Moody’s downgrades Barbados: Does it really matter? We’re already ‘junk’ status!

 moodys Barbados credit rating

Is devaluation a now a given?

by West Side Davie

There comes a time during a bankruptcy when the debtor stops caring. The debtor realises that there is nothing more they can do and it’s all about the ride and having a place to sleep and a meal or two a day. I’ve been there myself, and although I don’t care to go into the personal details I can assure you that your skin gets thick and tough and very quickly you get a new attitude that allows you to survive and even thrive as your finances and everything you have crumbles. Mostly your woman leaves. No money, no honey!

With assets of $20,000 and debts of $100,000, it doesn’t really matter if the debts climb to $200,000 or $300,000…. I can’t pay it! You think, “Let it go sky high! Why should I care?”

Unless the debts were passed onto your children like the indentured slaves and sharecroppers of the past – or of the present in some countries.

Back to Bim… Barbados has a few more assets than I did, but the people in charge of the money are going to squeeze us for more interest. They do this by lowering the ratings. The lean years are here and our so-called leaders never put away a dollar during the times of plenty.

IN CONTRAST to the prevailing mood of confidence over the economic future of Trinidad and Tobago, there is spreading depression across in Barbados where thousands of public sector workers are facing retrenchment early next year as the government anxiously seeks to avoid a devaluation of the Barbados dollar.

Here in Trinidad and Tobago, while Prime Minister Kamla Persad-Bissessar was last week playing a “Santa Claus” role with her offer of a 20 per cent rebate over the past two days on a range of widely consumed basic commodities, the Guyana the government of President Donald Ramotar found much comfort in another consecutive year of  economic growth.

(snip)

Having concluded an arrangement with the IMF that included, for a start, the bitter medicine of some 3,000 job cuts in the public sector, or face the threat of devaluation of the Barbados dollar,  the Democratic Labour Party administration of Prime Minister Freundel Stuart has Barbadians in a mood of spreading gloom.

Accustomed to applause from international financial institutions and credit rating agencies as having the most stable currency in this region-50 cents to the US dollar-the prospect of having to cope with a devalued dollar is viewed by Barbadians as sacrilegious talk.

… from the Trinidad Express Spectre of devaluation

Bajans are well and truly screwed. And so are the next generations because we keep mortgaging the future for our children.

The answer from our leaders is never to stop borrowing and to make do. It never is that. Always the answer is to pay whatever is asked in interest and go to the money men.

Tell you what I’m going to do. I’m going to get a little squat, work hard and save. I’m not going to continue to borrow money. I’m going to reorganise my life, downsize, and work hard.

But I’m not going to borrow more money if that borrowing is on the heads of my children…

Another downgrade for Barbados

Moody’s Investors Service on has downgraded Barbados’ government bond rating to Ba3 from Ba1, putting the country’s rating deeper into junk territory.

It cited the country’s “continued anemic economic performance”; ongoing deterioration in the government’s financial strength, due to persistently large fiscal deficits and rising debt levels; the deterioration in the government’s debt profile as a result of the significant increase in domestic short-term borrowings over the past two years; and the fall in foreign exchange reserves by more than 30 percent during January-September to $505 million for its two-notch downgrade.

Moody’s also said the country’s credit outlook remained negative.

“The continued negative outlook on Barbados’s rating primarily incorporates Moody’s expectation that the government’s debt metrics are likely to continue to deteriorate. Additional factors driving the negative outlook are the rating agency’s expectation that (1) Barbados’s growth prospects will likely remain subdued; (2) the recently announced fiscal consolidation plan is unlikely to reverse current trends in government debt indicators; (3) the government is likely to face increasing financing costs; and (4) pressure on the exchange rate peg will continue to increase,” it said in a statement issued a short while ago.

… continue to read this article at Barbados Today Another downgrade for Barbados

20 Comments

Filed under Barbados, Business & Banking, Economy

20 responses to “Moody’s downgrades Barbados: Does it really matter? We’re already ‘junk’ status!

  1. Party Animal

    I am amazed who many Bajans don’t understand the position this Country is in. I hope the Unions and Private Sector will take action NOW.
    We need to shut the Country down and send the D’s packing.
    The Lucians did it sometime back, we need to do it NOW. We cannot wait any longer.
    Go to youtube and listen to some facts. It is scary.

    DEVALUATION = DEVASTATION

  2. PLANTATION DEEDS FROM 1926 TO 2013 , MASSIVE FRAUD ,LAND TAX BILLS AND NO DEEDS OF BARBADOS, BLPand DLP=Massive Fruad

    MIA full of shit, DBLP government is in Unity, just like voter fraud,
    All she talking needs to be apply to her self and turn her self in the the Police.

  3. PLANTATION DEEDS FROM 1926 TO 2013 , MASSIVE FRAUD ,LAND TAX BILLS AND NO DEEDS OF BARBADOS, BLPand DLP=Massive Fruad

    First reported 225 Million now its 150 Million they looking to take? What math are they doing now to drop 75million , Must be more side pocket money for self , Some one must of told them to cut the fat or the FRAUD.
    Audit must be done and we all need to see it posted.

    MIA your ass think that FOI is only for the BLP and not all of Barbados and for you then to tell up or show us what you feel we only need to know
    We know at PLANTATION DEEDS YOU ARE A FIRST CLASS CROOK.

  4. Wily Coyote

    I agree, MIA is full of S_ _ T. Both political party’s don’t have a F _ _ King clue.

    We all know who pulled the plug on Barbados, question is who/how and when someone is going to put the plug back in the drain.

