Prime Minister Freundel Stuart has again stood defiant in the wake of a series of downgrades, telling party supporters Barbados could not be downgraded by any rating agency.
“No rating agency in the world can downgrade Barbados. Rating agencies can downgrade your credit rating, your ability to borrow money, but they cannot downgrade you as a people,” Stuart said at a meeting last night of the ruling Democratic Labour Party (DLP) at The Alexandra School in St Peter.
It was a repeat of the position he adopted in March of this year at the DLP’s mid-year conference, one day after international rating agency Standard and Poor’s (S&P) had downgraded the island from ‘B- to ‘CCC+’ – the island’s 18th under his administration at the time – and a week before Moody’s downgraded Government bond and issuer ratings to Caa3, placing Barbados on the same level as Greece, the Ukraine and Venezuela.
“Rating agencies can only downgrade Barbados’ credit worthiness, its ability to borrow. They cannot downgrade Barbados itself,” he said then.
Stuart was even more dismissive last night of the international rating agencies, as well as economists and political opponents who see the downgrades as evidence that his administration’s economic policies were not working.
“What they will say and what they have been saying is that rating agencies downgraded Barbados 18 or 19 or 20 times, whatever it is . . . what credit rating?
“You can’t talk about the country’s credit rating without at the same time trying to link that to the credit rating of the average man and woman in the communities of Barbados.
“There are so many other aspects to a person rather than whether they can borrow money or not, and as it is true of an individual, so also of a country,” he said.
The Prime Minister said that in the history of this island the average man or woman had been unable go to a bank and borrow money as he or she wished because they did not have the collateral.
However, he insisted that poor credit ratings did not affect Barbados’ ability to produce excellence.
“The fact that we have not been able to borrow money, does that mean that we didn’t produce Gary Sobers? Does it mean that we didn’t produce Rihanna? Does it mean that we don’t produce about 45 or 50 Barbados scholars per year? Does it mean that we don’t rank very high in the United Nations Human Development Index? Does it mean that we don’t have one of the ten best education systems in the world, because our credit rating has been downgraded by rating agencies?”
Since March there have been two further downgrades, the most recent in September when S&P announced that it was lowering its long-term local currency sovereign credit rating on the island to ‘CCC’ from ‘CCC+’.
It also warned at the time of the possibility of another downgrade over the next 12 months, while calling on the Stuart administration to take the necessary steps to lower the country’s high fiscal deficit, strengthen its external liquidity, and reverse its low level of international reserves.
The Prime Minister’s reaction at the time was sternly criticized by Minister of International Business Donville Inniss, who 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,” Inniss said at the time.