The Tribune

Moody’s: Economy not growing fast enough

NO one should be surprised at Moody’s latest assessment of this country’s GDP growth for 2013. The long and short of it is that — according to Moody’s — this nation’s economy is not growing fast enough to significantly dent the near 15 per cent unemployment rate and its growing fiscal problems, Tribune Business reported on Monday.

Moody’s made particular mention of Government’s continued effort to regain majority ownership of BTC from Cable & Wireless. In Moody’s view this move was a “credit negative” for the Bahamas.

Bahamians do not seem to understand how badly the government has sullied this country’s international reputation as a place to do business with its foolhardy election promise to break a legitimate contract freely entered into by the former government with a foreign investor. Creditable investors will now look on this country through jaundiced eyes.

Mr Christie knew — we will not insult his intelligence by saying that he “should have known” — that if he won the election he could not have turned the Bahamas’ 49 per cent ownership in BTC to 51 per cent – with Cable & Wireless stepping down to the position of minority shareholder.

“Cable and Wireless,” Mr Christie said, “has given us the complete assurance that they have no intentions of selling and I could understand why they wouldn’t sell it because it’s a profit setter for them.”

Mr Christie forgot to mention that despite BTC’s current problems, it is also a profit setter for the Bahamas. With the Bahamas’ 49 per cent holdings in BTC to Cable & Wireless’ 51 per cent, BTC is now earning more for the Treasury than it did when government owned the full 100 per cent of BTC. So let’s stop this political bluff. There are winners on both sides.

The day Prime Minister Christie met with Cable & Wireless’ CEO Tony Rice, he knew that he was going through a charade for the sake of an election bluff. He knew before the first handshake that there was no hope of displacing Cable & Wireless in its majority position.

Early last week Mr Christie told The Tribune that “we have to reach a conclusion on our talks sooner than later. Whatever that conclusion is we have to know so that the government of the Bahamas can in fact review whatever options are available.”

Options? What options? Cable & Wireless have said “no.” Mr Christie wants to reach an early conclusion. Seems the conclusion has already been reached. Mr Christie should admit failure, apologise to the Bahamian people for creating a hope that was never there, and move on to something that will get the economy moving.

BTC is now making more money for this country than it did when it was fully Bahamian owned. So, in heaven’s name be grateful for something.

Obviously another reason that Moody’s is not enthusiastic about the Bahamas’ future is because all it reads about are politicians’ spending plans. To hear politicians talk one could easily assume that the Treasury is well oiled. It is only when the union cries out for more that Mr Christie reminds them that “we’ve just been downgraded” — the Treasury is bare.

But what do we see on the other side of the coin. The much hailed Urban Renewal, so out of control with spending that we understand the land clearing project has been stopped.

Apparently the land clearing exercise — to beat the thieves from the bushes — was so badly coordinated that Urban Renewal ended up duplicating much of what Environmental Health and the Ministry of Works were already doing. We were told that the abysmal lack of coordination must have cost at least $700,000.

If the stories we are now hearing are true, then Urban Renewal has cost far more than that, especially when administrative salaries are taken into consideration.

We have even heard of a case from the prison — we are told it is true — but even though the source is reliable we find it difficult to believe.

Apparently there is an inmate there bleating that Urban Renewal still owes him $180,000 for a contract he was given to clear a plot of land.

It is said that while he was out on bail, he was given the clearing contract. In the meantime, his case was heard, he was convicted and sent to prison. From prison he is saying that he was paid $60,000 for part of his work, but was still owed another $180,000 for the remainder. We have heard that small contractors are sent out to clear overgrown property. The contractor then submits a bill on completion. The usual way of operating is for the price to be agreed by both parties before a job is started – not one side dictating the price after the job has been completed, as is said to be the case in the Urban Renewal programme.

We’ve also heard of the case of a legally blind man —a regular caller to some of the talk shows — getting a $100,000 Urban Renewal contract, also a well known contractor related to a former cabinet minister receiving a contract in the region of $400,000 to clear an area of land near CV Bethel School on East Street south. If any part of this is true, then Urban Renewal has, to date, cost far more than $700,000. However, the worst news of all is that it has not made an appreciable dent in crime.

As is now underway at National Insurance, an accounting should be done of this department and the public should be informed of how their money is being spent.

No wonder Moody’s holds out little hope for the Bahamas. So far it has shown that it cannot sensibly manage its resources.

Government owes the Bahamian people an explanation.