NASSAU, BAHAMAS — The International Monetary Fund’s (IMF) recent statement on the Article IV consultation gives a “damning outlook” and highlights structural issues that the Minnis administration has failed to address, Opposition Finance spokesman Chester Cooper said yesterday in a statement.
“The IMF noted much of what we already knew about the country’s dire fiscal circumstances. Nonetheless, it was a damning outlook highlighting structural issues that the FNM (Free National Movement) has failed to move the needle on in nearly four years,” he said.
“In responding to the IMF, the Ministry of Finance released a statement firmly rooted in delusion.
“Whilst some of the underlying economic circumstances were brought about by Hurricane Dorian and the COVID-19 pandemic, the current administration’s lumbering and anemic response has made it worse than it had to be.
“We have repeatedly said it did not have to be this bad. What is more worrisome than the IMF report, however, is the silence of the ministers charged with fiscal matters since the beginning of the year.”
Cooper added: “The public has no idea what the government is doing to shore up our financial situation and spark much-needed recovery. We have a minister of finance who wasted everyone’s time in Parliament last week patting himself on the back for the falling COVID numbers, but spoke not at all to the widespread economic calamity that is occurring around us.
“He also did not speak to the implementation of the wish list presented by the Economic Recovery Committee thus far. We were promised that projects would be fast-tracked and the approval process streamlined or approved or not, but have gotten no update.”
The Exumas and Ragged Island MP noted that IMF has highlighted the need for tax reform.
“We heard nothing along this front. We have a minister of financial services who said not a single word in Parliament last week about the looming blacklisting threat by the European Union. Instead, he sought to praise the prime minister and attack the opposition as the financial services industry appears left to fend for itself,” said Cooper.
“We have a minister of foreign affairs who spoke aimlessly in Parliament about the IMF report as if a 16 percent contraction of GDP and a near 100 percent debt-to-GDP ratio were an endorsement of this administration’s fiscal prudence. He also could not elucidate any strategy to deal with the EU threat despite having responsibility for our diplomatic mission in Brussels.
“We have a minister of state for finance who cannot update us on the status of the promised Grand Lucayan sale, its promised opening or how much the government has sunk into this endeavor to date.
“On top of the government’s lack of accountability and a plan, we are also concerned at the response to fiscal affairs so far.”
According to Cooper, given the government’s performance thus far, the IMF’s projections may be overly optimistic.
“The recent travel protocols and restrictions imposed on travelers to the US, coupled with its advisory for US citizens not to travel abroad, as well as Canada’s suspension of flights to the Caribbean will have a further adverse impact on tourism inflows,” said Cooper.
“With that in mind, it is unlikely that the projected two percent economic growth will materialize in 2021 on the current trajectory. Under-performance in the US economy with continued high unemployment there, as the US Congress deliberates aid to businesses and families and struggles with its vaccination programs, along with extended delays of cruise travel, also do not bode well for the remainder of this fiscal year.
“I do not say lightly that we appear to be in very serious trouble. It is imperative that the government produce a plan to weather this scenario, protect Bahamian businesses and the most vulnerable, grow the economy and expedite FDI projects as well as attract new ones. However, we have no confidence or historical reference that this will happen under this administration.”
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