As the slow times are not predicted to improve in the near future, Bahamians must now decide whether they want their future in the hands of an indecisive Perry Christie or a decisive Hubert Ingraham... ...As for the Democratic National Alliance (DNA), more experience is needed for the difficult times this country might have to face

Beware of election promises

tribune242 editorial




ELECTION TIME is here again and so are the promises. Promises, we might add, without any reference to the Public Treasury.

Bahamians should be aware of the times in which we live and don't depend on election promises -- even in good times they were just that -- promises that never saw the light of day.

In Grand Bahama, for example, Dr Michael Darville, the PLP's Pineridge candidate, has promised that should his party win the 2012 election, Grand Bahama will not only have a new hospital and all its medical facilities upgraded, but, according to Tanisha Tynes, PLP candidate for East Grand Bahama, her area will have its first junior high school.

National health insurance will be introduced to cover the medical needs of all Bahamians. Dr Darville said the PLP has also been working on a national plan to put the island back on the road to recovery through meaningful investments and programmes to create permanent jobs in tourism and the industrial and agricultural sectors.

It is true that Freeport's needs are great, but despite what PLP candidate Gregory Moss has said, the Bahamas (Grand Bahama included), like the rest of the world, is suffering, not only from its own inefficiencies, but from the global recession.

The World Economic Forum, holding its 42nd meeting in Davos, Switzerland, from January 25-29, closed its meeting on a sombre note. About 1,600 economic and political leaders, including 40 heads of state, discussed their fears that Europe's fiscal crisis could put the entire global economy into recession.

Despite the efforts of the Ministry of Tourism, if people have to cut back on their vacations because their finances are tight, this country's tourist dollar will shrink. Recently, Freeport's once bustling Container Port was forced to lay off several employees because one of its major Mediterranean clients, hit by the international economic situation and loss of business, had to reduce its services. The Hutchison Whampoa group also laid off about 72 employees as a part of its international downsizing "due to the economy and the resulting decline in business". In the UK, about 400 Hutchinson staff lost their jobs.

These layoffs were employees from the Grand Bahama Airport Company, the Freeport Harbour Company and the Freeport Container Port.

So it is wrong for any politician to deny that this country is not also caught up in a global downturn.

"The economy in Grand Bahama is at a place where we are not generating new jobs as fast as they are losing them," said Grand Bahama Chamber of Commerce president John Swain. And, unfortunately, with tourism slow and all tourism dependent businesses in the doldrums, there are few places in Grand Bahama to find work.

All eyes are now fixed on the USA in hopes of an economic improvement there, which might spill over onto Bahamian shores. Until this happens, no politician from any of the parties can make grand promises and try to make constituents believe they can keep them.

Why even in the good times -- before the economic bubble burst -- Mr Christie was unable to fulfil his election promises after he won the government in 2002. At that time, no one imagined that in a few more years the good times would come to a screeching halt.

In 2002, Mr Christie promised National Health Insurance, which even then the country could not afford. He was in government for five years and never delivered on the promised national insurance "so that poor people will stop dying simply because they are too poor to pay for medical attention". Also, before winning the government in 2002, he promised that if elected his government would "transform the hospital (PMH), the flagship for the entire health care system into the first class care facility that it has the potential to become", to "modernise the Sandilands Rehabilitation Centre" and develop a regional hospital in Exuma. None accomplished, and none attempted. They were only election promises.

If these promises could not be kept in the good times, why should voters believe that any political party can guarantee that they can be delivered in the bad times?

The unions, as was to be expected, want to get as much as they can now. They believe that if they don't get what they claim was promised them by the Ingraham government before the election, they will get nothing under the Christie government, should that government win the election. That is probably true. But what the unions have to understand is that no matter which party wins the government, the Public Treasury will dictate who will get salary increases and when.

The voter is now in a privileged position to judge the performances of two five-year term governments -- the Christie government in good times, and the Ingraham government in economically critical times.

As the slow times are not predicted to improve in the near future, Bahamians must now decide whether they want their future in the hands of an indecisive Christie or a decisive Ingraham. As for the DNA, more experience is needed for the difficult times this country might have to face.

February 02, 2012

tribune242 editorial

Caribbean Blog International

...how do we regain a positive outlook for the economic future of our country and avoid the actual downgrading of The Bahamas’ rating?

Improving our economic situation

By Alfred Poitier

The fact that the outlook for the Bahamian economy has been downgraded to negative by Moody’s should come as no surprise to the opposition or the governing party of The Bahamas.  As a matter of fact, the downgrading is water under the bridge.  It is now time to avoid the water from rising over the bridge.  The pertinent question is how do we regain a positive outlook for the economic future of our country and avoid the actual downgrading of The Bahamas’ rating?

Moody’s has listed specific reasons for the negative outlook for our economic future which are listed below:

• Debt increased by 150 percent over the past decade

• Debt increased by 40 percent in the last two years

• Debt to gross domestic product is 40 percent above the average

• Economic growth has been a modest six percent over the past 10 years.

Simply put, if your revenue is not increasing proportionately to your increasing debt then at some point your revenue will not be able to pay your debt.  This is the major concern of Moody’s and thus the negative outlook rating that it gave The Bahamas.

Our slow economic growth cannot sustain the continuous high level of borrowing.  The constant budgetary deficits must be addressed and actual payments on our national debts need to begin.  Government needs to work towards a balanced budget and stop spending more than we make.

The blame game needs to be thrown out of the window.  The fact is we have borrowed beyond safety levels and now we must find ways to correct this situation.  The easiest way to correct this challenge is to simply boost our revenue.  Governments usually boost revenue by increasing taxes, which unfortunately increase the cost of living for citizens of the country.

However, creative governments find other ways of increasing revenue such as providing incentives for citizens to do more within the existing tax structure, creating more revenue by increased volume. Creative governments also look at providing incentives for new industries that will not only provide needed services to residents, but also improve the quality of life for them and create new streams of revenue for the government.

Many opportunities have been placed before our governments to diversify our economy by encouraging Bahamian ownership in new industries.  But we have missed the boat, or for whatever reason, failed to embrace them.  There is no doubt that the government needs to find other means to grow our economy.

Foreign investment is good mainly for the short-term but as the foreign investor makes his profits over time he will more than likely send his profits out of the country.  In the long-term his investment may not be as beneficial as if a Bahamian did the same investment, as chances are his profits will remain in The Bahamas and probably even be invested in another venture.

It is time for us to seriously consider the natural resources that we have been blessed with and utilize these resources to the benefit of our citizens.  Serious consideration should be given to drilling and the processing of natural gas, first and foremost, for local consumption.  This could help reduce fuel costs for necessities such as electricity, transportation and so much more.  This would also reduce the level of importation of fuel products and could provide export revenue for the country as well.

The problem is our government relies heavily on gasoline taxes and may be reluctant to promote anything that would reduce the amount of gasoline imported to the country.  However, consideration should be given to the fact that the new industry could very easily provide equal or greater revenue to the government provided proper licensing fees and reasonable taxes are applied.

I used natural gas as an example of the natural resources we do have in The Bahamas.  However, there are many other areas of industry that The Bahamas is poised for based on either location or natural resources.  Simply putting a plan in place to explore, with the intent to execute one of these options, can change our present economic outlook from negative to a minimum of stable.  Yes, I did say just putting a plan in place.

Obviously prudence must play the major part in addressing the financial ills of our country but governments must show faith in the citizens through the provision of opportunities through legislation and/or financial aid to advance new, and to grow existing, industries in The Bahamas.

Sep 07, 2011

thenassauguardian

Caribbean Blog International