Saturday, May 1, 2010

Bahamas Government Debt To Worsen

GOVT DEBT TO WORSEN
By CANDIA DAMES ~ Guardian News Editor ~ candia@nasguard.com:


A rising government deficit and persistent revenue vulnerability will continue to drive government debt up in the near future, according to international credit rating agency Standard & Poor's, which says in a report that government debt as a percentage of gross domestic product (GDP) will climb to more than 50 percent by next year.

The report fleshes out the details of the agency's initial assessment of the Bahamian economy and the fiscal and monetary conditions revealed late in 2009.

While the expanded report points to increasing debt levels — as did the initial assessment — all the news is not so gloomy.

As it regards unemployment, the agency projects that joblessness will drop from 14.5 percent this year to 12 percent next year. A further decline to 10 percent is projected in 2012.

But S&P said foreign direct investments will slow further this year, and it repeated previous projections that the economy will likely decline by 0.5 percent in 2010 and grow in 2011 for the first time in three years. The growth next year is expected to be 2 percent.

While debt levels are projected to remain pressured in the immediate future, the agency made the point that current government debt levels temporarily provide some space for fiscal weakening compared to similarly rated countries. Compared to many of its peers, The Bahamas' debt levels are in a favorable position, the report noted.

"We project debt levels to rise, but domestic markets will provide most of the financing," said S&P.

The agency projects that general government debt — which stood at 32.8 percent in 2006 — will climb to 49.5 percent this year, move up to 51.9 percent next year and increase further to 52.4 percent in 2012.

Minister of State for Finance Zhivargo Laing noted last night that the new report provides a more comprehensive story on what had been published by Standard & Poor's late last year.

Regarding the debt projections, Laing said the government will be able to comment more fully on what its views are on where the country will likely be when the budget communication is presented next month.

Asked whether there is cause for concern as it regards debt levels, he said, "Any sound fiscal management program rests on wanting to control debt to the extent possible. In fact, nobody would borrow if they didn't have to, but where it is necessary it has been a part of the government's fiscal program for some time.

"In an extraordinary economic climate there's some extraordinary borrowing. We now have weathered the worst of it so we're now seeking to return to levels of borrowing and deficit spending that are more in keeping with what has been our objective in times past. So to the extent that we have no difficulty servicing our debt there is no concern. To the extent that we want to ensure that we don't continue to grow the debt to a place where that could be a problem one is always concerned to do that."

According to the report, the general government deficit rose sharply and likely will average 4.7 percent of GDP in fiscal year 2009/2010 and 2010/2011. General government deficits averaged 1.4 percent of GDP from 2000 to 2007.

The report explained that increased spending against a narrow revenue base, which has declined amid the economic recession, led to larger deficits.

S&P said the higher deficits reflect government policy to alleviate the social impact of the economic recession and to support growth. The report points to the government's unemployment benefit program, the temporary jobs program and accelerated capital works projects.

The agency said, "Deficit financing comes predominantly from domestic sources, a credit strength for The Bahamas. The structure of the debt remains favorable, though it has recently relied more on foreign debt. Domestic debt accounted for 90 percent of total debt in 2007, which declined slightly to 88 percent in 2008 and further to 80 percent in 2009."

S&P pointed out that the government had hoped to receive between US$200 million and US$300 million in proceeds from the sale of a 51 percent stake in the Bahamas Telecommunications Company in the first half of 2010 to alleviate financing needs.

"However, the government has once again postponed the privatization following seemingly disappointment with the bids and prices offered at the end of 2009," the report said.

The ratings agency said it expects foreign direct investments (FDI) to remain low in 2010.

"FDI totaled US$600 million during the first nine months of 2009, compared with US$1 billion in full-year 2008," S&P said. "We expect FDI to slow further in 2010 as tourism projects progress slowly."

The report said FDI projects that appear to have staying power are those that eventually will serve high-end customers or a niche group of tourists, as well as those that will provide residential tourism products.

The agency said, "Once buoyant prospects for a major expansion of tourism projects, totaling more than US$10 billion over the next five to 10 years, are more subdued."

In the report S&P repeats a controversial statement it made in a previous report.

It said, "After posting real GDP growth of 5.7 percent in 2005, momentum slowed sharply and then the economy contracted. In 2007, the increase in real GDP was a mere 0.7 percent as growth was interrupted, first by the elections and then by the new administration's protracted period of reviewing contracts after it came into office in May 2007.

