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RICHARD COULSON: The curse of broken promises

By Richard Coulson

On Mexico’s 100th Independence Day in September 1910, the 80-year-old president staged a splendiferous celebration of 34 years of iron-fisted rule, secure in the belief that his party would remain in power. Yet eight months later they were rejected, he was forced into exile, and within three years Mexico was plunged into bloody revolutionary anarchy that, by 1920, utterly transformed the nation’s economic, social and political structure.

The Bahamas is not Mexico, and we do not forecast any similar tidal wave of violence - although our crime reports tell us hand guns are about as common as lollipops. But, just as in Mexico a century ago, we see a groundswell of change that will play out over several years. In Mexico, the cause was rigid oppression of the working class; here, disaffection arises from the curse of broken promises. Our ‘leaders’, of all political stripes, are caught in a spiral of problems from which they seem unable to escape. Here’s what they face:

How to prevent government extravagance and further credit downgrades, in the face of the VAT tax that was approved in a vote from which the PM himself took a ‘holiday’?

How to explain the abysmal failure to make electric power cheaper and more reliable, after years of ‘studies’ and ballyhooed deadlines?

How to justify to the ill and the poor the looming Critical Care Block of Princess Margaret Hospital still standing unopened with no date set for completion?

How to make clear that the famous ‘Bahamianisation’ of 2 per cent of BTC’s shares is an empty gesture, until the new Foundation’s trustees (unnamed) take some visible action?

What answers to give to the new/old stories about the shambolic state of court records, and a tortoise-slow postal service?

What are the allegedly ‘new’ approaches to combating violent crime?

What attempt is being made to correct the debacle of last year’s futile mortgage relief plan?

In many countries with a parliamentary system, an administration with a similar litany of failings would already have been forced from office. Our own electorate has traditionally been apathetic between election campaigns. But times are changing. The Bahamas Chamber of Commerce and Employers Confederation has come to life, and is rallying the business community into vigorous debate with Government on economic policy. New,highly vocal citizens’ groups have been organised, such as Tamara van Breugel’s energetic Citizens for a Better Bahamas, with its unrelenting attacks on VAT and lack of transparency in public affairs.

A wide swathe of citizens, even die-hard PLP loyalists, are questioning whether any of our political parties can cut the mustard. In short, political insurgency no longer waits until the eve of an election - it is under way this very moment, almost three years before the politicians must face the polls, barring an unprecedented, but entirely constitutional, interim election.

Let’s review a few of the more glaring broken promises:

At January’s Business Outlook Conference, Mr Christie assured us of a focus on growth, As the first step, he would ‘shortly’ appoint a distinguished National Council of Economic Advisers to lead the way forward; we have yet to see any names. VAT would be accompanied by ‘fiscal reform’ , including a programme to ‘reinforce expenditure discipline’. (That includes $100 million for BAMSI?) Two main planks of fiscal reform, a Fiscal Responsibility Act and a Freedom of Information Act, have been totally ignored. As to reining in the Budget, we have been told repeatedly that it is not accepted Bahamian policy to shrink public employment, although it is done every day in the private sector. Nothing has been heard about selling off the perennial sink-holes of public subsidies, Bahamasair and the Broadcasting Corporation.

Result: Another recent credit warning from Moody’s, and a little-noticed statistic: Earlier this year, FCIB (First Caribbean International Bank) took a write-down of $543 million on its Caribbean business, nearly half of which derives from the Bahamas. The financial analyst commented: “All is not well in the Caribbean region with its bloated, over-indebted governments operating in slow-growth environments.”

Growth, not taxation, is the key to economic salvation. Robert Myers, BCCEC chairman, told us that a GDP growth rate of about 5 per cent is needed to pay public debt and cover a rational expense budget, while the IMF recently reduced its growth estimate for the Bahamas to 1.2 per cent for 2014-2015, maybe 2 per cent, according to Moody’s. While Government brings us VAT, perhaps necessary in itself, where do we find policies for growth? A grand announcement of future PPPs (Public/Private Partnerships) was issued last month, as if making a new discovery. We already have two active examples, in our air terminal and our container port—both conceived years ago under previous political leadership.

The greatest stranglehold on growth is that major broken promise, the electric power system, whose vivid failings affect every individual and business. The perennial blackouts are now a subject of bitter humor: Summer rains and lightning strikes come as a surprise to BEC. The excess costs to consumers have been endlessly documented: Atlantis pays $1.5 million a month, highest in the Caribbean, about twice what it should and 150 per cent more than in the US. Spread nationwide, billions are being spent on power that could be liberated for other investments, as Bahamian competitiveness is shrunk, not only in tourism but in every sector of business.

Whatever windy excuses we hear from loquacious BEC chairman Leslie Miller, the underlying faults do not lie on his doorstep but result from years of government failure to make tough decisions, by both FNM and PLP. Back in 2008, BEC issued RFPs for renewable energy projects, and a half-dozen fully-documented bids were received (we advised on one). BEC was not satisfied, so the whole exercise was repeated in 2009, wasting similar time and expense for the bidders. Nobody was ever formally accepted or rejected; the bidders simply learned the matter was ‘on hold’ pending a study by a foreign consultant for a total energy plan. This was the famous Fichtner report, which was received in 2011, read, (though never publicised) and filed away to gather dust.

