NASSAU, BAHAMAS — A new partnership between the University of The Bahamas and the Ministry of Finance aims to enhance the government’s current economic modelling.
Minister of State for Finance Kwasi Thompson underscored the data-driven approach to public policy during a press conference to announce the signing of a Memorandum of Understanding (MoU) for the launch of the Bahamas Recovery and Sustainable Growth Project.
Thompson said: “In working with UB, this administration is further cementing the government’s move to a more scientific and data-driven approach to public policy. Under the project, UB will research and determine optimal growth levels to support the Government’s plan to set the country on a more sustainable macroeconomic path.
“It will expand and enhance the government’s current economic modelling, platforms and protocol by allowing for more suffocated analysis using a wider range of input and variables. This administration is focused on combating the challenge of producing growth at sufficient levels to address the full gamut of national development priorities, including fiscal responsibility targets relating to revenue, expenditure and debt.”
Thompson said: “The Government and Public Policy Institute (GPPI) at UB has put together a team of expert economic and fiscal specialists that will conceive a data-driven approach to our growth trajectory to support the existing capabilities of the Ministry. The team will use data provided by the government to establish a baseline of the country’s current economic and fiscal status.
“From there, they will engage in economic modelling to predict growth forecasts over short, medium, and long-term outlooks. The model will expand the number of economic indicators that are assessed from a three-sector model to a five-sector model. The analysis will allow GPPI to present a set of sound recommendations to address the economic and fiscal trends we have historically experienced and that have worsened due to the pandemic.”
The team that will conduct the study will comprise of Professor Olivia Saunders, Professor of Banking, Finance and Economics in the Faculty of Business, Professor Tri Lam, Associate Professor, Department of Banking, Finance and Economics, School of Business, Dr Jorge Baca-Campodonico, an expert in fiscal policy, econometric modelling and a former minister of finance of Peru along with Zhivargo Laing, a former minister responsible for Finance and Economic Development as well as Executive Director of Government and Public Policy Institute University of Bahamas.
Laing explained the study seeks to capture the dynamics of the country’s economy.
“What are the pieces and parts that move the economy in a certain direction and produces a certain outcome,” Laing said.
“We will be able to generate scenarios that predict and forecast various outcomes for the short, medium and long term for the economy. We are able to take recommendation from the ERC and existing policies of the government put those into the model and see what they will produce. The government will be able to have an idea of the impact of its current or any new or proposed policies.”
Thompson noted that in the past, The Bahamas has largely relied on multinational economic modelling.
“The models to be developed by GPPI will be specific to The Bahamas and based on our unique economic background and expertise,” Thompson said.
“These improvements can promote better prioritization of limited resources and more relevant and attainable growth results.
“Additionally, this contract includes training of specialists in the Ministry of Finance on how to use the new models which will ensure sustainability and long-term benefits. I’d like to thank the University of The Bahamas for entering into this agreement with us. The work of GPPI will bring about findings that can turn our economy around.”
Dr Rodney Smith, President of the University of The Bahamas said the university has committed to using all available resources within its community as well as its broader networks throughout the world to address the issues that confront the country.
Smith added: “As we all know, our nation has experienced significant economic disruptions in recent times arising from, among other things, Hurricane Dorian, and the enduring global COVID-19 pandemic. The Ministry of Finance desires to determine the level of growth the country needs to achieve to reverse the current economic and fiscal trends toward a more sustainable financial future and has entered into an agreement with the University of The Bahamas through its Government and Public Policy Institute (GPPI), to study this issue and present its findings and recommendations.”