Politics in perilous times
By BRENT DEAN ~ Guardian Senior Reporter ~ brentldean@nasguard.com:
Sitting in the House of Assembly during the budget communication, I drifted off in thought as the prime minister informed the country about how bad things are.
Likely thinking about bills or some other mundane annoyance, I was staring with a not too pleased look on my face out of one of the western windows when a Free National Movement MP tapped me.
The MP said: "Why do you look sad? It is us who should be sad."
And many members of the governing side did look less jubilant than the norm during budget debates.
Finance ministers usually get rounds and rounds of applause from colleagues as they announce the various 'gifts' to be provided in the upcoming fiscal year.
This time was different, however.
The only notable applause Ingraham received, if I recall correctly, was when he ended the communication. And that was muted.
The times we live in:
The beginning of the second decade of the 21st century has been tough.
The collapse of the housing market and consequent global financial crisis has changed the Bahamian political landscape.
Ingraham directed his 2007 campaign personally at his friend and former law partner Perry Christie. Christie was savaged and called weak and indecisive.
In one of the last sittings of the Parliament before the 2007 general election, Ingraham shouted across the floor of the House, while on his feet, that Christie was "impotent" as a leader.
The attacks worked. Christie was sent in shame to opposition.
In opposition his fate was not good for quite a while. He lost MP Kenyatta Gibson to the FNM.
Former PLP Senator Pleasant Bridgewater was arrested and charged in an attempted extortion case. MP Obie Wilchcombe and PLP Senate leader Allyson Maynard-Gibson starred as witnesses in an embarrassing soap opera.
Christie was also unsuccessfully challenged for the party's leadership by Dr. Bernard Nottage.
And let's not forget the Malcolm Adderley affair.
Christie's time in opposition was mirroring his time as prime minister, with political misfortune standing behind every door.
Tough times for the FNM too:
As the PLP tripped and stumbled through opposition, two problems kept mounting for the Ingraham government: A high level of violent crime and a poor economy.
The Bahamas is on pace to set its third homicide record in four years.
The 2009 Her Majesty's Prison report recently revealed that in 2008 and 2009, a period when there were more than 150 homicides, only one person was convicted and sentenced to prison for murder.
This is stunning failure.
The collapse in the prosecutorial arm of the state was evident across the board as similarly abysmal results were reported in all categories of violent crime.
People are being robbed, raped and killed and no one is being punished.
On the economic front, despite the best efforts by the FNM, the country would have been in recession for three years by the end of 2010.
With the unemployment rate likely around 15 percent, and few prospects of that number dropping significantly within the next 23 months, a Progressive Liberal Party once lost in misstep after misstep appears again to have a chance to be government.
This more so because the economy is bad and crime still appears to be getting worse rather than anything the PLP did or is doing.
Things may not get better:
So if an election were called today, who would you vote for?
This question is almost impossible to answer at this time because there is a missing part of the equation.
Will Hubert Ingraham run again as leader of the FNM?
Ingraham has pledged to answer that question before the year is out.
His political legacy is great.
Ingraham stands without question as the most significant politician in the post-Lynden Pindling era having, thus far, won three governments.
What stands in front of him now, however, is a bleak set of circumstances that are not going to get better before the next general election is called.
The extraordinary spending states took up in the wake of the global economic crisis has given way to sovereign debt crises across the globe.
Countries with high debt levels – developed and developing – are now reckoning with years of profligate spending.
The post-World War II welfare states are unraveling.
British Prime Minister David Cameron warned his people about a decade of austerity; people have died in Greece in clashes over spending cuts; Spain has slashed public service pay by five percent, among other measures.
The list of states choking on tough austere medicine goes on and on.
The United States too, with its two wars and large entitlements, will have to move more aggressively to reign in spending.
Further tax increases to plug its budget deficit of more than a trillion dollars are likely.
The great danger for The Bahamas is that as developed states fall prey to a double dip recession, our prolonged recession will continue without relief.
Two more crises loom.
The oil will gush in the Gulf of Mexico until at least August when a relief well is completed. This is a best-case scenario.
If the first well does not work, others will have to be attempted. Oil could flow for the rest of the year into 2011.
The Bahamas would be impacted.
Few tourists would come to a tropical paradise with oily beaches. Stopover arrivals dropped by 10 percent in 2009. A further decline would lead to a halt of tourism related investments, and layoffs.
Needless to say, a major hurricane in a populated part of the country would be calamitous.
The politics of it all:
The PLP has the luxury of sitting back and watching the Ingraham government struggle with one crisis after the other.
All it has to do is attack, saying that things are bad and they (the FNM) are the government.
This simple cynical strategy is effective.
In 2008, George Bush and his party were swept out of power in the U.S.; Gordon Brown and labor recently lost in the U.K.; and Patrick Manning in Trinidad and Tobago was too ousted from power a few weeks ago.
Anti-incumbency is in the air.
The problem the FNM faces is that it is hard to say "we did a lot for you" when things remain so bad.
Yes the FNM created the unemployment benefit; yes they boosted social service assistance; and yes they kept the economy afloat.
But, thousands of people remain out of work. Thousands are also the victims of crime.
Rational and employed people like me see that the governing party has tried.
Those who have been unemployed for two years, and who have been robbed several times in-between, do not care as much about these efforts.
They are hurting.
The weakness for the PLP is it has offered no new ideas thus far.
The PLP has run away from two of the recent national debates – one has concluded and the other is just beginning.
The party has refused to take a position on the legalization of gambling for Bahamians and it has not taken a position on the Chinese labor issue at Baha Mar.
Running away from the issues does not inspire confidence.
Christie is the master of letting opponents – both internal and external – hang themselves when the heat comes, while he steps to the side avoiding the arrows.
At a time when people are hurting, the PLP needs to look like the alternative government.
Not stepping up on the tough issues makes the PLP look like the small protest parties rather than the polished machine ready to govern.
The opposition may be finally heading in the right direction on this issue.
Christie told reporters at a news conference on Friday that his party would have a draft of its policy positions prepared by July.
How will it all end?
At this stage it would be hard to see Ingraham walking away sometime in December. A late departure from the FNM would lead to civil war in the governing party.
The young Turks like Branville McCartney who think they are ready to lead would be up against the fifty-somethings in the generation of Tommy Turnquest who think they are experienced enough to lead. (Who knows if Turnquest even has those dreams anymore).
So, we could have another round of Ingraham versus Christie.
The two leaders and parties have different things to work on in order to win.
Ingraham needs a success.
Crisis management is admirable, but some major investment creating lots of jobs must happen for him to distance self and party from the PLP.
The crime numbers too need to stabilize. In the first quarter of 2010, housebreaking was up 29 percent. This type of crime is most damaging politically because it affects so many people so personally.
Christie needs solutions. People won't buy into the help and hope he was selling in 2002.
He also needs to offload the PLPs who got into scandal since they won government the last time.
These cancerous presences will turn off middle-class voters – a group the PLP struggles with.
With no polling data in front of me, I can only speculate as to the mood of the country. The Elizabeth by-election gives some guidance.
When both parties went all out to win a swing seat in February it was a virtual draw.
Either can win the next general election. Strategy and discipline are key, however.
