Barbadians are being told to be wary of regional and international credit rating agencies, as these entities only seek to exploit the country.
This message comes from the ruling Democratic Labour Party Member of Parliament for St Michael West Central James Paul, just 11 days after regional credit rating agency Caribbean Information and Credit Rating Services Limited (CariCRIS), handed the country its 23rd downgrade since the Democratic Labour Party (DLP) took office in 2008.
Despite the fact that there is consensus in the economic community that downgrades impact on the country’s ability to secure funding, Paul, who was speaking to party supporters during a branch meeting at the Lawrence T Gay School last evening, suggested that there were racially tinged ulterior motives behind the issuing of ratings.
“Circumstances happen and I am saying to you that the circumstances that this country faces are as a result of trying to cater for people. So credit rating agencies don’t tell you how well you are managing the affairs of the country. You think those people from Standards and Poor’s or whoever cares anything about us. We have this thing that because they come from the great white country that we have to respect them. Respect them for what? At the end of the day all they want to do is rape this country as much as possible,” Paul told the packed auditorium which responded with loud applause.
The St Michael West MP reiterated his party’s argument that a number of mitigating social factors, which results in the fiscal constraints of a country, are not taken into consideration by rating agencies.
“Credit ratings are what they are and it doesn’t define who you are. It doesn’t reflect the challenges that you face as a human being in terms of having to look after your children and their family. It is just a credit rating from somebody who doesn’t give two hoots about you,” said Paul.
“So when you hear the Barbados Labour Party (BLP) talking about this body give us a downgrade; so what? At the end of the day our people still eating, at the end of the day if they still want to go the hospital they are going to still get care, they could still get to school but the credit rating agencies don’t care anything about that. So why the heck should we care about what they say?” Paul questioned.
On January 10, CariCRIS reported that it had lowered the island’s foreign currency rating by one notch from CariBBB+ to CariBBB- and its local currency rating from CariBBB+ to CariBBB.
CariCRIS suggested that while the island’s creditworthiness was still adequate, it took the decision to downgrade the island because of the sustained reduction in net international reserves which had fallen to the equivalent of 2.2 months of import cover as at September 2017, below the internationally recognized minimum of three months or 12 weeks import cover, with foreign currency commitments, including the Government’s amortized debt commitments, outstripping foreign currency inflows.
The latest downgrade occurred just three months after the New York based Standard & Poor’s lowered the country’s credit rating from CCC- to CCC, warning that there was now a higher risk associated with maintaining the currency peg to the US dollar.