A political row has developed over a growing national debt even though the government insists that the increase was slowed substantially over the last year.
Free National Movement Chairman Carl Bethel yesterday raised alarm over the debt, pointing out that the government has little to show for it.
“The question that we ask is now that they have broken the $2 billion mark in public debt, what do the Bahamian people have to show for it? Thatﾴs the first and very serious question,” said Mr. Bethel, who pointed out that the government has constructed no new schools since it came to office three years ago.
In the notes attached to the budget communication, the government indicates that the increase in the national debt, which takes into consideration the government guaranteed borrowings of the public corporations, slowed to $130.7 million in 2004, bringing the debt to $2.533.3 million.
The debt, according to the Central Bank, has increased steadily since 1996. In 2001 it stood at $1,963 billion, and in 2004 it was $2.522 billion.
Mr. Bethel also said that, “The hospital is in the same terrible condition that itﾴs been in for the last two years. The roads are still degenerating into potholes. Where has this money gone? Thatﾴs the first big flaw I see in the budget.”
However, PLP Chairman Raynard Rigby shot back, saying the FNM government measures success in the wrong way.
“The reality is the FNM does not understand what fiscal prudence is about. You canﾴt take in a penny today and spend a penny tomorrow. Remember there were eight years under the FNM when the economy boomed and was doing fairly well,” he said.
“They said they had balanced the budget. They said they had budget surpluses. What did they do with the budget surpluses? They squandered the money not thinking and planning for the day when there would be a downturn in the Bahamian economy.”
This past Sunday, when he appeared on the Love 97 programme “Jones and Company”, Minister of State for Finance James Smith pointed out that The Bahamas is in a better position than any other country in the region and many countries in Europe when it comes to its level of debt.
Seeking to ease alarm over the level of debt, Minister Smith pointed out that The Bahamas is poised for economic prosperity and the government should use the opportunity to try to pay down some of its debt.
In fact, the budget communication notes, which provide the economic background against which the new spending plan is based, point out that the growth in the Bahamian economy is expected to strengthen during 2005 and to remain robust over the medium term.
“While tourism continues to be the main force propelling the expansion, the foreign investment inflows are expected to significantly impact the construction sector in the short-term,” officials indicate.
“With other sectors of the economy also expected to record stable to increased output, this will sustain a favourable climate for the evolution of the public sectorﾴs finances.”
In the upcoming fiscal year, the government intends to spend $1.214 billion, an increase of $39 million, or three percent over the 2004/2005 budget. The budget makes provisions for the ministries of education and health to receive the largest allocations of $216 million and $185 million respectively.
The government projects it will collect $1.145 billion, an increase of $93 million, or nine percent in revenues. Economic growth was pegged to be at least 3.5 percent.
“This budget presentation by the present government shows that their priorities are misplaced because we donﾴt see what this money is being spent on,” Mr. Bethel insisted.
“The public debt and the national debt are rising inexorably and is now breaking the $2 billion mark,” Mr. Bethel said.
Pointing to the FNM governmentﾴs track record, he noted that during his partyﾴs tenure in office more schools were built, repaired and expanded.
In comparison, Mr. Bethel said the PLP government has not seen fit to rebuild schools like T.G. Glover Primary or repair the A.F. Adderley High School.
“We see there has been a failure totally to build any new schools in the southwestern district of New Providence where there is an absolutely chronic need for new classroom space, not just additional classrooms,” he added.
“We need a high school in southwest New Providence and we need at least another junior high school and certainly another primary school just to accommodate the amount of students who now live in southwest New Providence.”
Tosheena Robinson-Blair, The Bahama Journal