The losing leader will bear an eternal scar. He would be the one that was sent into retirement as a loser.
This represents a hellish punishment for great politicians.
Both Christie and Ingraham are proud men who care about their legacies; and both have much work to do in order to win.
June 14, 2010
thenassauguardian
A political blog about Bahamian politics in The Bahamas, Bahamian Politicans - and the entire Bahamas political lot. Bahamian Blogger Dennis Dames keeps you updated on the political news and views throughout the islands of The Bahamas without fear or favor. Bahamian Politicians and the Bahamian Political Arena: Updates one Post at a time on Bahamas Politics and Bahamas Politicans; and their local, regional and international policies and perspectives.
Monday, June 14, 2010
Sunday, June 13, 2010
Bahamas' gaming industry for Bahamians and other residents cannot be stopped by no administration
The fate of the numbers men
thenassauguardian editorial:
The decision by the numbers bosses to speak with The Nassau Guardian this week was a significant development in the debate to legalize gambling for Bahamians.
A businessman claiming to speak on behalf of a number of numbers houses said that they opened up their books to representatives of the government in order to assist with what they thought was a process to fully legalize gambling.
But, what they thought was to happen, did not.
Instead, Prime Minister Hubert Ingraham has pledged a referendum if his party wins the government at the next general election.
The gambling issue seems too overwhelming for the Progressive Liberal Party. Its leader has not even attempted to take a position.
Meanwhile, the police have now increased their scrutiny of the openly illegal local gaming industry. One of the numbers bosses said that police cars are parked outside their businesses with increased frequency.
Some 10 to 20 percent of the staff at the numbers houses have, or will have to be, let go as a result of the police pressure, the number boss claimed.
Turning up the 'heat' on the number houses will not shut them down. The will of the people cannot be stopped by the state when the people no longer consent to an old law.
What is likely to happen as a result of increased police pressure on numbers houses is more corruption.
The numbers bosses will likely have to up their 'fees' to the agents of the state charged with investigating and arresting them.
There will be another sad consequence to not fully legalizing gambling. The police have scarce resources and a serious violent crime problem to deal with. Wasting time attempting to shut down the numbers houses will take resources away from a force struggling to catch and prosecute murderers, robbers and rapists.
With two homicide records in three years, and a current homicide count on pace to set a third such record, it seems illogical to assign officers to bother the numbers bosses rather than investigate violent crime.
The church leaders who oppose the full legalization of gambling are 'hit-n-run' commentators.
They always come out for the status quo, but do not realize that the continued prohibition only fuels corruption.
A more reasonable stand would be for preachers to call for moderation and restraint.
The numbers men are going nowhere. The local gaming industry cannot be stopped by a PLP or a Free National Movement (FNM) administration.
This is because the people want to do it in large numbers.
The more pressure a misguided state puts on the numbers men, the more they will use their money to buy the favor of those our leaders send after them.
This unwise fight is unhealthy for a Bahamas that has too many necessary battles to fight.
One day soon the numbers men will be respected businessmen just like the shipwreckers and bootleggers became. Their children now sit, decades later, in significant positions of power.
If this generation of political leaders do not see the wisdom of legitimizing them now, fear not, the next will.
June 10, 2010
thenassauguardian editorial
thenassauguardian editorial:
The decision by the numbers bosses to speak with The Nassau Guardian this week was a significant development in the debate to legalize gambling for Bahamians.
A businessman claiming to speak on behalf of a number of numbers houses said that they opened up their books to representatives of the government in order to assist with what they thought was a process to fully legalize gambling.
But, what they thought was to happen, did not.
Instead, Prime Minister Hubert Ingraham has pledged a referendum if his party wins the government at the next general election.
The gambling issue seems too overwhelming for the Progressive Liberal Party. Its leader has not even attempted to take a position.
Meanwhile, the police have now increased their scrutiny of the openly illegal local gaming industry. One of the numbers bosses said that police cars are parked outside their businesses with increased frequency.
Some 10 to 20 percent of the staff at the numbers houses have, or will have to be, let go as a result of the police pressure, the number boss claimed.
Turning up the 'heat' on the number houses will not shut them down. The will of the people cannot be stopped by the state when the people no longer consent to an old law.
What is likely to happen as a result of increased police pressure on numbers houses is more corruption.
The numbers bosses will likely have to up their 'fees' to the agents of the state charged with investigating and arresting them.
There will be another sad consequence to not fully legalizing gambling. The police have scarce resources and a serious violent crime problem to deal with. Wasting time attempting to shut down the numbers houses will take resources away from a force struggling to catch and prosecute murderers, robbers and rapists.
With two homicide records in three years, and a current homicide count on pace to set a third such record, it seems illogical to assign officers to bother the numbers bosses rather than investigate violent crime.
The church leaders who oppose the full legalization of gambling are 'hit-n-run' commentators.
They always come out for the status quo, but do not realize that the continued prohibition only fuels corruption.
A more reasonable stand would be for preachers to call for moderation and restraint.
The numbers men are going nowhere. The local gaming industry cannot be stopped by a PLP or a Free National Movement (FNM) administration.
This is because the people want to do it in large numbers.
The more pressure a misguided state puts on the numbers men, the more they will use their money to buy the favor of those our leaders send after them.
This unwise fight is unhealthy for a Bahamas that has too many necessary battles to fight.
One day soon the numbers men will be respected businessmen just like the shipwreckers and bootleggers became. Their children now sit, decades later, in significant positions of power.
If this generation of political leaders do not see the wisdom of legitimizing them now, fear not, the next will.
June 10, 2010
thenassauguardian editorial
Saturday, June 12, 2010
James Smith - former minister of state for finance says Government's projections for budget year 2010-2011 'may be too optimistic'
Govt projections for budget year 'may be too optimistic'
By ALISON LOWE
Tribune Staff Reporter
alowe@tribunemedia.net:
THE GOVERNMENT'S debt-cutting and revenue-raising projections for the budget year may be too optimistic and do not take into account the possibility of a double-dip recession or an event like a major hurricane, said a former minister of state for finance.
James Smith, a senator during the former PLP administration, yesterday suggested an effective step to boost the economy which has not yet been proposed could be achieved by having the Central Bank of the Bahamas lower the prime interest rate - simultaneously lessening debt burdens for regular Bahamians and for the country's "biggest debtor", the Government.
"The prime rate in The Bahamas has not changed since February 2005 despite the fact the prime rate has been dropping across world. In the same way you go to a stimulus package to increase aggregate demand in a recession you also want to provide grease for the private sector by lowering interest rates," said Mr Smith, Chairman of CFAL.
"I think Ministry of Finance should speak to the Central Bank on monetary policy and ways it could assist us in this crisis. They tend to err on side of caution so unless you nudge them they'll not move," he added.
Speaking during the wrap-up of the Budget debate for 2010/2011, Prime Minister Hubert Ingraham said the measures it contains -- including an expenditure reduction of 2.6 per cent or four per cent in real terms, enhanced revenue collection measures and some increased taxes - are "designed and intended to correct an imbalance which left alone would create an enduring economic crisis of enormous proportions."
