Will there be an economic meltdown?
Published: Oct 12, 2013
Recent headlines in a major daily would seem to suggest that there is a real possibility that there will be an economic meltdown in our country. Sources attributed quotes to unnamed officials from various international financial rating agencies and offer scant empirical evidence to bolster bogus claims that our dollar may have to be devalued and that we may lose our international credit rating.
As a trained economist and a graduate with a degree in economics and fiscal management (Walbrook College/London) I do not subscribe to that alarmist view or position. The economy in The Bahamas is strong, albeit, it is still, like most nations around the world, challenged by internal and external threats.
The last FNM administration and my good friend Hubert Alexander Ingraham spent public money like dirt. They borrowed massive amounts of funds on the international market for all sorts of infrastructural projects and bogus so called socio-economic schemes. The New Providence Road Improvement Project witnessed a massive overrun in excess of $100 million.
BTC, while I agree that it had to be divested, was literally sold for a pittance. Yes, BTC is now being managed and operated better than before, but could we not have gotten a better cash deal even if it meant that the people owned less than the fabled 49 percent?
The Arawak Cay Port project was totally unnecessary at the time it was conceptualized and implemented. Hundreds of millions of dollars from the private funding sector and tens of millions of dollars from taxpayers were diverted from other more immediate projects which could have jumpstarted the economy.
Eventually the freight companies had to be moved from Bay Street but who has benefitted in the short and long term? The traditional white Bahamian families and firms have had their choice real estate locations freed up and they are now worth far more than before.
Dilapidated buildings have either been burnt (inadvertently or otherwise) and or torn down. In addition, scores, if not hundreds, of freight workers, inclusive of aged office staffers, would have been laid off.
The so-called socio-economic schemes by the FNM were cooked up, I submit, to buy political support and to award cronies and consultants with a paycheck at taxpayers’ expense. The FNM blatantly expended public funds, big time, to prop up its last days in office. That administration left the nation virtually bankrupt and clinging to financial life support.
The PLP is on the right track with its austerity program. Yes, we are all disappointed that more was not done to stimulate jobs for well-deserving Bahamians as promised during the 2012 electoral campaign, but we must continue to exercise fiscal prudence.
The PM and his economic team have the right concept and expenditure is being carefully monitored. Minister of State for Finance Michael Halkitis (PLP-Golden Isles) is the right man for the job and he has performed excellently in his post. I see a bright future for him within the PLP leadership cadre.
Employment will eventually rise as the private sector, which is swamped with millions of dollars, comes out of its shell and starts to invest in meaningful and viable businesses. Foreign investment will continue to trickle in. Once the PLP approves an LNG project, as I am certain that it will, new industries will be created and thousands of well-paying entry level jobs will become available.
Construction will come on stream within the next year as potential homeowners come to realize that the Bahamas Mortgage Corporation, led by Senator Alex Storr (PLP), has funds available to assist such people with partnering with the private sector to obtain land and to actually construct homes outside of the regular governmental oversight.
Once the hiring of additional civil servants is controlled and we allow people of retirement age to free up the system, we will see a drastic reduction in the overall costs and expenses of running the central administration. The current level of civil servants is unsustainable and a massive drain on our revenues.
Affordable Crown land must be freed up in the Family Islands so as to encourage home construction, hospitality investments and agricultural ventures by qualified Bahamians. Not only would we free up space in New Providence but selected Family Islands would see the introduction of economic activity and the diversification of the economy.
No, there will be no economic meltdown under the wise fiscal policies of the gold rush administration and the stable leadership of Perry Gladstone Christie (PLP-Centreville) and Philip Brave Davis (PLP-Cat Island, Rum Cay and San Salvador), our esteemed prime minister and deputy prime minister respectively.
I often have problems with the leadership style of Christie and I am a PLP. There is no conflict with this as I call a spade a spade. We are on the brink of an economic boom and I predict that early next year we would have turned the corner.
To God then, in all things, be the glory.
– Ortland H. Bodie Jr.