Turnquest fears for the country’s future economy

As of Tuesday, February 17, 2015

K Peter Turnquest

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

FREE National Movement Deputy Leader Peter Turnquest said he was “very concerned” about the country’s economic future as he castigated the government over its lack of detail in the 2014/2015 mid-year budget presentation.

Speaking in the House of Assembly yesterday, Mr Turnquest said it was difficult to make comparisons year over year in the mid-year exercise due to the many budget format changes made last June.

He accused the Christie administration of attempting to “swing” Bahamians with the newest economic projections that were outlined in Prime Minister Perry Christie’s mid-year budget communication last week.

During that presentation, Mr Christie said the latest International Monetary Fund (IMF) forecast showed that real output in the country’s economy is expected to be over $600 million larger in 2017 than it was in 2012. In real terms, it is an increase of almost 8 per cent over the current five-year mandate, he said.

However, Mr Turnquest took issue with this forecast.

He said: “To take this projection into context, however, it would be useful to note that the Bahamian economic share of the world’s total GDP, adjusted for purchasing power parity, was 0.01 per cent in 2009 and is forecast to be 0.01 per cent in 2015, no change.

“In other words, don’t get swing by these numbers as they are dependent on global economic forecasts, not the Bahamas in isolation. As the government is quick to point out when it fits their purpose, we have an open economy that is vulnerable to external conditions, particularly the United States’ economy and so as one goes, so does the other; (it has) very little to do with direct government effort.”

However, his assertions drew ridicule from seated members of parliament on the government’s side who said the FNM was attempting to confuse Bahamians.

Mr Turnquest went on to urge the government to divest itself of Bahamas Telecommunication Company shares.

The Ingraham administration sold 51 per cent of BTC to Cable and Wireless Communications in 2011, to stern opposition from the PLP.

The former administration had planned to offer nine per cent of the government’s shares in BTC to the public.

Last year, the government concluded a deal with the company that saw CWC transfer two per cent of BTC’s shares to a charitable trust for Bahamians.

The government still owns 49 per cent of the company.

“Given the actions or lack thereof on that divestment exercise, are we to trust this government when they say they will cause 51 per cent (of the country’s second mobile services provider) to be owned by Bahamians? I think not. I do not believe it is in their philosophy to see Bahamians have a significant equity stake in our country. They prefer the cradle to grave approach, keeping people dependent on them in exchange for votes,” Mr Turnquest said.

“If 51 per cent is to be sold in the new company, I urge the government to make it a true IPO offering and that it does not attempt to act as an intermediary or interfere in the offering. They have no creditability in this regard.

“I call on the government to fully divest itself of BTC shares so that there can be no claim of insider trading and or unfair practices. How does an investor trust the regulator of a process to police that process, particularly when they have a vested interest?”

State Minister for Finance Michael Halkitis said last week that the government would be the majority shareholder when the country’s second mobile services company is launched, but that the shares would eventually be offered to Bahamian investors.

Mr Christie has since said the government will only own 51 per cent of the new company as a temporary measure to immediately facilitate the transfer of shares to local investors.

Yesterday the FNM deputy leader also renewed calls for the government to implement a Fiscal Responsibility Act, and to create an Office of the Ombudsman, a National Economic Council and a non-partisan “Ways & Means Council”, to collaboratively determine budgetary spending.

John 9 years, 10 months ago

While Perry Christie may be proudly boasting about how successful his government was in implementing Value Added Tax, a burden on the backs of the Bahamian people, his advisors should warn him that implementing it is one thing and sustaining it is another story. VAT is canabalistic by nature and it takes a bite out of everything that moves in the economy. So not only are you burning the candle at both ends ( customs taking vat at the ports and merchants taking from the end consumer) but vat is imposed on every transaction in between. And if there is no real growth vat will feed on itself and shrink the economy to recessionary levels. Persons who collect vat may find after making one or two submissions to the government that they no longer have the funds to do so, or they cannot replace inventory or meet other financial obligations of their business and so eventually they will be forced to close. It will not be a matter of choice. If the economy does not grow it will mean that government is getting a bigger slice of the same pie. So everyone else is getting less. And an even greater danger is if government does not use the funds it draws out of the economy to pay down its debt, then what's next? An increase in the value added tax on an even smaller economic pie? Yes it is true that the US economy under Barak Obama has rebounded. The stock market has set new records, unemployment is down, gas prices are down and fuel is plentiful, crime in most major cities in the US are at their lowest levels in ten years and so is the number of persons going to jail. So do you think the Republicans are going into elections under those conditions? They have already started efforts to reverse Obamas policies and stall the economy. What happens in America will happen here and while we may save a boom, from most indications it will be short lived, especially now with China heading into a recession. Save your pennies and avoid debt.

duppyVAT 9 years, 10 months ago

Bahamians should ALL fear for the future of our country if we have any patriotism inside of us. But we have to stop allowing the two political juggarnauts to play us for fools ....... it is time to vote INDEPENDENT and form a coalition government based on competing interests and philosophical balance between free enterprise and socialism ..... its too skewed right now.

proudloudandfnm 9 years, 10 months ago

Where are the PAC reports?!?!?!? How can the FNM challenge anything the government says if they are not utilizing the PAC as they should?????

TheMadHatter 9 years, 10 months ago

So, Mr. Turnquest, why didn't the FNM ever get around to offering that 9% ownership to Bahamians? Couldn't let the yard-niggers move up even a little bit, eh?

TheMadHatter

asiseeit 9 years, 10 months ago

Madhatter, that is wrong as the FNM gave Bahamians the chance to invest in the port and Commonwealth Brewery. Both of these stocks have done very well and common Bahamians who invested have made money. The port was oversubscribed but every Bahamian that wanted a to invest got shares. What investment has been offered to the Bahamian people under the PLP? P.M. refuses to allow that 9% you speak about come to market and he is making sure that common Bahamians have no chance to invest in the new cell company. The PLP has the Bahamian people twist right up. They say they are for the grass roots and the common man yet they do nothing to help them of any substance (ham, turkey, and election "gifts" do not count). The PLP is about the PLP and the political elite, once, poor Bahamians see this they may start to move forward because under this government we are STAGNANT. Anything is better than what we have now.

John 9 years, 10 months ago

Perry Christie try to draw parallels between the BoB scandal and RBC/Finco profits and falling drastically and another Canadian bank reporting a net loss. Did the Central Bank have to step in and intervene on the procedures of any of these banks? Did any of them have to be re-funded? Was the trading of any of their stocks suspended and did they have to remove their bad loans off the books to save themselves? And how did shareholders of those banks find out about those losses? From direct reports from those institutions or from leaks to the press and constant denials of trouble by the Bank? Is the CEO of any of them there banks being fired or being asked to resign?