The Crisis of the Bahamian Economy

Local News

From the desk of the Leader of The Bahamas Democratic Movement:

The Minnis Administration is out right lying about the true state of the nation’s economy and the state of our debt crisis. In his 2020/2021 budget communication, the Prime Minister outlined in the approved budget section that the current GDP stands at $11.5 Billion. According to his numbers this represents an 11.6% decrease from the previous period. On the other hand, data from the Department of Statistics contradicts this initial assessment. A statement released by the Department of Statistics on May 21, 2021 indicated that the Bahamian economy contracted sharply by 24.7% in normal terms and by 14.5% in the real terms. It said that the current GDP in real terms now stands at $9.665 billion. This paints a much grimmer picture than what the Prime Minister would have the Bahamian people to believe. The question is “who is lying”?

Considering another aspect, if we rely on the information provided by the Department of Statistics which states that our debt is $9.506.8 billion and the current GDP in real term stands at $ 9.665 billion, then our Debt to GDP ratio is 1:1. Further, it is projected that our debt will continue to increase and reach as high as 12 billion by the end of the fiscal period 2021. This will result in a GDP ratio that is negative. This is a dangerous financial position for our country to be in and if we do not fix it, we will ‘fall’ off the economic cliff.

Fellow Bahamians, not only are we compromised by the excessive level of debt being laid upon us, I ask you to consider more deeply the factors of our GDP which is the measure of productivity in our country. During the current fiscal period 2020/2021, The Bahamas will experience a $900 million recurring deficit because of the reduction in revenue in the same period and the increase in public debt servicing to the tune of $397 million. In fact, according to the Department of Statistics, over the period of 2019/2020, The Bahamas experienced a decrease in every industry except Financial Services and Insurances. While these two industries saw a positive net gain, our most significant industry, the Hotel and Food industry, saw a decline of 71% in total value to the tune of 820 million and the Aviation industry saw a 70% decrease in total value to the tune of $115 million. This is understandable in part, due to the impact of the pandemic, but where I cry shame and lament is in the lack of vision on the part of this Administration! This Government has done very little to stimulate or even promote alternative industries in our country so that masses of Bahamians could start to pull themselves up from in the midst of the destabilization of the world economies.

Equally appalling to me is the lack of attention successive Governments have paid to the literal health of our people. Undoubtedly, and I am sure you will agree, that the dynamism of our economy is underpinned by the human resources of our nation. While we grapple with tools to move our economy forward, we cannot neglect to raise the alarm and create policy that address the level of sickness and death we experience as a people. According to the Diabetic Association of The Bahamas, The Bahamas presently has 155,000 people diagnosed with diabetes. This number represents 40% of the nation’s population. What is even more frightening about this statistic is that diabetes is not the number one killer of Bahamians, hypertension is. According to the World health ranking, The Bahamas is ranked 8th in the world in Prostate Cancer, 11th in Hypertension, and 6th in Brest cancer. This is indeed a crisis.

Fellow Bahamians, we are in a fight for our financial freedom and in a fight literally for our lives. If our country is to see the ‘light of day’ again, we must address the decay of both our economy and our health with the same degree of criticalness and urgency. If not, there will not be a thriving and healthy Bahamas for our children to inherit.