Govt. seeking US$252 mil. emergency IMF loan

Govt. seeking US$252 mil. emergency IMF loan
IMF logo

NASSAU, BAHAMAS — The government has applied to the International Monetary Fund (IMF) for US $252 million to support its ongoing COVID-19 response and budgetary operations.

The Ministry of Finance announced yesterday that as a member country of the IMF, the government of The Bahamas has applied to take advantage of a low-cost emergency loan facility that is available to all member countries.

It was noted that the $252 million falls within the borrowing authorization approved in the Supplementary “Hurricane Dorian” Budget in February. The additional resources will support the Government’s ongoing Coronavirus (COVID-19) response and other budgetary operations,

“This loan is not a structural adjustment facility. It does not involve the conditionality elements normally associated with the IMF facilities that most are familiar with. This facility is a low-cost option, with an interest rate of some 1.054 per cent that we are smartly availing ourselves to address our current needs,” said K. Peter Turnquest, Deputy Prime Minister and Minister of Finance.

“In a few days, we are going to present a new budget and it will continue to reflect the double impact of Hurricane Dorian and COVID-19. However, we have demonstrated that our approach to addressing these emergencies is to focus on the health and safety of Bahamians, social protection for the most vulnerable, and the need to sustain employment. These priorities will continue into the new budget, as we work to stabilize the domestic economy and plant the seeds of recovery. This loan facility assists us with meeting our existing obligations through the end of the fiscal year, as has been approved by Parliament during the Supplement “Hurricane Dorian” exercise,” Turnquest.

Since COVID-19, some 27 countries have accessed financial assistance using the IMF’s Rapid Financing Instrument (RFI), including other CARICOM countries. Member countries with stable debt can apply for this facility when they have had a major economic shock, such as those caused by wide fluctuations in commodity prices, natural disasters, or other emergencies – in this case COVID-19.

“This particular low-cost facility is a one-time deal that cannot be used again until repaid. A simple way to think of this is like borrowing against the value of your ownership in a

company. The Bahamas has a quota in the IMF which can be likened to its ownership of shares in the IMF. Borrowing against these shares is normally at a lower interest rate than borrowing from a commercial source, and therefore a more favorable option for emergencies like the one we face today,” said Turnquest.

The IMF Board meeting is planned for early June and if approved the funds would be made available to the Government within three business days. Again, unlike with IMF-supported programs, there are no conditions or prior policy actions that the Government must take before the funds from the RFI can be disbursed.

The Ministry of Finance noted that “while the Government could have negotiated a loan with other financial institutions, the RFI is indisputably the better option, in the current circumstances, given its fast disbursing nature and low interest rate.”

Although the loan must be repaid in five years, the grace period of three years is favorable as this will give the Government time to refinance the loan for a longer time horizon, if it deems fit.

5 comments

I would agree to this loan if it is to develope our fishing, farming and other natural resources for self-sufficiency.

I have lived in The Bahamas for 25 years. I am writing you to anonymously as, like all the investors and employers I have known, I have had enough. I have attempted to employ hundreds of Bahamians, trained every one and paid millions in contributions. Like the queue of other investors, I am resigned to joining the exodus, and leaving.

It’s important to celebrate when you have succeeded, but it’s equally, if not more important, if you are an honest person, no matter how proud you may be, to know the terms on which you have failed.

The Bahamas “project” has failed. It is a catastrophe.

Our national educational average has not surfaced over a D grade for decades; any intellectual capacity we have flees each year to the U.S.; and 90 percent of our citizens and residents are a collection of burger-flippers not even remotely employable by any known Western standard. The most beautiful beaches in the world are consumed by trash; the shores infested by Casuarina; the coral and fishing waters are poisoned by bleach.

Our “electorate” is disconnected and exhausted; since Pindling the political class has been bottlenecking the inflow of foreign investment and public treasury funds for their own Swiss accounts. We are incapable of solving our most basic problems, such as drainage, potholes, accounting, hurricane recovery or the use of computers. The workforce is so pathetic. The government itself has had to fight the cliched accusation of “victimization” for firing people who are incapable of even showing up to an office.

Our media is so amateur it’s mocked anywhere else it is seen. We have no artists of international renown, little culture to speak of and our sports teams’ wildest ambition is to bring back just any medal of some kind. There are people in this place who “disapprove” of “rock n’ roll” music as if we were in the 1940s.

The resentful “immigration” policies are so nakedly racist and xenophobic they literally embed the “Mr 10 percent” scam into our “law”. After five years trying to play one of the big boys, we cannot grasp what the WTO is, let alone accede before we are thrown out from the five-year limit – even Afghanistan managed it.

And we haven’t even talked about crime: an overflowing prison we can’t relocate to one of the thousand cays, if the gang-bangers sent there aren’t lucky enough to be the cousin of a judge. Our public transit – African minibuses – are barely serviceable; the Family islands don’t even have banks despite being the most incredible tourist magnet on the planet; and our national airline is known for having the least routes, the least planes and the worst punctuality of any of its peers.

