The Tribune

By David Allen

Many Bahamians are blaming the Government for perceived corruption and illicit laundering of borrowed funds in various loss-making enterprises. It is my position that international and local lending institutions, which have collectively lent our Government $5.8 billion over 40 years of independence, are also accountable to the Bahamian people. Equivalent to a drug dealer enticing an addict with free drugs to keep their habit going, these lending institutions have leant the Bahamas Government funds, knowing full well it is unable to handle them properly.

When the Bahamas goes bankrupt and its currency devalued, international lending institutions will snicker and jeer. However, they are culpable and liable for the malfeasance of both Bahamian political parties in the mismanagement of funds. First, as a lender, they had a duty to ensure that funds were properly managed. They should have required audits on all funds loaned to our Government.

Second, as a lender, they should have ensured funds were spent on valuable assets – that the Bahamian people received value for money. Imagine a retail bank providing a $500,000 mortgage on a house valued at $20,000. Likewise, lenders of funds used on local projects should have ensured every penny was spent in a prudent fashion, and that these projects were worthy of investment.

Third, prior to lending, international lenders should have ensured that the Government was not unduly burdened; retail banks check a borrower’s income to ensure capacity to repay a mortgage. Much like colonial slave traders abetted African chiefs to sell their people into slavery, international lenders have aided and abetted the Bahamas Government in selling its people into slavery.

How could a competent international lending institution lend to a Government, in this day and age, which does not have a Freedom of Information Act? It is clear that to do so could be considered negligent. Further, how could a credit rating agency not downgrade the Bahamas to the extent that future borrowing would become impossible, when it knows full well that the Government will never be able to repay its debt. Much like a dog with rabies is put down, the credit rating agencies should have downgraded the Bahamas’ credit rating to ‘junk bond’ status to prevent further borrowing. As with the North American sub-prime mortgage crisis, they should be held culpable for the illusion that Bahamas’ bonds are investment grade.

The Bahamas is following St. Kitts (200 per cent) and Jamaica (150 per cent) down the debt-to-GDP path of no return. Its people are being sold into slavery again. The Bahamas will likely face bankruptcy and its currency devalued. Never able to repay its debts, the country will be placed in a global debtors prison of sorts.

As the day of judgment nears, I would urge international lending institutions not to lend our Government a penny more without full audits on the spending of borrowed funds and the enactment of a Freedom of Information Act. Otherwise, our blood is on their hands. In a just world, any funds that have not been properly lent would not be repaid. The beneficiaries of these funds were the Bahamian people, and we never received payment. Rather, funds ascribed to us have been laundered into the pockets of a few affluent Bahamian families. Let these families repay the international lenders, not us. Let these families go bankrupt, not us. Let these families pay increased VAT taxes, not us. Let these families have their currency devalued, not us.

It is no longer a fruitful enterprise to blame the Bahamas Government, or whichever party has its hand in the cookie jar at any given time. It is clear that those in power do not have the capacity for change or guilt. With this in mind, I petition the international lending institutions directly. Perhaps, some greater power, such as the United Nations, will hold them accountable and ensure that real change in government lending occurs. Lending that enables the misuse of funds is wrong. International lending institutions must ensure that small governments cannot borrow to the extent that they become overburdened and allowed to bankrupt their own countrymen.