Hon. I. Chester Cooper, M.P.,
Exumas and Ragged Island
PLP Deputy Leader
Shadow Minister of Finance
For Immediate Release
May 25, 2020
The Progressive Liberal Party notes with interest, and a healthy dose of skepticism, the announcements by the Ministry of Finance on Sunday.
That the government intends to borrow $250 million from the International Monetary Fund (IMF) is not surprising in and of itself.
However, that just weeks ago the government said no borrowing was foreseen, speaks to the validity of the government’s financial forecasts.
This is unchartered territory.
It is the first time in the history of The Bahamas that we are borrowing from the IMF.
On the face of it, 1.05 percent is not an unattractive rate, in a market where government 2024 paper is trading at 15 percent, following the recent downgrade and negative outlook.
However, the offer raises many questions.
We have previously warned about leaving a rainy-day reserve, as well as borrowing headroom.
With more than $3 billion borrowed even before Dorian and COVID-19, that Bahamians cannot see or touch, it appears that the chickens may be coming home to roost.
We also question the intended use of the proceeds and what, if anything, this new borrowing has to do with Hurricane Dorian.
There has already been considerable borrowing for Hurricane Dorian commitments with very little to show for it.
Where has the money that has already been borrowed gone?
Which commitments have not been met?
And how much of this new money is needed for the commitments that were not met?
We expect that this IMF agreement will be tabled in Parliament on Wednesday so the terms are clear to the Bahamian people.
The public must be assured that no implicit or explicit conditions exist.
As for the government’s pre-budget statement, the Minnis administration should be aware that Bahamians do not take its budgets seriously. In fact, it said very little.
The reality is the upcoming budget is going to be brutal on the ordinary citizens of this country.
The next budget, more than anything, represents the cumulative impact of a series of poor fiscal decisions in the three previous budgets.
Those poor decisions started with the disbanding of the revenue task force, continuing with a VAT increase which did not account for elasticity in the economy.
The results of the FNM’s budgets have been failed target after failed target and delivered nothing but misery to the Bahamian people.
The promise in week 10 of the crisis, that the new budget will make sure that no one grows hungry rings hollow. Many Bahamians are going hungry now as the prime minister’s promise of a food delivery network remains just that.
The government has a responsibility to protect citizens.
Additionally, money allocated and approved but not yet paid out, does little to stimulate the economy and is useless in helping the needy.
Public trust in this administration remains at an all-time low.
The best we can hope for is that the damage this is administration continues to do is not irreparable.