Moody’s downgrade ‘no surprise’
Barbados is afflicted with “an implementation deficit disorder” that is preventing it from taking action to rectify the country’s economy.
Instead of taking steps to boost the economy, the country was talking a lot about what needs to be done but is failing to fulfil its own promises.
So said Charlie Skeete, a retired senior economic adviser of the Inter-American Development Bank, who told the Midweek NATION yesterday in the wake of Moody’s Investors Services’ downgrade of Barbados credit rating “it is very clear we are not making progress, not behaving like adults. In fact, I have come to the conclusion as others have observed that on the part of the authorities there is an implementation deficit disorder.
“We are not doing the things that even we said as early as November last year that we would do. We are not doing them.”
Skeete, a former Barbados ambassador in Washington who was once permanent secretary in the Ministry of Finance, complained that Barbados was making promises about economic reforms and pledging to take steps to kick-start the economy but doing precious little.
“You cannot have a reform programme announced publicly, negotiated and discussed with the International Monetary Fund and then cherry pick what you will do and when you will do it, contrary to targets laid out in the programme itself,” Skeete said in an interview from his home in the suburbs of Virginia, just outside of Washington D.C.
“When you act in that manner, then you are not serious,” he charged. “Sooner or later Barbados will have to return to the market. When it does, what will the purchasers of Barbados bonds ask themselves? They will ask what are the institutions whose job it is to report on the fiscal and monetary health of Barbados, what is their assessment of the prospects of us being repaid. They are all saying loud and clear they are not very good unless certain things are done.”
Skeete complained that instead of tackling the economic problems and living up to its own programme and timetables, some in Barbados were engaging in “fruitless and stupid debates” about sovereignty and outsiders telling the country what it should do.
“That’s not an adult conversation,” he charged.
Skeete said that Moody’s decision to downgrade Barbados didn’t come as a surprise to him because Barbados itself had put the Wall Street firm in a position in which it had to downgrade the rating.
“I was not surprised by the action because what else could Moody’s have done? The action was predictable,” said Skeete.
“In my view, Moody’s action could have been avoided by a display of willingness to implement a programme that already had been announced.”
For instance Barbados had promised to study and reform the statutory bodies because the Government itself had said there were too many, about 19 in all, and some of them were dysfunctional,” Skeete recalled. “What has become of that? There was a commitment by the Government to reduce expenditures on the two largest categories of expenditure on the fiscal account – wages and salaries and subsidies and transfer. Not only did they not decline but those two areas actually increased.”