Over the weekend, Elcott Coleby, deputy director of Bahamas Information Services, sent a release to the press to announce the downgrade by Standard & Poor of Barbados\u2019 financial rating \u2013 the second in four months. Barbados is listed in tenth place as one of the world\u2019s most heavily indebted countries. From a rating of BB+ it has been dropped to BB-.<\/p>\n
\u201cThe downgrade reflects the mounting external pressures associated with a persistent current account deficit and external financing challenges, as well as the ongoing high fiscal deficit largely because of a substantial fall in government revenues as a result of the weak economy,\u201d the agency said.<\/p>\n
\u201cIn reacting to the news,\u201d according to the Barbados press release, the \u201cformer president of the Economic Society, Ryan Straughn, said the latest rating has not come as a surprise and suggested that the writing had been on the wall for some time since Government did not go ahead with the expenditure cuts announced by the Minister of Finance in the August 2013 Budget.\u201d<\/p>\n
But what interested us even more was Mr Coleby\u2019s warning at the top of the Barbados release. \u201cThis,\u201d wrote Mr Coleby, \u201cis where the Bahamas could be headed if it fails to act \u2014 sooner than later. So far, the Bahamas government has successfully staved off another downgrade in 12 months \u2014 thanks to its fiscal consolidation plan. Barbados was not so lucky.\u201d<\/p>\n
Nor will the Bahamas be, if it does not get its reckless spending under control.<\/p>\n
However, the point that rankles Bahamians is government\u2019s apparent reluctance to cut unnecessary spending. Bahamians resent having to be taxed to support the status quo. Unless government sets an example, Bahamians will grumble. This is the frequent complaint that we hear within the ranks of the unions.<\/p>\n