Tuesday, December 31, 2019
By NEIL HARTNELL
Tribune Business Editor
A well-known businessman yesterday voiced fears that the “overwhelming majority” of Nassau residents may not feel the benefits even with the capital’s economy poised for “a good inning” in 2020.
Sir Franklyn Wilson told Tribune Business that the increasing wealth gap between “the haves and have nots” appeared to be “off the radar” where the government was concerned, even though “fewer and fewer” Bahamians were seeing their share of national income increase.
He argued that the cruise port’s $250m transformation, together with other multi-million dollar developments such as Baha Mar’s water-based theme park, The Pointe’s completion, the Gold Wynn and Hurricane Hole projects, and continued investment by the likes of Albany would ensure New Providence’s economy enjoys “a good year” - but only at the macroeconomic level.
“I believe New Providence is poised to have a good inning,” the Arawak Homes and Sunshine Holdings chairman told this newspaper. “I think there’s a reasonable basis to think that New Providence will have a good year...
“However, you know, while I say New Providence should have a good inning, those are macroeconomic numbers. While the macroeconomic numbers may be favourable, the impact on the majority of people may not necessarily follow as the gap between the haves and have nots continues to widen.
“The pot as a whole is getting bigger, but fewer and fewer people are getting a decent share. Even when I say New Providence will have a good inning, I’m talking in macroeconomic terms which may not necessarily translate to the overwhelming majority of the population a year from now feeling any better off. The majority will not feel any better off.”
Sir Franklyn said the government seemed to have forgotten the growing income inequality, and widening gap between rich and lower income Bahamians, given that none of its public statements or speeches had ever addressed the issue.
“I have yet to hear any government minister make any statement that they see this as an issue,” he added. “I cannot think of any statement a cabinet minister has made which specifically addresses the imbalance between the haves and the have nots as a key public policy issue. This is not even on the radar of the authorities.”
Concerns over income inequality, and a widening gap between rich and poor stemming from a middle class ‘squeeze’, have been voiced periodically ever since the 2008-2009 recession. Real per capita incomes took 10 years to recover to their pre-recession levels, hitting this mark only in 2017.
Sir Franklyn, meanwhile, suggested that K Peter Turnquest, deputy prime minister, may come under pressure from his Cabinet colleagues to loosen spending and other fiscal controls in a bid to shore up the Government’s popularity just over half-way through its term in office.
Asked about the Government’s ability to avoid a further sovereign credit rating downgrade post-Dorian, he replied: “Minster Turnquest, he is really giving it a good shot. He is trying. I’m sure he will do his personal best to try and avoid it.
“I get the sense that there’s some restlessness within the Cabinet. They sense the popularity of the Government is not trending in a favourable direction, so they will push the minister of finance to do things which may not be consistent with avoiding that downgrade. I think a lot truly depends on the extent to which the Minister of Finance can be strong in the face of pressure from his own Cabinet colleagues.”
The Government previously revealed it will have to seek Parliamentary approval to borrow an extra $508m to finance post-Hurricane Dorian reconstruction, blowing out its projected 2019-2020 fiscal deficit to $677.5m from the initially projected $137m.
Its Fiscal Strategy Report also shows it borrowing a further $499m in 2020-2021, and $301.2m in 2021-2022, meaning that the Minnis administration is forecasting it will need to borrow some $1.479bn over its final three years in office and taking the national debt to nearly $9.5bn.
The likes of Standard & Poor’s (S&P) and Moody’s have effectively taken a wait-and-see approach, though, seemingly preferring to assess how The Bahamas manages the post-Dorian fall-out and whether it can restrain any unnecessary spending before moving to again narrow the deficit.
Sir Franklyn yesterday urged Mr Turnquest to follow “the Paul Adderley model” and “put country before party” in how he handles the public finances in the aftermath of the Category Five storm.
He added that it was “likely to be significant” that Mr Turnquest was finance minister, rather than the Prime Minister, which was the structure employed by all Dr Hubert Minnis’ predecessors.
“Thank God that we do not have that model where the Prime Minister is the de facto minister of finance,” Sir Franklyn told Tribune Business. “Experience has shown whether it was Pindling, Ingraham or Christie, it’s hard under that model to resist pressure to open up the purse.
“Thank God we don’t have that model today. Hopefully, the deputy prime minister has the ability on his part to say: ‘Man, let’s not look at this thing in the short run’. The late Paul Adderley increased taxes right before the 1992 general election. He had to know that what he was doing was good for the country even if it was bad for the party.
“I say to Mr Turnquest: ‘Keep in mind the Paul Adderley model’. Do the right thing. If you do the right thing for the country it may not be good for the party, but country first.”