Moody’s Rating Unchanged For Barbados

Central Bank of Barbados

Moody’s published its Disclosures on Credit Ratings of Barbados as at 26 March 2012. Its review has not gotten much airplay on the talk shows which have been concerned with the REDjet matter. Perhaps it says a lot about Barbadians and where our priorities are located at a time when the economy continues to face unprecedented challenges.

A scan of the 5-page report confirms that the Barbados 4.3 billion economy continues to be challenged. Noteworthy is that concern about the fundamentals of the local economy  pre-dates the slow down in the global economy.  What the global recession has done is to expose a false position that the Barbados was a citadel of strength. Here is a pertinent comment extracted from the Moody’s Investor Service Review:

“The economic strength assessment balances a relatively high GDP per capita (US$ 19,200 in PPP terms) with low growth rates and the small size of the economy (US$ 4.3 Bn.) which relies on a narrow economic base that depends heavily on tourism and international business services. Even during a period of very favorable global conditions from 2004 to 2007, Barbados’ real GDP growth averaged just 3-4%. Furthermore, both of the island’s main industries are expected to continue showing low growth in coming years as they face significant structural challenges. As a result, growth is expected to be only 1% in 2011 and just above 1% in 2012.”

It is interesting that Moody’s challenges the role of the Social Partnership by asserting that “the social partnership which supports this consensus may also be contributing to a climate of political inertia, which is inhibiting the implementation of the structural reforms necessary to improve competitiveness and address the government’s fiscal challenges.” Bear in mind successive governments have been stuck on the point that the social partnership model has worked for Barbados.

Whether B or D we are all Barbadians and the need to effectively manage our limited resources must be a priority for ALL. What is evident from Moody’s write up is that a restructure or repositioning of the Barbados economy is necessary and is long in coming.

Do we continue to blame red or yellow or do we get on with the job?

0 thoughts on “Moody’s Rating Unchanged For Barbados

  1. “It is interesting that Moody’s challenges the role of the Social Partnership by asserting that “the social partnership which supports this consensus may also be contributing to a climate of political inertia, which is inhibiting the implementation of the structural reforms necessary to improve competitiveness and address the government’s fiscal challenges.”” – David/BU – taken from the above blog.

    Here is a portion of much of what we had edited out from the article that was finally submitted as this week’s instalment – and which you have so kindly published. Indeed this portion is very pertinent, and that makes great sense, given what Moody’s has said: “It is debatable whether/ if it (the Social Partnership) had come about just before or at the time of the DLP Government/IMF led implementation of the 1991 structural and stabilization program, if indeed Barbados would have succeeded in bringing about a great measure of stabilization and structural adjustment in the country. Notwithstanding the verbal licks and lashes Mr. Erskine Sandiford (now Sir Lloyd) got then, he was clearly very decisive and tough in certain cases, and very deliberate in helping to bring about compromises where necessary, in order to make sure that that program succeeded.”

    David, we have even gone somewhat beyond what Moody’s has said though.

    The fact is that the Social Partnership is creating significant political and other problems for this country.

    It has become like an old automechanic workshop that is being used by an “old school” mechanic for the sending and storing of many disused unused old parts – which he uses whenever a few people would be looking for some hard to get parts for especially older vechicles. But the truth would be that this workshop has got in so many old metals that it really serves no great purpose in today’s quick moving auto-mechanical world – where parts shops, in Barbados and elsewhere, simply specialize in bringing in a great deal of modern day vehicle parts, and selling such parts at reasonable or extravagant costs to owners of those vehicles, for those said vehicles to be quickly fitted with those parts (repairs??).


  2. Who pens Moody’s analysis and ratings? Is it Clyde Mascoll or Charlie Skeete- he like he ill Tony Best dont quote him anymore.
    Moody’s statements might even come from Patrick Hoyos.
    Irregardless of how diligently Barbadians and thier government work and aspire Moody’s unyielding negativity and doomsday ratings makes one think the entire country should just give up and go and lay on the beach until death takes us.
    Mr. Moody is there not one iota of the positive or progressive in Barbados? Should the 300,000 inhabitants find somewhere else to live, you literally are destroying all hope in the population.

