PLP deputy leader Chester Cooper. Photo: Terrel W Carey Sr/Tribune Staff
By EARYEL BOWLEG
ebowleg@tribunemedia.net
PROGRESSIVE Liberal Party Deputy Leader Chester Cooper condemned the government for not heeding warnings when Moody’s placed the country under review for downgrade in April.
The international credit rating agency had predicted the Bahamian economy would shrink by eight percent this year. The agency has now forecast that the economy will shrink by between 16 and 20 percent. A two-notch downgrade and a negative outlook was placed on The Bahamas, stripping the nation of its investment grade status with both Moody’s and Standard & Poor (S&P).
Mr Cooper said on Friday that Moody’s action was not totally unexpected. He said: “Moody’s warned in April when we were placed under review that we would be downgraded if they did not see a credible fiscal and economic policy response from the government. They clearly did not.
“While we did experience the economic shock stemming from the coronavirus pandemic, it is clear that the response has not met the challenge before us. Its response to Dorian was similarly anaemic and slow. We see a pattern when it comes to this administration responding to crises.
“We warned them to take progressive steps early to mitigate the fallout from COVID-19, but this administration did not. We warned them about taking action quickly for filling financing needs, but this administration dithered.
“It is telling that Moody’s itself questions if the government will even be able to adequately fulfill its financing need.”
The deputy leader noted the impact on taxpayers with an increase in the costs of debt servicing, and making borrowing more difficult and more expensive. Mr Cooper called it “a triple whammy” for The Bahamas to be downgraded two notches and given a negative outlook.
He said the party urged the government to address structural impediments to growth such as the cost of energy, the ease of doing business, a more robust regime to encourage foreign direct investment and stimulate domestic investments.
Democratic National Alliance (DNA) leader Arinthia Komolafe also said the downgrade was no surprise, adding that “the FNM’s administration fiscal experiment is a failure in the face of Moody’s downgrade”.
She criticised both the PLP and FNM as the path to non-investment grade or junk status was paved by administrations led by both parties.
“We did not get here overnight,” she said. “Our rating got progressively worse and the proverbial chickens have come home to roost. It is common knowledge that our sovereign rating was downgraded three times under the previous FNM administration and four times under the PLP administration between the years 2007 and 2017.”
“The current administration inherited an economy rated as junk bond status by Standard & Poor's and a notch above junk status based on Moody’s rating,” she said.
She added: “While COVID-19 and Hurricane Dorian dealt major blows to the Bahamian economy, it is disingenuous to suggest that our junk bond status was as a direct result of these two crises. This is a culmination and manifestation of ill-advised fiscal policies and economic policies, failure to diversify the economy, reluctance to conduct comprehensive tax reform, and failure to address structural defects in our economy.”
Comments
TigerB 4 years, 6 months ago
The opposition’s deputy leader yesterday urged the government to borrow up to $2bn to prevent the Bahamian economy’s collapse amid the COVID-19 pandemic.
Chester Cooper, pictured, the Progressive Liberal Party’s (PLP) shadow minister for finance, told the House of the Assembly that the Minnis administration should “identify borrowing facilities in the area of $1bn to $2bn in this low interest environment in order to shore up the economy” “This can be a combination of direct borrowing, and through public private partnerships (PPPs) for projects that will create much-needed jobs and stimulate the domestic economy,” he added. Noting that the US government has just approved a $2tn stimulus package, Mr Cooper argued that the government “should not scoff” at suggestions The Bahamas needs its own $2bn stimulus package to combat the economic fall-out from COVID19.
March 31 2020, Tribune
moncurcool 4 years, 6 months ago
Seriously? That is what the people in opposition will say? Their only solution was for the government to borrow money to get out of this situation. Guess they all living under a rock with what is happening with the world economies.
tetelestai 4 years, 6 months ago
Respectfully, read again, moncourcool, that was not all that he said.
bahamianson 4 years, 6 months ago
Chester, come on, you really don't have a leg to stand on in this argument. The FNM or the PLP couldn't have stopped Dorian or the Corona Virus. Both cost the Bahamas billions of dollars.
ColumbusPillow 4 years, 6 months ago
Bahamas ranks 119th in the World Bank's ease of doing business rating, behind Swaziland. There are some very big obstacles for business investment in this country. TIME TO REDUCE THESE OBSTACLES!
The_Oracle 4 years, 6 months ago
Childish arguments. With zero tourism revenue the only sensible thing government could have done differently would be cutting civil servant salaries in half while they were shut down. Sure as hell not something the PLP would have considered. Nor did the FNM have the guts to do so. It was what the private sector did do, had to do, very unfortunate for those sent to N.I.B. to collect their 50% salary for staying home. Some companies opted to handle the stay at home salary themselves, worries that employees could wait weeks (which turned into 3 months plus for some) Some have yet to receive a dime from THEIR contributions. Many have found their employers have defrauded them. They should be named and shamed. No, if elected the thieving will continue right to the bottom of the treasury cookie jar. they all do it. Overtly or otherwise.
tetelestai 4 years, 6 months ago
The irony is that you are calling other arguments childish, when your assertions are, by far, the most infantile of them all.
tribanon 4 years, 6 months ago
The_Oracle has plenty of undeniable history to support his assertions and concerns whereas you literally have nothing to support your very misguided willingness to turn a blind eye to any and every criticism of corrupt and incompetent elected FNM officials solely because they happen to be of the FNM persuasion.
Clamshell 4 years, 5 months ago
My dick hurts.
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