The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas’ inability to “save for a rainy day” could come back to haunt it if Hurricane Matthew proves as devastating as forecast, the Democratic National Alliance’s (DNA) leader told Tribune Business yesterday.

Branville McCartney said that with a total public sector debt of $7.64 billion, a sum equivalent to 90 per cent of gross domestic product (GDP), the Government lacked the ‘fiscal headroom’ to properly respond if the Category Four storm inflicts severe damage on public infrastructure and society at large.

“I think that goes without saying,” the DNA leader responded, when asked by this newspaper whether he was concerned that the Bahamas lacked the borrowing capability to react in Matthew’s aftermath.

“Where we are, our fiscal position is tenuous. It is not good. It’s almost like it could be equated to not saving for a rainy day, and it’s raining. It’s raining and we’ve not saved.”

While the cost, time and hardship associated with Matthew’s recovery depends on how much damage the hurricane inflicts across the Bahamas, Mr McCartney said this nation might have to look beyond the multilateral lending institutions “if the worst case scenario materialises”.

While seeking financial assistance from the likes of the Inter-American Development Bank (IDB, Caribbean Development Bank (CDB), World Bank and International Monetary Fund (IMF) was fine, the DNA leader suggested that Bahamas may “have to look to our big brother to the north for some type of assistance”.

“There’s no if’s, and’s and but’s about it,” Mr McCartney told Tribune Business. “We can’t do anything to help ourselves because of our financial position. We are struggling as it is. We don’t seem to be able to see the light of day as it is now.”

Nassau has traditionally served as a hub for getting aid and materials to storm-hit Family Islands, but that trend is likely to be disrupted if Matthew stays on its forecast track and makes a direct hit on New Providence.

And Mr McCartney warned that the hurricane could create an economic “standstill” for the Bahamas, wiping out the projected 0.5 per cent GDP growth for 2016 and sending this nation back into recession.

“We don’t need this in this country right now,” the DNA leader told Tribune Business. “We haven’t recovered from the recession of 2008. Last year this time, we had Joaquin. We’re still feeling the effects of Joaquin in the islands that were hit.

“It’s [Matthew] not going to help us grow. It’s going to cause us to not grow. The bottom line is that this puts a standstill on any type of growth, and the concentration will be on rebuilding.

“It’s going to put us in a state of repair, not a state of growth, and that puts us back. There’s nothing we can do about this. It will be money coming out, not going in.”

In fact, the Bahamas could see substantial foreign currency inflows associated with reinsurance monies to pay Matthew-related claims, should there be widespread damage.

Still, Mr McCartney acknowledged: “It seems like every island in this country is going to be impacted. It’s certainly a daunting prospect.

“This hurricane is predicted to be more devastating than Joaquin; I pray that things change. We saw what happened with the homes and houses then, and we have similar in New Providence. I’m thinking about the devastation to people’s homes if it comes the way it’s supposed to come.”

The DNA said widespread, extensive damage to people’s homes would negatively impact businesses and the wider economy, as staff would be more concerned with restoring their lives than coming to work. As a result, workplace productivity will suffer.