Barbados is one of the most diverse economies in the Caribbean. It’s certainly the most robust, drawing in revenues from a wide range of industries (tourism, business services, manufacturing, agriculture), which feed into the region’s most politically and economically stable state.
Barbados, as stable as Singapore or Switzerland, and a key economic and financial ally of the UK, US and Canada, suffers none of these travails. Yet its sovereign rating drags. In November 2013, Standard & Poor’s cut the long-term rating of Barbados to BB-minus from BB-plus, citing external pressures and a small current account deficit. The following month, Moody’s Investors Service followed suit, downgrading the island’s bond rating to Ba3 from Ba1.Why the rating agencies are wrong
|Glyne Harrison, CEO, First Citizens Bank|
And Barbados isn’t finished there. Next up: plans to become a globally-relevant stock market, thanks to the international securities market (ISM), set for launch as early as mid-2014, and to make it ever easier to set up and do business here. "Our ambition is to become like Singapore, where you can set up a business in minutes," notes Jeremy Stephen, president of the Barbados Economic Society.
All of which paints a far healthier – and a far more balanced – view of one of the world’s, and certainly one of the Caribbean’s, most diverse, stable and ambitious economies, than the skewed findings of the ratings agencies would imply. "When Moody’s and S&P evaluate a country they do it in my view with ‘statistical perversity’," says Sir Trevor Carmichael, a leading lawyer and chairman of Bridgetown-based Chancery Chambers. "They often fail to recognize the overall diversity and flexibility of a jurisdiction, and they lose sight of the unique fundamentals of that country."
He points for proof of Barbados’s golden future to rising business and leisure arrivals from overseas, the launch of the ISM, and the push to expand into new, more profitable, and higher-value services. This is an extraordinary island nation, run by extraordinary individuals. It may be underrated by the ratings giants, but the global investor and business community knows a good thing when they see it.