The private sector is again pledging its support to the Freundel Stuart administration as it tries to turn around the sinking economy.
However, while council member of the Barbados Chamber of Commerce and Industry (BCCI) Oliver Jordan said he was confident Government would do what was necessary to repair the struggling economy, he said the situation required even more urgency in the face of yesterday’s downgrade by international ratings agency Standard & Poor’s (S&P).
The New York-based S&P said in a release it was lowering the country’s long-term currency sovereign credit rating to ‘CCC’ from ‘CCC+’, and warned of increased risks to the country’s currency peg of 2:1 to the US dollar, as well as a likely chance of the Democratic Labour Party (DLP) government falling short of balancing the Budget this year and the next due to a range of factors.
These factors, it said, included a weak track record of execution, the introduction of measures halfway into the fiscal year, the likely overestimation of one-off revenues, and “political considerations while mobbing to an election year in 2018”.
Jordan today sidestepped the issue of the upcoming election, but said the private sector, through the Social Partnership, stood ready to assist Government in ensuring that remedies were executed in a timely manner.
“Elections are political issues. For us [the private sector] the focus is really on the economic issues and what needs to be done now. As I said, from a private sector perspective we are going to continue to support the efforts of the Government.
“Obviously we are actively engaged in dialogue with Government and coming out of the working groups now the next steps will be to focus on the actual execution in a timely manner . . . I think now is the time for us to really focus on what we can execute and execute them in a timely manner,” he stressed.
As Chairman of the Social Partnership, Stuart in March established two working groups comprising representatives from the private sector, Government and the trade union movement – one to examine the fiscal deficit and the other to look at the foreign reserves situation.
However, Government rejected the recommendations from both committees and later introduced a $542 million austerity package aimed at wiping out the near six per cent fiscal deficit within the current financial year.
In addition to the tax measures, Minister of Finance Chris Sinckler pointed out that Government was also counting on the sale of the Barbados Hilton Resort and the Barbados National Terminal Company Limited to help lower the deficit. Neither of those sales has been finalized.
In its latest report S&P said should Government fail to advance measures to significantly lower its high fiscal deficit, strengthen its external liquidity, and reverse its low level of international reserves, which stood at about 9.7 weeks of import at the end of June, there could be further pressure on availability of deficit financing, albeit from official or private creditors.
However, Jordan told Barbados TODAY this afternoon the Social Partnership continued to “look at what is needed to be done and hopefully once we get the report of that we will focus on the steps that need to be taken.
“Obviously it is something of national interest and we all want to work together to make sure that we address the challenges that we face,” he said.
“Earlier this year we had done some work looking at the state owned agencies but that is all wound up now in the work that is being done with the Social Partnership,” he added.
BCCI President Eddy Abed yesterday gave a more pessimistic assessment of the situation, telling Barbados TODAY the downgrade was another dark cloud over the investment climate here and the business community was now extremely concerned especially because no policies were likely to be implemented between now and the election, due by the middle of next year.
In a separate interview this afternoon, Governor of the Eastern Caribbean Central Bank Timothy Antoine, while noting he had not yet seen the report, expressed optimism, saying he believed the Freundel Stuart administration “will figure it out”.
“That is a matter for Government and people of Barbados. I expect that they will figure it out. I said that in May and that is still my position,” Antoine assured.