The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian per capita income has taken a decade to recover to pre-recession levels of 2007, with a just-released report arguing this masks "significant income inequality".

An Inter-American Development Bank (IDB) on proposed welfare system reforms that were halted following the 2017 general election lays bare the wealth fault-lines in Bahamian society by revealing that the richest ten percent in this nation consume more than the poorest 60 percent.

Explaining why social security reforms were essential, the IDB report said the last nationwide survey conducted in 2013 revealed that "one out of eight" Bahamas residents was living in poverty - a ratio that has potentially increased in Hurricane Dorian's aftermath.

With poverty levels in double digits, the document added that The Bahamas' relatively good social indicators often masked low school attendance, poor academic achievement and health problems that are exacerbated by a "fragmented, non-contributory" social security system that has remained "unchanged" in the 15 years since the reforms were first conceived.

While The Bahamas' average per capita income struck $30,000 in 2017, the IDB said this merely revealed a lost decade of "catching up" as such a level had already been reached 10 years before prior to the 2008-2009 recession.

"Figures on income levels can mask significant income inequality," the IDB report said of The Bahamas. "Consumption of the richest decile is equivalent to more than the poorest six deciles put together.

"The global economic crisis that began in 2008 led to historically high levels of crime and violence, and has resulted in higher fiscal deficits and rising debt. With 350,000 inhabitants, the internal market of this archipelagic nation is small, the production base is narrow, and it relies almost entirely on one trading partner."

Noting that the national poverty rate had increased by more than three percentage points to 12.5 percent in 2013, the last time the Household Expenditure Survey was conducted, the report added: "In other words, one out of eight residents was living in poverty in 2013.....

"Education outcomes and poverty are closely linked in The Bahamas. For poor children, the pattern is one of low pre-school enrollment and poor performance during high school in terms of grades and attendance (both required for graduation). At three years of age, about 34 percent of poor children are enrolled in preschool compared to 75 percent of non-poor children.

"While enrollment rates are high and similar among the poor and the non-poor at all grades, important gaps remain. For instance, the percentage of people older than 15 who completed school decreases by almost 20 percentage points for the poorest income quintile."

With public high school graduation rates pegged at 48 percent, the IDB said the figures were "likely to be even lower for children from disadvantaged families". There were also indications that women of "lower economic status" in The Bahamas, and with less than a tertiary education, are more vulnerable to obesity.

"There are problems in attendance or attrition at the high school level that are linked to perceived low relevance of education and low academic expectations, as well as increasing opportunity costs," the IDB report added. "Sixteen and 17year-olds earn an average yearly income of US$4,661, or 1.3 times the poverty line."

Suggesting that the Bahamian welfare system was inadequate to address such challenges, the report added: "The Bahamas had a fragmented, non-contributory, social protection system at the time of the design of this project and, to a large extent, the situation remains unchanged.

"The Ministry of Social Services and Urban Development (MOSS) manages ten cash and in-kind targeted transfer programmes. These programmes include food assistance (permanent, temporary and emergency modalities), financial assistance (rent, water, electricity, gas, clothing, building repairs, burial assistance and others), school uniform and footwear, the National Lunch Program, disability allowance, and medical care assistance.

"These are administered by different divisions in the Ministry. In addition, the National Insurance Board (NIB) provides means tested non-contributory pensions, as well as disability and survivor benefits targeted to the elderly poor who do not meet the requirements for a contributory pension or other contributory benefits."