Rev. Fr. Sebastian Campbell - Chairman of the National Heroes Committee says: ...parliamentarians are “lazy” in the naming of national heroes in The Bahamas throughout the years

Campbell: Parliament “lazy” in naming nat’l heroes

Travis Cartwright-Carroll
Guardian Staff Reporter
travis@nasguard.com

Chairman of the National Heroes Committee Rev. Fr. Sebastian Campbell blasted parliamentarians for being “lazy” in the naming of national heroes in The Bahamas throughout the years.

Campbell spoke at a state-recognized funeral for Progressive Liberal Party (PLP) co-founder William ‘Bill’ Cartwright at St. Gregory’s Anglican Church on Carmichael Road yesterday.

Campbell said he met with the Cabinet last week to discuss the funeral and proposed that Cartwright be referred to as the “honorable William Wilton Jose Cartwright, national hero”.

“Some around the table almost had my head,” he said.  “I was told that only Parliament could give such a designation. I told them under my breath ‘that’s nonsense’.

“On the January 10, 2007, the National Heroes Committee designated William ‘Bill’ Cartwright as honorable for life on behalf of the Bahamian people who are the true sovereign of any country.

“Parliament of The Bahamas has been extremely lazy in this regard. To date only one person, I believe, the late Sir Milo B. Butler, has been declared a national hero by Parliament.

“We wait patiently for people of the stature of ‘Bill’ Cartwright to die then we flirt with the term national hero of the first order. This is our national character on which we seem not to be ashamed.”

Campbell noted that people of “lesser pedigree” than Cartwright overshadow him in accolades.

“Those who sacrificed nothing, gave up nothing, now have roadways and superstructures named in their honor,” Campbell said.

He continued: “And many of today’s players in the political platform know nothing about William ‘Bill’ Cartwright, Cyril Stevenson and [Sir] H.M. Taylor. No wonder tributes paid in recent days to Cartwright lack so much substance.”

The men founded the PLP in 1953.

Cartwright died at 89.

He spent the last two years of his life in an old folks home, before being taken to hospital in the days before his death.

Cartwright, a native of Long Island, represented Cat Island in Parliament for seven of the 20 years he devoted to public life.

PLP Deputy Leader Philip Brave Davis said at Cartwright’s memorial on Friday that The Bahamas failed Cartwright.

At the funeral yesterday, Prime Minister Perry Christie agreed with Campbell that Cartwright deserves special recognition.

Christie said the government would allow The College of The Bahamas to begin immediately to record the history of the country to “fill in the gaps that have been left by those who have offered their own experiences”.

“We have an obligation as a country to do something about this deficit that the Rev Fr. spoke about, and quickly,” Christie said.

“To the family...I have indicated as the leader of the PLP on the one hand that I would move to ensure the upliftment of the names of those who are a part of the original visionaries and [their] name in the annals of our party, so that henceforth we will no longer have to guess, but will be properly lifted and institutionalized.

“So from a party perspective the history will be complete.”

Jun 19, 2012

thenassauguardian

Caribbean Blog International

The Bahamas nears " the ranks of 'Third World' nations via the rapid rise in the national debt... ...with an International Monetary Fund (IMF) report warning that our nation's 57.6 per cent debt-to-GDP ratio has passed the threshold at which it will act as "a drag" on its economic growth

Debt 'Pushing Bahamas' Deeper Into Third World


By NEIL HARTNELL

Tribune Business Editor

THE Bahamas has "pushed ourselves further into" the ranks of 'Third World' nations via the rapid rise in the national debt, with an International Monetary Fund (IMF) report warning this nation's 57.6 per cent debt-to-GDP ratio has passed the threshold at which it will act as "a drag" on its economic growth.

James Smith, a former Central Bank governor and now-Ministry of Finance consultant, told Tribune Business that the Bahamas had "dug ourselves a hole" with a national debt projected to hit $4.613 billion by end-June 2012, adding that its fiscal woes were begin to resemble "more and more" those of its many troubled Caribbean neighbours.

As he acknowledged that it would be "very difficult" to get the Bahamas' fiscal deficit and national debt back on to a sustainable trajectory, Mr Smith's comments were given further credence by an IMF paper, published on Friday, which showed this nation's debt-to-GDP ratio was now likely to 'drag down' its economic growth.