Having "borrowed to sustain living standards to the extent we could" the Bahamas has a "high level of debt" which is unsustainable, he has said. In his Budget presentation he said the government plans to reduce, through its budgetary measures, the country's GFS deficit from 5.7 to 3 per cent by July of 2011. Speaking on Thursday, he described the steps being taken to achieve this as "not a painless medicine" but said "the alternative is demonstrably worse", pointing to recent economic crises in Greece, Spain and other European countries.
For 2010-2011, the Government is projecting that it will cut its recurrent deficit (fixed revenues minus fixed costs) to just $62 million, compared to $259 million for 2010, a reduction of more than 76 per cent. With capital spending set to exceed capital revenues by $240 million, the Government is projecting a total deficit of $302 million in 2010-2011, compared to $514 million in 2009-2010.
Stripping out the cost of debt principal redemption for both years shows that the Government's targeted GFS fiscal deficit for 2010-2011 is $227 million, a 46.4 per cent reduction on this year's $425 million deficit. As a percentage of GDP, the target GFS deficit for 2010-2011 is 3 per cent.
Mr Smith said he believes the government is "sending the right message" to international credit rating agencies - who determine at what rate the Bahamas can borrow money on the international market - when it shows "recognition that debt and the deficit are rising too rapidly."
However, he said, he would have preferred to see "a more realistic timeline" for reduction in these figures than that proposed by the Prime Minister of "two to three years." He said that he feels it is unlikely the deficit can be reduced by $200 million in the next year unless "some external event" like the privatisation of BTC comes into play.
"By increasing a number of taxes you might really slow down the economic growth rate in the country which depends primarily on imports for its revenue base, having an unintended negative effect," he said.
Meanwhile, he said such optimistic revenue projections do not take into account the possibility that the Bahamas may see a ripple effect from the economic woes plaguing the Euro zone at present - exemplified by the Greek crisis - or the likelihood that a hurricane could hit, taking up precious resources.
June 12, 2010
tribune242
By ALISON LOWE
Tribune Staff Reporter
alowe@tribunemedia.net:
THE GOVERNMENT'S debt-cutting and revenue-raising projections for the budget year may be too optimistic and do not take into account the possibility of a double-dip recession or an event like a major hurricane, said a former minister of state for finance.
James Smith, a senator during the former PLP administration, yesterday suggested an effective step to boost the economy which has not yet been proposed could be achieved by having the Central Bank of the Bahamas lower the prime interest rate - simultaneously lessening debt burdens for regular Bahamians and for the country's "biggest debtor", the Government.
"The prime rate in The Bahamas has not changed since February 2005 despite the fact the prime rate has been dropping across world. In the same way you go to a stimulus package to increase aggregate demand in a recession you also want to provide grease for the private sector by lowering interest rates," said Mr Smith, Chairman of CFAL.
"I think Ministry of Finance should speak to the Central Bank on monetary policy and ways it could assist us in this crisis. They tend to err on side of caution so unless you nudge them they'll not move," he added.
Speaking during the wrap-up of the Budget debate for 2010/2011, Prime Minister Hubert Ingraham said the measures it contains -- including an expenditure reduction of 2.6 per cent or four per cent in real terms, enhanced revenue collection measures and some increased taxes - are "designed and intended to correct an imbalance which left alone would create an enduring economic crisis of enormous proportions."
Having "borrowed to sustain living standards to the extent we could" the Bahamas has a "high level of debt" which is unsustainable, he has said. In his Budget presentation he said the government plans to reduce, through its budgetary measures, the country's GFS deficit from 5.7 to 3 per cent by July of 2011. Speaking on Thursday, he described the steps being taken to achieve this as "not a painless medicine" but said "the alternative is demonstrably worse", pointing to recent economic crises in Greece, Spain and other European countries.
For 2010-2011, the Government is projecting that it will cut its recurrent deficit (fixed revenues minus fixed costs) to just $62 million, compared to $259 million for 2010, a reduction of more than 76 per cent. With capital spending set to exceed capital revenues by $240 million, the Government is projecting a total deficit of $302 million in 2010-2011, compared to $514 million in 2009-2010.
Stripping out the cost of debt principal redemption for both years shows that the Government's targeted GFS fiscal deficit for 2010-2011 is $227 million, a 46.4 per cent reduction on this year's $425 million deficit. As a percentage of GDP, the target GFS deficit for 2010-2011 is 3 per cent.
Mr Smith said he believes the government is "sending the right message" to international credit rating agencies - who determine at what rate the Bahamas can borrow money on the international market - when it shows "recognition that debt and the deficit are rising too rapidly."
However, he said, he would have preferred to see "a more realistic timeline" for reduction in these figures than that proposed by the Prime Minister of "two to three years." He said that he feels it is unlikely the deficit can be reduced by $200 million in the next year unless "some external event" like the privatisation of BTC comes into play.
"By increasing a number of taxes you might really slow down the economic growth rate in the country which depends primarily on imports for its revenue base, having an unintended negative effect," he said.
Meanwhile, he said such optimistic revenue projections do not take into account the possibility that the Bahamas may see a ripple effect from the economic woes plaguing the Euro zone at present - exemplified by the Greek crisis - or the likelihood that a hurricane could hit, taking up precious resources.
June 12, 2010
tribune242
Friday, June 11, 2010
Drifting Oil from Deepwater Horizon oil spill caught in the Gulf Stream current could impact The Bahamas
Oil spill material on course for Bahamas
By K. NANCOO-RUSSELL
Freeport News Reporter
krystal@nasguard.com:
Although it is suggested in several Internet reports that the Deepwater Horizon oil spill is likely to affect Grand Bahama in the future, local Ministry of Tourism officals have been silent on what, if any, steps are being taken to assure potential tourists that the island's coast is clear.
A search by reporters on different online locations showed various mentions of Grand Bahama in articles discussing the threat of the spill which is currently spreading in the Gulf of Mexico.
There are also queries submittted on message boards by persons who have already booked, or were planning to book, vacations to The Bahamas on whether the oil spill would affect their stay in any way.
An article written by the Managing Editor of the cruisecritic.com website Melissa Paloti addressed concerns about whether cruise ports would be affected.
"We're keeping a close eye on ships that call on Nassau and Freeport in The Bahamas, as well as those that turn around regularly in Florida homeports, such as Miami, Fort Lauderdale and Port Canaveral," it read.
"Lines include Carnival, Royal Caribbean, Celebrity, Norwegian Cruise Line, Princess and Disney. Spokespersons for all of the above-mentioned lines have all said that no itinerary changes have been made though they continue to monitor the situation."
Another article by All Headline News Editor Ayinde Chase pointed out that water samples taken from the Florida coasts have confirmed low concentrations of subsea oil.
"This news confirms what many had already suspected and now give further evidence that pieces of the Gulf oil slick are breaking off and beginning to enter the loop current, possibly propelling tar balls towards beaches in the Bahamas and South Florida over the next several weeks," the article reads.
"Currently news of the northern Gulf Coast dominate the headlines but soon Freeport, Grand Bahama Island, even Nassau could be impacted by drifting oil pieces caught in the Gulf Stream current, which flows around the tip of Florida and passes along the western end of The Bahamas."