"The review of $80 million worth of contracts and the eventual cancellation of a $23 million public contract for the straw market negatively affected investor sentiment and brought substantial disruption to the contracts' activity."

It noted that the straw market project did not move back on track until December 2009, when the government signed a construction contract.

As noted in its summary release at the end of 2009, the agency placed The Bahamas' sovereign credit rating at BBB+/Stable/A-2. This compares to the A-/Negative/A-2 rating it gave in November 2008.

Regarding the December 2009 rating, S&P said, "The stable outlook reflects Standard & Poor's expectation that the government will gradually reduce its fiscal deficit and will maintain a generally stable external financing profile. We do not expect The Bahamas' tourism product to improve sharply until the U.S. economic (and U.S. consumer) recovery has consolidated."

April 30, 2010

thenassauguardian

Friday, April 30, 2010

Ex-Progressive Liberal Party vice-chairman Melissa Sears is the focus of repeated attacks by PLPs on the Internet and in the political sphere

PLP 'bid to smear ex-chief'
By PAUL G TURNQUEST
Tribune Staff Reporter
pturnquest@tribunemedia.net:


PLP operatives are allegedly continuing a vicious smear campaign against one of their own colleagues, The Tribune has uncovered.

Having recently resigned from her post as vice-chairman in the Progressive Liberal Party, Melissa Sears has become the focus of repeated attacks by PLPs on the Internet and in the political sphere.

In their messages, some party supporters have sought to sully the former vice-chairman's reputation and have gone as far as to cast a cloud of suspicion over her friendship with a sitting FNM Cabinet Minister.

Yesterday, a source close to Ms Sears actually distanced himself from the party's official messaging on the issue, claiming he did not want his planned statement on the matter to be associated with what "the rest of the party" was seeking to do.

Ms Sears, he said, will make any statement she feels is necessary if and when the time comes.

In the meantime, however, the vice-chairwoman's resignation is continuing to be used as a political football among two of the most prominent warring camps within the party.

The attacks against Ms Sears has left some within the organisation to question the amount of damage this issue will ultimately inflict upon the party.

It has also left others calling for a shift in the messaging of the PLP and a "much needed change" in the way "sensitive matters are handled."

As it relates to the attacks on Ms Sears' name The Tribune was reliably informed that a current PLP Member of Parliament was the actual genesis of those reports.

In fact, we were made aware yesterday that an operative within the party was successful in transmitting a lurid text message to the Cabinet Minister's cellular phone seeking to disguise the message as a legitimate one from the former vice-chairwoman.

This message, it was said, would then have been posted online to embarrass Ms Sears and the Minister; destroying any possibility for the fledgling politician to ever return at any level of influence in the PLP.

It is understood that this message, has been forwarded to the relevant authorities to ascertain its origin for further investigations.

These attacks, along with others, have left some right-thinking PLPs disgusted with the way the party has handled the resignation of Ms Sears.

Instead of seeking to coax the party supporter into re-thinking her decision, it was said that some within the organisation immediately went on the offensive and tried to "ruin her politically."

Speaking with The Tribune yesterday, Erin Ferguson, the political commentator and TV show host said that having known Ms Sears for a few years as a native Grand Bahamian himself, he was disappointed in the way the party was handling this "great young talent."

"This is just another example of the PLP displaying their ability to misuse and mishandle excellent young talent in the Bahamas.

"Melissa Sears has shown she is grounded in family, church, and community, and she is certainly a woman that serves as an example to any young woman as to how to go about serving your country as a good citizen. It's unfortunate in my opinion that she has been put through the political wringer of the PLP," he said.

Mr Ferguson added that countless other young people have been put through this unfortunate process and many others have refused to even engage these political parties as it is an "absolute waste of time."

April 29, 2010

tribune242

Thursday, April 29, 2010

National Drug Prescription Plan in Dispute

Drug plan in dispute
By CANDIA DAMES ~ Guardian News Editor ~ candia@nasguard.com


The National Insurance Board and the Bahamas Pharmaceutical Association have failed to reach agreement on the government's National Drug Prescription Plan, with a major disagreement erupting over markups for the drugs that will be a part of the scheme.

"You can't ask business owners to sign their own death certificates," said Dr. Marvin Smith, who heads the association.

The government plans to implement the national plan through NIB in August to increase access to cost-effective drugs for certain conditions. During the initial phase of the plan, patients who qualify will be able to fill prescriptions at no cost to them from participating private and government pharmacies.

