PM: Economy poised for growth

As of Tuesday, January 14, 2014

By AVA TURNQUEST

Tribune Staff Reporter

aturnquest@tribunemedia.net

DESPITE increased austerity measures for the public service, Prime Minister Perry Christie yesterday reassured businessmen that the economy is poised for sustained economic growth in 2014 and for the remainder of his government’s term.

Addressing the business community at the opening of the 2014 Bahamas Business Outlook, Mr Christie outlined widespread tourism development underway in the Family Islands.

Pairing fiscal reform with economic growth initiatives, Mr Christie forecast that the multi-pronged strategy would improve revenue collection “by at least $100 million”.

“The initiatives,” said Mr Christie, ”which we have been focused upon over the last eighteen months of my administration [are] to strengthen the Bahamian economy, increase jobs, address social ills, including poverty and crime, and generally improve the quality of life throughout our archipelago nation.

“This task has been a daunting one within the context of a still slow, although recovering U.S. economy, a sluggish European economy, and a lingering international recession except most notably in China. We are encouraged by reports of projected strengthening of the economies of major developed countries.”

Responding to calls for increased spotlight on the lack of crime in the Family Islands, Mr Christie added that it was critical that trends experienced in the capital were not exported as foreign direct investment brings increased employment opportunities on other islands.

His forecast comes after the Bahamas was given a “six month window” in which to stave off another credit rating downgrade through concrete fiscal reform actions.

Describing the Government’s planned $800 million correction as “enormous”, Aaron Freedman, the Moody’s vice-president who led its recent Bahamas country report, said the Christie administration’s goal of increasing revenues by a sum equivalent to 10 per cent of national gross domestic product (GDP) was “pretty drastic”.

He and his colleagues put the scale of the government’s proposed fiscal turnaround into context by telling The Tribune most countries sought revenue increases equal to two to three per cent of net GDP from fiscal reforms.

The Bahamas, though, is targeting a gross revenue increase up to five times that amount, with $500 million in new income adding to the estimated $300 million in existing import tariffs that it must replace.

Value-Added Tax (VAT) is projected to generate $500 million of that $800 million, or just over 60 per cent, but Mr Freedman said Moody’s was “sceptical” the new tax would meet the government’s forecast.

Mr Freedman and his team said it was likely that VAT legislation would be “watered down” by public opposition to the new tax.

Yesterday, Mr Christie said: “Our reform proposals on VAT are informed by detailed, comprehensive studies on the impact of tax reform by the IMF, IDB and others. We continue to study alternative proposals and my Government has commissioned a final study on the issue which will address all the issues, concerns and alternative recommendations.

“Our objective,“ he said, “is to have a system that provides adequate revenue for modern governance while providing economic growth, transparency and efficiency.

“We continue to listen to alternative proposals that will achieve objectives. The Government is, and will remain engaged with all stakeholder groups and is intensifying its focus on both business and consumer education.”

Other initiatives expected to foster economic growth include: energy reform; completion of CWC negotiations with respect to additional shares in BTC and further liberalization in the telecommunications sector; modernized casino legislation; the Bahamas Agriculture & Marine Science Institute; the National Training Agency; expansion of ship registration to include the formation of a yacht and private aircraft registry; the 2015 carnival-styled festival; public sector construction.

Mr Christie added that the National Economic Council will be established “shortly” to review and advise the government on sustainable economic opportunities.

realfreethinker 10 years, 3 months ago

The same, POISED FOR GROWTH he spoke of in 2012 ????

B_I_D___ 10 years, 3 months ago

It's official...he's on some sort of illicit drugs...LSD maybe...maybe he's tweaking out on meth. Economic growth...HA!! Businesses nationwide are already slowing down their buying and trimming their stock in preparation of the VAT disaster that is pending. Businesses threatening to close altogether. The honest businessman will get shafted again while the others that do not play by the rules, continue to get away with dodging customs fees, not paying property taxes, not paying NIB, etc, etc. If VAT becomes reality July 1st, the economy will TANK and crime will spike as people won't be able to afford their rent or their food.

ohdrap4 10 years, 3 months ago

Another postcard from the bubble

sheeprunner12 10 years, 3 months ago

**Who is advising Perry Christie???????????

IMF, 'Snake', John Rolle, NEC, Flying Ryan, Papa, Confucius?????????????????

ALL OF THE ABOVE!!!!!!!!!!!!!!!!!!!!!!!!!!

helpless, hopeless......................................... sigh**

ThisIsOurs 10 years, 3 months ago

It's something to see that even Moody's, the rating agency itself, is saying the goals are too lofty. "Who is advising them" is correct....

And how exactly is the acquisition of the BTC2% expected to foster any growth??? It would be ludicrous for BTC to hand over anything that sees huge revenues in the short term, they will have to hold onto that 2% for years before it pays back the investment to acquire it. These guys are being led by a visionless blind man.

Emac 10 years, 3 months ago

LOL!! What I would like to know is where is banker? We really need your expert opinion on this one!

banker 10 years, 3 months ago

Christie is now on the thin line between delusional & mental retardation. Increasing government revenues make economic growth - it slows it. The government taking money out of the economy is like cancer cells robbing body nutrients. This is true because of government corruption & the extra money winds up in the pockets of the kleptocrats.

But let's look where he expects economic growth. (1) energy reform. Now the entire island generates electricity with Bunker C Crude -- the worst possible fuel. Sustainable & renewable energy sources require huge capital investments up front. The government doesn't have the money with their $800 million drag on the economy. They can pass all of the energy reforms that they want, & nothing will happen. Privatisation in the energy field has the PLP cronies looking to do some bloodsucking at the public's expense.

(2) BTC shares -this is a crazy WTF moment. Telecommunications requires huge amounts of capital to keep current. The government doesn't have deep pockets. The 18 vice presidents under the old BTC including the huge internal corruption under the Leon Williams tenure ran where everyone was getting kickbacks. Maybe that's the way that the PLP prefer to do business. They are not governing, they are racketeering.

(3) Modernised Casino Legislation. They can't even solve the webshop issues. That is the big thing sitting right under their noses that they cannot see. It is utter hypocrisy. Florida benefits $50 million from Bahamians gambling there, & the web shop owners probably benefit the same.

(3) The Agriculture and Marine Institute -another sinecure for cronies that will produce nothing. The only way that these institutes work, is if they invest in actual farms and aquaculture. Another Urban Renewal. Urban Renewal was suppose to fight crime. Mother Pratt is going around saying that if they kept UR 1.0 instead of UR 2.0, then they would have solved the crime problem. Another user of Biblical Crack Cocaine.

(4) National Training Agency. They are training bed makers, souvenir makers and other low value occupations. We need knowledge workers, but the education system is so screwed that we have two to three generations of functionally illiterate, non-trainable young people with no life skills. The ex MP of Bamboo Town who bought out the distillery has the right idea for an IT school, but the former drug runner doesn't realise that you need a cadre of well educated people to attend IT schools if they want to compete.

What the PM doesn't realise, is the size of the task ahead, just to get back to zero. We need $2 billion for new water pipes. NP needs new electrical infrastructure to prevent brown outs. It needs public transportation. It needs desperately a revamping of the education system if we are to survive as a nation. And this donkey dunghead of a prime minister who is cognitively impaired tells lies. He should stick to Junkanoo shuffling.

The sad reality is that we seem to be in a stste of POLITICAL paralysis

Thats scarier than economic recession

There is NO Bahamian "FDR" in our foreseeable future right now. If so, can someone volunteer a possible candidate????????????????

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