Deputy Progressive Liberal Party leader Chester Cooper.
By RASHAD ROLLE
Tribune Senior Reporter
rrolle@tribunemedia.net
DEPUTY Progressive Liberal Party leader Chester Cooper said the Minnis administration’s current budgets for unemployment, food, rental and social assistance during the COVID-19 crisis are “woefully understated” and should be aggressively increased.
His assessment features in a personal plan released this week outlining ways to help the country during and after the crisis.
Some of the brightest economic minds and members of his parliamentary caucus contributed to the plan, he said.
Warning The Bahamas faces a severe recession, he said how the government responds will determine the severity of the recession or whether it becomes a depression.
He expects that public debt will increase dramatically in the next 12 to 18 months, reaching a debt-to-GDP ratio of over 100 percent “from the current level”. He further forecasts a funding need of between $1 billion and $2 billion to keep the economy afloat.
“The government should take $250 million and invest immediately in real food security. BAMSI is a good model but Andros is primed for growth in agriculture,” he said.
He called on the government to encourage BTC and Aliv to boost bandwidth for free for people who need to work at home for 60 days, offering tax credits and subsidies to facilitate this.
He said the government should also immediately facilitate free online interactive courses via BTVI and UB to strengthen the labour force during this time.
To attract tourists when the COVID-19 crisis fades, Mr Cooper said the government should offer aggressive incentives, including reduced taxes on airline tickets for a six-month period and the removal of certain VAT and/or hotel room rates for the same period.
He said the government should cut its recurrent expenditure, eliminating inefficiency and waste in ways that go beyond “lip service to cutting overall expenses by ten percent”.
“Low-hanging fruit would to restrict local and international travel over the next year, purchases of new vehicles and eliminate discretionary, non-essential expenditure,” he said.
“The savings maybe re-purposed to support an enhanced budget for unemployment benefits, social assistance and support for the domestic economy. Review of all consultant contracts to ensure no double-dipping. That is, collecting a pension and consultant salary at the same time.”
The Exuma & Ragged Island MP said the government should provide value-added tax and other tax or loan credits to all businesses to retain as many employees as practical and to ensure quick release of money to employees while removing some administrative strain off the National Insurance Board, which can then concentrate on self-employed people.
He also wants the government to appoint a debt management committee to review and recommend advice on managing and structuring the country’s debt.
Mr Cooper said the government should seek to issue up to $1 billion in bonds over the next year that could be called COVID-19 relief bonds in order to reduce government cash outflow in the short-term.
“These bonds should be targeted to specific projects, for example, food security/BAMSI expansion or technology and e-commerce to provide efficient management of and service delivery to our citizens,” he said. “Issue medium-term COVID bonds with a maturity date of up to ten years. These bonds will have a coupon and will be targeted at retirees looking for income to live on. This issuance will be $150-$200 million. Issue short-term bonds up to five years, targeted at banks as they invest excess cash in the system. This issuance would be up to $500 million.”
He also said the government should borrow $750 million in US currency for budget support, using substantial portions to prepay debt that will soon come due.
“Use the powers under the Financial Administration and Audit Act to get dividends from cash-rich organisations including the Bahamas Maritime Authority, URCA, Central Bank, the Insurance Commission, etc,” he said.
Once the COVID-19 health crisis subsides, Mr Copoer said the government should review loss-making quasi-government enterprises with a view to finding “private sector-styled strategies” for them.
“Enterprises such as Bahamas Power and Light, Bahamasair, Water & Sewerage Corporation and ZNS should be scrutinized, thus freeing up over $100 million in annual subventions in addition to freeing up over $750 million in debt and hundreds of millions in future pension obligations, while allowing for reduced cost to the consumers, which would allow for more discretionary spending, hence increased economic growth for all,” he said.
He added a new Sovereign Investment Fund should be created by initially transferring the government’s private sector investments like Aliv, BTC, Cable Bahamas and Bank of the Bahamas.
“The government may systematically reduce its holding with the orderly sale of shares to Bahamian investors of all sizes,” he said.
