By NEIL HARTNELL
Tribune Business Editor
A prominent banker yesterday urged both major political parties to “put away the childish banter” and focus on the fiscal and economic reforms The Bahamas has lacked for 25 years.
Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business that the country’s present difficulties cannot be blamed solely on one administration - least of all the present one that has been in office for just six months - with “guilt” to be shared across multiple PLP and FNM governments.
Speaking out after Michael Pintard, the Opposition’s leader, asserted that confidence among lenders/creditors in The Bahamas’ sovereign debt is at an “all-time low” based on the deep discounts and high yields at which existing bonds are trading, he warned that the arguments were akin to “the pot calling the kettle black”.
“It is always concerning to see the political banter when the reality is our circumstances are not solely about one administration,” Mr Bowe said. “Both of them need to put away childish banter and become more mature.”
Warning that credit rating agencies and external investors monitor what both parties say closely, he added that such observers were really seeking “a rolling prospectus” that outlined The Bahamas’ risks, and which was updated every six-12 months to reflect what this nation had achieved via economic and fiscal improvements.
“If we set aside the politics for a minute, The Bahamas has a need for a National Development Plan, The Bahamas has a need for accrual-based accounting standards, The Bahamas has long needed a debt management strategy, and The Bahamas has long needed a proper determinant on our fiscal performance,” Mr Bowe argued.
He added that the Budget process was too focused on the May projections, and too little attention was paid to actual performance and outcomes when matched against these estimates. The Bahamas could only “talk about true fiscal responsibility and accountability” if the Auditor General’s Office is able to publish the Government’s audited accounts within months of year-end.
“The solution has long been there,” Mr Bowe told Tribune Business. “National Development Plan, accrual-based accounting, debt management strategy. They’ve been needed here for the best part of 25 years....
“It’s impossible to blame the other side. Both parties are guilty of it. This government has been in for six months. They could not have done any more damage than what they set in motion. The Budget was passed prior to the election and, while they did a supplementary Budget, it will take time to affect revenue and spending measures.”
Mr Pintard, in an earlier statement, had said: “Neither the supplementary budget, the Fiscal Strategy Report nor this recent mid-term budget statement by the Davis administration has arrested the significant fall-off in The Bahamas’ bond prices.
“Further, just last month the Central Bank reported that the Government’s recent attempt to raise funds in the domestic market was substantially undersubscribed. Clearly, despite the bombast and rhetoric from the Prime Minister about his government restoring fiscal health, international and domestic creditors are simply not buying his talk.
“Their actions in the financial markets demonstrate their lack of confidence in the fiscal plans and strategy of this Davis administration. No matter how much the Prime Minister and his officials seek to distract and deflect, the investor confidence in Bahamas government debt is at an all-time low.”
Mr Pintard had continued: “This frankly is an urgent matter that transcends partisan bickering. We therefore call on the Government once again to articulate and execute a sound and credible fiscal plan that will again engender the confidence of the creditor community and ensure that, as a country, we maintain our access to financial markets at affordable rates.
“Unless the Government develops and executes a sound fiscal and economic plan, we all as a country will face the prospect of significant hardships. Of course, these hardships can be avoided if the Government does the right things now.”