    • @Bajee

      The report is not all negative.


      The social partnership is a sacred cow, to offer a critique about it is like criticizing Rihanna.

  3. @ the Poster and EVERYBODY

    This is exactly where I am getting at with my Petition. And yet Every time I keep on posting it, nobody takes me seriously enough by getting on board and signing it. Its so simple yet frustrating. Why bother touting this to Bajans if they themselves AREN’T EVEN WILLING to step up to the plate and make the necessary sacrifices in order to implement change that would otherwise help to establish OUR NATION’S OWN BRAND, NOT A BLOODY PLAYGROUND FOR RICH AND WEALTHY FOREIGNERS AND THAT DIRTY “QUEEN” OF THEIRS!

    Through my petition, I have CONSISTENTLY pointed out where the necessary steps should be taken in order to ensure the nation’s competitive edge, but have only gotten backlash from people WHO EITHER DON’T EVEN KNOW WHY THEY DISAGREE OR ARE JUST SIMPLY TOO SELF-CENTERED AND ARE HARDWIRED TOOLS THAT JUST REGURGITATE ARCHAIC COLONIAL PRINCIPLES NOT EVEN RELEVANT TO THE NATION FOR TODAY’S ECONOMY!

    That, Or No one Pays any F*CKING ATTENTION TO ME! SO WHY COMPLAIN??!! YOU’RE OUTRAGED BUT YOU’RE NOT WILLING TO GO OUT AND ACT IN ORDER TO MAKE A DIFFERENCE! So why frigging complain? NO ONE wants to make any sacrifices to keep what little comforts they have in order to help forge and solidify a stake in our nation’s economic future. SO WHY CRY WHEN PEOPLE DON’T WANT TO GIVE TOWARDS THEIR NATION’S FUTURE?!

    Forgive the yelling, but its all but too pointless to pose these articles and to have people comment and when I actually POSE AN ACTUAL STRATEGY I GET RIDICULED FOR BEING A YOUNG IDEALISTIC YANKEE, SO WHAT THE F*CK IS THE POINT HERE??!

    I am sorry brother David, but this is falling on nothing but deaf ears, and the Bajan “SHEEPLE” are just too damned pre-occuppied with the mundane matters rather than HOLD THEIR POLITICIANS ACCOUNTABLE! I feel like its not worth expending such valuable energy to a cause that a people AVIDLY CHOOSES TO REMAIN BLIND TO!

  4. yeap! Bajans “too hard wired ” not willing to pay the Price. the lack of response to this thread is evident that bajans only interest is self .

  5. but what is of real interest is that if moody’s has issued another down grade the talking heads would have been asking for the heads of government forthwith so it is understandable the lacklustre response.
    today i heard Min. Lashely calling on the private sector to do their part in contributing to the revitalisation of old historical buildings however i don’t think that is about to happen because all the private sector plans on doing is providing low wage jobs but when it comes to putting resources that would be of benefit to the country they have always look the other way unless it is something in a project for them.

  6. Brudah-Bim,

    There are many people in Barbados that do take these types of posts somewhat seriously.

    We can call the names of many people who tell us that they are tuned into these posts and by extension this blog.

    But, the very sad thing about it is, even though many of them do read these types of posts they dont themselves post or blog anything.

    Some of these persons even pretend to us that they are revolutionaries/revolutionists, esp of the Pan-Africanist/militant/radical mould.

    Some of them would even after not posting, would later engage us, in various places in Barbados, in conversations about what should or not be done politically democratically in Barbados to presumably better the country.

    Such persons we are wary of though. They are pure talkers anyhow, and not political action-oriented people

    So dont give up Brudah-Bim, as David encouraged earlier.


    You said that the Social Partnership is a sacred cow. We hold no such opinion. We see it as a big stumbling block in the way of much progress for the people of Barbados. It must be removed!!!


    Realize/recognize the pattern and style of posted comments by BU posters to what Brudah-Bim has said above, and to those persons who post intelligently on here from time to time.

    Such centers around responding to the particular comments, and responding with friviology, or embittered comment, or sheer personal opinion.

