Stuart addresses downgrade, outlook

A RUSH to achieve economic growth would have a disastrous impact on Barbadian households.

 

That is according to Prime Minister the Right Honourable Freundel Stuart as he addressed the recent downgrade by rating agency Moody’s during a St. Michael South branch meeting over the weekend.

 

His comments came as he acknowledged concerns by Moody’s and Members of the Opposition Barbados Labour Party that growth in the economy is not occurring at a fast enough rate.

“That is a coded way of saying that we should aim to get the bottom-line looking good as soon as possible, but the truth is, getting the bottom-line looking good quickly will involve devastating Barbadian households,” it was revealed.

 

The Prime Minister stated that such a move would not work in a small personalised society. “Those things can work in larger and more impersonal societies. We are really a tightly knit community in Barbados and we have to be very careful how heavy a yoke we ask people to carry, we have to be very careful how heavy a burden we impose on them,” he noted.

“The government has taken a position that rather than sprinting to bottom-line results where the arithmetic is right, but the society is wrong, that we want to keep the society right while working our way towards correct arithmetic. And that is our position.”’

 

He pointed out that in the most recent downgrade, Moody’s suggests that the outlook for Barbados is now stable, while in previous downgrades, the outlook was negative. “And that is what the government is aiming at. In this turbulent period when so much was happening in the international economy, my commitment was and I made it clear publicly, to stabilise Barbados.”

 

“So I am not unnerved by any of these happenings. We are restructuring the Barbados economy to make sure that in the future when things happen beyond Barbados’ shores as was the case in this global financial meltdown, that Barbados would be in a better position to absorb the shocks and not be destabilised by them as was the case on this occasion and on previous occasions,” he said.

 

Prime Minister Stuart lamented that there is the suggestion being mooted that a downgrade is an indictment on the country’s value or lack thereof. He clarified that a downgrade solely speaks to the country’s ability to borrow money.

 

“Whether people who have money to lend, will lend you money at a reasonable rate of interest or whether they will think that lending you money is a big risk and therefore will impose higher rates of interest. But what is downgraded by these rating agencies is your credit rating, your ability to borrow. Now when you hear the public discourse, you get the impression that the country is being downgraded, that the people are not worth anything anymore, that children are no longer speaking to their parents, and employees are no longer speaking to their employers and all the churches have been shut down,” he said.

 

The Prime Minister stressed Barbados has never defaulted on the payment of its debts. “So don’t get side-tracked by this talk. There are elements in this society who cleverly equate the downgrading of a country’s credit rating with the downgrading of a country overall. Not true,” the Prime Minister reiterated. (JH)