By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Tax Coalition co-chair yesterday described his “greatest fear” as Nassau being struck by a major hurricane or the world economy suffering a devastating blow before the Bahamas’ fiscal position improves.

Robert Myers warned that the Bahamas would be “in big trouble” if Nassau, specifically, was hit by either a Category 4 or 5 hurricane within the next decade, as this would immediately wipe out any improvements in the Government’s financial position post-fiscal reform.

The same, he warned, would occur if the global economy tanked as a result of a September 11-type event or major spike in oil and other commodity prices due to the Bahamas’ overwhelming dependence on external forces.

“My greatest concern is one of two events happening,” Mr Myers told Tribune Business. “Either we have a catastrophic hurricane hit Nassau, not the Family Islands.

“With this type of fiscal crisis, if at any time in the next 10 years we have that happen, a Category 4 or Category 5 hit Nassau, we are in big trouble.”

He added: “Or, if there is an international event, whether that is a major war or oil prices and commodity prices spiking, and shooting up, we are in trouble.

“We are too dependent on the outside. Tourism will take a major bath, as the cost of operations is too high, and the Government will have a fiscal crisis as businesses close.

“If a major hurricane hits Nassau, major tourism businesses will pull out, unemployment will skyrocket, the Government will collect less taxes, and major infrastructure needs will go up,” Mr Myers said.

“Out debt-to-GDP ratio will go from 65 per cent to 85-90 per cent in one event. Then we will have an increased risk of a credit downgrade or de-pegging and devaluation.

“That’s why it’s so important that we act now when we don’t have a problem and show we can do the right thing. Don’t wait for the crisis to happen and we can manage our way out of the situation, and not be controlled by it.”

Nassau has had a relatively ‘charmed life’ with major hurricanes, having avoided a major blow from the most powerful storms for decades. While the capital city had been, in the opinion of some, been aided by storms’ dislike of its surrounding shallow waters, at some point it’s luck may well run out.

Mr Myers’ message is that the Bahamas simply cannot afford to wait to put its fiscal house in order, given the country’s high vulnerability to external shocks - be they natural catastrophes or man-made disasters.