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?