The paper, Threshold Effects of Sovereign Debt: Evidence from the Caribbean, analysed the Bahamas and 12 other regional nations, and found that above a 55-56 per cent debt-to-GDP level, any further increase in that ratio would impede economic growth.

The Bahamas, which is projected to have a total debt-to-GDP ratio of 57.6 per cent by month's end, according to government statistics, has already breached that barrier.

"The main finding is that there exists a threshold debt to GDP (GDP) ratio of 55-56 per cent," the four authors of the IMF paper found. "Moreover, the debt dynamics begin changing well before this threshold is reached.

"Specifically, at debt levels lower than 30 per cent of GDP, increases in the debt-to-GDP ratio are associated with faster economic growth. However, as debt rises beyond 30 per cent, the effects on economic growth diminish rapidly.

"And, at debt levels reaching 55-56 per cent of GDP, the growth impacts switch from positive to negative. Thus, beyond this threshold, the debt becomes a drag on growth."

Tackling the rapid rate of increase in the Bahamas' fiscal deficit, projected to hit a record $550 million under the GFS measurement during the 2012-2013 fiscal year, and the national debt could arguably be the Christie administration's greatest challenge over the next five years.

But, beyond some revenue enhancement measures largely left in place by the former Ingraham administration, pledges of tax reform and efforts to get the private sector going, it has yet to lay out a clear strategy for containing the fiscal deficit and national debt.

"The trend is still very worrisome," Mr Smith conceded, "because it's very difficult once you've let the horse out of the barn. It's very difficult to get it back".

He argued that the projected $550 million fiscal deficit for 2012-2013 was largely "a catch up from all the expenditure that has taken place", meaning it has resulted from extra debt servicing and spending commitments made by the former Ingraham administration.

"You couldn't even roll it back," Mr Smith added. "If you stopped everything, it would be more costly and would put a brake on what little growth there is.

"There's going to be no quick turnaround, as the world economy is still sluggish. By and large we have dug a hole for ourselves."

The former finance minister and Central Bank governor told Tribune Business that it was "a fair assessment" to argue that the Bahamas' fiscal predicament was due more to spending increases, particularly on the Government's recurrent or fixed costs, as opposed to the revenue side of the equation.

"In the last year or so we seemingly outspent the fall off in revenues, and from a policy perspective we should have been holding back when we realised we were not emerging from recession, at least not at the pace the US was," Mr Smith said.

A report by the United Nations' Economic Commission for Latin America and Caribbean (ECLAC), released on Friday, blamed the Bahamas' 2010-2011 nominal fiscal deficit of 4.7 per cent on spending increases that outstripped a 10 per cent rise in revenues to a sum equivalent to 17.7 per cent of GDP.

"The improved revenue was offset by a substantial nominal rise in expenditure to 22.9 per cent of GDP," the ECLAC report noted.

"Current expenditure reflected a sharp increase in payments for goods and services, and higher debt interest payments as government borrowing mounted. Growth in capital expenditure more than doubled with major investments in road infrastructure and in the airport expansion project."

Mr Smith, meanwhile, told Tribune Business that the Bahamas effectively needed an 'out of the box' game changer, something not associated with its traditional industries, to reverse the decline.

"We need some kind of external something we didn't plan for to get us quickly out of this," he added. "The things that we can predict, nothing seems to give us the sufficient impetus that we need in the short-medium term.

"We're beginning to look more and more like the rest of the Caribbean," Mr Smith told Tribune Business, referring to the likes of Barbados, Jamaica and St Lucia, all with debt-to-GDP ratios of around - or above - 100 per cent.

"We've been trying to pull ourselves so hard out of the Third World, but seem to have pushed ourselves further in. It's really going to take a combined effort - the labour has got to become more productive, the investment support machinery has got to be more efficient. We've simply got to work a lot harder as a country. It's not business as usual."

The bulk of Bahamian GDP was derived from tourist spending, but Mr Smith questioned whether US visitors - who still account for over 80 per cent of stopovers - would return to pre-recession spending levels even if there was recovery at home.

"We don't have the level of tourist expenditure needed to support increased GDP growth," he added. "To the extent that we are using subsidies to the tourism sector in terms of assisting the hotel industry, the likes of Companion Fly Free, we are actually getting less spending per tourist dollar, as we are actually paying to get them here. We're not getting the same bang for the buck."

The authors of the IMF paper urged the Bahamas and others above the 55 per cent debt-to-GDP mark to "adopt policies that do not impede growth" by setting the ratio on a downward trend.