Thousands of Bahamians who qualify for the plan are waiting for it to start. The plan is a key campaign promise of the Ingraham administration, which has touted it as a crucial initial element of a national health insurance program. The drug scheme's beneficial schedule will include prescription drugs and specific medical supplies deemed necessary by an attending physician for treating a chronic condition of a plan participant.

But NIB has so far failed in its efforts to get the Pharmaceutical Association onboard.

Smith said the nearly 50 pharmacies that are members of the grouping still have concerns about the markups that would be allowed under the plan, and will not participate under the current proposal.

He told The Nassau Guardian that NIB is proposing a 45 percent markup for drugs that cost at under $5; a 35 percent markup on drugs that cost between $5 and $25 and a markup of 25 percent on drugs that cost over $25. Added to the costs of the products would be a $3 dispensing fee per drug.

"There is no way that pharmacies can support, in this first phase, any markup that they're proposing," Smith said.

He said the pharmacies would not be able to survive under that proposal because they have numerous overhead costs that must be taken into consideration.

The association is proposing a 45 percent markup on pharmaceuticals that cost under $20; 40 percent on drugs that cost between $20 and $40 and a markup of 35 percent on drugs over $40. Under the association's plan, the dispensing fee would range from $3 to $5.

"We're not asking for excessive markups," Smith said. "We're saying let's get it to where people can survive, get it to where businesses could be steady and stable. That's all we want."

NIB Director Algernon Cargill said the plan will go forward even if an arrangement cannot be worked out with the Bahamas Pharmaceutical Association.

"We've negotiated markups based on a scientific review of similar plans throughout the region," Cargill said. "While our markup is at the highest level of all the similar plans that already exist in the region, we believe that markup allows for a fair and reasonable return based on the anticipated 35,000 new clients in the first phase and 100,000 in the final phase of the National Drug Prescription Plan.

"In our view, the markups that approximate 50 percent allow for a reasonable return and also allow for the pharmacies to provide for a high level of service to clients that ordinarily would not have visited their pharmacies because they primarily now go mostly to public pharmacies to receive their prescription drugs."

He noted that several pharmacies have already embraced the plan. Cargill said these include Walk-In Medical Clinic pharmacies; Betande Pharmacy; Lowe's Pharmacy; People's Pharmacy and Centerville Pharmacy. He said Wilmac's Pharmacy is also signing on.

According to Cargill, the contracts are flexible and pharmacies that sign them can opt out at any time without penalties.

"We are happy that we have a representative group of pharmacies in order to move the plan forward," Cargill said.

While Cargill admitted that no Family Island pharmacy has signed on as yet, he said the prescription drugs for Family Island locations will be available at public clinics.

He also said the biggest challenge with launching the plan right now is identifying the wholesalers who will provide the drugs to the participating pharmacies.

Cargill stressed, "The National Insurance Board is not insisting that all of the pharmacies sign on to the plan. We want the pharmacies that want to work in partnership in providing better health care services to Bahamians in The Bahamas and can do so with a reasonable profit."

But Smith told The Guardian, "Do you really want a plan that says only the giants who can afford to operate at a loss maybe a bit longer than other people are going to be involved? All that would do is deplete the sector of small businesses and if you only leave the giants then the government puts itself at risk because they would be the only ones who can actually pull a power play on the government. You need the small business persons."

He said, "We want to partner with the government in this initiative. We want this plan to work."

The initial phase of the plan will include NIB pensioners; people receiving invalidity benefits; minors 17 and younger and all full-time students up to 25.

During the later stages of the plan, a new addition to NIB contributions will be initiated to cover the plan.

April 29, 2010

thenassauguardian

Wednesday, April 28, 2010

PLP chief Melissa Sears 'offended' by party leader - Perry Christie's remarks

PLP chief 'offended' by Christie remarks
tribune242:


PLP CHIEF Melissa Sears quit her job as vice chairman because she was "offended" by verbal remarks made by party leader Perry Christie, The Tribune learned last night.

As speculation mounts surrounding her departure, it is being reported that she decided to resign following a meeting in Grand Bahama.

According to sources very close to the matter, Mr Christie was in Grand Bahama to rally the party's machinery sometime earlier this month. At this meeting, it was claimed, he made the point that he had "no time" for Ms Sears -- who was in earshot of the remark.

Although the comment was admittedly "harsh", one PLP source explained that the party leader was sending the message that he was aware of Ms Sears' alleged allegiance to other would-be leaders within the organisation.

"She was a known anti-Christie during the PLP convention and even before that. So he had to let her know that he was aware of that fact. In this (political) climate you have to do what you have to do," the source added.

