The Tribune

EDITOR, The Tribune.

This week a failed Prime Minister gets to puff up his chest and strut around the failed Baha Mar resort and pretend to host the annual general meetings of the Inter-American Development Bank.

For the privilege of operating on this hemispheric stage, Perry Christie gets to waste untold millions of our VAT money hosting an organization that his government, by their neglect and failure to engage, has deemed to be useless.

We can expect thousands of the Bank’s staff to decamp from their luxurious digs around the corner from the White House in Washington, and set up shop in those parts of the Cable Beach white elephant that may actually have been given a certificate of occupancy by the Ministry of Works.

These staff are being joined by a similar number of government officials from the lending and borrowing countries of the bank as well as a legion of courtiers who make their living from the billions that the Bank disburses to developing countries each year.

Last year the Bank met in Korea when Perry Christie, oblivious to the man-made and natural hurricanes that were about to hit, decided that he could do what the big boys do and host a similar AGM.

He traipsed the Police Force Band to Korea to bamboozle the IDB into thinking that he can do what only the US, Canada, Brazil, Mexico and certain other large countries have done in the past. I am told that his fellow Caribbean Prime Ministers started to look for lint in the carpet, so shocked were they that the Bahamas would volunteer for so expensive an undertaking.

Perry thought he could get to show off his new Baha Mar resort. How could he not have known in April that a tsunami was about to engulf the project two months later? If he didn’t know then he was seriously out of the loop or fast asleep.

Five months later we had the natural disaster called Hurricane Joaquin. And then when our national debt started to creep to a dangerous percentage of GDP, Christie had three good reasons to go to the IDB and back out of the hosting. But he is too proud, too stubborn, too belligerent to see that there was no “win” proposition for the Bahamas to host the AGM.

The IDB is an inherently political organization. It does what its political masters demand of it. Brazil, a country so developed that it has its own space programme, and despite being mired in a fiscal and political quagmire, still managed to draw on $242 million from the Bank in the first two months of this year. The Bahamas stood at zero with no discernable projects in the pipeline.

As Minister of Finance Perry Christie has failed to grasp the significant role the Bank can play in helping him manage his finances with counter cyclical support, stimulate the economy through selective infrastructure spending, and reduce the national debt by using cheaper IDB money to pay down more expensive commercial debt.

It is now costing us serious money to be members of the Bank. We are in what the economists call negative flows, meaning we are sending the IDB more money in debt servicing than we are receiving in new benefits.

The IDB Board has approved a few dozen petty cash sized grants ($100,000 here, $500,000 there) to the Bahamas but just two loans totalling $53 million since the PLP has been in office. (Not counting the FNM negotiated $65 million transportation supplemental loan approved in September 2012.)

Were it not for these meetings this week, the two loans – one aptly to deal with “citizen security” while we hunker down in a crime wave, and the other to help make the Ministry of Finance more efficient would still be waiting for Perry to bring them to Parliament for mandatory approval.

The $33 million for institutional strengthening was approved in 2014 and the citizen security loan has been languishing since it was approved last summer. As usual Perry and the PLP were late again and had to rush them through Parliament in January. And they think the IDB can’t see through their incompetence.

The Bahamas’ IDB loan portfolio is the smallest in the Caribbean and the entire region and it is only to save the government much embarrassment that the Bank still keeps an office here. Perry refuses to engage the bank. It was not always so. Hubert Ingraham worked with the Bank and pressed them for favourable terms on major infrastructure projects.

We can argue that the New Providence Road Improvement Project was a huge inconvenience to all of us, but no one will now say that it was a bad investment.

Under Ingraham the IDB also helped with airport, water and sewerage and with budget support loans during critical economic times back in 2009.

IDB money does not come without strings attached. The IDB demands full transparency and accountability. You might get delays and bureaucratic bungling on an IDB loan, but it’s a safe bet that corruption (thiefin as we call it), will not burden the project or the taxpayers.

The PLP prefers to borrow from the Canadian-owned Bay Street commercial banks, sucking away capital that the local banks would then otherwise be forced to lend to the private sector. But Perry has gleefully borrowed at interest rates up to 7 percentage points higher than he could get from the IDB.

But then the Bay Street banks don’t ask too many questions on sovereign loans. They leave the cavity search for the long-suffering local businessmen.

By no means should we get the impression that the IDB is a saint. After all these years and despite all the sweet-talk from their media savvy President, Colombian Louis Moreno, the IDB still doesn’t understand the problems of the private sector in the Caribbean (or want to).

You can count on two fingers the number of Bahamian companies that have even gotten past the welcome mat at the Bank’s headquarters in Washington, much less gotten to present a project that the Bank took seriously.

This is largely because their cadre of international civil servants are fat and comfortable in their world of no-risk, no-responsibility. From Suriname in the south all the way up to us here in the Bahamas, the private sector thinks the IDB is a joke. Moreno will have to fix this with more than just talk.

We get enough talk and endless hot air but no action from Perry. We don’t need more of the same from Moreno.

THE GRADUATE

Nassau,

April 6, 2016.