Acknowledging that it was difficult for the Caribbean to embark on fiscal consolidation, given the recession's hangover and high unemployment levels, the IMF paper urged governments to combine with the private sector to "present more innovative ideas, and rehash some of the current policies for the region:".

The authors, for instance, called for "greater progress" in sectors such as information technology and renewable energy.

June 18, 2012

Tribune242

Caribbean Blog International

We all agree that Bahamians with qualifications should not be overlooked... but we also agree with Mr Chester Cooper of the Chamber of Commerce that "'Bahamian First' must not mean 'Bahamian First at any cost' ...We clearly need to perform at international standards to keep the Bahamas competitive"

Bahamians First, 'But Not At Any Cost'

Tribune242




IN THIS column yesterday, we published a warning from the World Bank that fears about the eurozone had reduced investors' tolerance for risk. The bank urged poorer economies -- and this includes the Bahamas - to protect themselves by reducing their debts.

The world's fear of a prolonged -- much longer than originally predicted -- economic crisis greatly threatens our islands because of the nature of our two major industries -- tourism and finance. Of course, to hear the blustering of the PLP on the campaign trail, the Bahamas' unique economy has in no way been affected by this crisis. Although on one occasion Prime Minister Christie, while still in opposition, did concede that even if it had, during Prime Minister Ingraham's administration, Mr Ingraham had made the situation worse. Despite the fact that Mr Ingraham was doing a yeoman's job of managing the Bahamas' affairs so that the suffering here has not been as great as in other countries, the PLP refused to give him any credit. And so, during their five years, we hope never to hear any of them blame the difficult times that we might still have to face on the world's economy -- as far as they are concerned it does not exist. Too many Bahamians believed them -- so for them whatever goes wrong will be the fault of the new government - don't look outside for excuses.

However, like it or not, the stark facts are: The Bahamas' bread and butter comes from tourism and investment. Tourists travel when they have a small nest egg set aside for their vacations. To hear the world's economists talk, in the next year or so this will be greatly curtailed because that nest egg will have to go to pay mortgages, school fees, etc -- savings, savings and more savings will be the name of the game.

Therefore, a place like the Bahamas, which has almost priced itself out of the market with, among other things, its high utility costs, will have to cater to the rich who will be the only ones with the surplus cash to live like kings -- and travel to places like the Bahamas.

Mr Ingraham, in trying to create jobs during this difficult period, decided to improve the country's infrastructure to raise standards that would attract the wealthy -- at the same time putting Bahamians to work. He was criticised for this. But, like it or not, the Bahamas has to have a standard that would encourage a wealthy man -- as happened a few weeks ago -- to take over an entire hotel, turn the centre court into a tropical pool and create on the remaining courts an Arabian Nights setting for his daughter's multi-million dollar wedding. These are the people that this country will need for their survival -- the average citizen will no longer be able to afford "a short trip over". So whatever, the new government is thinking, we hope they will widen their vision and continue the improvement of the island's infrastructure now under contract.

As for the financial side of our economy and the need for investors, the attitude -- that we heard expressed on the floor of the House many years ago -- of "bring 'em in, suck 'em dry, and throw away the husks" just will not work. Just as Shane Gibson's blustering over work permits certainly will close the door to many potential investors.

We all agree that no Bahamian should be without a job if his credentials -- and work ethic -- fully qualifies him for a position.

However, what Mr Gibson must accept is that it is the owner of the business who decides the standard of the person he wants on his staff -- not Mr Gibson's Immigration Department.

Any investor coming in will want around him persons who have worked with him for years -- one of whom will be his accountant. If they are not given some consideration, then they just won't invest.

Many are concerned by Mr Gibson's putting employer's "on notice" that the issuing of labour certificates will no longer be "business as usual."

He said companies that hire foreigners must send "justification" for every employee that they have on work permits to the government.

Employers, who The Tribune interviewed, want to know what his plans are as they already justify every work permit application. These employers maintain that they have measured up to all of Immigration's requirements. They now want to know what Mr Gibson is planning.

At a time when we need all the foreign investment that we can get, Mr Gibson's intemperate threats will certainly not bring them in.

We all agree that Bahamians with qualifications should not be overlooked, but we also agree with Mr Chester Cooper of the Chamber of Commerce that "'Bahamian First' must not mean 'Bahamian First at any cost'. We clearly need to perform at international standards to keep the Bahamas competitive".