When contacted for comment on the matter, PLP chairman Bradley Roberts said he doubted that Mr Christie would make such a remark, and directed The Tribune to speak to the party leader directly.

However, repeated attempts to reach Mr Christie proved unsuccessful, and messages left were not returned up to press time last night.

While Ms Sears' alleged allegiance to one faction or the other is not known officially, it has been reported that she was a staunch supporter of PLP deputy leader challenger Obie Wilchcombe who came to her defence in yesterday's Tribune.

In that article, Mr Wilchcombe said Ms Sears was an "outstanding young woman" who still has a career in politics.

"She is an outstanding orator and has her hands around the issues facing people. She believes in people and has committed herself to helping the least amongst us. Her decision does not mean her political life is over or her relationship with the PLP," said the West End and Bimini MP.

However, a former leadership candidate during the PLP's 51st National Convention in 2008, Paul Moss, said the PLP has to address the fact that the party is losing good and qualified persons "left, right, and centre."

Having resigned from the PLP himself, Mr Moss asked the public to question why "good partisan people" are incapable of having a voice and even staying with the party.

"The party's inability to have introspection to prepare itself moving forward to being the alternative to the government, they have not done that. They are trying to win at all costs. And I don't think that is going to work, even against a third party," he said.

April 27, 2010

tribune242

Tuesday, April 27, 2010

Bahamas Government considers strong action to adequately address the disposal of carbon-polluting items such as motor vehicles, tires and appliances

Environmental levy would be beneficial, minister says
By JIMENITA SWAIN ~ Guardian Senior Reporter ~ jimenita@nasguard.com:


The government is serious about taking strong action to adequately address the disposal of carbon-polluting items such as motor vehicles, tires and appliances, Minister of the Environment Dr. Earl Deveaux said yesterday.

The pledge to impose environmental levies was made recently in the Speech from the Throne.

Under the proposal, a $150 levy would be tacked on for an imported vehicle less than three years old and $200 for a vehicle over three years old. Fifteen dollars would be attached to washing machines; $15 to dryers; $10 to televisions and $10 to mattresses, among other items.

"At this point the levy will go into a special account and that will help defray the cost of eventual disposal whether it be to export it, to recycle it or to compress it or compact it," Deveaux said.

"You will have a dedicated stream of funding that would enable you to dispose of this thing that eventually needs to be disposed of."

A major concern at this point in New Providence is maintaining the landfill to make use of the 50-year life cycle, he said.

He added that the landfill should be managed in a way so that there could be income generated from recyclable material, which in essence would extend the life of the landfill.

The aim is to convert the waste to useful energy, Deveaux explained.

He noted that in 2003 the government approved a tipping fee at the solid waste facilities.

"That tipping fee was imposed on all solid waste coming into the New Providence facility and when that tipping fee was approved in the regulations, the schedule actually had attached to it another set of items that would attract an environmental levy," Deveaux explained.

Those items included, washers, dryers, refrigerators, microwaves, vehicles, all type of tires from cars, trucks, and motorcycles, the minister said.

"There is a schedule attached to each of them that indicates a cost for disposal. The idea is that when these items are imported into the country, brand new or used, attached to the cost of importing would be a levy that would be used to dispose of them when they are eventually disposed of," he said.

There are any number of derelict vehicles around New Providence and unless the market is good, he said the cars simply litter the landscape.

"When the fire broke out at the [derelict vehicle facility] a few months ago there were 400,000 tires there. Unless we have a means of converting them to energy of some sort or recycling them in some way, they harbor mosquitos, rodents and are a real issue to the public health," Deveaux said.

"...When somebody's refrigerator, washer, dryer, or any appliance reaches its useful life, many of them end up in the back of yards, many of them end up in the forests, some of them that are collected end up at the dump."


April 27, 2010

thenassauguardian

Monday, April 26, 2010

Melissa Sears resigns as a Progressive Liberal Party (PLP) vice chairman

Melissa Sears resigns as a PLP vice chairman
By NOELLE NICOLLS
Tribune Staff Reporter
nnicolls@tribunemedia.net:


RISING star in the Progressive Liberal Party, Melissa Sears, has resigned her post as vice chairman of the PLP.

Bradley Roberts, PLP chairman, said he received a resignation letter from Ms Sears on April 20. The letter did not indicate the reason for her resignation, and Mr Roberts said he has yet to speak with her to gain further insight into her reason for resigning.

