You can bet that S&P would follow suit. Barbados can’t really take another downgrade. That would trigger a devaluation and collapse of the economy as has happened in other downgraded states.
It would be very wicked of these agencies who were giving triple A ratings (AAA+) to some of the institutions that triggeredthe2007/2008 economic crisis and caused the collapse of the Western World’s financial money and banking system.
Barbados has been very good over the years to the international lending institutions and the local foreign-own banks generating millions (if not billions) of dollars in interest income for them. Barbados has never defaulted on any international loan commitment to the extent that she was often approached and offered loans even when there was no request from her end.

Why would they want to dump the old girl in her time of need? We have been a loyal customer so it would be foolhardy of these agencies to sell us down the river to the IMF.

Honestly the rating agency look at the creative account they tried accomplish and gave it failing grade. They haven’t flunked us as yet but are leaning toward it. It time for government to actually act and realise they pushed the situation to where it is now and time to fix. Either with the opposition or not but it time for preventive action against a downgrade, not reacting to situations at moderate to slow pace.

@ clone you must be living a dream you expect the likes of onions and miller to give the govt any credit afterall they had predicted four years ago that the country would fall off the cliff and they still waiting for that to happen. what you shuld tell them that under OSA they country was downgraded in times of plenty with the “ecinomist and chief ” at the helm .

@Miller

You asked about Four Seasons. BU understands National Insurance is investing 60 million; nine million in equity and fifty one million in a bond. The NIS investment was contingent on IADB board approval and now that has come the equity component has been injected and the legal work for the bond is being done. Once the legal work is done the National Insurance will disburse the bond funding.

Will repeat for the benefit of Onions et al, the sell off of assets to T&T occurred under the last government. We are reaping what we knew would have eventually occurred, a rationalization of the T&T business in Barbados. Can we say the Opposition position has changed were they to assume government?

@David,

Agreed. Family silver. Now them $$$$ sold for must look small.

Or is the real lessonm that large companies should not be in the hands of a few wealthy?

Would you write a cheque to an organisation for which you do not have acces to info on Supervisorty controls? Has the Auditor General passed their controls as acceptable, that you can write a cheque to?

The IADB will have project supervision and controls of disbursements, would they not?

Write a cheque willy-nilly just so, imagine…..60 bloody million?

@David | July 14, 2012 at 6:59 AM |

The IADB has a track record that can be assessed.
That Paradise outfit is a shell of a company used as a facade to channel consultancy fees and other on-costs. It does not have the organisational capacity and ability to execute the required level of project management.

Senator Chandler is not very far off the mark.

@ Miller
Nah as Miller said…..we were spared because of the consequences..but must now beware of the T&T connection….500+30 sent home in2 mths..this types of negative activity is what causes S&P to downgrade….we really got our hands full.
***************************************
For those who can remember T.Geddes Grant & co…there in White Park employed 1000 plus in many areas …could have been compared to SBI of now…..when purchased b y Ansal Mcal……within no time
A Lockjack shut down the place sending nuff people of all races scrambling.
You can bet their ‘modus’ has not changed and its time Govt implement some safeguard agreement with Jack…or else…too much is at stake here.
The day the economy is ran by Jack…..and Moody sees the volatility and instability…we won’t be as lucky as now.

@Miller

Agree to the need for transparency to permeate these kinds of transactions.

@David (Not BU)

The issue here is here is did we have to sell some of these assets anyway?

Also many of these assets were sold to get forex and that was the sell job to Bajans.

David ( not BU ) sorry

old onion bags | July 14, 2012 at 8:19 AM |

Seems like Crusoe lives overseas
————-

???

Clone “wake up”

The global recession does not mean a recession of ideas on how to position the Barbados economy effectively in these challenging times.

your quote:
“People know that it is tough but why do you feel that this resource lacking country can do any better than those industrial countries that Moody’s and Standards and Poor’s downgraded over the last two years.”

Total old school thinking about Barbados that killing we … our strength is our people “Clone” we boost our high education standards but have no jobs for our youth, hotel servitude thinking has to end or we will …

Our current PM and DLP party is “WEAL” when we need strength that SIMPLY … “lets wait and see what happens globally” is not a strategy.

we need relevant education to the times …

we need to expand bajan exports (i.e rum)

we need to RE_THINK our position in the world and how best to preserve our way of life … the PM and Min.of Finance don’t have a CLUE.

And look real foolish on TV

What is this nonsense comparing countries that export commodities to Barbados? Let us pick Guyana for example. Do you know Guyana’s debt at 600% was forgiven in the 1990s?

@ Clone | July 14, 2012 at 8:45 AM |
“We would have done much better than so many countries at this time.”

You should stop being so vainglorious and stop comparing this 2×3 coral rock with a history of a plantation-type economy with massive industrial and service economies as found in Europe.
If you want to make any sense with your analysis compare Bim with countries of similar size and economic dependency. Bermuda, Bahamas, Cayman Islands, Singapore and Malta would be preferred references- not Portugal, Spain, Italy or Greece.