When The Freeport News contacted the director for the Ministry of Tourism's Grand Bahama Office on Wednes-day, Karen Seymour, she said no one from that office would be able to speak on the matter. Reporters were re-ferred to the Ministry of Tourism's Plantation, Florida office on Tuesday but have been unsuccessful in obtaining a statement up to press time yesterday.
Florida officals lauched an advertising campaign proclaiming that the state's "coast is clear," in an attempt to mitigate the losses in-curred by trip cancellations. The campaign was later pulled as the threat of the spill reaching those shores loomed. The Ministry of Tourism has announced no such campaign for The Bahamas.
The Freeport News has learned that a meeting is expected to be held on Monday (June 14) with members of the Disaster Preparedness Committee and other officials to discuss the contingency plan created by the government. Admini-strator Don Cornish said the meeting will seek to assess the infrastructure and resources available on island for use in the event the spill comes to local shores.
"We will talk about the plan that has been submitted and examine it to see how we can put resources in place to respond. In addition to that we are going to identify volunteers to assist us with clean-up if in fact we have contamination of our beaches," he said.
Commandeer Patrick McNeil of the Port Depart-ment confirmed that a team of scientists left New Providence yesterday, headed for Bimini where they will collect water samples and information about existing marine life to serve as a benchmark should conditions change. The exercise is similar to the one conducted in Cay Sal last month. The team is expected to return to New Providence on Sunday and another expedition is planned for Grand Bahama sometime after that.
An article posted on the discover-eleuthera-bahamas.com site pointed out that the danger of an oil slick expansion comes from the action of the loop current which is active in the Gulf of Mexico but which does not touch Eleuthera, meaning that island's beaches are safe.
"But, that cannot be said of all other islands in The Bahamas. The Bimini Islands, famous for deep sea fishing, are endangered and so are the beaches of Freeport the second largest and highly touristic town in the Bahamas. Freeport is situated on the western tip of Grand Bahama island."
That current flows northward into the Gulf of Mexico, the article explained, then loops southeastward to the Florida Keys.
"From there it is called the Florida Current. The Florida Current flows west of the westernmost Bahamas, i.e. the Bimini Islands and Grand Bahama (Freeport). These are the Bahamian islands endangered by the oil slick," it read.
Another article posted on June 9 on the Atlanta Weather Blog noted that pieces of the oil slick are breaking off and beginning to enter the loop current, possibly propelling tar balls to-wards beaches in the Baha-mas and South Florida over the next several weeks.
"Freeport and Grand Baha-ma Island, even Nassau, could be impacted by drifting oil pieces caught in the Gulf Stream current, which flows around the tip of Florida and passes along the western end of The Bahamas."
"Assuming oil continues to spew from the broken well, various models suggest oil slick pieces cutting under the Florida Keys and heading towards Florida's east coast by early next week. Meteorologists foresee oil passing under Key West, Fla., possibly washing upon shores in Miami, and then heading north to Freeport, Bahamas."
A trajectory could also place oil pieces further south, the article continues, where (they) would affect beaches along Havana, Cuba and then swinging wide through Grand Bahama Island.
Accuweather staff writer Carly Porter writes that meteorological models show drifting pieces of oil cutting under Key West.
"There is the possibility that drifting pieces of oil could get swept up in the Gulf Stream and round the tip of the Florida Peninsula. Once in the Gulf Stream, oil drifters could be swept toward the Atlantic with the western end of The Bahamas the most vulnerable," he said.
"Oil in the form of tar balls could wash up along the beaches of popular tourist destinations of Grand Bahama Island and Nassau.
The accuweather.com meteorologists are predicting that drifting oil has a 15 percent chance of reaching Freeport within the next 30 days; a 20 percent chance in the next 60 days, a 25 percent chance in the next 90 days and a 30 percent chance in the next 120 days.
freeport news>Freeport News
By K. NANCOO-RUSSELL
Freeport News Reporter
krystal@nasguard.com:
Although it is suggested in several Internet reports that the Deepwater Horizon oil spill is likely to affect Grand Bahama in the future, local Ministry of Tourism officals have been silent on what, if any, steps are being taken to assure potential tourists that the island's coast is clear.
A search by reporters on different online locations showed various mentions of Grand Bahama in articles discussing the threat of the spill which is currently spreading in the Gulf of Mexico.
There are also queries submittted on message boards by persons who have already booked, or were planning to book, vacations to The Bahamas on whether the oil spill would affect their stay in any way.
An article written by the Managing Editor of the cruisecritic.com website Melissa Paloti addressed concerns about whether cruise ports would be affected.
"We're keeping a close eye on ships that call on Nassau and Freeport in The Bahamas, as well as those that turn around regularly in Florida homeports, such as Miami, Fort Lauderdale and Port Canaveral," it read.
"Lines include Carnival, Royal Caribbean, Celebrity, Norwegian Cruise Line, Princess and Disney. Spokespersons for all of the above-mentioned lines have all said that no itinerary changes have been made though they continue to monitor the situation."
Another article by All Headline News Editor Ayinde Chase pointed out that water samples taken from the Florida coasts have confirmed low concentrations of subsea oil.
"This news confirms what many had already suspected and now give further evidence that pieces of the Gulf oil slick are breaking off and beginning to enter the loop current, possibly propelling tar balls towards beaches in the Bahamas and South Florida over the next several weeks," the article reads.
"Currently news of the northern Gulf Coast dominate the headlines but soon Freeport, Grand Bahama Island, even Nassau could be impacted by drifting oil pieces caught in the Gulf Stream current, which flows around the tip of Florida and passes along the western end of The Bahamas."
When The Freeport News contacted the director for the Ministry of Tourism's Grand Bahama Office on Wednes-day, Karen Seymour, she said no one from that office would be able to speak on the matter. Reporters were re-ferred to the Ministry of Tourism's Plantation, Florida office on Tuesday but have been unsuccessful in obtaining a statement up to press time yesterday.
Florida officals lauched an advertising campaign proclaiming that the state's "coast is clear," in an attempt to mitigate the losses in-curred by trip cancellations. The campaign was later pulled as the threat of the spill reaching those shores loomed. The Ministry of Tourism has announced no such campaign for The Bahamas.
The Freeport News has learned that a meeting is expected to be held on Monday (June 14) with members of the Disaster Preparedness Committee and other officials to discuss the contingency plan created by the government. Admini-strator Don Cornish said the meeting will seek to assess the infrastructure and resources available on island for use in the event the spill comes to local shores.
"We will talk about the plan that has been submitted and examine it to see how we can put resources in place to respond. In addition to that we are going to identify volunteers to assist us with clean-up if in fact we have contamination of our beaches," he said.
Commandeer Patrick McNeil of the Port Depart-ment confirmed that a team of scientists left New Providence yesterday, headed for Bimini where they will collect water samples and information about existing marine life to serve as a benchmark should conditions change. The exercise is similar to the one conducted in Cay Sal last month. The team is expected to return to New Providence on Sunday and another expedition is planned for Grand Bahama sometime after that.
An article posted on the discover-eleuthera-bahamas.com site pointed out that the danger of an oil slick expansion comes from the action of the loop current which is active in the Gulf of Mexico but which does not touch Eleuthera, meaning that island's beaches are safe.
