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This government is devaluing our international credit standing at a record pace. If we are downgraded again we will be one step away from being officially classified as Junk, making borrowing more difficult and the cost more expensive. We will then have gone from the star credit in the region just a few years ago to Junk Bond Status in two budgets.

This is the cost of this government’s fiscal incompetence and lack of imagination of how to deal with economic problems that are worsening by responses that are plenty of talk and little action. Too little, too late. Barbados cannot afford to be downgraded by international investors twice in two years while the Guyana economy reports this week 2.7% growth for the year so far.

The Government persistently says that they have everything under control. If this government means by under control, credit downgrades towards junk, an 8% rise in the cost of living last year, unemployment rising from 6.7% to virtually 10% and a 4.8% drop in GDP this year, I shudder to think what we will have next year when the fiscal and reserve position will be spinning further out of control.

It is clear from the comments of all of the international agencies and the Central Bank of Barbados that there will have to be further belt tightening by the Government to improve the public finances.

It is imperative that the Government discuss these further cuts in public spending that may come with Barbadians given its propensity to maintain spending on non-essential political expenditure like Constituency Councils while applying cuts to essential areas like health and law enforcement.

It is also now urgent that the Government act decisively in implementing the recommendations from CARTAC for the remeasurement of the Barbados economy, which has been in the Government’s hands for about 6 months. This report shows that the Barbados economy is underestimated by about 15% to 20%.

If this is done, the debt to GDP Ratio for the national debt will move from 96% to 84%. This will provide some limited elbow-room so as to avoid more severe government cuts affecting Barbadian households and businesses.

The question must be asked by the public and answered by this government - why did the Minister of Finance not ensure that this action was taken urgently so as to possibly head off the downgrade by international rating agencies, Standard & Poors and Moody’s.

These agencies have shown that one of their primary concerns triggering the downgrades has been the level of debt, as it relates to the size of the economy.

It becomes clearer every day that the Government is at a loss as to how to manage the recession and is so lacking in confidence that it will not come to Barbadians with the truth. The Barbados Labour Party is not criticizing for the sake of it.

We know that things could be better and we have tried to warn the Government that their policies were not going to have the desired effect. Our only desire is for Barbados to ride out the recession and to position ourselves to capture the growth cycle.

I am therefore urging the Government to offer anew plan as to how we are to do so. If there is an existing plan it is clearly not working. In addition, and as a matter of urgency, we urge the Government to implement the re-measurement of the economy by Cartac.
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