sterling history. Looking at that history, the history itself provides a lot of confidence under any government,” Stewart said.
Meantime, Williams told Barbados TODAY his Williams Industries Inc was working on a major project that would attract critical foreign exchange.
Opting not to give details, Williams would only say his aim was to have the project started within the next two months.
“We are still investing and we will continue. We have a new project looking at now which might be quite a good deal for Barbados, but I cannot say anything more about it at this stage.
“It will definitely be this year and it is an ongoing thing. It will definitely start this year. In fact, if it don’t start within the next two months it probably won’t start at all,” he added.
The respected businessman said it was critical that the country do all it could to gain and retain more foreign exchange.
“We believe that the island needs to earn more foreign exchange, and our objective is to earn and save more foreign exchange than we use. That has been our objective for a long time, but we are more focused on it now more than ever,” he stressed.
However, Williams cautioned against putting political objectives ahead of the interest of the island.
“I am absolutely sure that if the present Government or any Government is prepared to do the right things Barbados’ economy will do well and Barbados will prosper,” Williams said, while acknowledging that the recent downgrades were not at all good for the country since it meant Government would have an even harder time borrowing on the international market.
“So it will affect borrowing of foreign currency for the country of Barbados, but so far it is not affecting Williams Industries because we are still able to get foreign exchange, although it is a little more difficult now. But we are borrowing in Barbados dollars at a pretty low interest rate,” Williams said. [email protected]