The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas’ 78 per cent debt-to-GDP ratio “is a real concern” that threatens to sink this nation, the FNM’s deputy leader said yesterday.

K P Turnquest said it was “sad to note” that over the past five years the Bahamas’ debt-to-GDP ratio had climbed from 48 per cent, as at December 2011, to 78 per cent at December 2016.

“This highlights the fact that the economy, despite the noise by the Government, isn’t growing, and why the man on the street doesn’t believe the unemployment statistics,” he argued.

“We cannot afford this continued misrule, as the high debt-to-GDP signals higher borrowing costs and increased taxes on the backs of struggling Bahamians. The level of debt-to-GDP is a real concern for us. Talks of Baha Mar opening, fancy crime solutions or groundbreaking ceremonies for projects which aren’t funded doesn’t change the fact that our economy is contracting.”

Mr Turnquest added: “Further, the absolutely ridiculous hiring of multiples of nine and 10 persons in the Family Islands to watch administration offices and to clean toilets at a school is hypocritical, and beyond the excess we can afford.  

“It is ironic that it was this same [Mr] Christie and his band of merry men that critiqued the previous administration for its 52-week jobs programme, and for entering into contracts just before an election. Nothing has changed, and it lends itself to the criticism that they have not learned one thing as old career politicians.

“The fact is that with the level of debt we have amassed, and a stubbornly high private sector unemployment rate, these giveaways and padded contracts threaten to sink us further, and possibly expose us to the dreaded risk of devaluation we all hate to even think about. Barbados finds itself in a similar situation, having just been further downgraded and facing the possibility of IMF intervention.”

The Central Bank’s 2016 fourth quarter report showed that the national debt increased by $373.1 million during 2016 to break the $7 billion barrier at year-end, closing at $7.042 billion.

The increase was exacerbated by the blow from Hurricane Matthew, which forced the Government into some $130 million in unanticipated borrowing from a syndicate of commercial banks, while also negatively impacting its revenue collections.

While Matthew was a key factor behind the 168.6 per cent year-over-year increase in the fiscal deficit for the final three months of 2016, rising from $85 million to $228.3 million, the Central Bank report emphasises this was not the sole factor.

Mr Turnquest pledged that an FNM administration would restore fiscal accountability and transparency to government.  

“Fiscal rules, a strengthened Auditor-General Department, whistleblower protection and fiscal limits on discretionary spending will help to bring order back to the public finances, and finally help to start this debt reduction we so desperately need in order to secure a better future for our country than the generation before us,” he said.