Robert Myers, an Organisation for Responsible Governance principal.
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Bahamas will take “at least a decade” to escape its fiscal crisis, a governance reformer warning: “It’s not a one pill cure”.
Robert Myers, an Organisation for Responsible Governance (ORG) principal, borrowed a medical analogy from the Prime Minister for his extremely grim forecast on how long this nation needs to reverse its debt spiral.
While praising Dr Hubert Minnis’s national address for “saying all the right things”, Mr Myers reiterated that the new administration’s promises needed to be underpinned by laws that prevented the return of reckless fiscal policies.
Emphasising that Bahamians can no longer trust politicians “to do the right thing”, the ORG principal urged the Government to prioritise energy reform as “a massive fix” for the Bahamian economy’s woes.
He also called on trade unions to become “part of the solution” to improved worker productivity, arguing that they “cannot just sit and throw rocks at people” as has happened in the past.
“I think he’s saying all the right things,” Mr Myers told Tribune Business of Dr Minnis’s address. “It’s very encouraging, but the fact remains that if we want to put this country on a path and course to greater sustainability over the long-term, we’ve got to start putting this stuff in legislation as opposed to leaving it to the will of the politicians.
“That, in my view, is imperative because we’ve seen the considerable degradation that has occurred because of not having fiscal laws, or laws that guide the Government.
“We’ve seen the degradation that has happened because of the lack of laws that guide the Government, and it’s going to take us at least a decade - if we have the rights laws and safeguards put in place - it’s going to take us at least a decade to get out of the imminent danger we’re in.”
Mr Myers’ comments illustrate the scale of the task the Bahamas faces to reverse its current fiscal trajectory, which involves $300 million-plus annual deficits and a $7.052 billion national debt that was projected to breach the 80 per cent debt-to-GDP ratio at end-June.
A former Chamber of Commerce chairman, and head of its Coalition for Responsible Taxation, he led much of the private sector’s negotiations with the Christie administration over VAT and its revenue-side reforms.
Fiscal responsibility is one of ORG’s priority issues, and Mr Myers argued that current and future Bahamian governments needed to be bound by law to achieve this given the failures of their predecessors.
“We’ve got to create a culture of open, accountable government and eliminate the corruption; he’s [Dr Minnis] 100 per cent right on all these things,” he told Tribune Business.
“But let’s put in place laws that bind them to do that. We’ve left it to the will of the political elite, and arrived at this place because of it. I no longer want to trust personalities; I want to trust the law.”
ORG has been among the numerous groups campaigning for a Fiscal Responsibility Act, viewing it as a key tool in restraining government spending and forcing it to be more accountable and transparent over how it uses taxpayer monies.
Other observers have argued that the Bahamas needs to go further by implementing so-called ‘Fiscal Rules’, which would set limits for key ratios, such as debt-to-GDP, that the Government cannot breach or exceed.
K P Turnquest, minister of finance, previously told Tribune Business that Fiscal Responsibility-type legislation is near the top of the Government’s legislative agenda for when it returns to Parliament in September, lying second only to anti-corruption laws.
He added that a Fiscal Responsibility Bill had been drafted, having given an idea of what it may contain in his Budget address.
Mr Turnquest said then that such a Bill would target an annual GFS ‘balanced Budget’, meaning that the goal is to add no new debt to the existing $7-billion plus national debt.
The Government’s other objective would be to maintain “a desirable and sustainable” debt-to-GDP ratio. To underpin this, the proposed law will require the Government to set out the assumptions underpinning its annual Budget, along with its longer-term fiscal targets.
Targets could also be set for some components of the Government’s fixed-cost spending, such as the civil service wage bill, while plans and timelines for eliminating any deficits will also have to be laid out.
However, if the Minnis administration’s 2017-2018 Budget forecasts hold, the Government’s debt-to-GDP ratio will remain around the 80 per cent benchmark for the next three fiscal years through to June 2020.
