Two ways of reporting Standard & Poors’ Barbados downgrade

Happy Face reporting continues to undermine credibility of Barbados news media

Nation News says Barbados S&P rating “Going down”

Wall Street Journal says “brink of junk”

Reading about the same subject in the Wall Street Journal and The Nation makes for an interesting comparison.

There’s always an agenda in the news, but can you always see it?

One might presume that the WSJ wouldn’t have an agenda one way or the other concerning Barbados – but that presumption could be wrong. Perhaps the reporter or editor has a foreign currency position that will benefit from this story. Or not.

Readers seldom know the agendas behind the delivery or censoring of any story and that’s why we at BFP always remind folks to think for themselves and do their own research on anything that matters to them. That caution includes anything you read at Barbados Free Press too.

We believe that Barbados benefits from media-literate citizens who question everything and we don’t exclude ourselves from that scrutiny. We encourage it.

Frankly, I don’t trust the news media anywhere to be unbiased. As examples we’ve seen Reuters withdraw a thousand faked and staged news photos. The Los Angeles Times and the New York Times had to apologize for faking news stories. Fox News altered photos to deceive.

And don’t forget how our own Nation News, CBC, Voice of Barbados and Barbados Advocate refused to cover the story of how Jonathan Lazlo Danos, President of Barbados flyover contractor 3S Structural Steel Solutions, was being sued for fraud and secret kickbacks on another government highway bridge project in Jamaica. The Barbados news media refused to cover the story for ELEVEN DAYS until Barbados Free Press and other blogs shamed them into it.

As we said at the time…

“This joint refusal of ALL the Barbados news media to cover a story of national importance about allegations of fraud and secret kickbacks by a man who is in charge of our national highway and bridge project is unforgivable.”

From the BFP story Nation News Shamed Into Reporting Fraud Allegations Against Barbados Flyover Contractor, But Their Carefully Managed Story Still Communicates A Lie

There are many more stories that the Barbados news media ignored, for instance the failure of the police to respond to threats of violence and actual arsons against local businessman Adrian Loveridge.

It makes you wonder what the Barbados news media have gotten away with in the past.

Happy Face agenda of the Barbados news media

We’ve noticed that our oldstream news media – CBC, The Barbados Advocate, The Nation – often go to great lengths to soften or conceal bad news from the public. “Balanced reporting” in their eyes means leaving out the details to prevent citizens from doing their own analysis. When bad news is given, it is usually delivered in generalities and “balanced” with some positive statement or counter story.

Our news media also delivers one product to locals and a different product to the rest of the world via the internet.

Have you noticed that search engines like Google and Yahoo seldom take you to the Barbados Advocate online news stories? That’s because the Barbados Advocate blocks the search engine spiders from their website. They don’t want the rest of the world reading their online edition!

This blocking of internet search engines is a whole agenda by itself. Some of it might be marketing driven to force people to read advertising on the “printed” edition. That’s probably one of the reasons why Barbados Today and The Barbados Advocate primarily deliver their online news as a photograph of each page.

Crime stories get short shift on the internet because we don’t want to scare off the tourists. That’s an agenda and whether you agree with it or not, you have to admit that “not scaring away the tourists” is one agenda that shapes the news on this island.

The same can be said for the financial reporting by the Barbados news media. They don’t want to scare off foreign investors or the international bodies that give us loans and grants. Stories about corruption, poor management and inadequate standards aren’t good for attracting foreign currency so our news media avoids that news like the chicken avoids the mongoose.

How Bajan media reports bad news

Have you noticed? When our news media does report a problem it is often in the context of some government Minister announcing that changes are coming. Never that changes have now solved the problem.. just “we gin do somthin ’bout that.”

That is another way of softening bad news and not upsetting the government masters who direct the government advertising dollars to the newspapers. And we know that those full page government adverts figure highly into the business plan of any newspaper on this island.

There are many other reasons why the news media does what it does, but my intent is not to list every agenda – just to remind folks that there are multiple agendas behind every news story we read… or don’t read, in the news media.