    There is hardly anything to add many times, and nothing to add some times – scientifically, philosophically, politically,etc.

    It is clear that such people hardly read, hardly write or hardly research on anything out of the ordinary.


  7. The DLP is caught between a rock and a hard place, Sinckler had promise to review the 2.5% increase in VAT in 18 months. The general feeling among the bajan public is that it would have been removed since general elections are due shortly. However, Moody has warned the government that they are on the verge of being “trash rated”, which would mean difficult times for this country. In addition, they are telling the government they have to find other methods to reduce their expenditure as soon as possible. This leaves the DLP not able to hand out any “goodies” for elections. I wonder how the voting public would see this.

  8. The Scout wrote “This leaves the DLP not able to hand out any “goodies” for elections. I wonder how the voting public would see this.”

    What does that say about the voting public?

  9. the voting public was told that there would be a Review of the VAT not a removal and until unemployment has risen to a level where the government can collect a substantial amount of taxes the VAT would remain the same and that is REALITY! Not enough people Working! means not enough taxes the government is accessible to and the bills still must be paid. The govt is making a step in the right direction by having a international medical centre which will bring in much needed foreign exchange ,this idea is not new and is done in most major international markets

    • The is the part of Moody’s statement that we have not come to grip with as yet:

      Even during a period of very favorable global conditions from 2004 to 2007, Barbados’ real GDP growth averaged just 3-4%. Furthermore, both of the island’s main industries are expected to continue showing low growth in coming years as they face significant structural challenges. As a result, growth is expected to be only 1% in 2011 and just above 1% in 2012.

      So that in good times our growth or boom peaked at 3 or4%.

  10. ac
    Promises, promises!!!!!!!!!!!!!! we had so many of those leading up to the last elections that the voting public is seeing this as a comody. The IMF is suggesting the VAT be moved to 20%, are you now suggesting that as more people lose their jobs and the unemployment rises, the VAT will rise with it? If this is what you are suggesting whether the DLP or BLP wins the next elections are do such a thing, there will be distrurbance in this country, much worse than 1937. Bajans are on the verge of exploding.

  11. i am not an alarmist like some people who live and breath politics. however i am a realist , but the vat is not going down to levels where was before under BLP or DLP. Mascoll all but confirmed that on Sunday.

  12. Hants
    What does this say about the voting public?
    Since the 1971 elections when I was involved and even before that, both parties are known to offer many goodies before elections, many of which were either taken back if the won, of in some cases never given at all. This is the nature of politics in Barbados, and it is time politicians from both parties bite the bullet and tell the people the truth. Both parties are aware that if either of them do this, it is like committing political suicide, therefore, things will always remain the same. each party have their yardfowls who will support them what ever but there are the undecided who changes the balance every elections. Right now I’m hearing many DLP supporters saying they are not voting next elections, therefore if the BLP supporters and the undecided vote for the BLP the DLP will be badly beaten.

  13. “While it is true that the Partnership would have been a stabilizing factor and influence throughout the 90s and into the mid 2000s, it has, throughout its existence, remained true to form – it has been one hell of a methodology in political corporatist engineering that was designed only for a particular time, and to suit a particular purpose. Hence, many people will remember that it emerged out of the very tumultuous 1991 structural adjustment and stabilization period in Barbados. And, too, will remember that both its historical emergence and its social function denoted a desire by a few people within the major political government business and labor components of the country, to devise a common and stabilizing approach to some aspects of national problem solving, at what was then a very critical juncture in the country’s history.

    Moreover, it was founded on a political compact to advance and protect – in a backhanded manner – the fundamental, and sometimes interlocking, personal political professional financial interests of the MAJOR actors involved in each of these social segments that happen to be so fundamentally and diametrically opposite to each other within the Barbadian society.

    So, the truth is that the Social Partnership was never designed to protect the fundamental political class interests of the broad masses and middle classes of Barbados, but was designed to ensure that the majority of the latter classes continue to be severely politically exploited and socially marginalized by those private sector, governmental and trade union oligarchs that have used the bailiwick of the Social Partnership as another process through which they would advance or protect their fundamental interests, whatever their color or religious or gender backgrounds.”

    ac, those three paragraphs in our last article tell the story.

