IN the flood of overseas assistance which poured into The Bahamas in the wake of Hurricane Dorian we expect few of us will have noticed one of the biggest individual contributions made towards disaster relief.
Guyana, the once impoverished northern South American country which faces the Atlantic, announced it was donating $3 million through the Guyana Bank for Trade and Industry.
This incredibly generous aid dwarfed that put forward by other nations who many of us would naturally have thought could have easier afforded such a level of assistance.
So, what is it that has allowed this tiny country with a population of just 800,000 – not much greater than our own – to be so generous.
The answer is oil.
This year the first barrels of crude from massive oil fields off Guyana’s coast will come ashore and, if properly managed, will change the face of Guyana for ever.
As the nation accepted the argument to go for oil against all environmental protests its economy began to change as the drilling companies moved in.
This year its growth in Gross Domestic Product is forecast by the World Bank to stand at 4.6 percent.
And next year? An astonishing 34 percent increase is forecast.
Compare Guyana’s experience with where The Bahamas sits today.
Yesterday Finance Minister Peter Turnquest presented his 2019 Fiscal Strategy Report and Fiscal Adjustment Plan in Parliament. It makes for unhappy reading when you delve into the detail.
On top of our existing national debt of $8.2 billion next year we will be going out to the banks asking them to lend us another $508 million. We’re already spending $377 million just to cover the interest payments due on the existing deficit and this will grow to $400m by 2023/24.
There’s a big hole in BTC’s pension plan which is going to require $20 million being set aside for the next eight years.
Add in another $100 million provision in 2022/23 to cover a promisory note which will fall due for Bank of the Bahamas. This will be needed as it’s forecast only 40 percent of the loans made by BoB are going to be recovered.
Now take in another $130 million for HR reforms and increased technical capacity across the public sector to enable the government to deal more effectively with its administrative and policy agenda.
There’s the elephant in the room which no recent government has a clue how to tackle, only the knowledge it’s out there - a $2 billion deficit in civil servants’ pensions.
It’s likely at some point the government will introduce what’s called a Defined Contribution Scheme for civil servants still at work which will put them in a new ‘pension pot’. That stops the deficit getting any bigger and pays for future pensions but it does nothing to cover the shortfall.
Mr Turnquest has warned these and other factors will derail the government’s planned fiscal roadmap for five years, then we’ll be back on track.
It’s a fine ambition but we fear it’s a bit like playing roulette at Baha Mar. The government is betting on winning every spin of the wheel, nothing else going wrong – no global downturn in coming years to put a brake on tourism, no (God forbid) hurricane of the scale of Dorian.
Mr Turnquest has shown himself to be a capable and cautious Finance Minister but we believe it is time both he and the government start to think big – to look at beyond tomorrow.
We know that with one eye on the next election they don’t want to risk defeat at the polls by putting too much strain on families and businesses.
Look what happened with the VAT increase – outrage.
Half a year of sitting in the dark and now the public is going to be saddled with cleaning up BPL’s appalling history with an increase in their bills to cover new debt!
Inevitably there is going to be an increase in National Insurance contributions. There has to be and almost certainly it will be in the aftermath of the next election.
There’s no escaping these problems but as it stands we don’t see anywhere that blue-sky thinking which is going to get us to a position where we can actually feel we are getting somewhere, not just treading water trying to tackle each crisis as it smacks us in the face.
We need to be prepared to do something radical. The electorate will go along with whatever government offers as a viable alternative to drag us out of the morass we find ourselves in.
Whether that’s starting again in Grand Bahama, letting go of the shackles to Nassau and embracing massive unrestricted foreign investment and personnel.
We should be asking things like – what do we need to do to get Amazon to Freeport?
Why not send some of our government departments to Freeport – the influx of hundreds of jobs igniting the economy?
Grasp the nettle – or in this case a cannabis plant – and turn Andros into the Caribbean’s biggest exporter to the exploding markets for the drug in the US, Canada and elsewhere. Just get on with it (for export only of course!)
There should be enough wise heads in government – and outside – to have big plans in their heads they believe could work. Let’s hear them.
It maybe though, Mr Turnquest, Dr Minnis and Brave Davis too are all at the roulette wheel waiting for one number to come up and then we can all stand easy.
That’s Bahamas Petroleum Company.
Next year BPC will be drilling in our southern waters looking for oil.
Maybe, like Guyana, they’ll strike lucky and – environmental concerns fully discussed – our number comes up.
If it does pray we have the sense – and honesty – to manage such wealth. Also, that we remember those who helped us when we needed it and are prepared to do the same if our fortunes change.