June 14, 2012

Tribune242 Editorial

Caribbean Blog International

...if the Bahamian economy were to grow at a level of six to eight percent ...we would not be talking about government debt... ...The reason why we should prioritize economic growth over debt reduction is because greater economic activity generates greater revenue for government... ...Greater revenue reduces reliance on borrowing and so, debt would fall over time... ...Further, higher levels of growth usually lead to lower levels of unemployment, more opportunities for individuals to make money in order to pay their mortgages, to pay for college, or to start new businesses... ...But, in order to achieve such levels of growth, we need a plan

A call for a national economic plan

By David Frazer

In the 1960s, Germany experienced one of the world’s most impressive examples of economic growth and development that raised the standard of living for the Germans exponentially.  Its success was due to a number of factors, not least of which was its ability to organize its industries, plan for the future and engage stakeholders at all levels in the work of economic growth.  If one posed the question today where is the economy of The Bahamas headed in the next five to 25 years, it would be difficult to provide a viable answer partly because of the lack of direction in state policy.

The recently published budget and budgets of past governments confirm this notion.  The 2012-2013 budget proposes short-term bandages on an economic wound that runs deep through society, addressing symptoms of a much larger structural problem.  It is now time to focus our energies and resources on a cure to our economic illness.  It is time for a national economic plan.

Highlights of the government’s 2012-2013 budget

• Expanding the role of the Bahamas Development Bank and the Bahamas Agricultural and Industrial Corporation to go beyond lending money to provide equity, credit guarantees and marketing/accounting support is a promising move to support small business and Bahamian entrepreneurship.

• Tax reform was four pronged.  The government will establish a central tax agency to improve its ability to collect taxes.  It will reform the property tax system including a cap on property taxes.  It will look to reducing leakages in the tax system and to charge international fees for aircraft passing through the country’s airspace.  This effort to raise government revenue is commendable but insufficient; the expected revenue which incorporates these ideas would still leave the country with a massive expenditure-revenue gap of nearly $300 million.

• A debt management committee will be developed to implement a debt management strategy.

• A plan to rescue Grand Bahama includes tax reduction and a Ministry of Grand Bahama.

• The jobs program of the previous government has not been continued.  Described by the current government as “lacking focus”, the jobs program attempted to alleviate the unemployment situation particularly for youth.  The problem is that the new government has not proposed an alternative to reducing youth unemployment.

• A mortgage relief effort aimed at reducing loan payments for distressed mortgage holders has received scathing international criticism.  Standard & Poor’s, a reputable rating agency, responded to the government’s promise to help mortgage holders by suggesting that the government may face lower credit ratings if it continues to spend more than it earns.

• Tax concessions laced the budget and there was an explicit promise not to raise taxes for Bahamians.  This combination of tax reduction and mortgage relief spending has cast doubt on the “government priority” to reduce national debt.

Let’s be smart about debt reduction: Focus on growth

Given the extent of the global economic recession, the government has been forced to play a greater role in economic activity.  As in the United States, government spending grew to supplant the lost economic activity after the recession.  While we must reduce the level of government debt, we must be careful not to damage the economy while doing so.  One can look to Europe for an example of how austerity soon after a recession can be detrimental to economic growth.

At the same time, government must not be frivolous in its spending.  Promises in the budget to help individuals make home repairs on top of aforementioned mortgage relief may be politically successful but do not spur further economic growth.

We hope that political leaders will go through the budget, line by line, and re-allocate/reduce unnecessary expenditure.  As much as is possible, government spending should be guided by the principle that every dollar spent directly increases the Bahamian GDP by more than a dollar and/or increases productivity.  Under this principle, unnecessary spending may be brought to light.

Hypothetically speaking, if the Bahamian economy were to grow at a level of six to eight percent, we would not be talking about government debt.  The reason why we should prioritize economic growth over debt reduction is because greater economic activity generates greater revenue for government.  Greater revenue reduces reliance on borrowing and so, debt would fall over time.  Further, higher levels of growth usually lead to lower levels of unemployment, more opportunities for individuals to make money in order to pay their mortgages, to pay for college, or to start new businesses.   But, in order to achieve such levels of growth, we need a plan.

