The criticism of Prime Minister Freundel Stuart by one of his own Cabinet ministers is getting sharper, with Minister of International Business Donville Inniss today suggesting Stuart’s position on the recent downgrades of Barbados was disingenuous.
In a media interview this morning on the sidelines of the Global Value Chain Analysis workshop at Accra Beach Hotel, Inniss left no doubt where he stood on the matter, and his position was completely at odds with that of the Prime Minister.
Last Thursday Moody’s downgraded Government bond and issuer ratings to Caa3, placing Barbados on the same level as Greece, the Ukraine and Venezuela, and all but stating that the home-grown austerity programme had failed. It came six days after Standard & Poor’s reduced the country to ‘CCC+/C’ on account of its limited financing alternatives and low international reserves.
Speaking at the Democratic Labour Party’s (DLP) mid-term conference at Queen’s College a day after the S&P downgrade, Stuart had said that “rating agencies can only downgrade Barbados’ credit worthiness, its ability to borrow. They cannot downgrade Barbados itself”.
The Prime Minister had also contended that the downgrades would be impactful only if Government had intentions of borrowing on the international market.
“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,” Stuart told party DLP faithful.
However, Inniss today argued it was politically disingenuous to ignore the reputed rating agencies.
“Anytime that there is a rating agency, recognized and respected worldwide, that gives a rating on Barbados, you need to pay very close attention to it [whether] it is a good rating or a bad rating. I cannot comment positively if it is a good rating and then have nothing [good] to say when the rating is not so good. Now I am not focused on the messenger [rather] I am focused on the message,” he said.
While agreeing with the Prime Minister that Barbados had no intention of borrowing on the international market, the minister said the effects of the downgrades were more far reaching than Stuart sought to protray, as they could be telling on investor confidence in the country.
“On one hand we may not be going to the international market looking for financing and therefore in that respect the rating may not be overly significant. But I am also mindful that investors do pay attention to ratings in order to make informed decisions about where to invest and the quantity of invest that they make. I also know that those who are domestically located and may seek usually to invest in bonds may also have to look at these ratings.”
The Member of Parliament for St James South sought to impress upon his Cabinet colleagues that they ought to be seeking to improve upon the rating instead of criticizing the rating agencies.
“My issue is not to spend time criticizing the rating agencies or beat ourselves up on the rating to try to find ways to get a better rating. How can we move from the rating that has been issued by the rating agencies to a higher level? I think that is the conversation the country has to have. So I for one am not dismissing the reports of the rating agencies as a matter of fact they would spur me on to do better as a Government minister,” he stressed.