And the national debt will have risen, albeit at a slower rate, to $7.7 billion over that same period, with the ratio to GDP kept in check by improved economic growth.
“If our GDP was booming through the roof, we’d not have a lot of these problems, but we have poor GDP growth and little fiscal responsibility,” Mr Myers told Tribune Business.
“The other drivers of this are open and accountable governance, and fixing the education system. We’ve got to have a more productive workforce to have higher GDP numbers.
“It’s not a one-pill cure, to use Dr Minnis’s analysis. He’s right, but there’s no one pill solution to this.”
Mr Myers suggested that the Bahamas adopt “a relatively open” Immigration policy to attract the businesses, investors and managers with the capital and skills to grow its economy.
Apart from improving the ‘ease of doing business’ and maintaining foreign direct investment (FDI) at “a relatively high level”, Mr Myers’ economic recovery prescription also involves ‘buy in’ from the trade union movement.
“The unions have to take an active role understand they’re part of the solution, and recognise that regionally we’re uncompetitive,” he told Tribune Business.
“They’ve got to start working on, and drive, productivity if we’re going to remain a relevant tourism destination. They’ve got to take a vested interest. They can’t sit and throw rocks at people, and not care about the outcome.”
Mr Myers also urged the Minnis administration to focus on energy reform as a priority, adding: “Energy costs have to come down.
“Energy is a massive fix, and helps the bottom line of the Government, private citizens and the private sector. I can’t imagine that Desmond Bannister [minister of works] should be doing anything else other than trying to fix this power situation in the next couple of months. That should be his utmost and single priority. What can be more important than that?”
Mr Myers added that while the Government had delivered the correct ‘statement of intent’, it now needed to follow through and deliver on what it is promising.
“He’s absolutely on the right track. The question is: Can he walk the walk and actually make it happen?” he asked of Dr Minnis.
“It’s a massive task, and I understand the enormity of it. That’s why I’m really worried about it. It’s a lot to do.”
Comments
sheeprunner12 6 years, 9 months ago
Take the capital out of Nassau ...... to Fresh Creek ...... build a new capital "Lucaya" and the new Bahamas will emerge as you plan for a new economy and political culture ...... Get out of Nassau!!!!!!!
That is the first step to solve the problem
athlete12 6 years, 9 months ago
I agree and we've become too centralized with nassau thereby leaving the family islands to fend for themselves. Now the the city is overpopulated with jobs being scarce. Our education system is being crushed which is why the productive workforce no longer exist.
Baha Mar should not have been in Nassau, it will cannibalize the market.
We're driving into the abyss
John2 6 years, 9 months ago
For the first time in an independent Bahamas we have a government that is speaking about prudent government fiscal responsibility, accountability and through the legal process, prosecuting those who are found to be guilty and corrupt . Fiscal Responsibility-type legislation if passed into law will prevent this mess from happening again in the future. We do not want to go the way of countries like Greece with a dept to GDP ratio of 179 % (2016). We as a country have to much protential and with this new government it seams that the small steps we are beginning to take will is a very encouraging sign. Hope fully the rating agency will give one last change with no further downgrade. Bahamians as a people need to become more discipline as a people and not try to live to much of the american big time life style.. In the near term its going to get very rough before it gets better. Only the strong will survive. . .
TheMadHatter 6 years, 9 months ago
It's not a ten year problem, it's a nine month problem. Belly-swell-itis is the first disease Dr. Minnis needs to cure in the Bahamas.
However, since we as a society just love wife-raping, incest, and young prostitutes on the streets - that is a hard pill to swallow.
We are doomed.
TalRussell 6 years, 9 months ago
Comrade Robert Myers. Then how do you begin explaining to International Credit Rating Agencies that your Red Shirts's Regime's Ten-Year Battle To Wipe Out Debt - began within but days assuming power from the PLP - by "KP" borrowing close to another BILLION Dollars in the good name the Bahamaland's people... .And, that you were too damn lazy to prepare and write your own Red Regime's Budget..... So what did "KP" do.... He went full speed ahead and adopted the former PLP's Budget that they had prepared that they have presented on the floor of the House of Assembly - had they been the party elected to govern on May 10, 2017?
