“Standard & Poor’s Ratings Services cut Barbados’ credit ratings closer to junk territory, reflecting economic woes and rising debt.
The one-step downgrade to BBB comes two months after S&P took a more pessimistic view on Barbados…”
… from the Wall Street Journal article S&P Cuts Barbados’ Credit Ratings Closer To Junk Territory
You Ain’t Seen Nothin’ Yet, Folks!
When the Owen Arthur – Mia Mottley government loaned almost a QUARTER OF A BILLION DOLLARS to Barbados Tourism Investment Inc. without so much as the signing of a memo, the world paid attention. When Barbados “invested” two hundred million dollars in Kensington Oval without an agreement about who owned the facility, the world paid attention.
When the David Thompson DLP government “invested” millions in the CLICO – a company run by the Prime Minister’s friend and campaign supporter Leroy Parris – and then it turned out that the Florida “assets” of CLICO were so much swamp land… the world paid attention.
And so did Standard & Poor’s.
Like we said before in our article You Can Taste The Fear In Barbados – Travel Poised to “drop off a cliff” in January … bad times coming…
1/ Shun debt.
2/ Work hard. Harder than you ever have before. Make your employer and your customers regard you as invaluable and as a friend. Do it.
3/ Economise. Find new ways of saving money and not spending money. Forgo pleasures and materialistic desires. Save cash. Forge real stability in your life, relationships and finances. Reject the culture of “appearances”. Better a 10 year old auto that is paid for than a new 4×4 on the never-never.
4/ Maintain and develop the family relationships and friendships that will function in place of support from THE STATE. If you lose your job, if your company goes under, you will NOT be able to depend upon “de guvmnt.” That day is over although most (and the government) do not realise it. Your family and friends will look after you during the bad periods. Realise this and treat them well. Look after your friends and family when bad things happen – even to your immediate detriment. (Read “Hawaii” by James Michener and focus on the Chinese lady who saved her family with hard work and wisdom.)
Things are much worse than folks let on. Take stock. Change your habits. Love your family and friends.
Standard & Poor’s Ratings Services cut Barbados’ credit ratings closer to junk territory, reflecting economic woes and rising debt.
(From the Wall Street Journal)
The one-step downgrade to BBB comes two months after S&P took a more pessimistic view on Barbados, changing its outlook to negative from stable.
Tourism is critical to the Caribbean, making up 16% of its overall economic activity, according to the World Travel & Tourism Council. But the global economic downturn has reduced business and leisure travel.
Credit analyst Olga Kalinina noted in April that growing fiscal deficits and increases in the government debt burden could hurt Barbados’ long-standing commitment to maintain its currency peg.
S&P said Wednesday it expects Barbados’ economy to contract by 2.5% this year, followed by a flat performance in 2010, before gradually recovering to 2.5% growth in 2011.
The nation’s fiscal policy is seen resulting in debt rising to 86% of gross domestic product.
“Interest payments are expected to rise to 12% of revenues this year from 9% in 2007 – the highest level among the rating peers,” S&P said.
The outlook is stable, meaning further downgrades are unlikely for now, reflecting S&P’s expectation that the Barbadian government will tighten its fiscal accounts from 2010 onward.