The gloomy economic forecast delivered by the respected international credit ratings agency Standard & Poor’s (S&P) was no surprise for Barbadians. As a matter of fact, it has become a dreaded but expected norm these days, with the Opposition Barbados Labour Party pointing out that it is downgrade number 20 in nine years.
Ordinary, Barbadians generally are not au fait with the macro- and micro-economics that go into these ratings, but, quite frankly, citizens who have been feeling the prolonged pinch on all counts, whether it be the increase in taxes or the rising cost of groceries and other goods, don’t need financial experts to tell them that our economy remains terminally ill and there’s little to no recovery in sight.
Still, it’s hard to turn a blind eye and not wonder just how much lower Barbados’ credit rating can sink before decisive action is taken to reverse our economic fortunes.
The S&P report was pretty much what economic gurus – former Prime Minister Owen Arthur, former RBC Group economist Marla Dukharan, former Central Bank Governors, the Caribbean Development Bank and the International Monetary Fund, just to name a few – have been telling us for months.
Our coveted two-to-one peg to the United States dollar is under threat, with an out-of-control fiscal deficit, falling international reserves and slow implementation of effective strategies to halt the slide.
As it lowered its long-term local credit rating on Barbados to CCC from CCC+, with a negative outlook, S&P said: “Barbados’ policy challenges include high general Government debt, deficits, and debt servicing requirements; limited appetite for private-sector financing; and a low level of international reserves raising the risk to sustainability of the peg to the US dollar.”
What is also significant to note is that there is every likelihood that another downgrade could be on the way in the next 12 months if Government stops short of “balancing its fiscal budget, either from implementation of fiscal measures or a much needed jump in growth”.
Again, the suggested remedies are nothing new; but alas, we are still here, going nowhere fast.
Two months after a 20,000-strong march jointly led by the private sector and the island’s major trade unions to force the Freundel Stuart administration to implement corrective measures, and a subsequent day-long meeting of the Social Partnership in the full glare of the public on the way forward, Barbadians are no wiser as to the next step off this economic precipice.
We’ve had more than a dozen committees, dozens more reports and numerous recommendations and still no workable solution is in place.
The silence from Minister of Finance Chris Sinckler, Mr Stuart and the rest of the Cabinet has been deafening, while the economy seemingly remains on autopilot. And it has been pretty much business as usual.
We do not need an expert to tell us that the longer Government delays taking action, the more painful the adjustments will be. Barbadians are already suffering serious labour pains.
The Democratic Labour Party administration missed a ripe opportunity to give Barbadians hope that it was steering the economic ship out of turbulence when it held its 62nd annual general conference earlier this month.
Rather than touting the elements of an economic plan to rein in the deficit, stimulate productive activity and attract investment, the Prime Minister excited his party faithful by dismissing the Barbados Labour Party as a party of elites, and rallied the troops to gear up for the next general election.
Barbadians are quite aware of the upcoming poll and Government would do well to note that its track record, especially on the economy, will be on trial and its performance to date offers no comfort to veterans or newcomers in the DLP’s ranks.
What Barbadians want now more than ever is a Government that will put aside rhetoric and get down to the business of exercising the power handed to it by citizens to make tough decisions to lift us out of this economic mess.
It is not enough to ridicule or ignore the report by credit agencies such as S&P without presenting to Barbadians a plan to deal with lingering challenges of costly state enterprises, wastage in public spending, delayed projects and the like. There are a ton of issues to fix and those charged with our economic affairs must act now to offer hope to a weary population badly in need of an economic lifeline.
Even more so, it may be time for authorities to admit they have run out of answers and seek the help this country’s urgently needs before Barbados crashes down this precipice.