News
Challenging year 2012: A year in review in the Caribbean Community
Belize feared a bit better, with the government indicating in December it had reached an agreement with its creditors on restructuring the country’s US$544 million foreign debt, also known as the super bond. “This agreement is comprehensive, it is sustainable, and it will provide well in excess of US$150 million in relief to Belize,” a relieved Prime Minister Barrow said, after bondholders had earlier rejected an offer from the government on restructuring the debt and said they had hired lawyers after the expiry of a reprieve on legal action.
St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves aware of opposition criticisms that the local economy had gone into recession, said despite the slow recovery of the international economy, his administration was making efforts to ensure that “we have as much enterprise in the economic system to hasten the growth but we are also dependent very much on the vagaries of the international economy.”
In St. Lucia, the government of Prime Minister Dr. Kenny Anthony launched a multi-million dollar stimulus package in a bid to turn around a sluggish economy. Dr. Anthony said the construction stimulus program would help address some of the worst financial conditions now being experienced in recent years and praised the private sector for contributing towards the reality of the fiscal package.
Prime Minister Douglas, despite opposition criticism, maintained that the controversial Land for Debt Swap involving 1, 200 acres of State land in St. Kitts & Nevis would help ease the EC$900 million (US$333 million) owed to the National Bank.
“I want to emphasize that the Debt for Land Swap will reduce the Debt to GDP (Gross Domestic Product) ratio even further to well under 100 percent, and create even more fiscal space so that we can accelerate growth-related development initiatives while modernizing and strengthening our social safety net programs.”
The US-based rating agencies, Standards & Poor’s (S&P) and Moody’s, downgraded several Caribbean countries including Barbados and the Bahamas during 2012, with S&P also downgrading the Barbados-based Caribbean Development Bank (CDB) long term rating to AA with a warning that the ratings could plunge even lower if a regional government borrower fails to “clear its arrears” with the financial institution.
The S&P said that the decision to lower the ratings from AA+ to AA reflects “embedded credit risks in CDB’s loan portfolio.”
“Our view of the treatment of CDB as a preferred creditor by its borrowing member shareholders, which is established by practice, is a pivotal component of this analysis,” it added.
