Lee blames Govt for downgrade

He made his case in a statement yesterday, Why did Standard and Poor’s as well as Moody’s downgrade Trinidad and Tobago in only 12 months? “Only one year ago the previous ratings received were ‘hopeful’, but now they have slipped into an indicator of economic doom and possible economic catastrophe. So what has led to this disastrous change?” He claimed the Government has run the economy in a very haphazard and ineffective manner.

Lee said the two agencies blamed the Government for poor economic management and excessive borrowing, which he claimed reflects a Government lacking vision and an economic plan, including measures for diversification and innovation.

He asked whether the downgrades plus the high debt of State enterprises have tarnished TT’s image on the borrowing market? Besides future difficulty in borrowing on the international and local market, the downgrades also pose a risk for State Enterprises (especially those in the energy sector) that have unsecured loans unsupported by collateral, he said. “So the Government must now inform the population if the international and local creditors will be calling upon these State-owned companies to secure the outstanding owed value.” He said creditors may call on the Government to guarantee the repayment of outstanding public sector loans issued unsecured at an economic period when TT’s credit ratings showed an ability to successfully fulfill its debt obligations.

“Now that ratings suggest this nation is in ‘junk status’ based on improper economic management by Government the pertinent question that those in authority must answer is how will the Government deal with this issue if it arises and what resources will be used as collateral to secure these debts?”