By NATARIO McKENZIE
Tribune Business Reporter
THE Bahamas could “very quickly” join the likes of Haiti and Jamaica as an economic bail-out case if it fails to arrest its current annual $443 million fiscal deficit, a Tax Coalition co-chair has warned.
Gowon Bowe said the Bahamas must carefully chart its own course on fiscal reform, adding that the fate of its two Caribbean neighbours was “sufficient warning” of how bad things could be.
Mr Bowe, who besides being co-chair of the Coalition for Responsible Taxation is a PricewaterhouseCoopers (PwC) Bahamas partner in his ‘day job’, told Tribune Business that while this nation was not “anywhere near” such a fate at present, “we don’t want to teeter on that type of situation”.
Speaking after giving a presentation to the Nassau Institute on Wednesday night, Mr Bowe added: “If we don’t arrest the situation, and if we don’t carefully consider our future course of action, we don’t have to look any further than our neighbouring countries like Jamaica and Haiti, where they have gotten themselves into financial strife with the IMF as the only lender.
“They are now at the mercy of the IMF, and once you get into such a hole it is nearly important to get out,” he added.
“Their situation should give us sufficient warning as to how bad things can be in comparison to the relatively high lifestyle that we have at this point. We are not anywhere near there now, so I don’t want it to be seen as a scare tactic, but we don’t want to teeter on that type of situation.”
“Right now our debt-to-GDP is creeping towards 60 per cent, but if we go at a rate of $450 million a year, which we have been averaging for the past few years, it could be there and eclipse that very quickly. If that is indeed the case, you will find the same economic hardships being experienced by those territories because of the inability to turn their fiscal course.”
Mr Bowe said: “They [Jamaica and Haiti] are now at the mercy of the IMF. We see what happens when you are not in control of your own fate. The IMF and others don’t live in the countries, so their advice is taken form a text book on the outside and they re not living the realities.
“If you can direct your own course it’s best you do that. The least amount of pain is going to come about if we do it on our own. If we wait for an outside force it will not be with the same tact, and easing in it will be a blunt force.”