Back on November 23, 2009 a The Tribune’s website quoted Mr. Laing regarding The Bahamas Government’s recent debt issue of a $300 million sovereign bond.
The minister of state for finance is quoted as saying: “Our level of foreign currency debt is less than 10 percent of our GDP. There is no objective analyst in the world who would regard this as problematic.
The Bahamas stands as unique in that regard — that low level of foreign currency indebtedness. Our indebtedness, as a ratio of debt-to-GDP, remains a far cry from many in the developing world.
“…Once this is done. [Foreign currency debt] will be of the order of $600 million.”
There was also the obligatory comment that the government is borrowing in US$ so they don’t crowd out private sector B$ borrowers.
All these comments reflect omniscience of the anointed, but I suggest they are intended to allay widespread concern that the government has lost its way where our fiscal policy is concerned.
Remember, their Manifesto 2007 promised adoption of a “balanced budget” yet two years on, extraordinary debt offerings are now required just to finance little more than government payroll.
Now I know we are facing a huge world wide recession and I’m glad it’s Mr. Laing and his colleagues that have to face the economic problems the country faces and not me, but had they not burdened the Bahamian people with such a vast government bureaucracy in the first place, these drastic measures might not be necessary.
Finally, government debt is debt, whether in US$ or B$ and becomes the responsibility of every Bahamian, so it really doesn’t matter if The Bahamas is “unique” when compared to “many (countries) in the developing world”.
With a national debt fast approaching $4 billion and over 50 percent of GDP — a GDP that is shrinking in this economic environment by the way — cute statistics will do nothing to help Bahamians that will be burdened with either a higher tax rate, a devalued currency, or both in the years ahead.
And where will today’s parliamentarians (both PLP and FNM as they are equally culpable) be? Collecting their pensions from the public trough of course.
INGRAHAM BORROWS AND SPENDS TO STROKE HIS EGO. DURING THE FNM’S FIRST 10 YEARS IN OFFICE, BETWEEN 1992-2002, HE BORROWED AND SPENT $1.255 BILLION DOLLARS. INGRAHAM HAS ALREADY BORROWED AND SPENT $800 MILLION DOLLARS AND THEY’VE BEEN IN POWER LESS THAN THREE YEARS. THEY WILL PROBABLY BORROW AND SPEND, DURING THIS FIVE-YEAR TERM IN OFFICE, ANOTHER $2BILLION DOLLARS, AT THE RATE HE IS GOING. WHEN INGRAHAM AND HIS FNM CAME TO POWER IN 1992 AFTER TWENTY-FIVE YEARS OF PLP GOVERNANCE THE NATIONAL DEBT WAS ONLY $970 MILLION DOLLARS. THE BAHAMIAN PEOPLE CAN THANK INGRAHAM AND THE FNM FOR RESPONSIBILITY FOR MORE THAN TWO-THIRDS OF THE ACCUMULATED DEBT TO DATE. THEY DIDN’T CREATE WEALTH BUT ON THE CONTRARY, THEY BORROWED AND SPENT THEIR WAY THROUGH THEIR TERMS IN OFFICE AND NOW WE HAVE THE MOUNTING NATIONAL DEBT TO PROVE IT.
Rick Lowe? Hmmm!
But, Rick Lowe is stating something that i have said repeatedly: the debt to GDB is the highest its been in the history of the Bahamas. The IMF has already raised its concerns about this. The Free National Movement has borrowed more money in its 15 years of governance that the entire 30yrs of the PLP governance.
During the so called prosperous times of the mid to late 1990’s, the Ingraham government was borrowing money left right and center then too and the excuse they used back then was “capital works.” From that entire period the only thing HAI has to show for all the borrowing is some poorly designed sidewalks all over New Providence.
The Rick Lowe’s in the FNM needs to stop pussyfooting around and call a spade a spade! HAI and his little puppet Zharvigo, have no clue what they are doing. This is just a continuation of the policies the FNM implemented in the 1990’s. The only difference is the economy stinks and will be stinking for the next year and a half meanwhile the borrowing is being ratcheted up.
The Public service is well over 20,000. We cant continue to support that. Your talking in the neighborhood of $30 million a month. For all of you who say governments dont downsize in a down economy, that is total bull****. Where have you been the last 18 months? Governments worldwide are shedding jobs and cutting services. You cant pay out what you dont have in. Right next door in Florida, the state has let go hundreds of teachers, firemen and policemen. Here in the Bahamas, the government is to scared to do what is necessary.
The civil service needs to be downsized to around 15-17,000.
You cant pay out what you dont have. If you dont want the government to downsize, then you will have exactly what HAI is doing, borrowing through his nose and when the Bahamian dollar gets devalued and the economy goes into the tank as a result, some of you same people are going to be saying, “how did this happen.”
The last thing that any government anywhere will do is engage in mass layoffs..it is political and economic suicide. We are where we are, and Rick Lowe has added nothing to the debate. The economy needs to grow, and we need to reduce the amount of money that leaves via imports. Importing is BIG business, and fattens a lot of pockets, so good luck with that. What ever is done will be done on the ground by individual Bahamians, and the backyard gardens and more Bahamians doing more for themselves is a move in the right direction…
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