All Hands on Deck

The Bahama Journal Editorial


Certain high-ranking International Monetary Fund officials are today convinced that, “Although the outlook [for the Bahamas] is fraught with uncertainties and risks, the mission is confident that the resolute adherence to fiscal consolidation and an enabling investment climate will foster a stable macroeconomic environment and support sustained economic growth.”

We concur.

But even as we express our overall agreement with the IMF’s analysis; we are constrained to note that, we should – as a matter of both principle and policy – do all we can as to further empower our people; and to see to it that, growth and development is powered from both the inside and outside.

Such an addition of an endogenous dimension of development to the current policy mix would go a long way to helping Bahamians help each other.

Such a double-barreled approach to national development would – of necessity- push leadership in the direction of seeing to it that our most precious resources- here namely our youth are put to the most productive use possible.

Here our churches, unions, businesses, other civil society agencies – and the government are called to pull together in the interest not only of their membership; but in the interest of all to put the Bahamas on a path to sustainability.

And so, whether the reference made is to tourism, banking or the industrial sector, each and every one of these clearly has a stake in a vibrant, healthy, development-oriented Bahamas.

But just as clearly, we must break with business as usual.

Were we to do so, we would wake to find that, while things are tough; and for sure, while moving forward, things might get even tougher; we are ever optimistic.

We are buoyant not only because we know that, this period of austerity is one where those who stick it out will reap their fair share of rewards; but also because it is precisely in times like these –that is to say, days of creative destruction – when you either sink or swim.

For our part, then, while these are days of tremendous struggle, we are convinced that, the worst is over; and that, in the fullness of time – better days will come.

But even as we note that these so-called better days are ahead; we know it for a fact that, we must –like others in the mix- do our level-best to help make some of these things happen.

And for sure, we are also absolutely convinced that, the time is nigh for all of this nation’s right-thinking Bahamian sons and daughters to cease from their time-tested habit of sweating the small stuff; that is to say, their socially pernicious habit of making too much of the already too-little that divides them.

Happily, while this habit does persist – and might yet continue – we are happy to report that, this country that is ours continues to get kudos for the conservative manner given by all who govern to the economic affairs of this land that is ours.

Some of these kudos routinely come from world agencies such as the International Monetary Fund. In this regard, we now note some of what the IMF has had to say about the management of things in this period when austerity is the word that apparently matters most.

The team met with senior government officials and representatives of the private sector. At the end of the visit, Mr. Gene Leon, head of the IMF mission to the Bahamas, issued the following statement: “The global crisis of 2008-09 had a profound impact on the Bahamian economy. Tourist arrivals declined by 10 percent and foreign direct investment fell by over 30 percent, leading to a sharp contraction in domestic activity and a large rise in unemployment.

“However, lower import prices helped narrow the external current account deficit to about 12.5 percent of GDP; this together with external borrowing and the one-off allocation of Special Drawing Rights helped raise gross international reserves to about 2.5 months of imports, boosting support for the exchange rate peg…”

There was even more. Here we are led to believe that, “… Gross international reserves are projected to increase despite the higher oil prices owing to strong private capital inflows, including from Foreign Direct Investment…”

While this is not to be ranked at the optimal level, we do have some modest reason to be happy that ventures like Baha Mar are on stream.

And as Gene Leon aptly notes, “…Going forward, the authorities have indicated a commitment to maintain prudent macroeconomic policies, including fiscal measures to reduce the rising debt-to-GDP ratio and a monetary policy geared to supporting price stability and the US dollar peg… They also plan to continue with reforms to improve tax administration, increase fiscal responsibility, and transparency.”

Evidently, then, even if things were to turn out as suggested by the IMF; there would still be work [at the endogenous level] that could and should be done by Bahamians.

December 23, 2010

The Bahama Journal Editorial

Bahamas Blog International