The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE deputy prime minister yesterday said "structural adjustments" and "a cultural shift" are needed to address The Bahamas' "upside down" economy.

K Peter Turnquest told the National Conclave of Chambers of Commerce that the government remained resolute in its objective to ensure the private sector, and not itself, was the main GDP growth and employment driver.

Reaffirming its ambition to reduce the civil service workforce, he said: "We are building training programmes to help transition the civil service and contract workers off the public register. The central government's wage bill is the single largest recurrent expenditure at $793m.

"The government is currently the largest employer in the country but, as we improve the competitiveness of the workforce and reduce the size of government, we hope to change this, and place the responsibility for job creation, innovation and GDP growth where it belongs; on the private sector."

He added: Our economic driver equation is "upside down" and needs to be corrected. The government should take its rightful place as a regulator of the economic space, providing the enabling environment for a healthy private sector and as a service provider of last resort, rather than an employer.

"This, too, takes time. It requires structural adjustments and it also requires a cultural shift. I am confident that together we can overcome, fix the wrongs and build a better, stronger and efficient government machinery, but it does take patience, discipline and sacrifice."

Mr Turnquest pointed to the Minnis administration's $2.6m investment in full-time scholarships for Bahamas Technical and Vocational (BTVI) students as part of efforts to advance this goal. He added that it will improve skills while increasing the Bahamian workforce's competitiveness.

He added that the government was also focused on improving the performance and revenue yield of state-owned enterprises (SOEs), and reduce their subsidy costs to the government and Bahamian taxpayer over time.

"Twenty-three SOEs account for 15 percent of the government's total expenditure. This is unacceptable," Mr Turnquest said. "In light of the critical priority being attached to fiscal consolidation, such a drain on the public finances must clearly be rationalised.

"The government has already directed each SOE to move towards a cost-recovery operating model, which might include a mix of revenue enhancement initiatives as well as measures to reduce expenditures in-line with industry benchmarks. The SOEs are now articulating strategies that we expect will take them to this optimised point within three to five years."