"But, that cannot be said of all other islands in The Bahamas. The Bimini Islands, famous for deep sea fishing, are endangered and so are the beaches of Freeport the second largest and highly touristic town in the Bahamas. Freeport is situated on the western tip of Grand Bahama island."
That current flows northward into the Gulf of Mexico, the article explained, then loops southeastward to the Florida Keys.
"From there it is called the Florida Current. The Florida Current flows west of the westernmost Bahamas, i.e. the Bimini Islands and Grand Bahama (Freeport). These are the Bahamian islands endangered by the oil slick," it read.
Another article posted on June 9 on the Atlanta Weather Blog noted that pieces of the oil slick are breaking off and beginning to enter the loop current, possibly propelling tar balls to-wards beaches in the Baha-mas and South Florida over the next several weeks.
"Freeport and Grand Baha-ma Island, even Nassau, could be impacted by drifting oil pieces caught in the Gulf Stream current, which flows around the tip of Florida and passes along the western end of The Bahamas."
"Assuming oil continues to spew from the broken well, various models suggest oil slick pieces cutting under the Florida Keys and heading towards Florida's east coast by early next week. Meteorologists foresee oil passing under Key West, Fla., possibly washing upon shores in Miami, and then heading north to Freeport, Bahamas."
A trajectory could also place oil pieces further south, the article continues, where (they) would affect beaches along Havana, Cuba and then swinging wide through Grand Bahama Island.
Accuweather staff writer Carly Porter writes that meteorological models show drifting pieces of oil cutting under Key West.
"There is the possibility that drifting pieces of oil could get swept up in the Gulf Stream and round the tip of the Florida Peninsula. Once in the Gulf Stream, oil drifters could be swept toward the Atlantic with the western end of The Bahamas the most vulnerable," he said.
"Oil in the form of tar balls could wash up along the beaches of popular tourist destinations of Grand Bahama Island and Nassau.
The accuweather.com meteorologists are predicting that drifting oil has a 15 percent chance of reaching Freeport within the next 30 days; a 20 percent chance in the next 60 days, a 25 percent chance in the next 90 days and a 30 percent chance in the next 120 days.
freeport news>Freeport News
Zhivargo Laing: The Bahamas' best interest is worth the Free National Movement's (FNM's) political life
Laing: Nation's best interest worth FNM's political life
By KRYSTEL ROLLE ~ Guardian Staff Reporter ~ krystel@nasguard.com:
The austerity measures the government is proposing in the 2010/2011 budget were borne out of absolute necessity, Minister of State for Finance Zhivargo Laing said yesterday while contributing to debate on the new spending plan in the House of Assembly.
Over the past year and a half, the government has borrowed and spent millions of dollars to fund various initiatives in response to the economic downturn.
As a result, the national debt is nearing $4 billion.
But Laing said now that the economy is modestly rebounding, it is time for the government to try to right the country's finances.
He acknowledged that the measures that the government is taking could lead to some political fallout. Nonetheless, he said it is something that had to be done.
"To do the necessary is sometimes unpleasant, but always correct and always rewarding," he said.
"If sometimes you have to spell your political death, then march toward it. The truth is that this nation's best interest is worth our political life. We labored over many months, many hours to produce this budget. It is a challenging budget."
However, he added that it is "loaded with adequate provisions for every government ministry while all around the world civil servants are losing their jobs. We made provisions for every single civil servant to stay and they have seen not cuts in their salaries."
The government is seeking to increase the stamp tax on realty transaction, stamp tax on banks, hotel room tax, air and sea departure tax, vehicle tax, and the beer tax.
Additionally, all parliamentarians, including Prime Minister Hubert Ingraham, will take a pay cut.
Other cost-saving measures are proposed, including a stall on increments for public officers. Public service promotions are being frozen, except in special cases and public service employment is being frozen, except in extenuating circumstances, such as essential services.
Laing said there is no other way to enhance revenue but to increase taxes.
"The point is we should have a debate one day about this fundamental adjustment that we need to make to our circumstances, but over the next 12 months, we have to get revenue. We have to produce the revenue in a way that does not injure the people of the Bahamas," he said.
Laing said the country must begin to reduce the deficit and eventually begin lowering its debt to GDP.
Ingraham recently said the government debt at the end of June 2011 is projected to stand at 49.2 percent of GDP, up from 47.3 percent a year earlier.
Laing said the budget has long term implications that bode well for the country's future sustainability.
"For the next 12 months we have to attend to the business of the Commonwealth of The Bahamas. All of us are being called upon to act in a way to best assist the Commonwealth of The Bahamas to be better off financially," he added.
Laing noted that in some other countries public servants are being sent home.
He added that the majority of the taxes are levied at international sources and banks and not at the average Bahamian.
Laing also said the government is focused on its mission and vision for the country to have a dynamic and growing middle class, a level of saving for retirement, high levels of success for entrepreneurs and a modest level of taxation.
"That remains our vision and mission," he said.
"Our effort in this 2010/11 budget is geared towards putting us in a better position to fulfill that vision and mission."
June 10, 2010
thenassauguardian
By KRYSTEL ROLLE ~ Guardian Staff Reporter ~ krystel@nasguard.com:
The austerity measures the government is proposing in the 2010/2011 budget were borne out of absolute necessity, Minister of State for Finance Zhivargo Laing said yesterday while contributing to debate on the new spending plan in the House of Assembly.
Over the past year and a half, the government has borrowed and spent millions of dollars to fund various initiatives in response to the economic downturn.
As a result, the national debt is nearing $4 billion.
But Laing said now that the economy is modestly rebounding, it is time for the government to try to right the country's finances.
He acknowledged that the measures that the government is taking could lead to some political fallout. Nonetheless, he said it is something that had to be done.
"To do the necessary is sometimes unpleasant, but always correct and always rewarding," he said.
"If sometimes you have to spell your political death, then march toward it. The truth is that this nation's best interest is worth our political life. We labored over many months, many hours to produce this budget. It is a challenging budget."
However, he added that it is "loaded with adequate provisions for every government ministry while all around the world civil servants are losing their jobs. We made provisions for every single civil servant to stay and they have seen not cuts in their salaries."
The government is seeking to increase the stamp tax on realty transaction, stamp tax on banks, hotel room tax, air and sea departure tax, vehicle tax, and the beer tax.
Additionally, all parliamentarians, including Prime Minister Hubert Ingraham, will take a pay cut.
Other cost-saving measures are proposed, including a stall on increments for public officers. Public service promotions are being frozen, except in special cases and public service employment is being frozen, except in extenuating circumstances, such as essential services.
Laing said there is no other way to enhance revenue but to increase taxes.
"The point is we should have a debate one day about this fundamental adjustment that we need to make to our circumstances, but over the next 12 months, we have to get revenue. We have to produce the revenue in a way that does not injure the people of the Bahamas," he said.
Laing said the country must begin to reduce the deficit and eventually begin lowering its debt to GDP.
Ingraham recently said the government debt at the end of June 2011 is projected to stand at 49.2 percent of GDP, up from 47.3 percent a year earlier.
Laing said the budget has long term implications that bode well for the country's future sustainability.
"For the next 12 months we have to attend to the business of the Commonwealth of The Bahamas. All of us are being called upon to act in a way to best assist the Commonwealth of The Bahamas to be better off financially," he added.
