Submitted by Stephen Williams
This is an extract carried in last Sunday’s newspaper from an address given by Jerome Walcott at the BLP’s annual conference the previous day: “Let us answer the call of history, to once again provide leadership, good governance and programmes to put Barbadians back to work, to put money back in their pockets, to put back our country in its rightful place far removed from junk status.”
Some nerve, Dr. Walcott!!! I will deal with the part that addressed ‘junk status’.
My Dear Dr. Walcott, our situation is analogous to a country’s’ constant downgrade over the years caused by persistent borrowing year after year to sustain a quasi-artificial standard of living for a select few, as well as for a rainy day. Sounds familiar? Well, the day of reckoning SURELY HAD TO COME.
For the record, this country, during the Owen Arthur administration’s 14 years in office, experienced five (5) downgrades by Standard and Poors as well as by Moody’s – the US credit rating agencies – when there was lots of money around, and the economy was said to be growing yearly. Yes, the Great Economist was at the helm when we had five downgrades, despite the fact that the country was awash with cash. In fact, the BLP government had access to so much money (thanks to the newly introduced VAT that milked Barbadians) they earned the nickname of the “Cost-Overrun Kings,” giving new meaning to wastage, corruption and spendthrift.
Remember that the DLP administration took over during a biting and relentless recession – the worse the world has seen in nearly a 100 years. Conversely, the Owen Arthur administration NEVER had to deal with a recession, and so it had millions to squander – and oh how it squandered!
The problem was, the ‘nuff money’ did not trickle down to the masses; only certain people benefitted – the rich and famous, and their friends and families.
Dr. Walcott also talked about restoring “good governance.” Who can forget wastage on the Ackee Tree; St. Leonard’s School; Eagle Hall Market – a laughingstock showpiece; Kensington Oval; the Golden Showers; expansion of the ABC Highway; Dodds Prison; Barrack Building (Al Barrack did not win the tender process, but he was awarded the contract); the QEH; Hardwood Houses; GEMS; Southern Meats; the $M9 Newton IDC Building next to the roundabout; UDC and RDC; Edutech – where did all the laptops and computers go? What good governance is he talking about?
The BLP can now lecture the region and the world on the “virtues” of frittering away public money and impropriety – I suggest Public Wastage and Squandermania 101.
The credit rating agencies rank countries from the very top AAA to AA to AA+ to AA- to A, to A-1 to A-2 to A-3, down to BBB+ to BBB to BB+ to B, to CCC to CC to C, and at the lowest rate of CI, R, SD and NR (not rated). Junk bond status is really a NIG – a Non Investment Grade; and has more to do with a country’s ability to secure reasonable and advantageous interest rates on loans sought, than anything else. Many other countries have been downgraded over the course of this recession, including the US, UK and several countries in Europe.
Of course, it is not a position any country would want to find itself, but one from which we are working assiduously to extricate ourselves. So, Truth be told, in real layman’s language and for argument sake, we would have gone down from say a 6 to a 5, then from a 5 to a 4, from a 4 to a 3, from a 3 to a 2, and then from a 2 to a1 – ALL THIS OCCURED UNDER THE GREAT ECONOMIST, Owen Seymour Arthur. So, by the time the DLP took over Barbados’ credit rating was near the nadir. THE BLP GOVERNMENT UNDER OWEN ARTHUR NEVER HAD AN UPGRADE. I challenge them to prove me wrong. A further downgrade has, therefore, landed us at junk bond status from where we are climbing, but we are on the right track once we stick to the current medium term fiscal strategy.
One may argue around the edges, but the substantial point stands – the Owen Arthur administration had five downgrades, but NEVER had an upgrade. When we took office, we were near the bottom in terms of ratings.
The blogmaster invites you to join the discussion.