OUR CARIBBEAN: Downgrade politics in T&T, Barbados
A CONTINUING surprise for me as a journalist of the Caribbean region is the alacrity with which political parties so often rush to uncritically embrace negative fiscal ratings by international financial institutions and agencies as well as also adding own biting criticisms of governments’ economic policies. Of course, that’s while they occupy the opposition benches in parliament.
Latest examples of such posturings have been displayed, within a matter of days, here in Barbados and earlier in Trinidad and Tobago. In the case of this nation, it was its humiliating placement “at the bottom of the list” by the International Monetary Fund (IMF) for “poor economic performance” this year among a dozen Caribbean states.
The IMF’s gloomy projection significantly differed with that offered by Central Bank Governor, Dr DeLisle Worrell. He had earlier forecast economic growth between 1.05 and two per cent in his first quarter review, “principally on the strength of tourism” (the nation’s reputed major foreign exchange earner and a primary source of employment for Barbadians).
Then, last Friday, while Barbadians were celebrating the annual May Day holiday,the people of Trinidad and Tobago were to learn of the very surprising, hurtful disclosure that the United States-based Moody’s rating agency had downgraded their country’s credit rating from “stable to negative”.
Moody’s assessment was based, among other factors, on “persistent fiscal deficits” in the order of two to three per cent of GDP, and lingering dependency of state-owned oil corporations on government’s financing – currently at a period of dwindling income from the petroleum sector amid prevailing falling oil prices.
‘Day of shame’
Coming, as it did, amid mounting speculations of new parliamentary elections – likely to be announced later this month by Prime Minister Kamla Persad-Bissessar – Opposition Leader of the People’s National Movement (PNM), Dr Keith Rowley, was ready with a verbal savaging of the government in deeming Moody’s downgrade “a day of shame” for Trinidad and Tobago (headlined by the Express newspaper).
As viewed by the PNM’s current first-term leader, the country is saddled with a ‘spendthrift’ first-time People’s Partnership administration with little respect for proper management and accountability.
But both the finance minister Larry Howai – a former top brass in private sector commercial banking – as well as the Trinidad and Tobago Central Bank were quite dismissive of Moody’s downgrade.
‘Economy remains strong’
For Howai, while other countries – among them South Africa, Russia, Japan and Costa Rica – had also suffered Moody’s “downgrade” ratings, due primarily to the country’s decline in “commodity prices”, Trinidad and Tobago’s “economy remains strong”. He referenced, among examples, the country’s Heritage and Stabilisation Fund, currently pegged at US$5.6 billion, and with national reserves standing at US$10.8 billion for the first quarter this year.
Well, unlike Trinidad and Tobago, Barbados is certainly not in a national elections mode and the political strokes are, consequently, different. For a start, new elections are not constitutionally due before February 2018.
And while the PNM could see some political advantages in the Moody’s downgrade assessment for Trinidad and Tobago, the Barbados Labour Party’s crafty leader, Mia Mottley, would be quite mindful that, for all the real and imagined gloom, she needs to be circumspect in her own assessment of the IMF’s humiliating “bottom of the list” economic projection for Barbados in 2015.
For a start, and in the absence at the time of writing today’s column of any independent informed assessment, Minister of Finance Chris Sinckler has already declared himself as being “unfazed” by the IMF’s gloomy forecast. He contends that the Fund was “off target” and that the Government remained “on the right path”.
Time will tell.
Nevertheless, it could prove helpful if, generally speaking, parliamentary opposition parties – not without informed and experienced advisers of their own, and some also located in reputable independent organisations and institutions – cut the syndrome of rushing to applaud negative assessments by foreign-based credit rating agencies and international financial institutions instead of apparent eagerness to too often make responses with an eye at the next parliamentary elections.
• Rickey Singh is a noted Caribbean journalist.