NASSAU, BAHAMAS — The Bahamas should engage the International Monetary Fund (IMF) in a debt restructuring exercise, a well-known regional economist suggested yesterday while urging the government not to do what Barbados did and “wait until the wheels fall off.”
Caribbean economist Marla Dukharan while speaking at Royal Fidelity’s Economic Outlook Conference yesterday noted that The Bahamas is arguably in a better position than Jamaica was when it entered the IMF program in 2012 or Barbados in 2018, with the debt-to-GDP of both countries at the time being north of 140 percent.
While noting that this nation unlike any other in the region has had to face a “double whammy” via Hurricane Dorian in 2019 and the COVID-19 pandemic, Dukharan suggested that The Bahamas embark on a “sweeping socio-economic green agenda”, which could position it well to become the region’s next success story.
“I want to urge the government, don’t do what Barbados did. Don’t wait till the wheels fall off,” said Dukharan regarding the prospect of this nation entering an IMF debt restructuring program.
Economic Affairs Minister Michael Halkitis has stated previously that the government has no intention of entering an IMF debt restructuring program, given its confidence in the recovery of the economy driven by the tourism sector’s rebound.
Prime Minister Philip Davis recently noted that the global financial group Rothschild & Co which the government hired as an independent advisor on its multi-billion dollar debt portfolio is still working with the government having been contracted for a year.
Dukharan noted that most countries in the region, including The Bahamas, will record pre-COVID lines of growth in 2024. Dukharan also noted that like the rest of the Caribbean, The Bahamas is highly dependent on tourism from a GDP, jobs, and foreign exchange standpoint.
“Tourism is vulnerable to the climate crisis, uncertainty, discretionary spending in the US, pandemics and so many factors we can’t control,” she said.
“I have often wondered what is the net inflow of foreign exchange when deducted from what we spend on the imports to support this sector. We don’t have the data to determine the net impact of this sector in The Bahamas and the region,” said Dukharan.
This article is a masterpiece for many caribbean nation goverments to start and rethink of positioning their economy to reduce the IMF Debts.
There is a recent , March 2023, informative video on youtube highlighting top caribbean islands with the highest IMF debts and The Bahamas is deep down there. Although there is hope in rebounding the economy with the tourism and finance industry, poor management/corruption will force us going back to IMF for more $. The Davis admin is working to secure a $ 20 million package for the upcoming 2023 huricane season.. question is; will the money be return if we have a peaceful season or will it vapourize before 2026???