By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas will take “at least a decade” to escape its fiscal crisis, a governance reformer warning: “It’s not a one pill cure”.

Robert Myers, an Organisation for Responsible Governance (ORG) principal, borrowed a medical analogy from the Prime Minister for his extremely grim forecast on how long this nation needs to reverse its debt spiral.

While praising Dr Hubert Minnis’s national address for “saying all the right things”, Mr Myers reiterated that the new administration’s promises needed to be underpinned by laws that prevented the return of reckless fiscal policies.

Emphasising that Bahamians can no longer trust politicians “to do the right thing”, the ORG principal urged the Government to prioritise energy reform as “a massive fix” for the Bahamian economy’s woes.

He also called on trade unions to become “part of the solution” to improved worker productivity, arguing that they “cannot just sit and throw rocks at people” as has happened in the past.

“I think he’s saying all the right things,” Mr Myers told Tribune Business of Dr Minnis’s address. “It’s very encouraging, but the fact remains that if we want to put this country on a path and course to greater sustainability over the long-term, we’ve got to start putting this stuff in legislation as opposed to leaving it to the will of the politicians.

“That, in my view, is imperative because we’ve seen the considerable degradation that has occurred because of not having fiscal laws, or laws that guide the Government.

“We’ve seen the degradation that has happened because of the lack of laws that guide the Government, and it’s going to take us at least a decade - if we have the rights laws and safeguards put in place - it’s going to take us at least a decade to get out of the imminent danger we’re in.”

Mr Myers’ comments illustrate the scale of the task the Bahamas faces to reverse its current fiscal trajectory, which involves $300 million-plus annual deficits and a $7.052 billion national debt that was projected to breach the 80 per cent debt-to-GDP ratio at end-June.

A former Chamber of Commerce chairman, and head of its Coalition for Responsible Taxation, he led much of the private sector’s negotiations with the Christie administration over VAT and its revenue-side reforms.

Fiscal responsibility is one of ORG’s priority issues, and Mr Myers argued that current and future Bahamian governments needed to be bound by law to achieve this given the failures of their predecessors.

“We’ve got to create a culture of open, accountable government and eliminate the corruption; he’s [Dr Minnis] 100 per cent right on all these things,” he told Tribune Business.

“But let’s put in place laws that bind them to do that. We’ve left it to the will of the political elite, and arrived at this place because of it. I no longer want to trust personalities; I want to trust the law.”

ORG has been among the numerous groups campaigning for a Fiscal Responsibility Act, viewing it as a key tool in restraining government spending and forcing it to be more accountable and transparent over how it uses taxpayer monies.

Other observers have argued that the Bahamas needs to go further by implementing so-called ‘Fiscal Rules’, which would set limits for key ratios, such as debt-to-GDP, that the Government cannot breach or exceed.

K P Turnquest, minister of finance, previously told Tribune Business that Fiscal Responsibility-type legislation is near the top of the Government’s legislative agenda for when it returns to Parliament in September, lying second only to anti-corruption laws.

He added that a Fiscal Responsibility Bill had been drafted, having given an idea of what it may contain in his Budget address.

Mr Turnquest said then that such a Bill would target an annual GFS ‘balanced Budget’, meaning that the goal is to add no new debt to the existing $7-billion plus national debt.

The Government’s other objective would be to maintain “a desirable and sustainable” debt-to-GDP ratio. To underpin this, the proposed law will require the Government to set out the assumptions underpinning its annual Budget, along with its longer-term fiscal targets.

Targets could also be set for some components of the Government’s fixed-cost spending, such as the civil service wage bill, while plans and timelines for eliminating any deficits will also have to be laid out.

However, if the Minnis administration’s 2017-2018 Budget forecasts hold, the Government’s debt-to-GDP ratio will remain around the 80 per cent benchmark for the next three fiscal years through to June 2020.

And the national debt will have risen, albeit at a slower rate, to $7.7 billion over that same period, with the ratio to GDP kept in check by improved economic growth.

“If our GDP was booming through the roof, we’d not have a lot of these problems, but we have poor GDP growth and little fiscal responsibility,” Mr Myers told Tribune Business.

“The other drivers of this are open and accountable governance, and fixing the education system. We’ve got to have a more productive workforce to have higher GDP numbers.

“It’s not a one-pill cure, to use Dr Minnis’s analysis. He’s right, but there’s no one pill solution to this.”

Mr Myers suggested that the Bahamas adopt “a relatively open” Immigration policy to attract the businesses, investors and managers with the capital and skills to grow its economy.

Apart from improving the ‘ease of doing business’ and maintaining foreign direct investment (FDI) at “a relatively high level”, Mr Myers’ economic recovery prescription also involves ‘buy in’ from the trade union movement.

“The unions have to take an active role understand they’re part of the solution, and recognise that regionally we’re uncompetitive,” he told Tribune Business.

“They’ve got to start working on, and drive, productivity if we’re going to remain a relevant tourism destination. They’ve got to take a vested interest. They can’t sit and throw rocks at people, and not care about the outcome.”

Mr Myers also urged the Minnis administration to focus on energy reform as a priority, adding: “Energy costs have to come down.

“Energy is a massive fix, and helps the bottom line of the Government, private citizens and the private sector. I can’t imagine that Desmond Bannister [minister of works] should be doing anything else other than trying to fix this power situation in the next couple of months. That should be his utmost and single priority. What can be more important than that?”

Mr Myers added that while the Government had delivered the correct ‘statement of intent’, it now needed to follow through and deliver on what it is promising.

“He’s absolutely on the right track. The question is: Can he walk the walk and actually make it happen?” he asked of Dr Minnis.

“It’s a massive task, and I understand the enormity of it. That’s why I’m really worried about it. It’s a lot to do.”