The Tribune

TWO futures to choose from – but which path will we take?

Ask two economists what the state of finances will be in a year’s time and you’ll likely get two different answers. Fast forward a year and one of them is going to look pretty wrong.

And yet we sit peering into our financial futures today with two very different forecasts ahead of us.

Credit rating agency Moody’s has forecast the Bahamian economy will grow by two percent next year. The International Monetary Fund has smashed that prediction to pieces, with its own forecast of more than three times that amount of growth – a figure of 6.7 percent.

Which should we believe? Well, if the IMF is right and The Bahamas rebounds after coronavirus to the levels seen last year, Prime Minister Dr Hubert Minnis might as well call the election then and there. That would be a remarkable turnaround, leaving us in touching distance of figures from 2018.

The truth is the wide variation between the predictions – and Bahamians are already warning that higher forecast should be “taken with a grain of salt” – is in large part because so much is still unknown. Not just here but globally.

Gowon Bowe, of Fidelity Bank, is right to warn that it is impossible to predict how long and deep any recession will be as a result of this outbreak.

First of all, the virus itself must be brought to a halt, and as much as The Bahamas got a piece of good news yesterday in having a day with no new cases, we would be wrong to think it is behind us now. One day is hope, not a final outcome.

Then, when the virus is defeated, we must pull the economy back on its feet. That will be no easy task. Just last week, Dr Minnis described the increase in unemployment as “greater than most of us have seen in our lifetime”.

More than that, what kind of Bahamas will we be rebuilding? Do we restore the country to how it was before the coronavirus pandemic or do we reshape it to be less dependent on tourism? Former Minister of State for Finance James Smith says much depends on how quickly travel and tourism rebounds – but does the Prime Minister have other ideas?

Dr Minnis has said the country has to be ready to shift how we operate. “We must ourselves change,” he said last week. “We must change our attitudes, we must change our behaviour. We must make this crisis a crisis of opportunity, economic opportunity, financial opportunity, environmental opportunity and social opportunity.”

He talked of how we must learn the lesson that “we are all equal, we are all one” and that we must make generational changes to our economic structure. There were no specifics on what that might mean – indeed, he threw his call open to the public for ideas for the future.

So as we look into next year for The Bahamas, how can we estimate how much it will grow if we don’t know the kind of Bahamas we are building?

Will the key workers who have kept the country going get a bigger slice of the pie? Will we have a country that isn’t put into financial crisis by a month of missed pay cheques? How much will that cost? What is the price tag that swings from any changes to our economic structure? Indeed, for the money being spent right now to keep people fed and with roofs over their head, how much debt will we incur and how will we pay it back?

There are no answers to these questions yet because we don’t have answers on the course our future will take. Will we see a new Bahamas next year? Dr Minnis is right in saying that we should look at our country and see what we can make of it. How we can keep what works and forget what doesn’t work for our people. How we can improve the lives of all Bahamians. But saying it and doing it are two different things.

Just as we face a future with two different economic forecasts, we face a future with two different paths – the same route we have been taking, or something new. We just have to make sure that when we fast forward a year this time, the solution we choose will look like the right one.