The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas cannot afford for the Minister of Finance to undermine his standing as "Mr Fixit" by being caught up in a fiscal 'blame game', a leading businessman has warned.

Sir Franklyn Wilson told Tribune Business that "we all lose" if K P Turnquest, also deputy prime minister, is perceived by the rating agencies as "part of the problem" when it comes to the Bahamas' fiscal crisis.

With Moody's having placed the Bahamas' sovereign creditworthiness under a 'junk' downgrade review, the Arawak Homes chairman said it was vital that Mr Turnquest provide all the answers to satisfy its concerns and those of its fellow traveller - Standard & Poor's - during their imminent visits to the Bahamas.

Sir Franklyn argued that it was not in the Bahamas' interests for the Minister of Finance to "get into it", in terms of political finger-pointing and bickering, as this would only complicate the explanations desired by the rating agencies and International Monetary Fund (IMF).

Mr Turnquest, in his Budget address and subsequent public statements, has blamed the former Christie administration for "leaving the cupboard bare" as a result of reckless, uncontrolled spending that added $2.2 billion to the $7 billion-plus national debt in just five years.

The Opposition, though, retorted that Mr Turnquest's own statements are responsible for bringing the Moody's 'junk' downgrade review upon the Bahamas. Its members are arguing that the new government's $722 million borrowing within its first year, and revised $500 million deficit for fiscal 2016-2017, undermined trust and credibility in the fiscal projections and 'spooked' the rating agencies and international investors.

"It's irrelevant whose fault it is," Sir Franklyn blasted in a recent interview with Tribune Business. "Who cares? At this point, it doesn't matter who is to blame. We are all Bahamians. We are all in this together.

"The electorate spoke, and said the former government had created sufficient problems that they didn't deserve to be re-elected, and said to the new people: 'Go fix this problem'."

Turning to the consequences of the fiscal 'blame game', Sir Franklyn said of Mr Turnquest: "The day he was appointed he became 'Mr Fixit'. At one point he was seen exclusively as the pathway to the answer.

"This debate debate diminishes his ability to provide the answers when he's seen as part of the part of the problem. It's in the interests of the country to get past this blame game, as we don't want to restrict the Minister's ability to provide answers to the rating agencies because he's seen as part of the problem.

"We don't need that. He needs to be seen as 'Mr Fixit' by the rating agencies. If he gets caught up in it, he becomes part of the problem and we all lose."

Sir Franklyn expressed hope that the recent fiscal controversy would become "a teachable moment for a new generation of leaders", pointing out that the May 10 general election had ushered in many MPs and Cabinet ministers who were "inexperienced in terms of government".

"I just say that for what it's worth; not to criticise anyone," he said, arguing that Mr Turnquest should have delivered 'two' Budget speeches that were markedly different in terms of content and tone.

Sir Franklyn argued that the initial Budget address was largely read by financiers, rating agencies and investors, with many Bahamians paying little attention to the minutiae and detail.

He added that, traditionally, ministers of finance - who have often been the Prime Minister - tended to reserve politically-related comments and charges for their second Budget address, which often concluded the debate.

Sir Franklyn suggested that the 2017-2018 Budget communication had departed from this formula by mixing fiscal facts with political statements - something that could have confused external observers, such as Moody's.

"In the Budget speech itself, you make sure the speech is a dignified statement addressed to the financial community," he told Tribune Business.

"Don't let anyone fool you. That speech, 99 per cent or an even bigger proportion of the electorate don't read it. Financiers read that speech. That needs to be a dignified speech."

Sir Franklyn added: "When it comes time for the second speech, that's when political statements can come in. Financiers do not see that as, what rating agencies call, official comment.

"The formal Budget speech is official comment. I trust the Minister will learn from this, and do what other, more experience ministers of finance have done; they made two speeches.

"Prime Minister Ingraham was very good at this. His speech on the second reading was often times very, very different from his original Budget presentation. Ministers of Finance have two bites at the cherry; their original Budget speech doesn't have to say everything."

Sir Franklyn, though, praised Mr Turnquest as someone who was likely "to serve the country well", given his background as a PricewaterhouseCoopers (PwC) trained accountant.

He urged him to consult with previous ministers of finance, both FNM and PLP, to help prepare for visits by both the rating agencies and IMF. The latter is currently in Nassau.