The need for a national economic plan

Just over 26,000 Bahamians searching for work are unable to find it; thousands more have given up and left the labor force; unimpressive growth levels in the U.S. may dampen growth of tourist arrivals in the foreseeable future, and our own growth projection is stifled at less than three percent for the next few years.  These facts underscore a structural issue in the economy.  In essence, overreliance on tourism has limited the scope of economic growth.  We have failed to use the resources tourism has afforded us to develop other industries as a means to secure future growth.

We should get the largest stakeholders and experts in one room – business leaders, academics, government officials and local/international investors – to search for and implement a national economic plan with an aim to secure high levels of growth into the future.  Such a plan should be medium to long-term in focus and grounded in rigorous research on the potential for local business expansion, export of Bahamian franchises, products and services, and diversification within and across industries.

A plan of such magnitude is important because it provides an industrial framework for growth and will provide a sense of security for local business owners who would be able to plan the development of their own enterprises as a result.  A plan could create a momentum for the growth of certain projects and industries.  Finally, it would enable government to plan other areas of society such as new education and training initiatives, infrastructural projects and immigration policies that correspond with the national plan.

Our current economic realities call on us to make big decisions to secure a prosperous future.  Let us plan our way to economic vitality and growth.

 

• David Geraldo Frazer is a master’s degree candidate at Johns Hopkins University studying international economics and international relations with a bachelor’s degree in economics and business.  He is also a free lance consultant and can be contacted at: dfrazer1@johnhopkins.edu

Jun 13, 2012

thenassauguardian

Caribbean Blog International

Opposition Leader - Dr Hubert Minnis says: ...senior police officers are alarmed at the appointment of newly sworn in State Minister for National Security Keith Bell and fear operational interference

Police Alarm Over Bell Appointment



By KHRISNA VIRGIL

kvirgil@tribunemedia.net

A NUMBER of senior police officers are alarmed at the appointment of newly sworn in State Minister for National Security Keith Bell and fear operational interference, Opposition Leader Dr Hubert Minnis said yesterday.

Dr Minnis made the remarks during his House of Assembly contribution.

The session not only rehashed the previous Ingraham administration's work while in office, but continued with proposals for the 2012/2013 budget.

Speaking of the reform brought to the Royal Bahamas Police Force by the FNM, Dr Minnis said his government had worked hard to revitalise the force from 2007 until the PLP won the general election on May 7.

"As I speak," he said, "a former officer who acted in an extraordinary and partisan political manner during the election campaign is now Minister of State in National Security. I hope we do not see one of the worst periods of politicisation of the police force in its history.

"I understand that a number of senior officers are alarmed at the appointment and fear operational interference."

Dr Minnis pointed out that when in opposition the PLP blamed every criminal incident on former National Security Minister Tommy Turnquest.

But, he said, this was unfair as crime is a societal problem and politicians on both sides are "in this together".

For this reason, Dr Minnis said, the FNM will not blame every criminal act on the new Minister of National Security, Dr Bernard Nottage.

However, he did warn that the Bahamian people will not forget the PLP's promise that Urban Renewal 2.0 will be the cure for all crime.

The public is watching the new government, he said.

"We in the FNM support any crime fighting initiatives that are constructive and curb the senseless bloodshed, but, Mr Speaker, we want accountability. We want to see the logic and tangibles that come with launching such a programme."

From the opposite end of the spectrum, Dr Minnis urged the government to return to the basics of crime fighting on the streets of New Providence.

"We can't talk about zero tolerance when individuals are breaking the traffic laws; when individuals in the west have problems sleeping because of noise pollution, because of licenses given to homes and business that have excessive noise.

"When we close an eye to that we close an eye to the criminals who feel that they have the right to proceed," Dr Minnis said.

June 13, 2012

Tribune242

Caribbean Blog International

Does the Progressive Liberal Party (PLP) administration’s budgetary provisions remain true to its pledges to an impatient and hurting populace whose expectations for relief and renewal are extremely high... and to what extent does the 2012/13 national budget meet those high expectations?

The Budget: Part II

Consider this

By Philip C. Galanis

Last week, we invited our readers to consider whether the national budget for fiscal 2012/13 as presented by the Rt. Hon. Prime Minister and Minister of Finance addresses the important promises that were made during the general election campaign.  In answering that question, we reviewed the fiscal environment that the PLP Administration inherited on May 7, 2012 and the attendant limitations and constraints for the nation’s first budget for Mr. Christie’s second non-consecutive term in office.

