February 1, 2023

Peter Binose: Moody’s Latest Report on Saint Vincent and the Grenadines

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Moodys_logo_blueBy Peter Binose

After reading the current Moody’s outlook report, I no longer will be able to believe any Moody’s report about any country anywhere.

Anyone living in SVG knows things have never been worse. Businesses are closing at an alarming rate. We have a government that has bankrupt the country. Our banks are in trouble having to hoist charges on depositors which the depositors refuse to pay and are withdrawing their money and closing accounts.

When the Argyle airport opens the government will never be able to fund the running of it or be able suffer the huge losses which it will generate. Not one single international airline has registered to fly into Argyle. The Cuban engineer has refused to sign off on the airport because of a possible extremely dangerous condition of the runway. The land owners at Argyle still have not been paid for their lands and no proposal has been made to pay them after in some cases nine years.

The PetroCaribe deal is likely to implode because of what is happening in Venezuela and the original deal calls for all outstanding amounts to be repaid on demand. So loans from PetroCaribe may well be demanded for repayment forthwith at any time. Or the debt may be sold by the Venezuelans to a company that specializes in debt recovery.

Tourism has just about totally collapsed in all sectors; murders and robberies of boat tourist has brought the charter industry to a sudden and instant halt, some operators saying it’s like a tap being turned off.

Agriculture has just about totally collapsed and the government has not included any financial help or expansion in the 2016 budget.

All the islands infrastructure is falling apart which includes government buildings and roads. Many side roads are actually impassable by vehicle.

The government has borrowed so much money that we will never be able to repay the debts in any Vincention persons, adult or baby, life time.

One of the things always in my mind is the statement by Prime Minister Gonsalves that he is here to complete the work of Maurice Bishop the Marxist-Leninist revolutionary who carried out a coup d’état and took over Grenada by force. Gonsalves was part of that in a few days after the coup writing speeches for Bishop and riding in his car to meetings. One of the things that Bishop did was to instruct his central committee and those in the Ministry of Finance to keep two sets of books so a fraud could be carried out against the IMF and people like Moody’s. All that I have written in this paragraph is documented fact and is recorded in public records. The statement by Gonsalves I have asked a dozen times if the work of Bishops which he is going to complete excludes the two sets of books method, never an answer to that question.

I just cannot believe findings and opinions of Moody’s, but I submit below their latest report.