{Comrades, in name Sweet Jesus, No Need Make This Stuff Up ....When "KP" admitted he never even read the PLP's prepared Budget - before he presented it on the floor of the House of Assembly }.
DDK 6 years, 9 months ago
K.P.'s "near the top" "lying second only to anti-corruption laws" is not good enough. One would have thought that fiscal responsibility legislation would aid in the reduction of corruption. When Parliament reopens in September, the M.P.s will spend their days playing the corruption blame game until it is time for Christmas recess and run the clock out on fiscal responsibility and transparency legislation.
John 6 years, 9 months ago
Every time a dollar gets paid on the national debt of government waste is cut or some crooked politicians or government employees are let go, not only does the government increase it's ability to pay its debts, but more money becomes available to complete projects and services provided by the government. And if government continues on a course of debt reduction and efficiency there should come a point where taxes can be reduced. And government should be aware that there are agencies that come knocking on your willing to loan bags of money. Not because they want to be helpful but they have billions to lend and want to collect hefty interest rates. They are not worried about a country's debt ratio or of the tax burden high national debts place on local citizens. They just want to loan the money like any other financial institution.
TalRussell 6 years, 9 months ago
Comrades! It should bother you and your families that every cutback in spending is directed at the ordinary people, the near poor and the dirt poor Bahamalanders.
We really need cutbacks that forces MP's and Senators and their own families to have to experience the same cutbacks as the people they're directed at. We can start with making them park ALL government vehicles..... And I mean ALL..... including PM Minnis's Benz... and whatever kind automobile assigned to 'KP.'
Comrades, a country where Seventy-Cents of every dollar the government will spend in probably over your children's lifetime will go to pay the salaries, benefits and pensions of government workers - shouldn't be asking its citizens to pay for their cars, license plates, drivers insurance and maintenance. Lead by example!!!!
You'd thought some those with millions in declared net worth - would've been too damn proud to make the poor people pay for their transportation.
DDK 6 years, 9 months ago
You'd have thought, Comrade.
We_doomed_242 6 years, 9 months ago
lol so right just saw Reece chipman sporting around in a benz with the big mp plate on it out west the other day
sheeprunner12 6 years, 9 months ago
Each Ministry should now indicate to the media what their 10% reduction will affect ..... this sounds sexy to say ........ but The People would like to see how this 10% will affect them in reality
TalRussell 6 years, 9 months ago
Comrade We_doomed-242, I hope it won't take long before the ordinary income citizens, the near poor and the poor citizens does comes to see the Red Shirts - not as "It's the People's time" governing party but as a 'Red Proprietary Government' sounding more like the PLP - with each passing day of broken promises. See them as nothing but a whole new set 'Proprietors' who came to power promising rational and orderly government but appointed the same 108 political favour government boards as did the PLP. Even President Trump has gotten around to appointing 108 government boards.
Like the PLP, they will squeeze the population by over taxing them while selling of its resources,. They will sign over our remaining private islands, crown lands and public beaches to foreigners until the natives are boxed-in to revolt. Park those government cars... now!!
Funny, how the Red Shirts since coming to power have completely stopped mentioning the $1.2 million gift 'riot stuff' donated to the PLP government - by the Chinese government?
