Is The Bahamas Doomed Financially?

Wednesday 16th, January 2013 / 09:09 Published by

I found it very interesting and foreboding that the stories of the previous (FNM) government purchasing a $185,000 Mercedes Benz for the prime minister and the debt rating agency Standard and Poor’s revision of The Bahamas credit outlook from “stable” to “negative” were published in the same edition of The Nassau Guardian.

For years now, any layman with his ears open would have known that this country’s national debt had reached and exceeded the danger point because previous governments – PLP and FNM – had the country “living beyond its means” for as far back as I can remember.

With the national debt now in the $5 billion range, it is simply assinine for any government to even contemplate such a profligate spending decision.

That is, except for the tin pot banana republics of Africa whose presidents live in opulent luxury while their citizens try to survive on less than $2 per day.

That is the kind of company into which the previous government placed The Bahamas with this Mercedes Benz fiasco.

I never imagined that my beloved country would sink so low.

The fact that this was done by an FNM government that prided itself on “keeping a tight reign on government spending” in this period of economic recession is almost unbelievable. It literally makes one seriously question the ability and feasibility of black leadership.

We are now forced to accept the reality that while thousands of unemployed Bahamians are losing their homes, bathing in the sea (in Freeport) and wondering where the next meal is coming from, our government thought it wise to plunk down $185,000 on a car for the PM.

And all this while our sovereign debt is one downgrade above junk bond status.

No amount of spin or “historical explanation” can excuse this one. It’s a combination of the act being too dumb and our people being too smart.

If a vehicle for the PM was needed, I’m certain that there were a lot of suitable options costing well below $185,000.

It reinforces a point that I have been making for years. Our present and previous governments have done an extremely poor job of managing the finances of our country.

They have consistently made decisions (or neglected to make decisions) based purely on political rather than rational considerations.

In the process they have also engaged in a competition to see which can outdo the other in giving the people something for nothing, and which the country cannot afford.

In this make believe world it is apparently acceptable for one governing party to overspend by $550 million after forcefully and consistently criticizing the previous government for overspending by $500 million.

Of course they offer “reasons” for the financial decisions they made; however, I have observed that the reasoning does not cause the debt to become any smaller.

With the most recent negative outlook by Standard and Poor’s, which followed on the heels of the negative outlook by Moody’s, the storm clouds are gathering.

It gives intelligent people no comfort whatsoever for the Prime Minister to say that his government expected a downgrade to happen.

That is like saying you expected your vehicle to fill quickly with water and sink rapidly to the bottom of Nassau Harbour after you drove it overboard at Potter’s Cay Dock.

The worst part about all of this is, I have lost confidence in both the PLP and the FNM to solve our debt crises.

It is unwise to expect that the same people who created this problem are capable of fixing it. For example, our governments never speak of reducing spending, which must be an integral part of any solution.

I think as a country we are doomed financially unless there is indeed oil in great quantities to be found beneath our waters, or anywhere within our territorial boundaries for that matter. It is the only solution to our debt problem and I pray for this possibility daily. In the absence of that, we can look at Greece as a prime example of where we will be in five to 10 years.

By:  ‘Welly’ Forbes

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