Now have a look at how The Nation and the Wall Street Journal report the same event.

See the differences? Whenever you read news or whenever you notice a story missing, ask yourself, “Why?”

We’d prefer you read the stories at the Nation and the WSJ’s websites (click on the links), but just in case something changes we’ll print them in full here…

Nation News

Going Down

by Tony Best

THE BARBADOS ECONOMY remains in a state of depression.

And one leading international rating agency yesterday sounded a strong warning that an increase in taxes might be the only reasonable answer to some of the revenue challenges currently facing the David Thompson administration.

“It is hard to contemplate a meaningful fiscal consolidation without new revenue measures,” said Standard & Poors in a statement announcing a downgrade of the country’s overall credit rating.

It pointed to two significant factors which it said were compounding the overall national economic picture. The first being rising debt, and the second, the prospect of wage pressures that will likely increase following an expected economic rebound next year.

The National Union of Public Workers (NUPW) has already asked the Government for an eight per cent increase in wages spread out over a two year period.

But ahead of the much anticipated budget presentation by Finance Minister Chris Sinckler, S&P said the problems facing the country were “most pronounced” in the area of Government revenue, “with underperformance affecting all categories of direct taxes.”

Hardest hit was corporate taxation which registered a sharp drop of more than 30 per cent compared with the first nine months of last year.

S&P is further cautioning that Barbados’ debt burden stands to escalate during the next two years.

It also complained about the Government’s delay in dealing with the nation’s economic woes as it dropped Barbados’ foreign currency rating down a notch to BBB-minus from BBB. At the same time, the local currency rating fell from A-2 to A-3.

“The downgrade reflects the continuing weakening of the Government’s fiscal profile,” S&P stated in an explanation for its action.

The Wall Street firm said despite the Thompson Administration’s efforts to reduce the fiscal deficits and achieve a balanced budget by 2014, as projected in the medium-term fiscal strategy, the approach has turned out to be far more difficult than expected.

It also said there was an increasing risk that the country’s debt could surpass the currently projected peak of 61 per cent of the Gross Domestic Product in 2012.

S&P’s statement comes less than 48 hours after the Barbados Central Bank issued its third-quarter report in which it estimated an economic contraction of less than one per cent this year, followed by a two per cent rebound next year.

But the global rating firm warned that even if those targets were met, the result would lead only to a “gradual fiscal turn-around.”

Wall Street Journal

S&P Lowers Barbados To Brink Of Junk On Debt Concerns

Standard & Poor’s Ratings Services lowered its rating on Barbados to the bring of junk territory, saying the island nation’s debt burden will increase at least in the next two years.

The ratings agency said the higher debt will occur because of delays in the government’s fiscal-consolidation efforts and a slower-than-expected economic recovery. Tourism is critical to the Caribbean nation, but the U.S. recession reduced business and leisure travel. That has led to an increasingly pessimistic view from ratings agencies.

Despite the Barbadian government’s commitment to reduce fiscal deficits to reach a balanced budget by fiscal 2014, as stated earlier this year, the fiscal consolidation has proven to be more difficult and protracted, S&P said.

And while some factors leading to the poor fiscal outcome this year are cyclical and should improve with the economic rebound expected next year, other weaknesses–such as large and difficult-to-contain transfers and subsidies and a growing interest burden–are more difficult to address. Those factors will likely keep the debt at high levels longer than the government expects, S&P said.

S&P, which first moved toward a possible downgrade in November when it lowered its outlook on Barbados to negative, trimmed the rating by one notch to BBB-, the lowest investment-grade level. The outlook is stable, which hinges on S&P’s expectation that the authorities will, in the next six months, put in place fiscal measures to reverse the rising debt trajectory going forward.


Filed under Barbados, Barbados News & Media, Economy, Freedom Of Information, Freedom Of The Press

13 responses to “Two ways of reporting Standard & Poors’ Barbados downgrade

  1. BGR

    On the return of the DLP to the helm of Government, the nation was anticipating increase taxes due to borrowing & spending mentality of the BLP but it wasn’t forcoming in the way we thought it would. As a matter of fact, Thompson alluded to that fact in one of his public broadcasts. Various tax increases on the table that the DLP hadn’t even implemented yet.