Why is our international business taking flight to Bermuda and Caymans with other new players like St. Kitts, St. Lucia and St. Vincent “poaching” our existing business or attracting new business from our source markets?

You should also note that what we are experiencing in Western economies is NOT a recession but a major shift (paradigm in nature) in capitalism and its handmaiden finance. We are in the throes of a revolution similar to those previously experienced by mankind in the forms of the agricultural, industrial and educational revolutions. We will not go back to the 20th century model of economic sustainability. The information age with its democratization of technology (ICT) would not support the old ways of capitalist enterprise. Neither would climate change (whether man induced or naturally cyclical) allow our tourism product as currently defined to be a sustainable commercially viable enterprise. We are witnessing the dismantling of this industry with a transfer of international investment to new or re-emerging players such as Costa Rico and Cuba.

All BLP defenders

I am sensible enough to search and read for myself. Here is why you cannot mention Barbados and Guyana together. A CIA report of both countries’ economies
Guyana
The Guyanese economy exhibited moderate economic growth in recent years and is based largely on agriculture and extractive industries. The economy is heavily dependent upon the export of six commodities – sugar, gold, bauxite, shrimp, timber, and rice – which represent nearly 60% of the country’s GDP and are highly susceptible to adverse weather conditions and fluctuations in commodity prices. Guyana’s entrance into the Caricom Single Market and Economy (CSME) in January 2006 has broadened the country’s export market, primarily in the raw materials sector. Economic recovery since a 2005 flood-related contraction was buoyed by increases in remittances and foreign direct investment in the sugar and rice industries as well as the mining sector. Chronic problems include a shortage of skilled labor and a deficient infrastructure. The government is juggling a sizable external debt against the urgent need for expanded public investment. In March 2007, the Inter-American Development Bank, Guyana’s principal donor, canceled Guyana’s nearly $470 million debt, equivalent to nearly 48% of GDP, which along with other Highly Indebted Poor Country (HIPC) debt forgiveness brought the debt-to-GDP ratio down from 183% in 2006 to 120% in 2007. Guyana became heavily indebted as a result of the inward-looking, state-led development model pursued in the 1970s and 1980s. Growth slowed in 2009 as a result of the world recession, but picked up in 2010-11. The slowdown in the domestic economy and lower import costs helped to narrow the country’s current account deficit, despite generally lower earnings from exports.

GDP (purchasing power parity):
$5.814 billion (2011 est.)
country comparison to the world: 159
Barbados
Historically, the Barbadian economy was dependent on sugarcane cultivation and related activities. However, in recent years the economy has diversified into light industry and tourism with about three-quarters of GDP and 80% of exports being attributed to services. Growth has rebounded since 2003, bolstered by increases in construction projects and tourism revenues, reflecting its success in the higher-end segment, but the sector faced declining revenues in 2009 with the global economic downturn. The country enjoys one of the highest per capita incomes in the region. Offshore finance and information services are important foreign exchange earners and thrive from having the same time zone as eastern US financial centers and a relatively highly educated workforce. The government continues its efforts to reduce unemployment, to encourage direct foreign investment, and to privatize remaining state-owned enterprises. The public debt-to-GDP ratio rose to over 100% in 2009-11, largely because a sharp slowdown in tourism and financial services led to a wide budget deficit.

GDP (purchasing power parity):
$6.528 billion (2011 est.)
country comparison to the world: 154

David sorry to be late and sorry for posting my health care piece here, but I was providing preventative health care for a family member this morning. A do it yourself project, dependent neither on the private sector nor the government.

@David “There is rumour that the government plans to outsource MRI and related activities. Would be interesting to get some feedback on this matter.
Can we discuss implications?”

MRI’s may become more readily available.
The cost of MRI’s may go up.
Those people who can afford MRI’s will pay for theirs and will get diagnosed and treated more quickly.
Poor people who can’t pay for their own MRI’s will have to wait for the government to do it for them then the cost of the health care bill to the taxpayers may be higher.
If the government can’t pay these higher bills, then the government will “ration” MRI’s
Barbados being Barbados, those people who have good “contacts” will get their MRI’s quickly paid for by the government.
Those people who don’t know the “right” people will go on an obscenely long waiting list. Some will get sicker while they wait. Some will die while they wait.

Some of those “some people” will be me or you, or our 6 year old son, or our 3 year old daughter.

I’ve taken a close look at the publicly funded, publicly managed health care in Canada, and the private healthcare as practised in the United States. Canada has a better system. The Americans (belatedly) are moving in the direction that the Canadians have gone. Massachusetts under Republican Presidential candidate Mitt Romney (when he was governor of Massachusetts) adopted a system that is essentially an exact model of the Canadian system.

Why are we Bajans so intent on following the FAILED and soon to be abandoned U.S. model?

The soon to be abandoned U.S. model is good for insurance companies, and good for investors.

It is bad for sick people.

Public health care policy should FIRSTLY be about what is good for sick people.

I have noted that the leading cause of personal bankruptcy in the United States is high medical bills. Do we want that to happen here? Or are so foolish as to believe that it cannot happen? I have in my time seen a primary school pupil incur medical bills of over 1 million Barbados dollars. When this happens will the insurance companies still willing to insure the siblings? And if the insurance company dumps the rest of the family because of the possibility of the illness occurring in another sibling, then who pays?

