The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE deputy prime minister yesterday hit back at his opposition counterpart’s assertion that the government’s fiscal policies are being dictated by the International Monetary Fund (IMF).

K Peter Turnquest accused Chester Cooper, the PLP deputy leader, of having a “reckless disregard for the truth” following the latter’s criticism of Wednesday’s mid-year budget announcement.

Mr Cooper had predicted an “even greater revenue shortfall” and missed fiscal deficit targets for 2018-2019, arguing that the mid-year budget “did nothing to inspire confidence”. He also accused the Minnis administration of managing The Bahamas for the IMF and rating agencies rather than the Bahamian people.

Blasting back, Mr Turnquest charged that the former Christie administration had lead the country into “junk” bond status with four consecutive downgrades, and branded Mr Cooper’s IMF assertion as “a lie”.

“It is a complete and utter falsehood,” the deputy prime minister said. “Neither the IMF nor any other international body has ever dictated to, or directed, this government on any fiscal matter.

“The fiscal targets and related policies that we have established have been decided upon by the government alone, with no demands placed on the government by any external party – domestic or international.

“We have established a medium-term fiscal strategy, and presented it to the Bahamian people – something that is unprecedented in The Bahamas. We have explained why this policy and related strategies are good for the medium and long-term social and economic viability of The Bahamas.”

Mr Turnquest continued: “We understand that Mr Cooper and Mr [Philip] Davis want people to forget that their side was the author of four consecutive downgrades. We know they do not want people to remember that they ran up the largest accumulated deficits in any single term, despite benefiting from $1bn in new VAT revenue.

“But their desperate and futile attempts to distract from their disastrous legacy does not give them the license to speak untruths. We call on Mr Cooper to do the right thing and apologise for telling fibs. We are not optimistic, however, that he will do so.”

While saying he was not interested in a “back and forth” with the deputy prime minister, Mr Cooper responded yesterday: “For someone who should be spending the remainder of the fiscal year chasing every VAT dollar he can so as to not look completely inept at budget forecasting, the minister of finance appears to have a lot of time on his hands.

“His repeated protestations about the lack of the International Monetary Fund’s (IMF) involvement in the Hubert Minnis administration’s fiscal policy, however, belie the facts as they stand.”

Mr Cooper noted that in May 2018, the IMF’s Article IV consultation report on The Bahamas, conducted months prior, revealed that the fund had proposed “allowing for a transition period of three years covering fiscal year 2018 to fiscal year 2020, a deficit target of one percent of GDP from fiscal year 2021 onwards…”

“The IMF went on to say, on page 13 of that document: “The [government] authorities agreed with staff’s proposed fiscal rule targets. They welcomed staff’s proposed calibration of the fiscal rule, which they plan to include in the draft fiscal responsibility legislation. The bill is expected to be sent to Parliament in late May.”

“That same month, the Cabinet of The Bahamas approved that legislation,” Mr Cooper said. “The Minister of Finance said the IMF is helping draft the Public Financial Management Bill, which will eventually replace the Financial Administration and Audit Act, the very core of how our public finances are managed.”