    The Social Partnership was designed for a particular time and to suit a particular purpose. Otherwise then it was a response to a particular set of circumstances which no longer exist today.

    And it was a subterfuge by the above mentioned oligarchs to put in place a mechanism to further emasculate those who were of a lower class and of lower work statuses than they were.

    Hence, in order to do so they had to first plan to preserve their own various social political financial positions at a time of political economic crisis vis-a-vis only doing just enough to protect as many of the social political and financial positions of those workers as the circumstances would have allowed for then, and then to execute the plan – which was helped put in place via the Social Partnership. Only by weakening the workers were they able to remain stronger in their positions than the workers were in their own positions in the economic crisis in 1991. So it had helped to tremendously secure the relevant positions of the oligarchs via-a-vis the relevant ones of the workers. That was the main purpose of the Social Partnership.

    The conditions that had given rise to the execution of the purpose of the Partnership, even though such conditions have changed, must not be seen as part of those conditions that have since enabled and purposed its continuation.

    The functions of the Social Partnership have therefore been circumscribed by the conditions/purposes that would have given rise to it and that have, on a fast diminishing basis, been continuing with it.


  14. @ ac | March 28, 2012 at 10:51 PM |
    “however i am a realist , but the vat is not going down to levels where was before under BLP or D”

    Every day we see you taking one tiny step to the door that opens to integrity and fairness. However, we are very much concerned about your “two steps backward” so eloquently put by your ‘never-can-be’ favourite local Calysonian Serenader.
    If OSA brings evidence that the $75,000 was eventually made available his Party and used to finance the 2003 campaign would you then shut up even if you still earmark the BLP for vilification instead of your personal vendettas targeted at OSA? One is beginning to suspect more in your private mortar than OSA’s little pestle. “Hell has no fury like a woman scorned”!

  15. I think the Moody’s assessment is a pretty fair one. We seem past the worst of the recession and debt buildup. However, with growth levels of around 3% in favourable global conditions, growing out of the deficit in a weak global economic environment seems unrealistic.

    The debate then seems to surround the pace of fiscal adjustment. The administration with its Medium Term Fiscal Strategy is opting for a slower pace than that desired by the rating agency. I see it as a difficult call. A faster pace of adjustment runs the risk of major social social costs and the of slowing economic growth which may well worsen the ratios mentioned by Moodys. Even “wasteful” government expenditure adds to GDP. If the government steps back will private sector investment fill the void? is there crowding out? However, if the investment grade rating is lost, the country loses one of its options for raising international capital in a flexible and cost effective manner.

  16. The situation in Bim reminds me a bit of the California situation. A great place to live, lots to like, but the various interest groups seem dug into their positions, and are very capable of articulating their causes. In such an environment reform becomes, politically challenging to say the least.

  17. @PDC

    Maybe the intentions were good but like anything else there are those who would abuse a sytem to their advantage and it is usually the ones with the most influence or money which leaves little or no room for those the system was intended to benefit which are usually the disadvantage whose voice cannot be heard

  18. “Ontario’s government has introduced a budget that attempts to tackle the province’s ballooning deficit while maintaining economic growth, but critics said it lacked any plan for real job creation.

    Canada’s most populous province is facing a dramatic downshift in economic momentum, one that has meant much lower growth projections in an era of high oil prices, a strong currency and weaker U.S. demand.”

  19. @Justin Robinson | March 28, 2012 at 11:22 PM |

    Hi Dr. Robinson!
    Good luck in your stint in the hot seat.
    Would it be right to say that the 2012-13 Estimates are showing a shortfall between Expenditure and Revenue in excess of $100 million? If that is the case then we need to find ways of financing this “budgeted” deficit; either by way of cutting out or dropping some large expenditure programmes, raising revenue through additional taxation or by borrowings.
    Could you give the BU family an undertaking that as long a you are in the chair you would not allow the local Chancellor of the exchequer or the Minister responsible for the NIS to pressure you unduly into making the NIS funds a ‘piggy bank’ to pay the government current account bills. After all, these funds are the workers and employers contributions to make provision for ‘rainy days’ not investment or gambling chips. The Central Bank is there for any short-term accommodation or overdraft facility if government’s cash flow needs a bit of very short-term support. Would you also take into consideration the various warnings about the NIS investment portfolio? Can we be assured that any Government’s borrowings to support the 2012-13 deficit would not be primarily financed by the NIS?

