By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The prime minister yesterday defended the government’s multi-billion dollar borrowing as a matter of “survival” for The Bahamas and the only way to protect the most vulnerable amid COVID-19’s devastation.

Responding to Opposition attacks on the surge in the near-$10bn national debt as he closed the Budget debate, Dr Hubert Minnis said the economic “meltdown” caused by the pandemic meant that The Bahamas was in good company when it came to the rise in the government’s liabilities.

Pointing out that multiple other countries had adopted the same strategy, and incurred significant debts in doing so, he argued that the severity and speed with which COVID-19 struck meant the government had no option but to step into the gap left by the locked down private sector.

“We borrowed to feed our people when the global economy was in meltdown and Bahamians were in need,” Dr Minnis argued. “We borrowed to give our people record amounts of unemployment benefits so they could have some money in their pockets during a global public health crisis. I do not apologise for borrowing to take care of our people

“We borrowed so we could support Bahamian businesses. We borrowed to help our people get through these tough times, as a caring government should do. Governments around the world took on debt to support their people. It was a common policy for survival. To not borrow would have meant leaving Bahamians to fend for themselves while the world’s economy was in free fall.”

The government’s own budget data shows that the national debt will have increased by more than $3bn over the three-year period to end-June 2022, driven by a combination of Hurricane Dorian and COVID-19. The record $1.327bn fiscal deficit forecast for the current year, which is set to close in eight days’ time, will be followed by a projected $951.8m worth of ‘red ink’ over the next 12 months.

Dr Minnis’ address did not directly deal with the fiscal details, even as it was disclosed that the government is seeking a $200m guarantee from the Inter-American Development Bank (IDB) to underwrite the bulk of its foreign currency borrowing in the 2021-2022 fiscal year.