The Nassau Institute has said the current economic strategy is based on spend now and pay later.
In the government’s $1.38 billion 2006/07 Budget, Prime Minister Christie said the package would reduce the country’s deficit.
Yet The Bahamas’ national debt has increased from $1.17 billion in 1991 to $2.50 billion in 2004 οΎ– a 113.77 per cent increase over a 13-year period. This debt is expected to increase further over the next three years.
Nassau Institute President Joan Thompson told The Guardian yesterday that successive governments continue to pursue a fiscal strategy of borrowing to finance economic development and government programmes.
She added that legislators have simply dug The Bahamas into a financial hole that future generations would find difficult to crawl out of.
“Because every year the government seems to be presenting deficit budgets and basically deficits budgets mean they’re overspending,” she said.
“Over time, that is inevitably going to catch up with you because the cost of borrowing money will also increase,” she added. “So in fact, you’re shooting yourself in your foot at the same time. What you do to solve that problem, is you cut back in other places.” Those other places, she explained, are overstaffed government corporations.
“When you have an excess in the number of government employees, like they had [and still do] at BaTelCo (BTC) and like they have in most government departments, there lies the problem,” she said.
Mrs Thompson stressed that she was against the government hiring more people in the Public Service, adding that the country could not afford it. Foreign Affairs Minister Fred Mitchell announced last month that the government was discussing plans to hire 1200 new workers over the next year.
“That announcement should have never been considered,” said Mrs Thompson. “If they had any fiscal discipline, they would not consider that.”
Meanwhile, Tanya Wright, President of The Bahamas Chamber of Commerce, said she was looking over the Budget and would give a full report on her findings later.
The outspoken president, who is also an attorney and bank manager, criticised parts of the 2005/06 Budget, charging that it did not prepare The Bahamas for membership into regional trade agreements.
These agreements include the World Trade Organisation (WTO), the Caribbean Single Market and Economy (CSME) and Free Trade Area of the Americas (FTAA).
Mrs Wright said when one considers today’s climate of trade agreements and their increasing importance to national development, provisions should have been made in the last Budget to prepare The Bahamas, if and when we join these organisations.
“My main concern about the 2005/06 Budget is the fact that there’s nothing outlined in it for funding on trade agreements, whether it be secretariates or special groups,” she stated.
By: MINDELL SMALL, The Nassau Guardian
