By LEANDRA ROLLE
Tribune Staff Reporter
A FORMER Chamber of Commerce chairman said yesterday the government’s 2020/2021 Budget will have to be creative with its limited resources amid the COVID-19 crisis.
Gowon Bowe said as a result of the economic fallout from the virus, the government will either have “to reduce its spending or increase its borrowing.”
Acknowledging the government will have difficult decisions to make in the days and months ahead, Mr Bowe said the Minnis administration will have to become innovative in terms of expenditure “with the limited resources that it has.”
This, he said, includes limiting the amount of loans and grants given to businesses in the country.
He said: “…The government has traditionally seen itself as. . .a provider as opposed to a facilitator and that mindset shift has to move to well as opposed to providing business loans or business grants, can the government look at it in terms of saying ‘well if I know I’m going to spend x amount of money, can I start at advance sales or advance payments.’
“…I think the (government) has to become creative now in terms of ‘well how do I use the money that I’m going to expend in a manner that allows businesses to advance receipt of funds to, if you will, fund themselves’ and therefore, it doesn’t increase the amount of borrowing I will have to do because I was going to spend that money in any event.”
“So, when I start looking at where I’m going to borrow money, that should be in the areas where I can start seeing (investments) in the economy, but not using the cliché invest.”
He continued: “…So, for example, they’ve spoken about significant expenditure on airport developments. Well, (I would) focus on those airports able to generate revenue once borders open. I don’t focus on those airports that will not be.
“If I’m thinking about government building infrastructure, how do I develop buildings etc, that will become rental properties so I will no longer occupy 100 percent of it and allow it to (become) dilapidated.
“I will become effectively an investment property owner, 50 percent of it will be leased out to private tenants and therefore, that will serve two purposes – keep me on my toes in terms of maintaining the building but more importantly provide a cash flow again to help send some of the cost related with the borrowing that I will take on board.”
With tourism being the country’s leading industry for so many years, Mr Bowe also warned about the risks that come with diversifying the economy.
“We have to be careful about rushing to the government about diversification because I think a lot of persons fail to appreciate what tourism represents for us,” he told The Tribune.
“It is an export to a customer base of like I said seven million people, which is equivalent to probably two million full time residents.
“It is a source of foreign currency so it is our US source, if you will, in terms of the money that we have but most importantly, it is, if you will, a consumer of most of the businesses that have been established, whether directly or indirectly.
“So, when you talk about diversifying the economy, it’s not saying you don’t have other elements we should be considering, but do we have a product or a service that is going to reach two million people in the same way.”
On Sunday, Prime Minister Dr Hubert Minnis said the budget his government will issue this month will reflect decisions Bahamians will find painful as COVID-19 and the response to the virus causes the unemployment rate to skyrocket and tax revenues to plummet.