Laing noted that in some other countries public servants are being sent home.
He added that the majority of the taxes are levied at international sources and banks and not at the average Bahamian.
Laing also said the government is focused on its mission and vision for the country to have a dynamic and growing middle class, a level of saving for retirement, high levels of success for entrepreneurs and a modest level of taxation.
"That remains our vision and mission," he said.
"Our effort in this 2010/11 budget is geared towards putting us in a better position to fulfill that vision and mission."
June 10, 2010
thenassauguardian
Thursday, June 10, 2010
The revelation that the Bahamas government would not legalize gambling for Bahamians was like a slap in the face to some number house bosses
Numbers houses 'losing business'
By KRYSTEL ROLLE ~ Guardian Staff Reporter ~ krystel@nasguard.com:
The revelation that the government would not legalize gambling for Bahamians was like a slap in the face to some number house bosses, who claim the backlash that followed the government's decision has caused a decline in business and has forced them to make serious cutbacks.
One businessman, who claimed he was expressing views shared by Island Luck, FML and Asue Draw, which reportedly represent more than 70 percent of the local market, said after opening up their books to the government, they were shocked when it was revealed that the law would remain unchanged.
The businessman, who wished not to be named due to reported pressure from the police and financial institutions, said if someone had asked the number bosses two weeks ago whether their businesses would have been legalized, they would have said with absolute certainty that they would be.
While he said they respect the government's decision to leave the law as it is, they want to know what will happen next.
The comments came two weeks after the Cabinet Office announced that the government will not proceed with the legalization of gambling. The government has instead concluded that a referendum should be held after the next general election so Bahamians can have the final say on the divisive issue.
"Now what?" asked the group's spokesman, who added that since the government's declaration, police have been coming around their businesses more frequently and "harassing" their customers.
He said sometimes police cars are parked in front of their businesses, which has led to a drastic slowdown in business.
Things have gotten so bad, 10 to 20 percent of the staff working at the various sites have or will be laid off, the businessman said.
The number boss told The Nassau Guardian that representatives from the government and the Ministry of Finance approached them months ago seeking to get information to assist with the legalization of gambling.
"When the government made the announcement (that they were considering legalizing gambling) we opened our doors and we invited them in," he said.
"We provided them with all the necessary information that they needed. We wanted to support the government's decision, [we] wanted to help the country in terms of the deficit and we know the money could go a long way."
The businessman claimed that the bosses were told that by June 30 the necessary legislation would be passed in Parliament for the legalization of some form of gambling.
"We were all under the impression that it was going to be legalized," he said. "You don't have the Ministry of Finance walk through the number man's door if this is not something that the government has in mind. They contacted us," he stressed. "They met with us individually."
He said when they found out that the law would remain unchanged "it was a blow to everyone".
"We really didn't expect it. We were hoping that just like how they called us in the beginning, they would have called us back. We were accommodating. We had to hear about it in the paper. We don't know where to go from here. We want to know what is the government's position for the future. We need to know, the public needs to know because for every two people against it three people [are] for it."
The businessman said while he was not looking forward to his business being taxed, he was not against it and he was relieved that his business would be legitimate.
The prime minister has said the government would have collected $30 million to $40 million annually in revenue from the gambling business.
However, the businessman said based on the current market it would have been more like $15 million.
"I would love to see our $15 million a year build a school today and a hospital tomorrow," he said, adding that the Florida Lottery has donated millions of dollars toward education.
"We don't mind it being legalized," he continued. "It's a gray area that has not been enforced. We don't like the idea of being illegal businessmen. So the tax was never an issue. It's not a good feeling walking in banks and other financial institutions and being known as some number man, or getting the headache of getting kicked out of banks. We're mostly just guilty by association... because you're known as a number man, you're frowned upon and they just don't want to do business with you."
He said many Bahamians have pre-conceived notions that the gambling business leads to the bankruptcy of many people. However, he said the majority of people spend about $3 to $7 on a ticket to gamble.
"The average persons does not spend excessively on numbers. It's just the volume. You give a small investment for a big return. These people are putting in $1 and getting $900," he said.
Asked whether he considered the numbers business to be illegal, the businessman said, "We consider it to be illegal in a sense. The walk-in part of business could fall into the illegal category but the Internet is free for all."
Asked what he would say to the government, if given the opportunity, he said, "We're not complaining, we're not crying but it's just reality. We need to know where do we go from here."
June 9, 2010
thenassauguardian
By KRYSTEL ROLLE ~ Guardian Staff Reporter ~ krystel@nasguard.com:
The revelation that the government would not legalize gambling for Bahamians was like a slap in the face to some number house bosses, who claim the backlash that followed the government's decision has caused a decline in business and has forced them to make serious cutbacks.
One businessman, who claimed he was expressing views shared by Island Luck, FML and Asue Draw, which reportedly represent more than 70 percent of the local market, said after opening up their books to the government, they were shocked when it was revealed that the law would remain unchanged.
The businessman, who wished not to be named due to reported pressure from the police and financial institutions, said if someone had asked the number bosses two weeks ago whether their businesses would have been legalized, they would have said with absolute certainty that they would be.
While he said they respect the government's decision to leave the law as it is, they want to know what will happen next.
The comments came two weeks after the Cabinet Office announced that the government will not proceed with the legalization of gambling. The government has instead concluded that a referendum should be held after the next general election so Bahamians can have the final say on the divisive issue.
"Now what?" asked the group's spokesman, who added that since the government's declaration, police have been coming around their businesses more frequently and "harassing" their customers.
He said sometimes police cars are parked in front of their businesses, which has led to a drastic slowdown in business.
Things have gotten so bad, 10 to 20 percent of the staff working at the various sites have or will be laid off, the businessman said.
The number boss told The Nassau Guardian that representatives from the government and the Ministry of Finance approached them months ago seeking to get information to assist with the legalization of gambling.
"When the government made the announcement (that they were considering legalizing gambling) we opened our doors and we invited them in," he said.
"We provided them with all the necessary information that they needed. We wanted to support the government's decision, [we] wanted to help the country in terms of the deficit and we know the money could go a long way."
The businessman claimed that the bosses were told that by June 30 the necessary legislation would be passed in Parliament for the legalization of some form of gambling.
"We were all under the impression that it was going to be legalized," he said. "You don't have the Ministry of Finance walk through the number man's door if this is not something that the government has in mind. They contacted us," he stressed. "They met with us individually."
He said when they found out that the law would remain unchanged "it was a blow to everyone".
"We really didn't expect it. We were hoping that just like how they called us in the beginning, they would have called us back. We were accommodating. We had to hear about it in the paper. We don't know where to go from here. We want to know what is the government's position for the future. We need to know, the public needs to know because for every two people against it three people [are] for it."
The businessman said while he was not looking forward to his business being taxed, he was not against it and he was relieved that his business would be legitimate.
The prime minister has said the government would have collected $30 million to $40 million annually in revenue from the gambling business.
However, the businessman said based on the current market it would have been more like $15 million.
"I would love to see our $15 million a year build a school today and a hospital tomorrow," he said, adding that the Florida Lottery has donated millions of dollars toward education.