New York, May 19, 2016 — Moody’s Investors Service, (Moody’s) has today changed the outlook on the Government of St Vincent and the Grenadines’ B3/NP issuer and B3 government bond ratings to stable from negative and affirmed the ratings.
The rating action reflects our expectation that faster growth and lower fiscal deficits will keep St Vincent’s debt metrics consistent with B-rated peers. Real GDP will likely increase closer to 2% this year and next, after averaging only 0.5% per year from 2010 to 2015. We forecast debt will end at 260% of revenues in 2016, similar to the 234% median for ratings peers.
The stable outlook reflects our view that while debt will likely continue to rise in the next two years, the increase will be moderate and debt affordability will continue to be supported by low interest funding from multilateral and bilateral creditors.
The local currency ceiling remains unchanged at Ba3. The foreign currency bond and bank deposit ceilings also remain unchanged at Ba3/NP.
RATINGS RATIONALE
RATIONALE FOR AFFIRMATION OF ST VINCENT’S B3 RATING
After years of weak economic growth St Vincent is poised for a modest recovery, with real GDP forecast to grow 2% on average until 2018. St Vincent, like most other Caribbean nations, is highly dependent on tourism, which represents almost 25% of economic activity, either directly or indirectly. Most tourism is from the US and with the recent economic recovery in the US, growth has also picked up in St Vincent. Last year stay-over tourist arrivals rose 6.6% relative to 2014, compared with an average increase of only 0.1% since 2010.
Further growth may result from the opening of a new international airport. In construction since 2008, lack of necessary funding has delayed the start of operations of Argyle international Airport. Since currently there are no direct flights to the capital city of Kingstown from North America or Europe, the new airport will likely lead to an increased flow of tourists, a development we anticipate will have a multiplier effect on the economy.
Economic growth should help limit the increase in the debt burden, which remains on par with peers but has been rising in recent years. Debt to GDP will end at 72% this year, compared to 60% in 2012. Low interest funding from developments banks has helped keep interest payments stable, despite the increase in debt. We estimate interest payments will represent 9% of revenues in 2016, a similar percentage as in 2012, and lower than the B-rated median of 10%.
St Vincent’s B3 rating remains constrained by its small and undiversified economy. The country is highly susceptible to weather-related shocks and it relies heavily on grants and multilateral lending for its funding needs. Fiscal flexibility is limited as well as overall policy effectiveness reflecting a weak institutional framework and lack of timely and adequate macroeconomic data.
RATIONALE FOR ASSIGNING A STABLE OUTLOOK
The stable outlook reflects our expectation that the fiscal deficit will remain moderate over the next two years limiting the increase in the debt burden. Fiscal deficits averaged 3.5% of GDP since 2011 but that should fall to 2.5% in 2016, on the heels of increased tax compliance efforts and faster growth. The government aims to reach fiscal results close to balance by 2018, an ambitious target which we anticipate will be extremely hard to reach given historical performance.
WHAT COULD MOVE THE RATING UP/DOWN
We see limited potential for upward rating changes in the immediate future. Faster growth driven by the completion of Argyle International Airport and the expected associated increase in FDI in the tourism sector would be credit positive and supportive of the rating. A significant strengthening of the government’s balance sheet through a marked reduction in debt metrics or diversification of funding sources would place upward pressure on the sovereign’s rating. A significant reduction in external vulnerabilities, particularly a drop of the current account deficit which reached almost 30% of GDP last year, would also create upward pressure.
A further deterioration of the government balance sheet, the assumption of contingent liabilities coming from state owned companies, or increased commercial borrowing to finance potential cost overruns related to the Argyle airport would be credit negative. Downward pressure on the rating would also arise if access to grants and concessional finance were to deteriorate, or if a large external shock – such as a major hurricane – were to jeopardize balance of payments sustainability.
GDP per capita (PPP basis, US$): 11,009 (2014 Actual) (also known as Per Capita Income)
Real GDP growth (% change): 1.6% (2015 Actual) (also known as GDP Growth)
Inflation Rate (CPI, % change Dec/Dec): 0.5% (2015 Actual)
Gen. Gov. Financial Balance/GDP: -2.8% (2015 Actual) (also known as Fiscal Balance)
Current Account Balance/GDP: -29.6% (2015 Actual) (also known as External Balance)
External debt/GDP: 46.8% (2015 Actual)
Level of economic development: Low level of economic resilience
Default history: No default events (on bonds or loans) have been recorded since 1983.
On 17 May 2016, a rating committee was called to discuss the rating of the St. Vincent and the Grenadines, Gov-t of. The main points raised during the discussion were: The issuer’s economic fundamentals, including its economic strength, have materially increased. The issuer’s governance and/or management, have decreased. The issuer’s fiscal or financial strength, including its debt profile, has not materially changed.
The principal methodology used in these ratings was Sovereign Bond Ratings published in December 2015. Please see the Ratings Methodologies page on www.moodys.com for a copy of this methodology.
The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody’s may I ask you a question, how much of your report is based on information given you by the Minister of Finance and the Ministry of Finance?

Anyone who would like to know the content of the Maurice Bishop instructions regarding bookkeeping fraud and would like the reference for those public records please email me. Those included in the fraud instructions were the Cuban government and the USSR. It can also be viewed without restriction on microfiche in Maryland USA.

Peter Binose
[email protected]

[I am not accusing, alleging, expressing or implying that Prime Minister Ralph Gonsalves or Minister of Finance Ralph Gonsalves has done anything illegal or is involved in any fraudulent act now or in the past. What I have written is fact and I am asking questions because that is what investigative journalist’s do, investigate. None of this is new I and others have written about it many times]

DISCLAIMER: The opinion, belief and viewpoint expressed by the author do not necessarily reflect the opinion, belief and viewpoint of iNews Cayman/ieyenews.com or official policies of iNews Cayman/ieyenews.com.

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