Comments
mckenziecpa 4 years ago
I agreed very viable outline, I like the Minnis administration but they dropped the ball big time more ways than one regarding this COVID19 they are certainly no doing a good job helping my people a simple example 60% of people have little means in The Bahamas to feed all of them 400per 3 months per family is a measly 1,800,000 add free cable and light for another 3 months total about measly 5million. I don't want to hear treasury is broke, Inter Americans bank give the government grants. By the way those dumbass don't realize that it's the people money anyway and further it will recycle anyway I don't want hear about foreign reserves being depleted.
The_Oracle 4 years ago
Borrow borrow borrow, At the root of all our current limitations in dealing with this situation, and he wants to borrow more? This limited mindset betrays itself. So far BAMSI has been a political sluice gate for waste and contract awarding, Food security is a pipe dream until we all get hungry enough to start backyard farming as a Way of life. Government divestiture of "enterprises" has been done 6 wrong ways to hell and back already. No matter the incentives you offer to Tourists It will be a year plus before they return. There are answers for mitigating and helping, but typical Political answers fall far short. Particularly political answers they themselves would never follow through on. Interesting however, is the apparent theme/belief that one day this (soon?) will all of a sudden be gone? Back to normal?
Porcupine 4 years ago
Good points. Thanks.
OMG 4 years ago
Love it after all the cash squandered by the previous PLP.. "reduce inefficiency and waste". Mr Cooper do you remember the lavish plans, months of heavy equipment use,several visits by Perry Christie and countless other functionaries, the ground breaking ceremony, buying the land from an ex PLP cabinet member and what is there to show for it a huge pile of curry a flat area surrounded on three sides by cliff faces a dissapointed PLP supporter who had the building contract and no hospital in Palmetto Point. All the while workers house largely empty with great parking, great location and accomodation upstairs for nurses and doctors was ignored simply because there was little political mileage tp be gained from a conversion as opposed to this grandiose hospital which believe it or not included a helipad. Tell us Mr Cooper how much was wasted on this one PLP project
shonkai 4 years ago
Backyard farming should be a good option for most, we have a year-round growing season. Would also be great to see some Abaco chicken in the foodstores again. A lot of people are sitting at home doing nothing else than watch Netflix, should not be too hard to stream some basic vegetable gardening instructional videos instead of all the garbage we get too look at now.
hrysippus 4 years ago
The PLP are a party that has always relied on borrowing money to pay the salaries and unfunded pensions of the many thousands upon thousands of state employed workers. This is mostly why the country is almost eight billion dollars in debt today and teeters on the edge of a financial precipice. A silly set of ideas from this politician who I sincerely hope never gains a position of power.
Well_mudda_take_sic 4 years ago
Nothing but hogwash from this buffoon. Not an ounce of thought behind anything he has said here as can be so clearly seen from his complete lack of appreciation of the implications of much of the nonsense he has so foolishly suggested. Cooper is obviously in the camp of those idiots who believe our country can borrow itself out of the deep financial hole corrupt governments have dug for it over many years. But he fails to realize that only developed countries with the ability to print hard currencies for which there is a demand globally are capable of doing what he proposes.
The Bahamas does not have a hard currency and we import just about everything. And everything we import must be paid for with a hard currency like the US dollar. Our Central Bank can print more and more Bahamian dollars until the chickens come home to roost. The outcome would be the total debasing of the Bahamian dollar to the point where it would cost B$1,000,000 or possibly much more to buy a can of corn beef at the food store.
Our Central Bank can't issue anymore Bahamian dollar denominated debt because there is a limited local demand for it, even at very high interest yields. And our government lacks the ability to indefinitely continue increasing the foreign currency component of our national debt to provide the foreign exchange necessary to pay for our country's imports without eventually turning our country into a failed state, much like Haiti or Venezuela. In any event, the downgrading of the creditworthiness of the Bahamas by the unscrupulous rating agencies like Moody's, who represent the foreign lenders, are already causing the Bahamas to pay exorbitant interest rates on its foreign hard currency denominated debt.