{ You don't need make this up }.
sheeprunner12 6 years, 9 months ago
The National Debt cannot be eliminated ........ It will be like when oil prices went down to $30 per barrel .......... and Bahamian gas prices never went below $3.00 per gallon ...... Now even while oil prices remain rather low, our gas prices remain stubbornly high ........ What Myers means is that we have a $7Billion debt ........... This will remain the new threshold for the next 10 years ....... before it begins to rise because we have "head room" again ......... We cannot be that gullible
androsman 6 years, 9 months ago
This guy has the nerve to speak on fiscal responcibikty and bringing down the law on thepolitical elite. This guy, who two or three years ago was in this very paper being found guilty and fined $10,000 for deceiving customs and by or presenting a fraudulent valuation, or robbing the public purse and the treasury when importing his Porsche Cayenne jeep. This who Yall to give credibility to on this issue. Well blow me down!!!!
androsman 6 years, 9 months ago
Are you serious? this the same Robert Myers who i read about in this paper 2 or 3 years ago, who committed fraud against this country and tried to rob the public purse of what it was due. this the Robert Myers who was found guilty and fined $10,000 for presenting false and under valued invoice on an entry for his Porsche Cayenne Jeep. this who y'all give credibility to to speak on this issue. they are dead serious. well blow me down, y'all need to stop. But anyhow let me stop throwing stones.
truetruebahamian 6 years, 9 months ago
Take a lesson from someone who knows about real business. Myers knows business - its ups and downs and cruising levels. I know as well. There are so many with pie in the sky ideas and believe in unrealistic possibilities and these are people who - should they have a politician's ear might just benefit from an unrealistic and non thoroughly researched idea. I find this with many persons who have never had their feet wet by stepping into the actual entrance, the working day to day sweat and knowledge of the enterprise at the heart of the point of conversation. There are persons like Graham who have no actual hands on sweat of the workings of how aragonite gold and other seaborne imagined feasts are available to us without saying that aragonite is available in various degrees of oolite quality, but who will buy it? It is available everywhere and unless the U.S. boats pick it up, there is no sale from the Bahamas or anywhere else.
Porcupine 6 years, 9 months ago
What is not in the discussion is the fact that our situation is not an accident. The politicians are lured into taking these loans, enslaving their people in the process. Those who continue to lend us money know exactly what they are doing. They want us to be in this predicament. There is a playbook to this. It is called structural adjustment. Under the guise of prudent financial restructuring will come more pain to the average citizen. Prices will rise because everything is being privatized. As the business gurus say must be done. Public utilities and public property will be sold off to "reduce" our debt and to satisfy the bond holders. As the business gurus say must be done. Business is given the right to rule over people. The bigger the business, the more clout they have, in every arena. Take Starbucks and Apple. They pay almost no taxes. Because they are SO vital to the world, it is deemed appropriate that the little people should pay the taxes while the "job creators" get a free ride. The same thinking applies to VAT, a regressive tax. We no longer think that the rich should pay proportionately more in taxes. Why? Because it is working so well for the world. The world where 5 people own as much as the bottom 3.5 billion people. We need to rethink the entire paradigm. But, to do so you must have the learning to think outside the box. That is why education will never improve. The leaders don't want thinking people who can see through their bullshit. We need to end this selfish, backwards thinking. Why are the working and poor people always burdened with the pain and suffering while the politicians ride off into the sunset with their pensions and ill gotten millions. Seems to happen every time, no? There are many stuck in their ways of thinking, especially on these comments in The Tribune. They can be excused, for they were educated this way. We, the people, must see through this and plot a new course. We say we are Christians, yet, continue to worship the money, money changers, and those who preach the gospel of prosperity. We, as in most of the world's people, have lost sight of what "living" is all about. Here in The Bahamas, we continue to let the charlatans chart our course.
DDK 6 years, 9 months ago
Thank you, Porcupine, for taking the time to put 'the way it is' so eloquently.