    Better still lets leave the plug out of the drain, maybe some WHIT KNIGHT will come and buy the country, reintroduce slavery and get the economy going and the country functioning.

    Just a thought.

  5. Party Animal

    Wily Coyote,
    While I agree that neither Party is any better than the other, we….the People have to let the Politicians understand that we pay them and if they can’t do the job then we have to Fire them…Time to down tools and send them home the B’s will get the message, they know, we know all about them.

  6. Party Animal

    What the HELL can $ 150 million do for this Country, other than create more debt in repayments.
    This will only cover the Ministers Salaries for a few months. The lay offs will be like devaluation, you say 3.000 to go but will be more like 10.000 and may well catch up with a Sandy 20.000.

    I recon that we need at least $ 1½ Billion to put us in good stead, I don’t think anyone would lend crooks this kind of money.

    The answer for Barbados is a NEW PARTY may Sir Ritchie R.I.P

    DEVAULATION = DEVASTATION

  7. Richard Johnston

    There is a Hemingway character in “The Sun Also Rises” who is asked “How did you go bankrupt?” and his answer is “Gradually, then suddenly.” Barbados is closer than ever to the sudden part.

  8. LOOK

    It’s just a mess, Barbados, a messy mess, some of which was created by Mia Mottley herself.

  9. pageantry of verbal diarrhea

    Surely people can’t forget ” President for Life ” OSA and his ministers of incompetence and duplicity, especially Mia?

    Growing an economy while slowly advancing in the US can’t occur in Barbados when you piss on tourists, investors and hard working taxpayers.

    Where are the offshore accounts as per the promised FBI reports?
    Where is the promised ITAL and FOI as per the DLP?
    Where are the wage cuts by those in leadership?

  10. LOOK

    All should be in jail: Owen Arthur, Mia Mottley, Dale Marshall, George Payne and Gline Clark.

  11. old_CT

    A few years ago I asked via an e-mail “Is Barbados broke?” The moderator referred me to the statement made by the nob of the central bank the day before where he stated that everything was fine and would continue to be so. Well, ya broke now. Off shore business sailing away…..and the mug-punters (tourists ) are looking elsewhere.

    I have another question for all ya, “How did you think that a population of about 300,000 could sustain a civil service of almost 40,000?”

    Looks like the good people of Bim need a change….no D’s, no B’s something new.

  12. old_CT

    …nod should read “head”

  13. No need to change

    Old CT

    actually it reads nob not nod, which works

  14. lucchase

    Job creation is the government’s most urgent task. That is where attention should be.
    Get to work making Barbados beautiful, well educated, healthy and economically diversified. The time for austerity was during boom years, not now when the problem is too little growth.
    Again…
    While it is normal for jobs to be lost even during good times, right now the target should be job creation.

  15. lucchase

    @old_CT for better or worse… Sweden’s civil service makes up about 59% of their labour force. 4 in 30 is not so unreasonable in a ssuccessful economy.

    Job creation is the government’s most urgent task. That is where attention should be.
    Get to work making Barbados beautiful, well educated, healthy and economically diversified. The time for austerity was during boom years, not now when the problem is too little growth.
    Again…
    While it is normal for jobs to be lost even during good times, right now the target should be job creation.

  16. Party Animal

    LOOK Says:

    All should be in jail: Owen Arthur, Mia Mottley, Dale Marshall, George Payne and Gline Clark.

    You need to add another 20 names to your list.

    They should have been the first to test the New Prison, having spent $ 600.million, there must be some comfortable cells for Politicians.

  17. LOOK

    @ Party Animal

    Agree totally.

  18. Party Animal

    We hang petty thieves and appoint the great ones to public office.
    ~Aesop, Greek slave & fable author

    Those who are too smart to engage in politics are punished by being governed by those who are dumber.
    ~Plato, ancient Greek Philosopher

    Politicians are the same all over. They promise to build a bridge even where there is no river.
    ~Nikita Khrushchev, Russian Soviet politician

    When I was a boy I was told that anybody could become President; I’m beginning to believe it.
    ~Quoted in ‘Clarence Darrow for the Defense’ by Irving Stone.

    Politicians are people who, when they see light at the end of the tunnel, go out and buy some more tunnel.
    ~John Quinton, American actor/writer

    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other.
    ~Oscar Ameringer, “the Mark Twain of American Socialism.”

    I offered my opponents a deal: “if they stop telling lies about me, I will stop telling the truth about them”.
    ~Adlai Stevenson, campaign speech, 1952..

    A politician is a fellow who will lay down your life for his country.
    ~Texas Guinan. 19th century American businessman

    I have come to the conclusion that politics is too serious a matter to be left to the politicians.
    ~Charles de Gaulle, French general & politician

    Instead of giving a politician the keys to the city, it might be better to change the locks.
    ~Doug Larson (English middle-distance runner who won gold medals at the 1924
    Olympic Games in Paris, 1902-1981)

    I am reminded of a joke: What happens if a politician drowns in a river? That is pollution.
    What happens if all of them drown? That is solution!!!

  19. Party Animal

    pageantry of verbal diarrhea :

    The Bee’s very, very, very. quite, they must realize that there ain’t nothing left to tief, and trying to bring the Country back on stream would be to big a task, or beyond their capacity

  20. If ya dont make it change...it wont

    I think it time the people of Bim took to the streets and demanded a government that has transparent dealings…The average guy is paying for the politicians to line their pockets on both sides of the house….unbelievable that this still goes on in 2014
    People you need to make change happen as the thieves will keep thieving whilst you let them