Would you please allow a layman to give his views in your prestigious daily on why the government is struggling to pay its massive debt? Thank you.
Perhaps all of the opposition parties will pummel the Ingraham administration over the recent downgrade of our economy’s outlook from stable to negative by the international credit rating agency, Moody’s.
This action by Moody’s comes as no surprise to me. What surprised me, though, was the fact that it took this long to happen.
Moody’s has expressed concerns over this nation’s ability to service its massive national debt, which has already climbed over the $4.1 billion mark.
The FNM has already borrowed $1.5 billion since coming to office in 2007. The PLP government borrowed $800 million between 2002 and 2007. In just nine years the national debt has increased by $2.3 billion.
I don’t believe that any Bahamian government can ever reduce the national debt to zero.
The government has been running massive deficits in recent years because of its inability to raise enough revenue to meet its financial obligations.
Too many big businesses owe the government unpaid taxes and other fees, but they are never really pressured to pay their bills.
How many of the large hotels in Nassau owe BEC and Water and Sewage? How many businesspersons have avoided paying their National Insurance contributions?
This has been a perennial problem in this country for many years; and it has taken a tremendous toll on the Treasury.
The FNM government is between a proverbial rock and a hard place. In my opinion, if PM Ingraham raise taxes like he did last year, he will be lambasted by the PLP for placing an additional burden on the middle-class and poor.
If he doesn’t raise taxes, then agencies like Moody’s will continue to breathe down his neck for not doing enough to raise revenues.
If PM Ingraham resorts to reducing the size of the massive civil service, he will lose the election.
When PM Ingraham cut the staff at the Broadcasting Corporation of The Bahamas, he was heavily criticized by many.
Even the church took exception to the downsizing exercise at ZNS.
If PM Ingraham doesn’t downsize the bloated civil service or raise taxes, then the economy will continue along this destructive path.
Any government that lays off hundreds of its workers would be committing political suicide. Prime Minister Ingraham is well aware of this.
The government has to meet a huge payroll each month for nearly 20,000 civil servants.
Additionally, the government is set to hire some 3,000 unemployed Bahamians for one year through its National Job Readiness and Training Program. This will cost $25 million.
The Ingraham administration has already given away nearly $22 million to over 15,000 unemployed Bahamians through its Government Unemployment Benefits Program.
Even today there are hundreds, if not thousands of unemployed Bahamians who are depending on food vouchers from Social Services.
I know of persons whose utilities are being paid by Social Services.
Furthermore, there are thousands of retirees and senior citizens who receive a pension every month from the Treasury.
There are many former Members of Parliament, government ministers and senators who are also receiving a handsome pension every month.
The government also has to find money in order to maintain all of its hospitals, clinics, schools, administrative offices, embassies, airports, harbors, roads, police and fire stations and packinghouses.
Let us not forget Fox Hill Prison. There are approximately 1,200 inmates at that prison. It costs the government around $15,000 a year to maintain each prison inmate.
Corporations like BEC, Water and Sewage, ZNS and Bahamasair have all been a financial drain on the Treasury for years. Over the years Bahamasair has not been a profitable venture, yet over 600 or so Bahamians are employed at that airline. If Bahamasair was owned by a private citizen, they would have folded up shop long ago. But successive governments have kept the financially strapped airline in business for the past three decades. This makes absolutely no sense at all. Moreover, the government is repeatedly harassed by civil service unions for pay increases, financial bonuses and other increments. If the government fails to meet their demands, then it will pay dearly at the polls.
The Treasury has also lost around $100 million in the Educational Guaranteed Loan Program. That program has been suspended by the government; because many of the of loan holders are either unwilling or unable to repay their obligation.
The civil service in this country is just too massive. The Bahamas government is simply unsustainable. This country can no longer afford it. We can no longer afford to pay 41 Members of Parliament,16 senators and 17 cabinet ministers. A bloated government has caused The Bahamas to head down this slippery slope of financial ruin. Both the FNM and the PLP must bear some responsibility for the financial downgrade. They increased the size of government over the last 40 plus years. Many Bahamians were given government jobs by their MPs for supporting them on election day.
There are only two things that the Ingraham administration can do to get this nation’s finances on the right path again. But I seriously doubt that the FNM government will even consider doing any of them. That would cost them the election. In the final analysis, PM Ingraham is caught between a rock and a hard place.
by Kevin Evans
A Bahamian who is disillusioned with big government