One possible solution for us is to lease for 100 years most of the Crown Land and Sea Floor in the southern islands and territorial waters of the Bahamas to the US for military and other purposes so that the US can strengthen its national security interests in the Caribbean by heading off Red China's expansionary plans. The lease terms could include an upfront fee equivalent to the total amount of our existing national debt, including all Bahamian dollar debt and unfunded entitlements and contingencies, on a dollar-for-dollar basis, i.e. B$1.00 = US$1.00.
The annual lease payments over the 100-year lease term would need to be sufficient to help maintain the financial stability of the Bahamas, assuming the complete US dollarization of our economy over a short period of time in a way that respects the current one-for-one peg. Now that's a lot of interesting food for thought by the Bahamas government and the US government alike. The only major hiccup here is that the entire Bahamas may be underwater due to climate change by the end of the 100-year lease term! And "No" we definitely don't want John Christie to be the Bahamian realtor involved in this mother-of-all lease deals!!
Porcupine 4 years ago
At some point the US will collapse financially, due to the over-leveraging and the evident sociopathy of the financial institutions CEOs, the US regulatory non action and the existential fascism now taking over.that country. The US spends well over a trillion dollars annually on its military. Do you really understand and have a grasp of what a trillion dollars is? Type it into Google. "What does a trillion dollars look like?" Th, the US, like all fallen empires before it, will collapse because it spent too much of its treasure and wealth on war making. Along with hubris, exceptionalism, fascism, Trump represents the very worst of that once relevant nation. Yet, he is just the indefensible clown that many could see coming. A vile, lying and mentally unstable human being, the true tragedy is that more than a handful of people have voted for him. This is the lowest the US has ever been, though the trajectory has been rather steady and Trump is not an outlier in this regard. The US should be rejected for the very same objections you have against China. The US people have many good ones among them. The government of any country, not so much.
Well_mudda_take_sic 4 years ago
But, based purely on relative economic strength and power, all other countries of the world would financially collapse long before the US ever had to bite the bullet and follow suit.
joeblow 4 years ago
Throwing money at problems never solved them as the national debt shows. This country has had endless opportunities to put itself in a better position since Independence. Both governments have turned this country into a welfare state, the people into tribal political factions and the Treasury into a kitty for the political elite. We do not have the mental muscle or discipline to exercise fiscal responsibility and plan strategically. The game plan is always to do what other countries do, NOT to do what is in the best interest of the country!
This is just more shallow talk!
Well_mudda_take_sic 4 years ago
Actually what Cooper is doing is much worse than just shallow talk. By talking big sums of money in the way that he has, Cooper is very deliberately seeking to deceive the less financiually literate among us (and there are all too many of them) into thinking the Minnis-led FNM government can somehow just magically borrow any amount money needed to give to them to make them happy and get their vote. And of course nothing could be further from the truth given the current dismal state of our country's financial affairs. Bottomline: Cooper is nothing but a mischievous lying scoundrel of the kind that has put our country in the mess that it's in today.
Porcupine 4 years ago
You are right. We have had the opportunity to become self sufficient, educated and wise. Divide and conquer, both PLP and FNM has led us to where we are now.
K4C 4 years ago
I was wondering if the PLP think when you have cheques in your cheques book, there must be money in your chequing account
Well_mudda_take_sic 4 years ago
They've even fully tapped out whatever very costly bank overdraft facilities they were lucky to get.
bcitizen 4 years ago
What has the first 100+ thousand dollars thrown at BAMSI gotten us? NOTHING!
Well_mudda_take_sic 4 years ago
If memory serves me well, the first $100,000 went towards a very costly uninsured building that burned down; a building which Brave Davis assured the public was fully insured shortly after the fire that burned it to the ground.
Porcupine 4 years ago
It is even worse than this, mudda. Much worse. I think the problem is the contracts were too large. The MPs and others saw a cash cow with few strings attached. Not only that, they didn't even look out for those they were elected to represent. The fire wasn't an accident. Yet, we still must become much more food independent. We need to incentivize farmers, not political criminals.
moncurcool 4 years ago
And these are the people who want to lead the country. Thank you for showing you do not have a clue.
