The Tribune

By KHRISNA VIRGIL kvirgil@tribunemedia.net THE FNM administration has done nothing but mismanage the country and its economy, opposition MP Ryan Pinder claimed yesterday. During the House of Assembly debate on 15 Bills aimed at reforming the financial sector, Mr Pinder said the government's actions have put the country's financial stability at risk for decades to come. "Uncontrollable borrowing, the lack of fiscal responsibility and discipline on spending has resulted in negative outlooks and commentary about the financial and economic state of the Bahamas," he said. "Under this FNM administration, the credit rating was downgraded more than once and we are at risk for another credit downgrading." Mr Pinder went on to present parliamentarians with a timeline of the country's credit rating history. The recent downward trend is proof, he said, of the FNM's inability to manage the country's finances. In December 2009, he said, Standard & Poor's (S&P), a leading credit rating agency, "took an extraordinary position in downgrading the credit rating of the Bahamas on the grounds of increased spending and a narrow revenue base that has weakened the government's fiscal position," Mr Pinder said. According to the Elizabeth MP, the government failed to heed S&P's warnings, causing further downgrading. He noted that in 2011, S&P made more observations concerning the Bahamas' economy. "In the July 25, 2011 report, Standard & Poor's identified that one of the weaknesses of the Bahamas was a rise in fiscal debt and deficits that were generated during the recession," he said. Mr Pinder said S&P asserted that the country's credit rating could improve if the agency saw reasons for optimism. He said: "They do recognise that ratings could rise if the government takes a more proactive response to reduce the debt levels. "I see no proactive, progressive policy from this government. In fact this government is all about debt, and more debt, and more debt, and more debt, without care or concern with how it will be paid back. "Standard & Poor's observed that at the time of the report the deficit as a percentage of GDP was more than 65 per cent higher than the average for BBB rated countries." Mr Pinder said this demonstrates the government's lack of a progressive policy to reduce the debt ratio. Speaking later during the debate, Marco City MP Zhivargo Laing pointed out that government debt has risen, not just in the Bahamas, but around the world as the result of the largest international economic crisis in almost 80 years. Producing charts that indicated upward trends in public debt in a number of countries, including the Bahamas, Mr Laing nevertheless assured parliament that the country is well placed to meet its debt servicing responsibilities, not just now, but also well into the future.