Published On:Wednesday, December 02, 2009

AS we start the final month of 2009, we find ourselves perched at the crossroads of a most untenable position in Bahamian history. The authorities appear to be 'burying their heads in the sand' during a crime wave of epic proportions, while concurrently struggling to maintain the Bahamas through what is worldwide being referred to as the 'great recession'.

While crime is not a matter for political gain, it is a fact that governments take credit for low crime rates, yet refuse to accept any blame when crime is out of control.

While it is accepted that there is a high level of personal rage in our society, resulting in homicides perpetrated by persons known to the victim, something still has to be done. A greater focus on conflict resolution on a national scale must be undertaken. This can take the form of lectures, seminars, community workshops and the like. However, such an effort must involve schools, churches, civic organisations, cultural organisations, and lodges - in other words, the broadest possible spectrum of society.

From my vantage point, these are the two greatest impediments to the rebuilding of a prosperous future for the Bahamas, and thus represent my focus today.

Crime

As I talk to Bahamians and residents of the Bahamas from all walks of life, it is amazing that every conversation somehow reverts to the issue of crime. People simply do not feel safe in our country any more. The Government is perceived as being totally ineffective in the fight against crime, and for some reason is unprepared to make the necessary changes to correct the situation. I do not pretend to understand political strategy, but I do know that if something is not done, there will be fall-out at the polls.

Last week we hit another low when two groups of tourists were targeted at an 'eco-tourism' facility in the Chippingham area. A Travel Advisory from the US State Department is probably not too far off. I say to the current Administration: "You are not being perceived as having a handle on the crime situation, nor are you being perceived as having a real plan to combat it." The ball is squarely in your court.

Fair question

It is one thing to be critical, but it is also fair to ask: "What would you do?" We can begin by considering the following:

* The implementation of a 'Gun Court', where persons found with unlicensed guns are quickly brought before this court and their cases dispensed with quickly. This can be expanded to a 'Dangerous Weapons Court' to include knives.

* We could do what it takes to ensure that persons charged with murder are not out on the streets 'on bail'. If we need to change the law to do this, then so be it.

The current situation, where persons charged with one, and sometimes multiple murders, are arrested for additional offences while on bail is sheer and utter nonsense.

* We could implement a curfew for persons under the age of 20 years. If you are caught breaking the curfew you are remanded for a minimum of 48 hours before being released. If you have three violations you will be automatically sentenced to a six-month period of incarceration or structured community service. Further, I deputise members of the Royal Bahamas Defence Force to assist in enforcing the curfew.

* We need to confront the issue of 'gang violence'. This is an extremely complex social issue, and while I do not have any concrete recommendations, there are many in the community who have expertise in this area, whose voices and expertise must be galvanised into a cogent national plan.

Economy

Despite the outward appearance of 'business as usual', from all accounts the Bahamian economy is truly at a crossroads. The economy has slowed considerably. For the first time in memory, I have never experienced such a wide swathe of Bahamian professionals complaining about how tough the economy is, and this reality is not confined to a particular sector. Lawyers, doctors, accountants, small business owners are all complaining about the tough economic environment that we currently face.

Plight of small business

In the retail sector, for example, I am told that sales are generally down by 35 per cent to 45 per cent. Many small businesses have managed to keep their doors open thus far by running down inventories and running up accounts payables as much as possible. However, it is inventories that drive sales. So, if you are unable to finance new inventories, you will ultimately have no choice but to close your doors, even when the economy recovers.

The great irony is that when all the major economies have implemented policies to support the small business sector, we have actually done the opposite in the Bahamas. The banks have tightened credit and interest rates have remained artificially high, thus effectively putting many small businesses into liquidation mode.

Interest Rates

Exactly one year ago at a luncheon attended by a group of business leaders, there was a robust debate on the issue of the level of interest rates in the Bahamas. I did not support a reduction of interest rates at that time, based on my greater concern for maintaining an adequate level of foreign reserves and, ultimately, the country'd ability to maintain parity of the Bahamian dollar. I felt strongly that we should not act prematurely and potentially jeopardise our reserve position in the face of an uncertain global economic slowdown.

What has changed?

Last week (November 19) the Organisation for Economic Co-operation and Development (OECD), whose membership consists of the 30 largest economies in the world, revised its economic growth forecast to 1.9 per cent and 2.5 per cent, respectively, for 2010 and 2011. This compares to a projected contraction of 3.5 per cent for 2009.

Also, just last week, the minister of state for finance reconfirmed that our foreign reserve position is strong, and adequate to sustain the economy.

Tangible stimulus

In light of both factors, there is absolutely no reason why interest rates cannot now be reduced in the Bahamas. This would provide a real and tangible stimulus to the small business sector, to the average Bahamian consumer, and to the Government. Most of the Government's debt is in Bahamian dollars, so any reduction in local interest rates will produce millions of dollars in savings. Thus far, the road improvement programme is not trickling down to the average consumer in a tangible or particularly noticeable way.

Lower interest rates would touch every single Bahamian by providing financial relief via lower mortgage payments, lower interest rates on credit card debt and lower rates on bank loans.

Until next week...

NB: Larry R. Gibson, a Chartered Financial Analyst, is vice-president - pensions, Colonial Pensions Services (Bahamas), a wholly-owned subsidiary of Colonial Group International, which owns Atlantic Medical Insurance and is a major shareholder of Security & General Insurance Company in the Bahamas.

The views expressed are those of the author and do not necessarily represent those of Colonial Group International or any of its subsidiary and/or affiliated companies.

Please direct any questions or comments to

rlgibson@atlantichouse.

com.bs