STATEMENT ON MOODY’S ECONOMIC ASSESSMENT
CHESTER COOPER, MP EXUMAS AND RAGGED ISLAND MP, PLP DEPUTY LEADER
AUGUST 15, 2018
FOR IMMEDIATE RELEASE
Given the Minnis administration’s penchant for taking decisive action when foreign actors take issue with how it governs, it is hoped this latest assessment from credit ratings agency Moody’s might serve as a wake-up call, as professional Bahamians who have made the same observations have been roundly ignored.
Despite the hand-wringing of the prime minister, the labelling of Bahamians as corrupt, the back loading of bills to inflate the prior year’s deficit, the firing of countless people from the public service, the unnecessary raising of value-added tax (VAT), the hubris of an adrift finance minister, and the clueless inability to accept that it has borrowed excessively with little to nothing to show for it, the credit rating for The Bahamas is unchanged and the outlook of the economy remains negative.
Moody’s points out that though deficits have fallen, debt ratios and actual debt have risen under this administration. But we already knew that and have explained that to this government.
Moody’s appears reticent to get behind the government’s efforts at fiscal consolidation and raises doubt that the measures put forward by the Minnis administration will bear fruit. We also already knew this and have meticulously pointed it out.
Moody’s points out that economic growth is low for The Bahamas – a glaring weakness that we have begged this government to address many, many times.
The suggestions and recommendations are still on the table.
Moody’s points out that contingent liabilities in state-owned enterprises and the Bank of The Bahamas pose a great risk to credit worthiness.
This, as the government announced its intention to nationalize a barely functioning hotel for tens of millions of dollars in order to save jobs – though it has yet to articulate any concrete plan to make this a reality. We reiterate that our faith in this administration running any business is perilously low.
Concurrently, this administration’s handling of BPL, after condemning the Progressive Liberal’s Party’s (PLP) management of it, has proven to be disastrous.
For better or worse, this government has hinged all of our fortunes on the collection of increased revenue through a massive hike in value-added tax and gaming taxes; though they still have not fully implemented a tax on patrons as they admit they did not do sufficient research into the impact of such a measure.
They however continue to undermine their own revenue targets with half-baked policies and concessions.
Moody’s has said in clear language that it will downgrade The Bahamas should this fiscal consolidation plan, replete with holes, fail to pan out.
Were it not for Baha Mar, this administration would have nothing but a series of blunders on its hands.
It is over a year in and the FNM has nothing to show for its haphazard efforts but broken hearts and shattered dreams.
The PLP suggests that the FNM cease blaming others for its inability to function and seek the advice that our best professionals are willing to give to get the engine of the economy firing on all cylinders.
The minister of finance’s attempt to spin the current economic stagnation and Moody’s dubious assessment of the Minnis administration’s fiscal roadmap is laughable.
The government should consider that Moody’s has extended its probation; the next few months will be critical.
Any unplanned, large expenditure early in the fiscal year such as the Grand Lucayan hotel acquisition or shortfall in revenue targets will be sure to lead to a downgrade.
Perhaps another well-placed letter from wealthy foreign interests leaked to the public is needed for this administration to begin to understand what is truly at stake, notwithstanding the next general election.