At the conclusion of the Caribbean Development Bank’s 40th annual general meeting held in Nassau this past week, CDB President Dr. Compton Bourne spoke to the credit worthiness of The Bahamas. He said the Bahamas Government pays particular attention to managing the debt and ensuring a strong fiscal position. “*Everybody knows this is a difficult time, but I don’t see any signs of irresponsibility.”*

This week The Bahamas signed a loan with the bank for $10.1 million for capital works projects in the Family Islands. President Bourne acknowledged that the regional does pay attention to credit rating agencies, but noted that more attention is paid to a member country’s quality of economic management. *”We pay attention to the purpose and benefits of the investment,”* he said. *”We haven’t discerned any real change in The Bahamas’ creditworthiness.”*

S&P recently downgraded The Bahamas’ long term A- rating to BBB+. However, Olga Kalinina of Standard and Poor’s, in attendance at the CDB meeting, said in an interview with the Nassau Guardian that the credit ratings agency fully believed the country would once again regain its former credit status. *”I think it will come with time because we do believe the destination is still attractive for FDI (foreign direct investment). We do believe the government is able to manage this transition period and to achieve a higher level of growth and that’s obviously very important for a small island nation (like) The Bahamas.”*

Earlier in the year S&P noted that its outlook for The Bahamas was stable as a result of fiscal measures implemented by the government to mitigate increases in debt. It is anticipated that this will be a major focus in the 2010-2011 Budget Communication to Parliament next week.

During the annual meeting, an $850 million contingency plan was established for The Bahamas and other Caribbean countries to draw from coming out of a recession – that is, the Caribbean Joint Action Plan. During the signing ceremony five leading international financial institutions active in the Caribbean reinforced their commitment to ensuring long-term economic growth across the region and resilience to the global financial crisis. These were the Caribbean Development Bank with $300m, the European Investment Bank with $100m, the Netherlands Development Finance Company FMO with $100m, the International Finance Corporation – part of the World Bank Group with $150m, and PROPARCO – the private sector arm of the Agence Française de Développement Group with $200m.
The Caribbean Joint Action Plan will enable more effective use of financial and technical assistance by encouraging a stronger focus on each participating institution’s experience and capabilities. Joint investment under the plan will concentrate on crucial economic sectors most impacted by the economic slowdown: Finance, tourism and infrastructure.