{"id":31359,"date":"2013-02-08T09:14:22","date_gmt":"2013-02-08T14:14:22","guid":{"rendered":"http:\/\/www.bahamasb2b.com\/news\/?p=31359"},"modified":"2013-02-08T09:14:22","modified_gmt":"2013-02-08T14:14:22","slug":"moodys-urges-less-public-spending","status":"publish","type":"post","link":"https:\/\/www.bahamasb2b.com\/news\/2013\/02\/moodys-urges-less-public-spending","title":{"rendered":"Moody\u2019s Urges Less Public Spending"},"content":{"rendered":"

\"\"<\/a>As the government prepares to release its interim budget, top ratings agency Moody’s is urging a redistribution of spending and tangible evidence of new revenue steams.<\/p>\n

Ed Al-Hussainy, assistant vice president and analyst at Moody’s, said The Bahamas should “comfortably” finance any additional borrowing.<\/p>\n

Back in January, Guardian Business exclusively revealed that the government could borrow an additional $150 million or more, bringing the deficit up to around $700 million. Michael Halkitis, the state minister of finance, has shied away from any projections
\nuntil the mid-term budget is released on February 20.<\/p>\n

For Moody’s, what is more significant than any new borrowing is whether government will take new measures to right the ship.<\/p>\n

“It will be interesting to see the consolidated plans for next year, if we see some tightening,” Al-Hussainy told Guardian Business from New York. “It will be interesting to see if government spending will be redistributed a little bit. Right now there is a lot of spending on subsidies, programs and wages. We’ll see if there is more capital spending in other areas of the economy.”<\/p>\n

In other words, Moody’s is watching to see if the government can redistribute some of its funds into areas that stimulate the economy.<\/p>\n

Al-Hussainy pointed out that not all spending has a direct, positive impact on the economy. Public sector wages, for example can be a major drain on the public purse. Bahamas Electricity Corporation (BEC) has made announcements in recent weeks that it intends to put a freeze on raises and crack down on overtime.<\/p>\n

On the other side of the equation, however, is boosting revenue.<\/p>\n

“There is an expenditure component and a revenue component. Both sides are important,” he explained. “We’ll have to see what activity will take place in terms of raising revenue. Value-added tax is something to talk about, but that will take years,” according to Al-Hussainy.<\/p>\n

Government officials are proposed a revamp to the inefficient property tax collection procedure, although little known progress has been made in this regard so far. Last month, the Ministry of Finance proposed a program to stop the smuggling of cigarettes into the country through a stamp system, a move that could generate millions in otherwise lost tax revenue.<\/p>\n

Al-Hussainy told Guardian Business that reform to the country’s old gambling laws are also significant to staying competitive in the region and creating revenue. Officials are now reviewing a proposal from the private sector and a decision should be made soon.<\/p>\n

He called the domestic gambling industry “a drop in the bucket” compared to casino reform.<\/p>\n

“There are bigger fish to fry,” he said. “I don’t have a sense that opening or closing domestic gambling houses would substantially change the economy.”<\/p>\n

While official unemployment figures are high, Al-Hussainy went on to identify a substantial “gray market” of part time or underemployed Bahamians.<\/p>\n

In tough times, individuals start working on the informal sector. He explained that this demographic is harder to measure, but also has a tangible impact on the economy.<\/p>\n

By Jeffrey Todd<\/span><\/em>
\nGuardian Business Editor<\/span><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

As the government prepares to release its interim budget, top ratings agency Moody’s is urging a redistribution of spending and tangible evidence of new revenue steams.<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_10223285771444175_51037792744":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[3],"tags":[810,809],"class_list":["post-31359","post","type-post","status-publish","format-standard","hentry","category-business","tag-ed-al-hussainy","tag-moodys"],"_links":{"self":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/31359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/comments?post=31359"}],"version-history":[{"count":0,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/31359\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/media?parent=31359"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/categories?post=31359"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/tags?post=31359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}