Let’s not even mention the exploiting monstrosity that is GBPA: an undemocratic relic from 1955 which has devolved into a derelict, Haitian-style disaster in our supposed “industrial” heartland, fighting the “Bahamianization” battle all over again.

Consider for a moment Singapore or Qatar. Both hopeless rocks with no natural resources that received their independence at the same time as we did. Both are $300 billion success stories, and far further than 30 nautical miles from the world’s largest economy. Our most successful island is Abaco. Like its cousins the Turks and Caicos, Cayman, Antigua or BVI, it enjoys the growth from stability, prosperity, and gentrification no amount of catastrophe can force on us. It overwhelmingly opposed our 1973 mistake.

Look at what they did. Then look at what we have done. They embraced free market economics and banished government from anywhere it did not belong. The Bahamas government has sought to control every enterprise that arrives at the dock. The first is staggeringly wealthy; the latter is more accurately described as a prehistoric tribal theocracy from the jungles of the psychological Congo.

Among the basic things we lack: a postal system, public transport, credit card adoption, reliable hospitals, effective schooling, smoking and drink-driving laws, womens’ rights and the criminalization of simple realities like marital rape.

At some point we Bahamians have to be honest and brave enough to realize that when you take away the beaches, we are essentially a poor and corrupt Caribbean version of Zimbabwe. Sadly, our racist and xenophobic talk radio population is so appalling ignorant, all they know is how to insult and patronize other Caribbean peoples as having a pegged currency and being close to Miami.

The mandarins in Whitehall were right. We were not ready for independence and still won’t be for a long time. These islands are too young, too disparate and too, frankly, African, to entertain the idea. But like in the best Bahamian tradition, we arrogantly thought we were above our actual condition: a mistake which has haunted us for generations. One look at the more rural areas and TV cameras would be filming a nightmare based in sub-Saharan nightmare of beggars in rags, unroofed shacks, and street food.

I have seen hundred-million-dollar deals wrecked over and over again by sheer pride and utter stupidity. No grown-up country acts this way. It’s like we are tantruming children. The endemic level of cheap hacks “cheating” with bribes and retaliatory mafia-style behavior is textbook of a country that doesn’t click it is a country at all.

Every single thing the government has tried to control has failed. Every “Bahamian” provider is a low-quality disaster.

No matter how much investment third parties work so hard to bring in, they are derided, insulted, and arrogantly dismissed. Barbados just by itself, as one island, generates the equivalent of 50 percent of our GDP, at its most corrupt. They, at least, can get an Uber or bus home at 9 p.m. without being scammed $50.

When it’s not sneaking off to see their sweethearts, the people of these islands are fond of playing dress-up on Sunday mornings. Of all people, you’d think they’d recognize the tale of the prodigal son. We have lost ourselves to our pride, abandoned our heritage and failed miserably, to now live amongst the pigs.

The world does not take this “country” seriously; neither do the “politicians”, foreign investors or the people themselves. They just want a “tribe” with a flag to wave. We don’t need to give up any of those things.

All the talk is of VAT, the FNM’s performance, around the mid-term “budget”. We don’t have “no money”; we have tens of billions missing from theft and corruption, and not a single competent individual to resolve it.

All we have is U.S. tourists. People on cruise ships who vow never to return after being treated so badly while they eat over-priced food a chef in Fort Lauderdale would be fired for. We could have abundant agriculture in the north, multibillion-dollar tourism just in Exuma and 10 Hong Kong free trade zones if we asked for help and cooperation.

“Independence” was an interesting idea that allowed Pindling and his cronies to steal millions. There was no violent revolution. Britain didn’t want us.

Maybe they had a point. Maybe there was a lot we could have learnt if we weren’t D-minus students so full of hubris all we could do was defensively rant, like imposters with Short Man Syndrome.

In 2018, we have to take a hard, honest look at this “nation” and make difficult decisions in the light of the total, constant, abject failure of the last 50 years. We would have been better off as a British overseas territory, as Abaco believed, as Jamaicans believed, and as the Turks have been, despite all their many problems.

Maybe if we were strong enough to sit down and ask our mother country, she might help us with our neighbor, the United States, to develop ourselves into a real country. In exchange, we might be their beautiful park in the ocean, where they bring all their friends from the Commonwealth and Europe, benefiting us both. They’ve also made mistakes. We have common ground.

Brexit has happened. Let us hold our heads up and go back to London, for help. Let’s ask we be reincorporated into the U.K. for a fixed term, with a devolved assembly, until we develop.

If we really want a source of legitimate pride, let it be for our humility and sincere willingness to overcome our folly, and fully evolve into maturity. If we could do it ourselves, we would have by now. There is no shame in a mistake, only repeating it over and over.

– The Ghost of Junkanoo Future

Good idea. As if it will happen in a country so corrupt and poorly educated it cannot even operate a postal service itself….

That is all you have to say? you have no response other than to tell someone that anyone can read what they have to say? Maybe if more people in this country worried less about the consequences of speaking openly things might improve

Comments are closed.