"We don't mind it being legalized," he continued. "It's a gray area that has not been enforced. We don't like the idea of being illegal businessmen. So the tax was never an issue. It's not a good feeling walking in banks and other financial institutions and being known as some number man, or getting the headache of getting kicked out of banks. We're mostly just guilty by association... because you're known as a number man, you're frowned upon and they just don't want to do business with you."
He said many Bahamians have pre-conceived notions that the gambling business leads to the bankruptcy of many people. However, he said the majority of people spend about $3 to $7 on a ticket to gamble.
"The average persons does not spend excessively on numbers. It's just the volume. You give a small investment for a big return. These people are putting in $1 and getting $900," he said.
Asked whether he considered the numbers business to be illegal, the businessman said, "We consider it to be illegal in a sense. The walk-in part of business could fall into the illegal category but the Internet is free for all."
Asked what he would say to the government, if given the opportunity, he said, "We're not complaining, we're not crying but it's just reality. We need to know where do we go from here."
June 9, 2010
thenassauguardian
Bahamas 2010/2011 Budget Under Fire
Budget Backlash
jonesbahamas:
The widely unpopular 2010/2011 Budget came under fire Monday from one of the nation’s most prominent contractors and a political party leader, who both unleashed a perfect storm of criticism against the fiscal plan.
For a nation desperate for an economic lifeline, President of the Bahamian Contractors Association (BCA) President Stephen Wrinkle said this budget offered little solace.
He argued that the proposed budgetary initiatives would in fact send more workers to a growing unemployment line.
"I’m a builder and a developer and in my company, like every other company in The Bahamas today, I think everybody took pencil to paper in this last week and looked at what they can do without and who they can do without and we’re making our cuts," he said.
"The people that we were keeping because they were good staff, maybe we have to let them go now because we don’t have the workload to sustain it. We’ve been sustaining it for a year to a year-and-a-half in our industry anyway and most contractors have reached the point where unless they’ve got work in hand they are cutting back because they just can’t handle those carrying charges any longer."
Perhaps more importantly, Bahamas Democratic Movement (BDM) Leader Cassius Stuart, who is also a business consultant, said the budget had more to do with infrastructure than investing in human capital.
Both men were guests on the Love 97 weekly talk show, On Point, with hosts Rogan Smith and Tosheena Robinson-Blair.
"We are borrowing for capital development. What is frightening, though, is that we are putting the education of our people, the development of our human capital on the altar. We are sacrificing it on the altar of capital development," he said.
"How could we, on the one hand, cut expenditure for education . . . but increase capital developments for roads and other projects? It doesn’t make any sense because the number one engine in an economy is its people. People earn revenue. If the people are not being invested in or developed we’ll find ourselves fighting in the public and private sectors for more productivity from people."
He continued: "The government cut subsidies for the private schools by 20 per cent, which means that private schools will be forced to increase school fees. So now those who have children in private schools who can’t meet those [fee payments] will have to pull their kids out and put them in public schools. The public schools are already overcrowded, so where you currently have 30 or 40 students in a class in the public school, that will be increased to about 50 students."
Mr. Wrinkle said the "ugliest part of this budget" is the fact that the tax burden will continue to be placed on the only economic engine that the country has – the business community.
"We cannot continue to place the yolk of the burden on the business community without providing some incentive for growth," he said. "Our GDP is projected to shrink this year. The entire economy is in a recessionary mode, yet there’s been an increased tax burden on all aspects of business, whether it be an increase in stamp duty on legal transactions or NIB contributions for payrolls or business licence fees."
"The Industries Act was a real incentive that I think most Bahamians assumed would be a continuing incentive that would be available for manufacturing and when that was literally pulled out from underneath us with the stroke of a pen by one individual I think it sent a clear indication of how our country is governed."
Mr. Wrinkle said the business community now finds itself in a very difficult situation in very trying times.
"We’re now going to have to look at ways in which we can change our approach to not only make ends meet, but to make progress. With a shrinking economy, shrinking productivity, a shrinking market, we’ve got to offer some more growth incentive. Otherwise, all we’re doing is putting more plough on the horses and pulling it and at some point the horse is going to get tired and fall down," he said.
"I appreciate that there are only so many revenue streams that we have at the moment from which to draw. But, I am deeply disturbed that we are digging deeply at the crucial aspects of survival for our economic engine – the tourism sector: the room taxes have been increased; the departure taxes have been increased."
Mr. Wrinkle also expressed disappointment that the government does not consult the private industry.
"I think that is a tremendous loss, because you have experts in virtually every field of the budget readily available and willing to contribute to the management of the government, but we’ve got a government that holds its cards closer than Kenny Rogers did in Five Card Stud and they just don’t share information; they don’t share responsibilities or anything that they don’t have to share," he said.
Mr. Stuart agreed. He said the government should have consulted more with the relevant stakeholders.
Prime Minister Hubert Ingraham, during his budget communication, announced a number of budget cuts and tax hikes. He immediately raised the duty rates on car imports – a move that immediately sparked backlash from car dealers in the country. Many feared that their businesses would go belly up in the coming months.
A week later, after consulting with the dealers, the prime minister made several adjustments to the tax rates.
"The prime minister now finds himself, after the fact, coming to the car dealers after he discovers exactly what they are experiencing. Then he makes decisions based on what he finds. He should have just consulted with them in the first place, and by extension consulted with the mail boat operators and all of the stakeholders in society to find out what shortfalls they are experiencing" Mr. Stuart said.
The BDM leader called the budget "scary" and said for years he has been calling on the government to tighten up on spending.
"In the good times our government refused to do that. We have to be fiscally responsible and economically prudent. When things were good we were spending a lot, almost as if we were never going to reach this day. Now that we’re here the government has been forced to cut back on a lot of things and it’s needed. We now find ourselves in a place where we’re trying to figure out how we’re going to cover our costs and cover the overhead that the government has," he said.
Mr. Stuart said The Bahamas has not experienced any new growth in its industries, but has experienced a "significant" decline.
"Many small businesses, particularly in the manufacturing sector, have either shut down or downsized due to overhead costs. One of the many overhead costs that small businesses have been affected by is the increase in BEC (Bahamas Electricity Corporation) utility rates. It’s killing them," he said.
"There is a plan on the table to again increase that rate. On top of that we’re saying we want to increase National Insurance contribution rates by one per cent. Most companies are now looking through their books to see who they can let go because of the increase in overhead."
Mr. Wrinkle agreed.
He said the government has again "missed an opportunity to provide incentives for growth because without growth in the business sector, we’re not really going to climb out of this; we’re just making more demands."
"When you take away the concessions that manufacturers have, like the people that make the windows, the doors, the hurricane shutters and a myriad of consumable items, we’ve got chemical companies that make soaps – all of these things that are consumed here that save us from exporting our U.S. dollars and employ people keep people employed – it affects them," he said.
"It isn’t like the construction sector where I may have 130 employees this month, but next month I may have 50 because when our job is finished I have to let them go. When you’re building a manufacturing company and you start off with four employees, next year you’ve got six and then eight and then 12 and it’s long term. I really think this one is going to come back to bite [the government] because you can’t tell people that you want to produce Bahamian entrepreneurs and businessmen and then in a stroke of a pen you pull the rug out underneath them."