A National Energy Policy Committee of well-qualified individuals was created and issued its final report in 2010. Centred around the theme of ‘sustainable energy’ and revision of our 1956 Electricity Act, it was a cogent summary for total review. Although it can be read on the Internet, it, too, is presumably buried deep in a Government filing cabinet.

In 2013, the present administration created a ‘National Energy Task Force’ under the co-chairmanship of Renward Wells. It is unclear whether an actual report was submitted, but last August, Government gave the bold and stirring news that BEC would be split into generating and distribution companies, and bids would be accepted for the ownership and management of each. All decisions would be made by year-end.

These forecasts went up in smoke. At the January 2014 Outlook Conference, the PM could only say that advisers were ‘well advanced’ towards choosing a bidder “in the coming weeks”, followed by increasingly lame and uninformative delays announced by DPM Philip Davis and KPMG partner Simon Townend. Finally, a date of August 31 was promised for revealing ultimate decisions. This deadline was almost kept, but with a release telling us only what had not been done.

In tortured bureau-speak, Mr Townend told us BEC would not be split (this took a year to decide?), bidders had not been selected although maybe one, officially unnamed, had been dropped, and four (or is it five?), unnamed, remain in the running, and that a final decision would not be made until November, as “further negotiation” is needed. All we can learn from this high-level waffle is that BEC will not change its spots until well into 2015 (if ever).

Nothing has been clarified about the mystery letter of intent with Stellar Energy, signed by junior minister Renward Wells, now in deep parliamentary purgatory. Stellar’s principals have lauded to us their gas-plasma waste-to-energy system, being presented to the “highest levels” of Government as a cost-saving scheme that will supplement any BEC fossil fuel generation. We are not technically qualified to pass judgment, but we wonder how long these gentlemen will be knocking before they get a decision.

Throughout this whole period, countless renewable energy proposals, from proven solar and wind power to exotic ocean-thermal schemes, have been passed up to minister of the environment, Kenred Dorsett’s, desk, where all are told to wait until the magic BEC restructuring is completed . But surprise..... the minister has been inspired by his August trip to Samoa to attend the UN-sponsored Small Islands Development Conference, where he found a slew of great new ideas for energy projects that could be considered “by the end of this year.” It takes a Transpacific flight to get things moving - slowly.

Fewer Bahamians suffer from poor health care than from electricity outages, but their suffering is far more intense, particularly for the vast majority who cannot afford private care and who have been eying the promise of the glowing glass monolith looming over Shirley Street known as the Critical Care Block. Originally scheduled to open in the summer of 2013, it was mentioned at the January 2014 Outlook Conference, as one of Mr. Christie’s “new” (i.e. unfinished) projects. Now, it’s still glowing and open to office staff, but not to patients.

Construction was financed with a $45 million bond issue, although payment of the full cost is now locked in dispute with the well-known general contractor Cavalier Construction. Then it was announced in April that negotiations for a $35 million bank loan needed for equipment would further delay proceedings. In late August, the managing director of the PHA stated that the loan had been “finalised”. Presumably, purchases of equipment can soon begin, and at some unspecified date staff will be hired and doors will be opened. A nurse who works in PMH tells us that the new wards gleam in readiness but still lack that complex marvel of modern technology - beds.

It is much the same in Exuma. Six months ago, a handsome 30,000 square foot mini-hospital was completed just outside Georgetown, at a construction cost of $16 million we were told by the contractor. But that’s before installation of equipment, which he understands may be in place by Christmas, possibly with staff. Until then, locals can only pass it by when seeking an X-ray or lab work.

With that record, ‘up’ can only be the future path for the PLP, and indeed the party may be starting to meet the challenge. Although the new gaming legislation is attacked from both sides of the aisle, it seems to us a reasonable step forward to escape the consequences of last year’s botched and needless ‘referendum’, when a majority of the electorate did not, in fact, vote ‘no’. And the proposed constitutional amendments surely mark desirable reform, if only they can be passed.

However, much deeper changes are needed to reduce the strong strain of scepticism infecting voters. The PLP probably remains the party with the greatest grass-roots support. But we here make a bold prediction: Unless the party reorganises in style and substance, saying a fond farewell to their amiable, well-intentioned leader, they will lose in 2017, as voters grit their teeth and turn to the only alternative - some combination of the FNM and the DNA, or even a new party that may spring up. Dr Andre Rollins?

Doubtless this prediction puts us out on a limb, but we won’t be shot (as were Mexican journalists) and our record is not too bad: This column predicted, unhappily, Bush over Kerry in the 2008 US elections, and last fall we forecast that the PM would never put forward a bill imposing VAT at 15 per cent effective June 2014. So you can judge us down the road. Hasta mañana!

Comments

Sickened 7 years, 11 months ago

Well written Mr. Coulson. If only the grass-roots people, who always vote for the PLP, could read. Unfortunately, we seem to be stuck with 10's of 1,000's of ignorant Bahamians who still believe that the old guard (PLP and FNM) have the ability, or even desire, to move this beautiful county forward. We seem to be forever stuck with the greedy and corrupt politicians ... just like our brothers and sisters in Africa. Everyone could prosper if Perry et al would just get out of the way.

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