By NEIL HARTNELL
Tribune Business Editor
Private sector executives and union leaders yesterday praised the government for striking the right balance between its fiscal woes and propping up workers and the economy against COVID-19.
Robert Myers, the Organisation for Responsible Governance's (ORG) principal, hailed the Minnis administration's focus on assisting vulnerable workers and small businesses from within its recently-approved $677.5m deficit rather than engage in more borrowing.
Acknowledging that the government's lack of "rainy day money" had made the coronavirus "so scary", Mr Myers argued that taking on more debt financing to mitigate the fall-out could "be far more destructive" if it led to the Bahamian dollar's devaluation.
"That's the right answer in my opinion," the ORG chief said of the measures unveiled by K Peter Turnquest, deputy prime minister. "The coronavirus will pale in comparison to a devaluation, or uncontrolled debt spiral that ultimately ends up unpegging the Bahamian dollar and devaluation. That would be far more destructive.
"The next five administrations are going to have to address that [the Bahamas' debt] as the most urgent and pressing matter they have to deal with, and find some rainy day money and put some headroom back in there for protection against disasters and pandemics.
"That has to become a priority," Mr Myers added. "We've lived the irresponsible life, and simply have to change. There's nothing more pressing than that. The way to get there is to improve the ease and cost of doing business, and therefore make it that much more attractive to invest and start a business in The Bahamas, which then improves GDP growth.
"We're not asking anybody to conquer Everest. We're asking for small, measurable changes in the right direction. The Government has very limited funding for this type of event or any kind of emergency. They don't have any rainy day money. That's why it's so scary because we kept spending like there was no tomorrow."
Mr Turnquest, addressing the House of Assembly yesterday, said the Government was "up against substantial fiscal limitations, given its ongoing fiscal consolidation and the additional appropriations that were required for the equally pressing and urgent restoration activities in Grand Bahama and Abaco after Hurricane Dorian", trying to shield the economy and workers from the worst of the pandemic.
Kenwood Kerr, Providence Advisors chief executive, yesterday agreed that these constraints - combined with a limited fiscal stimulus tool-kit - meant the Government was never likely to come to near to matching the £330bn loan guarantee package proposed by the UK, or the Trump administration's $850bn plan, in its economic response to the coronavirus.
Disclosing that the Bahamian hotel industry pension funds were now moving to provide a "safety net" for their beneficiaries, Mr Kerr said the Minnis administration had given itself room to take more stimulus measures should the pandemic prove more prolonged than initially thought or more cases emerge here.
"In the context of the Bahamian economy it may be sufficient," he told Tribune Business. "I don't think they've pigeon-holed themselves or put themselves in a corner where they can't do more than that. For the time being it's a good first start.
"We've not yet fully recovered from, and addressed and assessed, Dorian, and now we have this next external event that we have yet to fully define or grasp. It's a first step in the context of the limited tools and resources we have. I don't think the Government can be criticised for this, and they have the right to go back to Parliament and expand the fiscal help or social safety net.
"In their took kit they have tax relief and all kinds of levers they can pull to make this a softer landing." Mr Kerr also suggested that The Bahamas was overlooking the benefits provided by the Family Islands, as these represented potential 'safe havens' for persons seeking to flee the coronavirus threat due to their remoteness and low density populations.
And, with energy and fuel costs acting as "almost the equivalent of a tax", the Providence Advisors' chief said the recent global oil price plunge could help to partially cushion the Bahamian economy against the COVID-19 blow once BPL and the gasoline companies caught up on their ordering.
He questioned, though, whether the oil price fall will "have any real benefit" on the transportation side given that Bahamians were likely to reduce the amount of travelling they did to conserve cash during the coronavirus pandemic.
Meanwhile, Obie Ferguson, the Trades Union Congress (TUC) president, said of the Government's measures: "I think they are doing the best they can with the limited resources we have. I think the Government is doing the best they can in these set of circumstances, and they should be commended. We cannot be like the US because we don't have the resources or the economic base."
The measures unveiled by the Government include $20m in short-term loans for small businesses, in an effort to strengthen the Bahamian economy's shaky foundations amid a near-total tourism shutdown.
Some $4m is being allocated to food assistance and social support for Bahamian workers impacted by the virus. These vouchers, worth $100 "every two weeks" or $50 per week, will primarily be for tourism industry workers who have lost their jobs and/or incomes due to reduced work weeks, and provide eight weeks worth of benefit.
The Government is also providing $10m for a "temporary unemployment benefit", to be administered by the National Insurance Board (NIB), and targeted at self-employed persons in the tourism industry such as jet ski operators, taxi drivers, straw vendors and tour operators.
And persons who are temporarily laid-off will be eligible for NIB's standard 13-week unemployment benefit, while sickness benefits will be available for those who catch or have to quarantine because of COVID-19.
The Ministry of Works will also reorganise its capital projects such that they boost small business activity, while the Government also pledged to accelerate approvals for all domestic and foreign direct investment (FDI) projects "in the pipeline".