NASSAU, BAHAMAS – The inability of Bahamians to readily invest their money abroad has resulted in ‘financial oppression’, according to a well-known ophthalmologist.
Dr K Jonathan Rodgers underscored local investment options were unattractive during a lecture hosted by local think-tank The Nassau Institute on “The End of Exchange Controls”.
Rodgers noted that while there are advantages to having the Bahamian dollar as fixed currency 1.1 with the US dollar, a key disadvantage was what he referred to as ‘financial oppression’.
Rodgers said while having a fixed currency limits currency speculation Bahamians were also disadvantaged.
“Due to the fact that Bahamians can’t readily invest their money overseas, they are forced to invest it locally,” he said on Wednesday night.
“One of the most common investments locally is real estate. That is one of the reasons it costs so much and that combined with high transactions fees make it almost prohibitively expensive for the average persons to invest in real estate.
Rodgers continued: “It’s madness. As an alternative you can put it in a government bond but two years ago our sovereign debt got downgraded one level above junk status and they are not quite as safe as they used to be so you have to think twice about that. He also argued due to low interest rates on savings and services fees, Bahamians were losing money saving with commercial banks.
“Financial oppression forces you into these types of investments,” he said.
On the possibility of the Bahamian dollar being devalued, Rodgers said: “You always hear people saying, especially on the radio and talk shows.
“That the Bahamian dollar will never devalue beach it is pegged to the US dollar. Absolute nonsense. Our currency is grossly overvalued. When you have an overvalued currency you tend to import more than you should and export less than you could. Government often has a falls sense of security with this one to one peg.
“This why they don’t have any problem borrowing in US dollars,” he added.