Mr. Wrinkle said he believes there is a serious disconnect between the politicians and businessmen in the country. He said while incentives for growth d not necessarily have to be tied to a budget, they should have been included.
"The fact that we don’t have adequate incentives in place is reflected in the way they address the budget. They have not looked outside the envelope of revenue stream. It appears that they had a list of the revenues and they went down with a pencil and ticked off which ones they thought they could increase and generate more revenue stream from the taxes," he said.
June 9, 2010
jonesbahamas
jonesbahamas:
The widely unpopular 2010/2011 Budget came under fire Monday from one of the nation’s most prominent contractors and a political party leader, who both unleashed a perfect storm of criticism against the fiscal plan.
For a nation desperate for an economic lifeline, President of the Bahamian Contractors Association (BCA) President Stephen Wrinkle said this budget offered little solace.
He argued that the proposed budgetary initiatives would in fact send more workers to a growing unemployment line.
"I’m a builder and a developer and in my company, like every other company in The Bahamas today, I think everybody took pencil to paper in this last week and looked at what they can do without and who they can do without and we’re making our cuts," he said.
"The people that we were keeping because they were good staff, maybe we have to let them go now because we don’t have the workload to sustain it. We’ve been sustaining it for a year to a year-and-a-half in our industry anyway and most contractors have reached the point where unless they’ve got work in hand they are cutting back because they just can’t handle those carrying charges any longer."
Perhaps more importantly, Bahamas Democratic Movement (BDM) Leader Cassius Stuart, who is also a business consultant, said the budget had more to do with infrastructure than investing in human capital.
Both men were guests on the Love 97 weekly talk show, On Point, with hosts Rogan Smith and Tosheena Robinson-Blair.
"We are borrowing for capital development. What is frightening, though, is that we are putting the education of our people, the development of our human capital on the altar. We are sacrificing it on the altar of capital development," he said.
"How could we, on the one hand, cut expenditure for education . . . but increase capital developments for roads and other projects? It doesn’t make any sense because the number one engine in an economy is its people. People earn revenue. If the people are not being invested in or developed we’ll find ourselves fighting in the public and private sectors for more productivity from people."
He continued: "The government cut subsidies for the private schools by 20 per cent, which means that private schools will be forced to increase school fees. So now those who have children in private schools who can’t meet those [fee payments] will have to pull their kids out and put them in public schools. The public schools are already overcrowded, so where you currently have 30 or 40 students in a class in the public school, that will be increased to about 50 students."
Mr. Wrinkle said the "ugliest part of this budget" is the fact that the tax burden will continue to be placed on the only economic engine that the country has – the business community.
"We cannot continue to place the yolk of the burden on the business community without providing some incentive for growth," he said. "Our GDP is projected to shrink this year. The entire economy is in a recessionary mode, yet there’s been an increased tax burden on all aspects of business, whether it be an increase in stamp duty on legal transactions or NIB contributions for payrolls or business licence fees."
"The Industries Act was a real incentive that I think most Bahamians assumed would be a continuing incentive that would be available for manufacturing and when that was literally pulled out from underneath us with the stroke of a pen by one individual I think it sent a clear indication of how our country is governed."
Mr. Wrinkle said the business community now finds itself in a very difficult situation in very trying times.
"We’re now going to have to look at ways in which we can change our approach to not only make ends meet, but to make progress. With a shrinking economy, shrinking productivity, a shrinking market, we’ve got to offer some more growth incentive. Otherwise, all we’re doing is putting more plough on the horses and pulling it and at some point the horse is going to get tired and fall down," he said.
"I appreciate that there are only so many revenue streams that we have at the moment from which to draw. But, I am deeply disturbed that we are digging deeply at the crucial aspects of survival for our economic engine – the tourism sector: the room taxes have been increased; the departure taxes have been increased."
Mr. Wrinkle also expressed disappointment that the government does not consult the private industry.
"I think that is a tremendous loss, because you have experts in virtually every field of the budget readily available and willing to contribute to the management of the government, but we’ve got a government that holds its cards closer than Kenny Rogers did in Five Card Stud and they just don’t share information; they don’t share responsibilities or anything that they don’t have to share," he said.
Mr. Stuart agreed. He said the government should have consulted more with the relevant stakeholders.
Prime Minister Hubert Ingraham, during his budget communication, announced a number of budget cuts and tax hikes. He immediately raised the duty rates on car imports – a move that immediately sparked backlash from car dealers in the country. Many feared that their businesses would go belly up in the coming months.
A week later, after consulting with the dealers, the prime minister made several adjustments to the tax rates.
"The prime minister now finds himself, after the fact, coming to the car dealers after he discovers exactly what they are experiencing. Then he makes decisions based on what he finds. He should have just consulted with them in the first place, and by extension consulted with the mail boat operators and all of the stakeholders in society to find out what shortfalls they are experiencing" Mr. Stuart said.
The BDM leader called the budget "scary" and said for years he has been calling on the government to tighten up on spending.
"In the good times our government refused to do that. We have to be fiscally responsible and economically prudent. When things were good we were spending a lot, almost as if we were never going to reach this day. Now that we’re here the government has been forced to cut back on a lot of things and it’s needed. We now find ourselves in a place where we’re trying to figure out how we’re going to cover our costs and cover the overhead that the government has," he said.
Mr. Stuart said The Bahamas has not experienced any new growth in its industries, but has experienced a "significant" decline.
"Many small businesses, particularly in the manufacturing sector, have either shut down or downsized due to overhead costs. One of the many overhead costs that small businesses have been affected by is the increase in BEC (Bahamas Electricity Corporation) utility rates. It’s killing them," he said.
"There is a plan on the table to again increase that rate. On top of that we’re saying we want to increase National Insurance contribution rates by one per cent. Most companies are now looking through their books to see who they can let go because of the increase in overhead."
Mr. Wrinkle agreed.
He said the government has again "missed an opportunity to provide incentives for growth because without growth in the business sector, we’re not really going to climb out of this; we’re just making more demands."
"When you take away the concessions that manufacturers have, like the people that make the windows, the doors, the hurricane shutters and a myriad of consumable items, we’ve got chemical companies that make soaps – all of these things that are consumed here that save us from exporting our U.S. dollars and employ people keep people employed – it affects them," he said.
"It isn’t like the construction sector where I may have 130 employees this month, but next month I may have 50 because when our job is finished I have to let them go. When you’re building a manufacturing company and you start off with four employees, next year you’ve got six and then eight and then 12 and it’s long term. I really think this one is going to come back to bite [the government] because you can’t tell people that you want to produce Bahamian entrepreneurs and businessmen and then in a stroke of a pen you pull the rug out underneath them."
Mr. Wrinkle said he believes there is a serious disconnect between the politicians and businessmen in the country. He said while incentives for growth d not necessarily have to be tied to a budget, they should have been included.
"The fact that we don’t have adequate incentives in place is reflected in the way they address the budget. They have not looked outside the envelope of revenue stream. It appears that they had a list of the revenues and they went down with a pencil and ticked off which ones they thought they could increase and generate more revenue stream from the taxes," he said.
June 9, 2010
jonesbahamas
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