Bowe: There will be a depressed economic environment for a period of time and our borrowing capacity has been utilized to a large extent
“Govt needs to redistribute the wealth…but that’s easier said than done”
NASSAU, BAHAMAS — The Bahamas government will likely have to make some very unpopular decisions in this upcoming budget, according to a top banker, who urged government not to throw caution to the wind.
Gowon Bowe, chief executive of Fidelity Bank (Bahamas), told Eyewitness News that heading into an election year, the government must resist the temptation of political expediency and carefully consider the long-term effects of its policies on the nation as a whole.
“Going into an election year, the government has the responsibility as fiduciary agents to make decisions that are likely not going to be popular because it is either not going to give to some that feel they are deserving [or] will need to take from some who may argue that it is going to hinder them in some way,” said Bowe.
“We cannot throw caution to the wind. We will need to strike a balance to minimize our mortgaging of the future to a bare minimum.”
He added: “We are in a precarious situation right now. We had fiscal headroom, though not a lot of headroom, and we have now used up a lot of it.
“Our borrowing capacity has been utilized to a large extent. We need to now focus on how to restore our borrowing capacity while appreciating that there will be a depressed economic environment for a period of time.”
Bowe also noted: “This upcoming budget has to look at how government expenditure creates a multiplier effect, turning a nickel into a dime of activity. Unfortunately, there is very little stimulus that is a rapid success story. It happens over time.
“Government has to turn its mindset and see its expenditure dollars as an investment in the future. It can’t simply look at this as a 12-month cycle and think immediate returns but look at [what] will be for the better long-term.”
Bowe noted the government has to be deliberate in looking at tax initiatives to not only protect its revenue base but also enhance it.
“This is where, if we were further along in a progressive tax structure, we would have the greater ability to tax those that have the capacity to pay as opposed to across-the-board taxation, which puts panic in the minds of the average citizen,” said Bowe.
“Government needs to redistribute the wealth and be Robin Hood in these times but that’s easier said than done.”
He added: “We have to move towards program-based spending where we are deliberate and specific in terms of what money is being borrowed and how they are being deployed.”
