Prime Minister Christie Speaks of S&P Credit Rating

Prime Minister Perry Christie said that when a Credit Rating Agency speaks to expenditure not being sufficiently controlled, they also acknowledge that in part that is due to the impact and cost of hurricane restoration.

The Prime Minister’s remarks came during the official groundbreaking ceremony for the construction of an Administration Complex in Eight Mile Rock on Thursday morning. He used the opportunity to talk about the recent downgrading of The Bahamas’s Credit Rating by Standard and Poor’s.

He said that S&P decided to downgrade the Bahamas to Junk status, but that Moody’s, looking at the same information as S&P, decided not to downgrade The Bahamas, and instead have kept The Bahamas’ Credit Rating at Investment grading.

“Even in S&P’s action, there is a silver lining,” said Prime Minister Christie. “They said that they would upgrade us from negative to a stable investment grade. They have a sense that we may be too optimistic about this one development in The Bahamas which, by the way, led them to downgrade the country in the first place, Baha Mar.”

He said that when they first downgraded the country because Baha Mar did not open on time, he began working in his office late at nights with a team of people to try and resolve the problems with China and Baha Mar.

“We committed ourselves to bringing about a positive result for this country,” the Prime Minister added. People called me a liar when I spoke about a positive outcome with the entire Baha Mar deal.  They called me delusional, subjecting the Prime Minister of The Bahamas with a responsibility of leading the Government of The Bahamas in dealing with an adverse impact, which did not come about through negligence or bad decision making of the Government.

“It came about because a Developer came into my office, asked me to intervene on his behalf and negotiate with the China Import/Export Bank. And the day when I told him that we had made a breakthrough and had a solution to it, that’s the day he filed for bankruptcy.

“We worked and we worked and brought about a result in The Bahamas that we thought would please and accommodate itself to the position of Standard and Poor’s.”

Prime Minister Christie pointed out that having the country hit by two major hurricanes in a short space of time dealt a major blow to the country’s financial purse, which resulted in the government having to borrow money to help bring about restoration.

“We’ve had an extraordinary experience in The Bahamas in having in the space of one year two major hurricanes – Joaquin and Matthew,” Prime Minister Christie pointed out. “We were estimating Joaquin which hit the Southern islands of The Bahamas, to be in the amount of $150 million and we’re estimating Matthew  (inclusive of personal damage for Bahamian households) to be in the amount of about $600 million.

“We’re talking about a country that has been devastated, not by a decision of government, but by the allowance of God. They call it ‘an act of God’. There was nothing we could have done, other than to pray that no one lost their lives.

“We have to accept the reality that climate change is here. We don’t need to bring any new science into this. Because of the low lying islands that make up The Bahamas, we run the risk of hurricane disasters overwhelming this country. All of this has to be built into our budgets.”

This, he said, is the challenge.

The Prime Minister noted that a government, when faced with its people losing homes, having negative impacts on their homes, could either pretend that it’s not the government’s problem and have people scrap to get by, or they could decide that it is their obligation to govern this country, and recognize always that there are people who live in this country who are unable to do certain things for themselves because of unemployment or having children with special needs.

“We have to do something when people are devastated by natural disasters and we are not going to apologize for having done something about it,” the Prime Minister said.

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