Ms Sears made an impression on the PLP leadership in 2008 when she delivered a speech at the party's convention. She was voted into office during the October 2009 PLP Convention.

"Melissa is an outstanding young woman who has a career in politics. She is an outstanding orator and has her hands around the issues facing people. She believes in people and has committed herself to helping the least among us. Her decision does not mean her political life is over or her relationship with the PLP," said Obie Wilchcombe, West End Member of Parliament. Ms Sears endorsed Mr Wilchcombe for deputy leader of the party when he contested the seat last year.

"She was the bright star of the (2008) convention and demonstrated then her tremendous oratory skills and her passion for people and her courage and determination as a fighter, which is required in front line politics," said Mr Wilchcombe.

Ms Sears had been touted as a potential candidate for the PLP in Marco City, Grand Bahama. This seat was formerly contested by Pleasant Bridgewater, against the FNM's Zhivargo Laing.

Ms Sears grew up in Marco City, but Mr Wilchcombe said she would be a qualified candidate for a number of Grand Bahama constituencies.

He said she had never written to the party to express interest in being a candidate, or applied formally. However, the party had been trying to encourage her.

"We have over the years sought to convince her to be a candidate. There comes a time when a party must recruit and look for the best and the brightest and she has proven that she is prepared to serve and not to be served. So she is one of those persons who we certainly would love to see carry the banner and be a standard bearer," said Mr Wilchcombe. "I believe this might be considered by some a bump in the road or a step backward, but I don't see it that way."

April 26, 2010

tribune242

Sunday, April 25, 2010

An estimated 85-90 per cent of the engineering work on major Bahamas-based development projects goes to foreign firms

85-90% export 'guts' engineers
By NEIL HARTNELL
Tribune Business Editor:


An estimated 85-90 per cent of the engineering work on major Bahamas-based development projects goes to foreign firms, the Bahamas Society of Engineers' president telling Tribune Business yesterday that "the wholesale export" of such services "absolutely guts our entire industry".

Robert Reiss, who is also principal of Islands by Design/Reiss, said qualified Bahamian engineers were still being denied the opportunity to fully participate in their profession through the continuing tendency of both local and foreign developers, plus the Government, to look outside this nation on jobs that Bahamians can do.

"One of the key elements of my platform, a key tenet, is the fact that I want the Bahamas Society of Engineers to support the implementation of the Professional Engineers Act and Board and, beyond just the Act, supporting securing and keeping Bahamian engineering jobs for Bahamians," Mr Reiss told Tribune Business.

"For too long and too often, our engineering work in the Bahama goes to foreign firms. It's fine if there's a need for specialist expertise, but there's a wholesale export of our money, our opportunities. The dollars and the opportunities for Bahamian engineers, who have gone abroad to school to get qualified, to participate in our profession get exported. It absolutely guts our entire industry."

Emphasising that "this situation of having Bahamians do Bahamian engineering work is not insular or inward-looking", Mr Reiss said the drive to ensure qualified Bahamian engineers obtained work they were qualified to do would "improve our economic engine" by keeping dollars at home.

Mr Reiss, who has been heavily involved in water and wastewater treatment engineering work in the US and abroad, told Tribune Business: "Even though I'm Bahamian, I see the companies I compete against and beat in foreign locations very smoothly get work off the Government that I even have difficulty in getting shortlisted for.

"I would easily guess that 85-90 per cent of the engineering work on major development projects is done by foreign engineers."

Culprit

Mario Bastian, the Bahamas Society of Engineers' secretary, added that the Government was just as big a culprit as developers when it came to denying Bahamian engineers opportunities on projects they were perfectly qualified to perform.

Local expertise and knowledge would be harnessed on many projects by using Bahamian engineers, Mr Reiss argued, and the passage of the Act and set-up of the Professional Engineers Board, with its registration requirements, is viewed as a tool to aid this goal.

The Act requires foreign engineers to obtain a certificate of temporary registration from the Professional Engineers Board when working in this nation, and also joint venture with Bahamian engineers when working on major projects in this nation.

The Board, and the requirement that Bahamian engineers (and their foreign counterparts) be registered in all the disciplines they perform, will enhance consumer protection by letting Bahamians know exactly what an engineer is qualified to do, plus enable the sector to be self-regulating and put certification standards in place.

Mr Reiss praised developments such as Albany, the National Sports Stadium and the Lynden Pindling International Airport (LPIA) redevelopment for allowing Bahamian engineers to play a key role on those projects.

April 23, 2010


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