    Now S&P have officially force their hand. Put the taxes on the people and bring them in line with what is transpiring in the developed world. You can’t escape it. Everyone must be on the same page.

    What is this?
    The middle class will be wiped out or dimished. The standard of living will degrade. The gap between the rich & poor will widen.

    The years of plenty are over. We’ll have glimmers of hope but that will be short-term only.

    Welcome to the New World Order.

  2. Dan

    I believe the word “junk” in the WSJ headline is misleading you. While I’m not a fan of the newspaper, in this case it’s technically accurate. In the US stock market, a “junk” bond is one which is rated BB or lower and is not deemed investment grade. Barbados’ rating (BBB-) is a single step above that. Meaning that if it slips further, it will be in “junk” territory. The word is just an industry term and not a biased slam against the country.

  3. BGR

    That should be – the middle class will be wiped out or diminished.

  4. untouchables

    Meanwhile those who have siphoned money off from the state into offshore bank accounts for doing nothing will remain untouchable and or looking will be for more opportunity with higher taxes.

  5. BGR

    Regardless Dan, investors will still be wary. It may also led to a deduction of a potential pool of investors looking our way.

  6. Knight of the Long Knives

    There is not much that can be done with the economy to tighten the reigns will escalate the contraction. Government is sitting tight and hoping to ride it out. The alternative is lay offs reduction in social programmes and eliminations of some. I hope it does not get to that point…

  7. Beefcake

    It is time for students to pay for their tertiary education.

  8. BFP

    Hi Dan

    Yes, we know that “junk” is a term used by the financial industry and all we are doing is to invite readers like yourself to examine the two articles for their different content, vocabulary and style.

    The word “junk” is not used in the Nation’s article, but was used in the WSJ article. That is an interesting observation.

  9. Capt. Nobody

    Only one thing: one more, and I repeat ONE more downgrading from S&P and this Country became a “no- investment” area with all the consequences you can imagine. Has this government a plan to exit or ease this situation??!

  10. BajanMike

    I believe the WSJ comments are more astute and does paint a more accurate picture of the economy than The Nation. No amount of sugar coating from the editors on Fontabelle can disguise the serious situation that is worsening. Junk is a technical term and means the probability of default is higher. We are bordering on a speculative gamble and have to pay high interest rates to borrow. This “opinion” is made in the market where many professionals that do only this for a living analyze the data. They vote in the marketplace. To them its not spin – just business. Government will have to hand over much of its income just to pay the interest on the debt. And its not too easy to tax businesses – they are already loosing money hand over fist. Taxing personal income or cutting wages seems the only option. And that is a sure fire way to find yourself on the opposition bench. Not an envious position.

  11. There is really no need to panic. If the D.L.P is afraid to introduce some rather drastic measures , then we will have a problem. I think that the credibilty of this government is good enough to get the support of the people.
    So far, the economy has been managed quite well , taking into consideration, that we import everything from ice cream to english apples. Look at the BMW’s and Benz on the road. We have a very lavish life style but we dont produce a single item /part that can be used on a motor car.

  12. Johnny Postle

    Kudos to those who have managed Barbados well. But the long and short of it all is that the bucket would have always fallen out from the bottom of the barrell eventually. Wise financial planning did not allow us to look to new drives to help fuel our economy. The fact we have no natural resources did not allow us to capitalized on the few resources we have in a meaningful way. For example the sea island cotton project; black belly sheep project and the pioneering of sound agricultural programmes to rid us of the heavy expense we are now paying for imported products. Failing not to mention the fact that we have numerous golden apple trees all over the place, up to this date we have not seen this fruit as lucrative earner for foreign change if we had to go into juice production. We have found all sorts of excuses to say why, some legit and some totally nonsensical. But a try beats talk any time and we certainly did not try.

  13. Avatar Gurl

    So…the crap has hit the fan. God help us all.