  20. ^^@David (B.U.)

    Much of the problem stems from the fact that much of the focus within the financial sector of Barbados, much of the focus has been heavily reliant on making “adjustments” (playing with numbers more so) to certain expenditures such as making cuts to certain spheres such as public health and consistently raising the VAT in order to leach the population of what little they make (ie. $150 pay cheque per week on Average) in order to compensate our external debt. Not to mention that our over reliance on imports increases the cost of living, subsequently leading to a higher VAT rate to being placed on everything from food to fuel and energy, and even the essentials such as food.

    Yet there has been a consistent lag in implementing the appropriate measures in order to establish key industries domestically and facilitating an environment for which domestic growth would occur thus solidifying the domestic market it and enabling it to compete. The government can do this by simply making strategic measures such as issuing subsidies in key industries for essential commodities.

    Instead, the incompetent fat cats have proven to be nothing more than mere pawns of the Europeans an Americans by zealously adhering to the protocols issued by D.C. that are nothing but pervasive and detrimental to our real economic growth and overall competitiveness in the global economy. By focusing on establishing Barbados as a productive market that is capable of globally competing enables us to accrue value overtime in our national reserves. There should be a re-haul in the structuring of the country’s financial sector (ahem! The Barbados Central Bank, AHEM!) that has a focus of maximizing development at a sustainable rate through strategic industries and building the value of our nation’s economy by avidly establishing our brand rather than selling it off as some “affordable” utopian commodity.

    We need a new administration that is mindful of the fact that THIS IS A NATION THAT THEY’RE RUNNING, and that THEY ARE PLAYING WITH THE LIVES OF THOUSANDS by recklessly making adjustments by raising taxes on the people. We need to tell the government that IT SHOULDN’T BE THE PEOPLE WHO BAILS THE GOVERNMENT OUT, BUT RATHER IT SHOULD BE THE OTHER WAY AROUND!

    Bajans need to realize that they are selling themselves short by not holding their government accountable if they do not demand for apprpriate measures to be taken in key sectors of our economy. IT IS OUR DUTY TO SCRUTINIZE OUR POLITICIANS” TO THE HIGHEST DEGREE AND DEMAND THAT THEY PRIORITIZE THE PEOPLE FIRST!

    Bawl, sit, fret, shout, and cuss all yuh want! But yuh know yuh 2 dyamn lazy to go out and ACT for CHANGE. All dese dyamn bajan en’ dey e’nt got a frigging clue as to whut de nation really needs to KEEP DE WATER FROM SINKING DE ROCK! No one here is talking about de LONG TERM MEASURES NEEDED for BIM to KEEP AFLOAT!! NO ONE HERE SEEMS to notice the the crooksters in parliament are robbing the nation blid in order to pay for THEIR BILLS & DEBT.



  21. @ Brudah-Bim | March 29, 2012 at 3:10 PM |
    “All dese dyamn bajan en’ dey e’nt got a frigging clue as to whut de nation really needs to KEEP DE WATER FROM SINKING DE ROCK! No one here is talking about de LONG TERM MEASURES NEEDED for BIM to KEEP AFLOAT!! NO ONE HERE SEEMS to notice the the crooksters in parliament are robbing the nation blid in order to pay for THEIR BILLS & DEBT.”

    We can feel your pain so deep as to make us cry.

    The Miller warned you early in the game. I will continue to support you despite the absence of my fighting sword which has been dulled by the many battles waged in the war of life especially those between the sexes.
    But take a piece of advice from an old sea dog: Bim must sink again before she surfaces again. She is experiencing her 150 or in some cases 75 year itch. There is currently too much water on board the little ship SS Barbados unless a tug called the Good Hope arrives with the crew of structural adjustment, hard-work, sacrifice and coming to grips with reality are on board, hopefully without the captaincy of Admiral IMF.

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