This week, we would like to continue to Consider This… Do the PLP administration’s budgetary provisions remain true to its pledges to an impatient and hurting populace whose expectations for relief and renewal are extremely high, and to what extent does the 2012/13 national budget meet those high expectations?

The macro view

The government anticipates that it will incur a total deficit of $570 million for the fiscal year ending June 30, 2012 and a Government Finance Statistics (GFS) deficit of $504 million for that period. This represents an increased GFS deficit of $256 million or 103 percent more than was originally approved by Parliament for fiscal 2011/2012. The GFS deficit as a percent of GDP will be 6.3 percent — a new record for The Bahamas — more than a doubling of that figure of three percent in the preceding year.  The increased GFS deficit will be financed by additional borrowings which will push the national debt from $4.3 billion at December 31, 2011 to $4.8 billion a year later, rapidly approaching 60 percent of GDP, also a new record — and not in a good way.

Similarly, the GFS deficit for 2012/13 will be $550 million which, as a percent of GDP, will be 6.5 percent — another new record for The Bahamas.  By the end of fiscal 2013, the national debt will exceed $5.3 billion, more than 60 percent of GDP.

Recurrent revenue measures

The recurrent budgeted revenues of $1.55 billion for the next fiscal year are anticipated to increase by only $100 million or seven percent over the actual outturn of the preceding fiscal year.  This compares to an increase of $435 million or five percent in the gross domestic product (GDP) for the same period.

At first glance, the projected recurrent revenue appears to be overly optimistic for several reasons. First, recurrent revenue is projected to exceed the increased GDP rate of growth by two percent.  Secondly, last year’s budgeted revenue of $1.514 billion was not achieved.  The actual, revised projected revenue came in at $1.45 billion or $64 million less than was originally budgeted.

The third and most compelling reason that we believe that the projected recurrent revenue is overly optimistic is that over the past five years, the average increase in recurrent revenue was three percent. To suggest that we will achieve more than a doubling of that amount to seven percent next year is questionable.  The government anticipates that it will collect an additional $148 million more in excise taxes in the next fiscal period than it did last year, although at the same time it foreshadows a reduction in almost every other category of tax revenue over the preceding year, except for tourism taxes which are expected to increase by $8 million.

Capital revenue

The government expects to receive no capital revenue for the ensuing year as compared to $86 million last year.

Recurrent expenditures

The recurrent expenditures for 2012 will end at $1.7 billion, $27 million or two percent more than the $1.68 billion that was originally approved by Parliament for fiscal 2011/2012.  For 2012/13, recurrent expenditures are forecast at $1.82 billion, an increase of $114 million or six percent over the preceding year.

Several recurrent expenditure allocations have been made to address specific campaign promises.  There is an allocation of $4.4 million for the re-established Ministry of Financial Services and $3.2 million for the establishment of the Ministry for Grand Bahama, both campaign pledges.  Thirdly, the government has provided $15 million “for the implementation of early initiatives in the Charter [for Governance], such as the introduction of Urban Renewal 2.0.”

Several other items are noteworthy relative to budgeted recurrent expenditures. These include significant subventions for the following ministries and departments:

Department of Public Service, $187 million – an increase of $13 million;

Royal Bahamas Police Force, $132.2 million – an increase of $5.6 million;

Royal Bahamas Defence Force, $54.7 million – an increase of $3 million;

Department of Education, $202 million – an increase of $5.4 million;

Ministry of Education, Science & Technology, $49 million – an increase of $3.7 million;

Department of Social Services, $40 million – an increase of $5.9 million;

Public Hospitals Authority, $199 million – an increase of $13.2 million.

These allocations demonstrate the government’s commitment to essential areas of our economy and society that require urgent attention.  Moreover, the increases reflect many of the areas that the PLP consistently promised the electorate they would address once they were returned to office.

The increases for the Public Service and Social Services demonstrate the government’s stated intentions to improve the conditions of the average Bahamian, whether working or in need.  Enhanced subventions to the Public Hospitals Authority reflect that healthcare is a priority issue and those to the Department of Education and the Ministry of Education, Science and Technology confirm the government’s oft-stated intentions to address the deficiencies in education as a method of creating a better future for young Bahamians.  The increases to the Royal Bahamas Police and Defense Forces confirm the government’s determination, as spoken about at every rally, to break the back of crime and to address the problem of our porous borders, with regard to illegal migration, poaching and gun-running.

