CBA Analytical Report
Recent developments by the IMF in Jamaica and now the Bahamas portend significant problems for these two prominent West Indian Countries going forward. In the case of the Bahamas IMF intervention would be even more serious than is the case with Jamaica. While the Jamaican Debt to GDP ratio overrun of 140 percent is higher than that of the Bahamas, Jamaica has a more developed Capital Market Driven Economy (CMDE) and consequently many more avenues to attempt compliance with any IMF sanctions.
Under pressure from the IMF Jamaica has entered a formal proposal to reduce their debt to GDP ratio from 140 to 95 percent over the next five years. Included in the proposal which Jamaica hopes the IMF will approve is an attempt to get their bond holders to accept a reduction in their payouts. Other elements of the plan as reported in The Caribbean Journal include intensifying tax reform efforts, with greater levels of tax compliance, and increasing public sector transformation. Jamaica is also attempting to eliminate discretionary tax waivers, and secure a contract with public sector workers to achieve a wage-to-GDP ratio of 9 percent by 2015/2016. It is also reported that Jamaica has already completed significant portions of a Public Debt Management Act.
The major element in the Jamaican plan is to attempt growth of the economy through proper export revenue producing investments, to bring monies into the country to pay down its debts and maintain essential services. Following Jamaica’s announcement of these measures and its debt exchange offer, international entities Standard & Poor’s, and Fitch have each now downgraded Jamaica’s sovereign credit rating. This is the same dilemma and area of concern for The Bahamas which the IMF and Moody’s are apparently focusing on.
Unlike Jamaica the possibilities for growth of export income in The Bahamas without a Capital Market Driven Economy (CMDE) is severely limited. The Bahamas is faced with few realistic avenues to grow its economy and provide the critically needed element of real Bahamian ownership of the major implements of its economy.
The Bahamian government and Bahamians in general seem to live in a “Fairy Tale” world in the words of Leslie Miller a current sitting member of Parliament on the Government’s side. Miller who is currently the Chairman of The Bahamas Electricity Corporation (BEC) recently gave a ZNS radio interview on the status of BEC and clarification of the dilemma of the economy in his usual plain language. Miller has been one of the few long standing players in Bahamian government who consistently speaks about the “Reality” of the economic situation in the Bahamas. He is known to be one member of the sitting Government who is prepared to speak to the true condition of the economy and the need for significant reform from the ground up. In the recent interview Miller used terms like “Bahamians must realize that we need to accommodate the realities in the world in which we live”. It is apparent that Mr. Miller is one politician who recognizes that the country and its economy must be competitive globally. The implication is also that many Bahamians may not understand, or even want to believe that the Country is not competitive in modern global markets. Miller euphemistically stated that the Bahamas needs to “tighten its belt or it will lose its pants”.
What Miller and other power brokers in the Country have not fully demonstrated is how to trigger and actually implement Bahamian ownership of the major implements of the economy. Currently, as often noted, there is no ownership by Bahamians of any major economic engines in the Bahamas. Even essential services such as telecommunications services have been privatized with foreign controllers. Obviously this situation not only maintains de facto control of the economy totally in foreign hands, but it also keeps the Government in economic bondage, as virtual beggars to foreign controllers who understandably keep their own interests as their priority. Miller essentially admitted that this has made The Bahamas a non-competitive destination for proper foreign investment.
During the prior government administration many were amazed that in the face of a depressed economy the prior administration never introduced a defined economic development plan other than essentially waiting for the economy of the United States to recover. Unfortunately waiting time ran out for them and they were unceremoniously voted out of office. The current administration which benefited from the laxity of the prior administration appears to be at risk for the very same reasons. In the face of Moody’s and IMF warnings the current administration has yet to introduce a well defined organized and believable plan for the development of an economy still in rapid decline.
Because Bahamians are exposed to the world through the Internet, and due our proximity to the greatest industrially developed country in the world, we have great aspirations of what we could be, and expectations of what we should have, and how we should live and exist. This has produced in us a false impression of our actual importance in global matters. The reality is that the resources necessary to exist the way those in major developed countries do is not feasible until the Bahamas can corral the monies, talent, and resources that would allow us to compete in the global community at higher levels. The Council for Concerned Bahamians Abroad (CBA) at www.ourbahamas.org has consistently reported that a Capital Market Driven Economy (CMDE) is essential to such an accomplishment; otherwise Bahamians must be content with whatever our level of development can provide.
As Bahamians we essentially live in a Neo-Colonial state on a “Neo-Plantation”, and controlled by Neo-Colonists and “Neo-Plantationists” (Neo-Plants) who keep us subjugated and controlled on the Neo-Plantation through Foreign Direct Investment (FDI). Neo-Plant foreign direct investors and collaborating government leaders, keep the citizenry “Ownership Free” of the major tools of economic development in their own country. In the Bahamas our only possessions are jobs within the Neo-Plantation where we work for the FDI Neo-Plants while they reap the cream of the profits and maintain ownership, while splitting off crumbs of profits to their collaborating Government Leader Neo-Plants. The philosophy of both FDI and Government Leader Neo-Plantationists is to keep the citizens on the Neo-Plantation as long as possible without the means to develop and maintain the ownership of the major implements of their own economy. This is why the Bahamas in the view of many is one of the leading examples of “Neo-Plantationism” in the modern world.
A classic and recent example of the collaboration between the Neo-Plants in the Bahamas is the government’s recent decision to unilaterally approve increased digital gambling capabilities for its major neo-plant foreign direct investor, while simultaneously holding a referendum to effectuate the endorsement of the same privileges for local Bahamian owned operations. It is important to note that the Government did not hold a referendum to seek approval to legalize the new gambling license it approved for the FDI Neo-Plant even though both matters were at issue at the same time. It is likely the Neo-Plant Government did not have the de facto power to refuse its Neo-Plant FDI collaborator these new gambling rights. CBA has previously noted that one of the problems with dependence on Foreign Direct Investment is that it comes with absolute control by the FDI, because the citizenry is usually “Ownership Free” of the Foreign Direct Investor owned industry.
Some observers feel that Bahamians currently exist in a state of Neo-Slavery aided and abetted by a history of neo-plant governments and foreign direct investor collaboration over the years. Without question, The Bahamas even with its inherent advantages is one of few countries that appears to have made no significant effort to develop a Capital Market Driven Economy that would afford its indigenous people and entrepreneurs the ability to acquire the resources necessary to gain ownership and control of the major elements of its economy. An example of this anachronism is often demonstrated by the fact that there is no Bahamian owned or operated major tourist resort in a tourism only economy.
This is why concerned international observers like Moody’s and the IMF are now beginning to take steps to assist the indigenous people of the Bahamas and prevent neo-colonialism and neo-plantationism from continuing to flourish in the Bahamas.
Submitted by CBA News Service