. Amazing what he suggest to play on people emotions about the government not doing. Yet, won't tell the people that if the government borrows all this money now it will have to tax the hell out of you later.
The_Oracle 4 years ago
I like the idea of a large scale lease to the U.S. Govt, however it will give the likes of Fred Mitchel a stroke, as messing up our Sovereignty is purely his domain! Actually both parties have buggered that up but the current opposition does claim some divine exclusivity to it. In conjunction with a large scale southern land and sea bed lease I'd say U.S. dollar-ize our economy. We don't have but a subsistence economy in any case, far too small to support our own dollar. The above could get the U.S. banks in here competing with the Canadians. They've had a good run at pillaging our economy.
Porcupine 4 years ago
What treaty or agreement has the US NOT broken? In history. Did you miss the reasons why the world had a "financial crisis" in 2008? Hint. It was the unethical, legalized corruption and greed of the banks in the US. Aren't we close enough to these criminals without.........................
DDK 4 years ago
Yada yada yada.......
CaptainCoon 4 years ago
ALL of the things this man is saying the PLP started and never finished.
BAMSI? The PLP fk that right up? No double dipping? Good Lord man, this man and his baboon party ain't no different from the FNM.
This country is finished. The blind talking to the deaf and the dumb knows better but can't speak.
SAD!
DDK 4 years ago
You are entitled, of course, to your thoughts, Mudda, but I don't like your possible solution one little bit and wonder if you have been at Comrade's homemade brownies 🤣
Well_mudda_take_sic 4 years ago
The alternative is Red China and the Yuan. And I wouldn't be the least bit surprised if discussions along those lines aren't already taking place with the ruthless Xi Jinping led communist regime.
Honestman 4 years ago
I thought Chester Cooper had a bit more business sense than to spout this nonsense but perhaps he is just playing to the PLP gallery. His solution is akin to a man who has just lost his job going to the bank and asking for his credit card limit to be doubled! The Bahamas CANNOT borrow its way out of this crisis as many of the above posts have correctly stated.
Well_mudda_take_sic 4 years ago
But does anyone have any idea who will be the first government employee to get laid-off because of our country's economic collapse? We should recommend to government that a statue of that poor soul be erected in their honour in the middle of Rawson Square.
sheeprunner12 4 years ago
The Bahamas needs to ……. (1) Open industries that tap into our salt, fish, sand, and palmetto, cascarilla and forests ………… (2) Engage in re-training our workforce to become skilled workers and not service workers …….. (3) Begin to reduce our food bill and foreign food tastes by 20% each year for the next 3 years ………. (4) Close the gaming houses and start a national lottery to create a Sovereign Wealth Fund ………. (5) Sell off or liquidate at least 50% of the 27 SOEs …………. We should be in pretty good shape if we do that in the next TEN years.
Well_mudda_take_sic 4 years ago
The Bahamas also needs fewer illegal aliens.....about 80,000+ of them!
Porcupine 4 years ago
You missed one, sheeprunner12. Engage in retraining all politicians; to be honest, educated, and to truly understand what a "public servant" means.
hj 4 years ago
Typical PLP mentality. Borrow and waste. I suppose he forgot to mention that all the borrowing will be paid by the taxpayers. Maybe he can also propose some new projects funded by the government that will result in some lucrative contracts for "certain" people. Also do not forget to hire even more people to the public service so generations of Bahamians remain in debt. And last but not least make some " anti foreign" statements once in a while.
The_Oracle 4 years ago
No worries, Fred will be along tomorrow for the anti foreign "Sovereign" speech. I do agree with shutting down all numbers shops and creating a national lottery, Which is what should have been done by the PLP instead of legitimizing an illicit underground Criminal enterprise which preys on the least able to afford it. Now would be a good time to seize their bank accounts and spend it on a staple foods food bank for the poor and unemployed. use their database of customers to distribute the proceeds.
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