A substantial percentage of recurrent expenditure, 18 percent, is allocated to servicing the national debt.  The interest on the public debt alone is budgeted at $207 million along with debt redemption of $121 million, which in the aggregate represents $66 million more than the preceding year.

Capital expenditure

Total capital expenditure for 2012/13 is budgeted at $400 million. The two largest items in this category are for the Ministry of Works & Urban Development for $229 million and Sundry Capital Expenditures for $132 million.  In the Ministry of Works, the largest expenditures have been allocated for road construction, highways, streets and bridges in the aggregate of $175 million. Sundry Capital Expenditures include provisions for the Baha Mar Road Development for $48 million, as well as subventions for Capital Subscriptions to International Agencies, the Broadcasting Corporation of The Bahamas, Bahamasair Holdings Ltd. and the Water and Sewerage Corporation in the amounts of $12 million, $5.5 million, $18 million and $20 million, respectively.

Conclusion

Within a very short period, the Christie administration has quickly sought to address the fiscal realities left by the former administration, while simultaneously attempting to honor some of its election campaign pledges.  In this first budget, the government has made a commendable attempt to balance the scales by holding off increasing taxes on Bahamians, while concurrently seeking to allocate its limited resources in an economically anemic environment.

However, the government would be wise to remember that this is a Bahamian public with great needs and little patience. As understanding as the people may be with this 2012/2013 budget, which is a hybrid of the outgoing Ingraham regime and the fledgling Christie administration, that understanding will only go so far before the expectations that were raised so high during the campaign need to be not only met but exceeded and the country put back on steadier, more fiscally secure ground to ensure the glowing future that was promised by the PLP.

Jun 11, 2012

thenassauguardian

The Budget: Part I

Caribbean Blog International

Dr Duane Sands, the former chairman of Bahamas Mortgage Corporation (BMC) says: ...the newly-elected Christie administration's goal of building 1,300 new houses over its five-year term was "probably unachievable"... ...suggesting it should instead focus on continuing to reduce the Corporation's 35 per cent loan arrears rate

Gov't's 1300 Housing Goal 'Unachievable'


By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE former Bahamas Mortgage Corporation (BMC) chairman yesterday said the newly-elected Christie administration's goal of building 1,300 new houses over its five-year term was "probably unachievable", suggesting it should instead focus on continuing to reduce the Corporation's 35 per cent loan arrears rate.

Dr Duane Sands told Tribune Business he was doubtful the BMC would be able to finance the aggressive housing initiative proposed by the newly appointed-housing minister, Kenred Dorsett, questioning: "Where is the money going to come from?"

Mr Dorsett, the minister of the environment and housing, recently said more than 1,300 government homes were expected to be built over the next five years.

But Dr Sands told Tribune Business that while the Bahamas Mortgage Corporation's financial standing had improved, he was doubtful it would be able to finance that many homes.

He explained: "It is difficult to imagine where the money is going to come from, because the Mortgage Corporation's financial standing - while improved - is not likely going to be strong enough to sustain that degree of new debt.

"If you have a deficit in the national Budget of $500-plus million in just this year alone, the likelihood that we are going to be able to afford any additional spending is going to be unlikely. I find it to be a very aggressive, ambitious and probably unachievable goal."

Dr Sands added: "I don't know where the money will come from. Floating more bonds means now that you have more guaranteed government debt. Unless they talk out of both sides of their mouth, talking about no new taxes and, at the same time, extending the government debt by new spending, I don't see how it is possible."

Dr Sands noted that the Mortgage Corporation's sinking fund is underfunded by millions of dollars. He said: "Serving that bond interest debt and bond maturity debt requires more money than the Mortgage Corporation takes in.

"The money is going to have to come from somewhere, and most likely the money is going to come from the taxpayers in some form or fashion, because the mortgage guarantee fund simply doesn't have enough money in it."

He added: "I have gone on record as saying he 2002-2007 programme was the most irresponsible use of money in the Mortgage Corporation's history. If you want to repeat that now, simply to say you have built so many houses, is unreasonable. Who is going to pay the bill?

"I would encourage them to continue to strengthen the position of the Bahamas Mortgage Corporation by aggressively pursuing some of the policies that have been shown to be effective, and which have reduced the arrears from 40 per cent to 35 per cent, as opposed to throwing caution to the wind."

Attempts to contact Mr Dorsett were unsuccessful up to press time.

June 08, 2012

tribune242

Caribbean Blog International