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Last Updated: Mar 31, 2017 - 8:27:31 PM |
 We are pleased that the Government has seen the wisdom in relaxing the exchange controls, enabling Bahamians more access to foreign currency.
The Prime Minister made the announcement in Parliament on Wednesday that the Central Bank will release a report on the liberalization measures and process to take effect in April 2017. The Right Hon. Perry Christie also noted that under the new policy considerations, Bahamian-owned businesses with “broad foreign exchange earnings potential or that are engaged in activities that promote national development goals will be able to obtain foreign currency funding, either from local commercial banks or from external sources”.
The DNA welcomes any policy decision that presents an opportunity for the advancement of businesses in The Bahamas. However, it appears that this policy action other than expected inflows of foreign currency is aimed more at addressing the perceived or actual risk averse nature and stringent lending practices of local financial institutions as well as the relative high interest rates in The Bahamas when compared to foreign lending institutions. If this is in fact the case, the tool of monetary policy could be used to influence the Discount and Prime Rates to achieve the same objective. It would be more prudent to examine the liberalization of exchange controls independent of the lending habits of the banking system.
A holistic economic plan will simultaneously employ prudence by mitigating the impact of such reduction in interest rates on the National Insurance Board (which the NIB V.P. of Investments recently indicated has 65% of its portfolio invested in Government debt), pension plans, savings and investments. Additionally, in the absence of a functional credit reporting system and credit bureau, the anticipated benefits of this policy action may not be achieved. Conversely, the current national and individual debt crises may be exacerbated.
We have for several years encouraged the liberalization of exchange controls as a part of our platform. However, we submit that a comprehensive approach which incorporates adjustments to our fiscal, monetary, public and exchange control policies is what is required to address our current economic woes. Hence, this policy action does not go far enough and appears to be an isolated and adhoc decision. Specifically, it fails to address the restrictions on Bahamians vis-à-vis investments abroad without incurring the high premiums associated with such transactions. This in turn stifles the growth potential and expansion of local businesses.
A government, which has affixed its eyes on opportunities beyond the upcoming general election would also include in its comprehensive plan specific initiatives aimed at improving the ease of doing business in The Bahamas. This will require public sector reform, energy reform and the removal of accompanying inefficiencies and red tape.
While the Christie administration should be credited for its move to relax capital controls, its push to appease the private sector months ahead of an election is seen for what it is - too little, too late.
The ease of doing business under a DNA administration will be improved for Bahamian entrepreneurs of today, and those who aspire, but do not see economic prosperity on the horizon under this current administration. The DNA is serious about bringing real economic empowerment to Bahamians.
Our country needs honest leaders who are prepared to put in place sustainable economic policies that will change this country's trajectory.
The Bahamian people deserve a government that will take its concerns seriously and put citizens first, not just before an election.
The truth is despite collecting over $1 billion in Value Added Tax (VAT) revenue, the government cannot account for the alarming increases in the GFS deficit or increase in the country’s debt. The culprit has been conveniently identified as Hurricane Matthew as if The Bahamas has not always been in the hurricane belt - an admittance of the lack of proper planning by the Government.
The one thing that the mid-year budget communication has done is reveal the facts. It is apparent that the GFS deficit has increased and recurrent expenditure is not being curtailed. The argument that spending has been reigned in and the economy is improving does not line up with the facts.
The Government is spending more and using VAT to pay increased bills instead of using it for its original purpose – eliminating the deficit and paying off the enormous national debt amassed over the last 10 years.
More revenue should NOT equal more spending. We should not be growing the public sector (by some 4,500 since 2012) while the private sector and middle class shrinks.
The DNA has assembled a team that is truly committed to good governance, and a DNA government will work in the interest of all, and not just a select few.
The DNA will not expect a pat on the back from the Bahamian people for doing the job the public will elect us to do.
When visited by the FNM or PLP candidates, and the respective MPs, ask them how their policies have improved your life over the last 10 years. Request information on how they have contributed to the betterment of your life or that of your family or your children.
Are you more prosperous now?
Are your businesses thriving?
Has your standard of living improved?
Are you safer?
Arinthia Komolafe (Mrs.)
DNA Candidate - Killarney
© Copyright 2017 by thebahamasweekly.com
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