One of the real dangers of the privitization of the health care system is that the tax paying upper and middle classes may see that they are not benefiting from a public system and may demand that their taxes be withdrawn from the system. Then we end up with a two tiered system. One system for the well off and one for the poor, including the “new poor” that is those formerly well off people who are hit with an expensive, expensive long term disease. A friend of mine spent 1/4 million dollars on a sick daughter before she graduated from secondary school, and another friend spent 1 million before his daughter died at 7.

I believe that as a matter of public policy Bajans would be better off with a publicly funded health care system. I have not seen any evidence that further privitization will make health care better or more affordable for most Bajans.

But I am only Simple Simon.

The problem for Barbadians is that we feel that an economy which is labouring in a fickle global economy we should not be willing to tighten our belts. We expect that easy living i.e. consumption spending on mostly imported items must continue to be the order of the day. News folks those days are done. In the 90s we built an economy on services but the world has changed. Preferential treaties are no more therefore our IB sector will always be under threat and tourists are travelling to new destinations. Our debt burden has been creeping up up since 2006, we were warned by the IMF and World Bank. It is not a NOW happening.

It has become a tougher place to compete. It is against this background we have to discuss the kind of economy we want. The same old tired bullshit is just that, tiring.

“we have to discuss the kind of economy we want.”

This calls for vision and an ability to see beyond “what is” and to look at “what could be” . Herein lies the problem. I can count on one hand with a few fingers left back at the number of our current political crop that have shown this. We can only hope.

@ ! | July 15, 2012 at 12:16 AM |
“The Statement was that Barbados was not ONLY an economy but a society.”

So tell us, “!’, what was the purpose of repeating such a trite and banal remark? What was the educational import or philosophical value to such a “sine qua non” given, if you would pardon the redundancy contained therein. Was it intended to impress an unsophisticated DLP audience of similar of intellectual banality bereft of common sense?
Do you know of any civilization or nation state that survived for any significant length of time without a “strong” economy? A strong society must be underpinned by vibrant economy in whichever model of development you want to use. Look around you today and see if those struggling “societies” are not beset with underdeveloped economic problems. Haiti, Somalia, Sudan and Eritrea readily spring to mind. Similar scenarios are being played out in Greece and Portugal and some Eastern European states. But of course there are always exceptions to the rule.

Can you think of any past Administration in Barbados’development that did not focus on building a strong economy in order to establish a fairer society?
Every society that attempts to look after those most vulnerable must first generate surplus wealth to achieve this goal.
Barbados, since Universal Adult Suffrage or majority government, has always had governments that were committed to the betterment of the masses. This did not start in 2008.
The difference between the BLP and the current DLP is that the BLP tries to create an economic environment where individuals can work and produce to improve their individual lot with the State providing incentives and a legislative framework to facilitate self-reliance; whereas, the present DLP administration sees unrealistic manifesto promises, handouts and dependency on the state and politicians as the way to control the voters and keep them in a state of poverty, mendicancy and politically obsequious.

What was the need to make such a stupid and immature statement that has come back to haunt the DLP if not the dearly departed? Was it to make the BLP and OSA look bad because they were proactive and with foresight based on experience highlighting the economic mistakes and mismanagement that are now surfacing as realties everyday? Do you remember when the first piece of the CLICO shit first hit the fan and Mia tried to warn and guide you lot? What was the response?
“Such alarm should be punished with laughter? CLICO is a well managed business with an excellent CEO and an estimable gentleman at the helm”. Who now is having the last laugh? Certainly not Mia, but LP at the stupid Bajan jackasses whom he took for a ride and then sailed off into the sunset with impunity and political protection from the racketeering politicians.

@ miller
Pay the character “!” no mind.
A government that promotes the idea of ‘….being more than an economy’ is busy ‘privatising’ health services and can only boast of free bus fares, summer camps and a $400,000 child maintenance fund. Compare the latter socially and financially to the amendment to the Tenantry Act under OSA that broadened the right to buy to persons living on NON-PLANTATION tenantries, which according to my research made over 10,000 more Barbadian households eligible. The likes of “!” could only fool the uninformed.

@ Sargeant | July 15, 2012 at 1:53 PM |

Singapore was thrown in as a benchmark of what is possible to achieve by a country with a small geographical size and with a colonial background and economic poverty. In the 1950/60’s Singapore was behind Bim as far as socio-economic and political development was concerned. Our father of Independence EWB and Lee Kuan Yew were contemporaries at the LSE with similar dreams for their homelands which faced similar problems of development. Now look at the difference! A horse and a donkey in the same economic race!

@ David | July 15, 2012 at 5:53 PM |

Just what the political science doctors would recommend for Bim!

EWB and JMGM Adams displayed similar tendencies. A functioning democracy with a strong economy and disciplined society can only evolve out of a colonial plantation political environment through tough non nonsense visionary leadership with a benign but firm hand at the helm during the transition.
You agree, David?