On July 9, S&P Ratings downgraded Trinidad &Tobago’s sovereign credit rating to BBB from BBB+, which put it at one notch above speculative or ‘junk. TT debt thus retains the ranking of investment grade but the the downgrade brings it just one notch about the Moody’s ratng of Ba1, which denotes non-investment grade or ‘junk’, and which it gave TT debt just over two years ago on April 25, 2017.
One of the region’s best economic analysts, Marla Dukharan, noted in her recent review of TT’s debt position that Moody’s and S&P both project primary fiscal deficits, meaning that the TT government has to borrow just to pay the interest on current debt, indicating that the debt level is already unsustainable.
According to Ms. Dukharan, both rating agencies also suggest that foreign exchange controls by the Central Bank are limiting growth outside the energy sector and both expect the level of foreign exchange reserves will further decline, as it has for the past few years. Apparently most if not all of the problems being faced by the TT economy have to do with its lack of success in diversifying its economy so that it is less dependent on oil and gas.
This is not a column, however, about TT’s economic problems: I just mentioned the latest downgrade and the challenges faced by our neighbour to contrast it with what is happening in our own economy. If TT is suffering because it has been unable to reduce its almost total dependence on fossil fuel exports for its foreign exchange, we in Barbados are suffering from the opposite malaise, which is, not doing enough to develop our biggest foreign exchange earner - tourism.
Now that the government is doing everything it can to attract investment, especially in our tired hotel plant, we are coming face to face for the first time in many years with the issue for which there is no clear cut solution: Development versus preservation. Every country, city or residential development in the world has to face up to this issue at some point in their development.
In Barbados, the fallout from it is often right next door. This is especially true of our south coast, from Oistins all the way down to the Hilton. That’s partially because the prime minister herself has earmarked this entire coastal area for development, as well as bringing hotels to Bridgetown. So the recent spirited town hall meeting over whether or not developers should be allowed to build a ten-storey hotel on the site of the old Blue Horizon hotel, and also a new beach club facility in the beachfront car park opposite said hotel, was expected and will be duplicated probably at every such town hall assembled to discuss any new hotel project. But what really concerns me - and I say this with respect for all of the dissenters, many of whom in these cases happen to be my friends or colleagues - is that their objections are not only predictable but don’t seem to be able to accommodate any view of the bigger picture.
Which is that it is not optional for us at this juncture of our economic progress to take an easy come-easy go attitude to tourism investment. Every single local dollar we spend depends on a buoyant tourism market behind it.
The main issues brought to the fore at the second Blue Horizon town hall meeting (as reported in the NATION) were reasonable and centred around an independent Environmental Impact Assessment being done. Traffic flow on the south coast is not going to get any better whether or not that particular hotel goes up, and of course we cannot overburden the still fairly dicey operations of the sewage system, which is being improved with the construction of the permanent outfall at Worthing, but which requires a much larger plant to replace the current one.
But these, though critical factors in their own right, are all lesser matters than the main philosophical question of development versue preservation.
The fault line is somewhere between the high water mark, where private property is supposed to end and the surf, the space between being ours as citizens of Barbados.
My point is that everybody in this country needs to thnk about how to balance the stresses and strains over growing our economy with maintaining our beach access and our overall envronment, knowing that there is a trade-off.
But we have the ability to mitigate the negatives, and in some cases make them disappear. We have the ability to widen beaches - as can be seen at sections of the boardwalk on the same south coast - and we could also develop public picnic areas next door to any new beachfront development where there is remaining government land and deem it part of the public patrimony. We can review and upgrade that high watermark legislation to settle the metaphorical cracks in the fault line appearing at Sandals a little further east of Accra Beach, and, for a moment last year, at the Crane Beach.
There are others. I am not going to get on one or the other side because I find it hypocritical to attack developers when this country badly needs investment. Growing our economy means we agree to have more people from abroad in our midst and more accommodations they expect in the price category they have selected for their vacation. It is not a matter of who you like or don’t like: it is understanding that we must have investment which earns foreign exchange in tourism no matter what other great things we do to earn our keep in the world.
Fighting each other will only lead to the demise of our economic structure, which we are all otherwise committed to saving.