By NEIL HARTNELL
Tribune Business Editor
The Bahamian economy is paying the price for the Government’s “financial disasters” in attempting to run businesses, a leading executive blasting yesterday: “The s* has hit the fan.”
Dionisio D’Aguilar, the Superwash laundromat chain’s president, told Tribune Business that Immigration and other ‘emotive’ issues were distracting Bahamians from this nation’s core problems - the need to grow the economy and combat crime.
Suggesting that the two issues were linked, Mr D’Aguilar said the Bahamian taxpayer was constantly “paying” for the multi-million dollar annual losses being racked up by the likes of BEC, the Water & Sewerage Corporation, Bahamasair, ZNS and the Bahamas Development Bank (BDB).
Suggesting that this was all “coming home to roost” in the form of anemic economic growth and higher taxes (Value-Added Tax), Mr D’Aguilar said government ministers and politicians were constantly accusing the private sector of corruption.
While acknowledging that there were some ‘bad apples’, the former Bahamas Chamber of Commerce president told Tribune Business that the cost was “chicken feed”, and paled into insignificance when set against what successive governments - PLP and FNM - had cost the Bahamian people.
While issues such as web shop legalisation, Immigration and constitutional referendums were all worthy objectives, Mr D’Aguilar said: “Our economy is not growing, crime is out of control and there is no solution for education. That’s what it’s distracting from. They’re a major distraction from the core issue of getting the economy growing again.
“How do we get our economy moving? Some 25 per cent of all mortgage credit is in default, the economy is bumbling along, and we are being distracted by things that appeal to the base, but fundamentally do nothing to change the dynamic in our economy. That is what is worrying.”
Mr D’Aguilar’s comments will likely strike a chord with many business owners and private sector executives, already apprehensive about their 2015 prospects as a result of VAT and declining disposable incomes.
The Bahamian economy has consistently underperformed in recent years, its GDP numbers expanding by little over 1 per cent in both 2013 and 2014, with the International Monetary Fund (IMF) describing its recovery from the 2008-2009 financial crisis as “painfully slow”.
While GDP growth rates are predicted to rise to over 2 per cent in both 2015 and 2016, this is a long way from the IMF’s prediction that the Bahamas needs an average annual 5.5 per cent growth rate until 2018 if all school leavers are to be absorbed into the workforce and existing unemployment slashed by 50 per cent.
“You cannot turn around this entire economy through Baha Mar,” Mr D’Aguilar warned. “I’m not sure if the Government are overwhelmed, can’t cope or can’t fathom the need for major structural change.
“We’re not growing. We’re bumbling along. Nothing is happening, our economy is failing to grow, and we’ve got this corresponding increase in crime.”
The former Chamber president said the increasing multi-million dollar losses being incurred by numerous public corporations and agencies were also sending a message that could not be clearer: The Bahamian government must get out of running businesses, and leave them to the private sector.
“What’s becoming clearly evident is that the Government of the Bahamas should move towards getting out of running anything,” Mr D’Aguilar told Tribune Business.
“If the Government of the Bahamas is running anything, it’s a financial and fiscal disaster. It’s incompetent at running anything properly.”
Slackness and inefficiencies were quick to “creep” in, he added, “and the Bahamian people keep on paying for it”.
“The Bahamian people have been called on to pay for the financial disaster at Bank of the Bahamas, they’ve been called on to pay for the financial disaster at BEC, and all these Corporations that are annual disasters,” Mr D’Aguilar told Tribune Business.
“All this is the product of failing to make the hard choices, and we the consumer end up paying for it.”
Citing PLP chairman, Bradley Roberts, as one politician who recently hit out at the private sector ‘corruption’, Mr D’Aguilar said: “What we cost the economy is chicken feed compared to what the political directorate has cost the taxpayer.
“There is no way that practice comes anywhere close to what the political directorate is costing the country with all these things. They’ve cost the taxpayers over and over the years.”
Added up, the figures are staggering. Bahamasair has cost the taxpayer more than $500 million - over half-a-billion- in its lifetime, while the Water & Sewerage Corporation, ZNS, the Development Bank and others eat up over $60 million in annual subsidies. Then there is BEC, which is losing up to $33 million annually.
Mr D’Aguilar suggested Bahamians only had themselves to blame for the Government’s profligacy, saying they had failed to hold successive administrations to account because they either did not care or felt it did not matter.
“It’s all coming home to roost,” he told Tribune Business. “It doesn’t make sense if you’re going to raise taxes to p* it all away, putting it into these corporations with no end in sight.”
While backing the Government’s decision to implement VAT, Mr D’Aguilar said the move needed to “go hand in hand with other tough decisions” that it was too scared to take for fear they would handicap their re-election prospects.
“It’s easier to maintain the status quo,” he added. “But the s* has hit the fan. We’re coming to the cliff now.
“What are we going to do? We have an economy in stress, a banking system haemorrhaging losses, and a crime rate that’s increasing because of the failing economy. And what are we going to do about education?
“We are still churning out thousands of poorly educated people every year. You can’t produce a workforce with people like that, who are uneducated and unsocialised.”
Mr D’Aguilar said all these factors were combining to produce a “deterioration in the quality of life” for Bahamians, with many too scared to go out at night and living in fear because of crime.