The Tribune

EDITOR, The Tribune

Your Editorial comment of Thursday, the 21st November, was informative in that it laid out the serious fiscal situation facing Bahamian governments as we continue to grapple with increasingly devastating Atlantic hurricanes.

While the media was curiously dismissive of the link between the last government’s fiscal woes and another category 5 hurricane, it is nonetheless positive (though not surprising) that, with the FNM in power and facing a similar weather-related fiscal situation, the media’s approach has been more constructive.

On present models, climate change will continue to fiscally challenge Bahamian governments of whatever party. It will, as you rightly state, require a departure from the ordinary ways of thinking if we are to maintain our historical record as a well-managed country with modest levels of public debt. Revenues generated from traditional sources (i.e. regressive consumer taxes on the poor) will not be sufficient.

However, it is hoped that your reference to the present oil-exploration activity being conducted by a company known as BPC does not reflect a serious suggestion that we pivot for revenues toward the very carbon industries that are blamed for the global warming that sent us Dorian.

Apart from being the last thing our environment needs, it was frankly embarrassing to see our Prime Minister run off to the UN claiming that we are innocent victims of a carbon-energy assault on earth’s climate, only to return and get busy approving oil exploration projects.

As for the Guyanese example, while I wish that unfortunate country well, it is difficult not to conclude that getting into the oil business in 2019 (when the US is a net energy exporter and there is an international upsurge in renewables-based technologies) is akin to getting into the horse and carriage business in 1919, when production of Ford’s Model T was in full swing. We will see.

The last thing we should want or need at this point in our national development is to sully our lands or seas with the muck of the dying oil industry.

As to the suggestion that ‘unshackled’ foreign investment will somehow heal our fiscal woes, it is worth considering that, with a population of under 400,000 souls, we received foreign investment inflows of $947 million, or about $2,700 per person, last year (a bad year for us). That places us among the highest per capita recipients of FDI on earth. It is long past time that we stopped the rush for numbers and became more discriminating instead about what kinds of investments we seek and permit – as the OBAN fiasco vividly demonstrates.

The Bahamas has sufficient investment inflows, a sufficiently small population and (crucially) a large enough economy to absorb the fiscal shocks associated with Atlantic hurricanes without a crisis every few years.

The elephant in the room is neither the need to sell out to the environmentally disastrous oil industry nor to join a race to the bottom for even more foreign investment, especially if the latter involves dismantling the protections of Bahamianisation. Rather, it is to bring our revenues in line with our GDP per capita by moving toward a sensible, progressive policy on taxes.

We can no longer afford to run our country on a narrow and inflexible revenue base that disproportionately taxes the poor and brings in no more than 18 percent of GDP in revenues. Nor can we afford to indulge the wealthiest individuals and corporations by foregoing taxes on income. It is a luxury that no country that is serious about its development can afford.

It really is that simple.

ANDREW ALLEN

Nassau

November 22, 2019