The Bahamian Coalition of Private Sector Organisations believes that the economy is not in a healthy state and has recommended wage freezes in both the public and private sectors, according to a report in the Nassau Guardian.
Responding to questions on the Bahamas Semi-Annual Economic Outlook Survey, the coalition’s president, Raymond Winder, seemed to contradict a more optimistic assessment of the economy made by Central Bank Governor Julian Francis earlier last week.
With public sector wages accounting for a large slice of the $2 billion national debt, Winder argued that: “The Government is not in the position to increase the national debt. We should bite the bullet now and preserve for the future.”
The survey, conducted over the last 18 months, provides a thorough assessment of the many factors that affect the economy including: prices, sales, employment and capital spending, how businesses perceive the near and medium term outlook, how productivity is changing and how labour laws affect businesses.
The results painted a fairly gloomy picture. Some 64% of respondents saw the economy as weak, with 9% rating it as very weak. Asked on their outlook for the next six months, 52% were pessimistic, whilst 47% saw little or no change occurring. Only 1% were optimistic.
Worryingly, four out of ten firms reported a net loss last year, a statistic which has doubled from the previous year. Two out of three firms also reported a drop in sales in 2002, all of which led to inevitable job losses in the latter half of last year. About 36% of firms laid people off in this time. This was not helped by an increase in labour costs. Some 67% of firms experienced increased labour costs, and 14% suffered ‘significant’ rises in this area.
Whilst Winder pointed to the general world economic slowdown and particularly the impending war in Iraq as factors, he pointed out that the Bahamas faced certain structural problems that exist outside of these influences. “We need to seriously understand what those problems are and those issues that prevent us from attracting the kind of investments to take the country forward,” Winder concluded.
By Amanda Banks, Tax-News.com
