Roberts: Moody’s downgrade confirms the the FNM Government Grossly Mismanged the Economy

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PLP Chairman Bradley Roberts

Press Statement By

Bradley B Roberts

National Chair Progressive Liberal Party on the Moody’s downgrade

December 13th 2012

In a rating action today, December 13, 2012, Moody’s Investor Service has downgraded the credit rating of The Bahamas from A3 to Baa1.

The Report confirms and supports what this administration  has been saying all along i.e. that during the years 2007 -2012 the Bahamian economy was grossly mismanaged by the FNM. Like the Standard and Poors downgrading, this downgrading by Moody’s is another indictment of failed FNM policies.

This administration inherited almost $100 Million in cost overruns on the New Providence Road Improvement Project (“NPRIP”), these funds had to be borrowed. Thirty three percent of the capital budget of the Ministry of Works and Urban Development for the 2012 – 2013 fiscal year relates  to the completion of the NPRIP.  The NPRIP is the most visible of the many examples of FNM mismanagement. Contrary to the suggestions made by the previous administration, this project did not result in a stimulus of the economy.  Moody’s links the downgrading directly to the roadworks (FNM mismanagement). Additionally when this administration came to office in May of this year it was saddled with well over $100 Million in other unpaid bills for which money had to be borrowed to meet these long overdue obligations. This was on top of the $200 Million overdraft left by the FNM.  These obligations had to be met as well as servicing a spiraling national debt.

The government has already stated that in conjunction with its international partners it is taking steps to address the drain on resources due to public sector support of loss making public sector corporations, to increase revenue by revamping our tax structure, to control the growth of public sector employment, to strengthen public sector planning, to accelerate job creating new construction and developments and to maximize job creation through existing and new touristic developments.

Notwithstanding the impediments left by the FNM, the Government has been resolutely moving ahead with short, medium and long term initiatives to systematically and in a sustained manner grow the economy.  They include initiatives relating to the cost of energy and other measures which will reduce cost to consumers, stimulate investment and create jobs. Specific examples include the Sunwing/Hutchenson/Government recently announced project for Grand Bahama and the Genting/RAV Bahamas Bimini Bay project. Working cooperatively with the Developer and its hotel partners, the Baha Mar Cable Beach project is moving on target for a completion and opening in 2014, which will result in the creation of some 8,000 new jobs. A number of other projects are underway.  These are all measures designed to positively impact the GDP, increase investor confidence, create new long term jobs and improve The Bahamas’ ratings by international agencies.  As has been said, the ultimate objective of the Government’s medium term strategy is to gradually restore the debt to GDP ratio back to internationally accepted levels.

We previously created 22,000 jobs, restored investor confidence and placed the Bahamian economy on a significant growth pattern.  We are confident that our strategy for turning around the economy and placing it on a growth trajectory will bear fruit in the short and long term.