Well_mudda_take_sic 6 years, 9 months ago
The IMF, IDB, Moody's, S&P, etc. (all agents of the U.S. government used as instruments to implement U.S. foreign policy) are putting considerable pressure on the Minnis-led FNM government to borrow even more rather than stick with an austerity program that will eventually eliminate our budget deficits and start paying down our national debt. It seems all of these agents of the U.S. government are telling our government that the Bahamas must continue to borrow willy-nilly in order to avoid wide spread civil unrest and increased violent crime that will result from an effective austerity program aimed at warding off economic collapse. We must turn a deaf ear to the advice coming from these international agencies because they cannot point to a single nation whose economy they have turned around; in fact, these agencies have wrecked the economies of many countries foolish enough to follow their advice. Minnis is absolutely correct in saying we must take our medicine now, and endure the pain that comes with it, in order to avoid what would otherwise be certain death for our country. The U.S. government will tell the world over and over again that we are a crime ridden country in an effort to pressure our government into borrowing more and more. We should respond by reminding the U.S. that it has several cities, each with a population far exceeding the population of our entire country, where the violent crime rates are so high that vast densely populated areas have become literal war zones, e.g. Chicago, Baltimore, Los Angeles, etc.
Reality_Check 6 years, 9 months ago
U.S. foreign policy has for decades been aimed at weakening and impoverishing other less developed nations as a means of enabling connected powerful U.S. corporate interests to swoop in and buy up state-owned assets and natural resources at bargain basement prices. This is precisely what the U.S. is hoping will be the result of its predatory foreign policy aimed at keeping the economy of Venezuela severely repressed, even in the post-Chavez era. Powerful U.S. oil companies just can't wait to acquire Venezuela's very valuable oil reserves for a bargain basement price.
Well_mudda_take_sic 6 years, 9 months ago
What the U.S. is doing to Venezuela now is almost exactly what they did to destabilize Ecuador so that U.S. corporate interests could rape, pillage and plunder the oil reserves of that country leaving nothing but an environmental mess for Ecuadorians. Many do not know that the proven oil reserves of Venezuela actually exceed the proven oil reserves of Saudi Arabia. The U.S. will gladly see Venezuela self-destruct as a country with much suffering by its citizenry if that is what it takes for powerful U.S. corporate interests to gain control of Venezuela's vast oil reserves or otherwise prevent those reserves from flooding the oil market with low cost oil. What the U.S. is doing to Venezuela is so blatant and so wrong on so many fronts!
DDK 6 years, 9 months ago
They can't seem to help themselves. It is now ingrained for them to behave this way. History shows that all great empires come to an end. That country is so greedy it will allow itself to be destroyed by fricking fracking to sell shale gas to Europe and attempt to knock the Russians out of the game with stupid sanctions. One of these days they will bite off more than they can chew.
Porcupine 6 years, 9 months ago
Do not confine your thinking to the "US". I am not saying that as a US citizen, for I agree with everything you guys wrote. It is the rich elite who control the world. The US is but one country. The elite control the US just as they control any country. They have no national loyalty. They move their money, residency and assets wherever it suits them. The governments, banks and lawyers respond to the monied interests regardless of nationality. The rich elite live in a world most of us can't comprehend. Their greed transcends nationhood. They control the world. While we keep talking about FNM vs. PLP, Bahamians vs. Haitians, or Chinese, or black vs. white. It is the ultra rich vs, the rest of humanity. This is the truth which we must see.
Reality_Check 6 years, 9 months ago
Repost: Unlike the U.S. we don't have the luxury of being able to print money to pay overseas creditors for goods and services imported by our country. This is why we cannot borrow our way out of the financial hole we are in and must instead go the austerity route. Minnis knows (and hopefully KP appreciates) that we must aggressively tackle a significant overall reduction in the very bloated costs of our government. Minnis will be greatly rewarded for doing so five years from now as things slowly begin to turn around for us.
sealice 6 years, 9 months ago
“The unions have to take an active role understand they’re part of the solution, and recognise that regionally we’re uncompetitive,”
We need to get rid of the Unions because they are more of the problem then politicos chasing votes will admit - the politicians want the votes more then they care about the actual people same as the Union Leaders.
And I wish this could be fixed in 10 years Mr. Myers but i expect in 10 years we ga still be broke and you ga still be bald.....
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