The Tribune

By NEIL HARTNELL Tribune Business Editor THE Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) chairman has given his "110 per cent support" to the International Monetary Fund's (IMF) call for more services to be outsourced to the private sector, noting that this nation had become "complacent" in its reliance on foreign direct investment (FDI) to drive economic growth. Agreeing that the IMF's Article IV report correctly illustrated the realities facing the Bahamian economy, Winston Rolle also called for public sector industrial agreements to include more performance-related pay clauses, so salary increases were not received "ad-hoc'. "It is what it is in terms of being the reality we are faced with," Mr Rolle told Tribune Business of the Article IV report. "I think it's also something we need to be paying very careful attention to, especially as we go into an election year. These are the kinds of things we need to be having discussions with politicians on." The Chamber chief said he "supported 110 per cent" the IMF's call for more government services to either be fully outsourced to the private sector, or handed over to private companies under a management agreement. "A lot of things the Government is doing could be done more efficiently through the private sector or public-private partnerships," Mr Rolle said. While declining to name the services and activities that ought to be privatised, or outsourced to private sector management, he nevertheless told Tribune Business: "There are a number of things we ought to be looking at. There are a number of areas of opportunity that could be examined as to how they could be managed." The Chamber chief also expressed hope that the Small and Medium-Sized Business Development Bill, which the private sector has worked on with the Government, would come to Parliament prior to the general election, "as the private sector should be the ones creating the jobs". In its Article IV report, the IMF said it backed the Bahamas' "lower reliance on fiscal incentives, which have failed to deliver high growth rates". It added: "The emphasis on measures different from fiscal incentives for boosting growth was a positive development, since the country's growth performance over the last decade suggests that the fiscal incentives model had not been effective in promoting sustained growth." Mr Rolle, though, said the Bahamas' weakness was not an overreliance on fiscal incentives, but more the foreign direct investment (FDI) variety. "If you take a look at our economic growth over the years, much of the growth is ties to foreign direct investment," the Chamber chairman told Tribune Business. "We'd gotten very complacent using that as a vehicle for growth, and it's only now with the challenges around the world and prospects for foreign direct investment nowhere near where we are accustomed to that we are only now for the most part examining our options." Mr Rolle acknowledged that the Bahamas' ever-expanding national debt and fiscal deficit, together with the credit rating downgrades imposed by Moody's and Standard & s, would make the Bahamas' access to sovereign debt markets - and the cost of such financing - more expensive. And all the Government's borrowing for social security and infrastructure projects "have to be paid for...... Someone has to pay for it. Someone has to bear that cost, and obviously it has a direct impact on our financial position". And, noting the IMF's criticism of the Government's decision to lift the public sector wage freeze one year after it was implemented, Mr Rolle agreed this was an area that "needs to be looked at". "One of the challenges is that a lot of these payments and wage increases are tied to union agreements," he told Tribune Business. "We need to build more agreements with performance clauses in there, so they do not receive payments ad-hoc, but peg them to delivery against service."