The international business sector believes the “worrying” downgrades of the Barbados economy will damage the country’s reputation as an international business centre.
With two downgrades in a week, the Barbados International Business Association (BIBA) said while businesses already operating here would probably not be impacted unless they were seeking financing on the international market, companies considering Barbados as a domicile were likely to be deterred.
Just Friday international rating agency Moody’s downgraded Government’s bond and issuer ratings to Caa3, six days after Standard & Poor’s downgraded Barbados to CCC+/C on account of its limited financing alternatives and low international reserves.
“When you find yourself in the bottom tier and you are associated with Venezuela and Greece that is not really good for the image of a country that is trying to promote itself as an ideal international business centre. So it is very worrying to us,” BIBA Executive Director Henderson Holmes told Barbados TODAY.
“The thing is, you may not hear anything negative, but the question is, how does it affect the thinking of investors who are now looking at Barbados? Some of them might not be affected because unless they are going to be going to the international market for financing they don’t have to bother too much about the downgrade. That is a fact.”
Holmes said perception was important to an international business centre and there were those who would not set up here whether or not they intended to seek financing on the international market.
The BIBA executive said international business was “our safest and our surest provider of foreign exchange”, therefore it was important to do all that was necessary to attract as many such businesses as possible.
The international business and financial services sector, which had about 4,000 active international business entities here, contributed approximately ten per cent of the island’s gross domestic product in 2015, the last year for which information was readily available.
In light of the recent downgrades, Holmes warned that it was more critical than ever for Government to take urgent steps to make it easier to do business in Barbados.
“We can’t have now as an added reason to losing business, the fact that it is difficult to do business in the country. We can’t have that,” he insisted.