THURSDAY, DECEMBER 22, 2016
business@tribunemedia.net
$3.85 Govt spending rises 26% in six years, IDB warns By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Government’s total spending increased by 26 per cent over the six fiscal years to end-June 2016, the Inter-American Development Bank (IDB) warning that it is prioritising the wrong areas for sustainable, long-term growth. The IDB, in its just-published Caribbean Quarterly Bulletin, said the bulk of the spending increase had gone on civil service wages and the Government’s fixed costs, with recurrent spending up by 27 per cent since the 2010-2011 fiscal year. This has outstripped the 18 per cent growth rate for capital spending, which pales alongside the Government’s $2.2 billion recurrent Budget, resulting in “short-term” economic impacts that fail to translate into sustained growth. As a result, the IDB is urging the Government to reprioritise, and switch its
Bank says spending focus is in wrong place Recurrent expenditure growth of 27% misplaced Calls for prioritising of education, health investment primary expenditure focus away from fixed costs and into capital investments in education, health and other economic services. “A decomposition of the Bahamas’ central government expenditure by economic and functional classifications shows that within the last six periods, 2010-2011 to 2015-2016, total spending has increased by roughly 26 per cent,” the IDB said of the Bahamas. “Current expenditure See pg b9
‘False indicator’ worry on unemployment drop By NEIL HARTNELL Tribune Business Editor and NATARIO McKENZIE Tribune Business Reporter
The 1.1 percentage decline in the Bahamas’ official unemployment rate would not have occurred without the post-Hurricane Matthew rebuilding boom, officials conceded yesterday, as Opposition politicians See pg b7
Post-Matthew repairs spark 1.1% pt rate decline Storm aftermath adds 1,385 jobs But one in four young Bahamians can’t find work
Bran: Too few understand ‘junk’ status fall-out By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Democratic National Alliance’s (DNA) leader yesterday lamented that too few Bahamians understand the ‘junk’ downgrade’s significance, and will only wake-up when Miami shopping trips are priced beyond their means. Branville McCartney told Tribune Business that many Bahamians would only realise what they had lost when it was “too late”, and the currency already devalued, as a result of the country’s inability to reverse its economic and fiscal course. The newly-appointed Senate Opposition leader likened Standard & Poor’s (S&P) action to “a charcoal present under the Christmas tree”, and predicted that it would further deter Bahamian and foreign investment in this nation. With domestic private sector activity likely to slow ahead of the upcoming See pg b6
Bahamians will only wake when Miami priced-out S&P action like ‘charcoal under Xmas tree’ DNA chief: ‘Economic growth’ a term, not reality
Branville McCartney
$3.90
$3.86
$3.99
Realtors slam ‘foolish’ $1m residency reform By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Top realtors yesterday warned the Government it would be “foolish” to double the permanent residency investment threshold to $1 million, estimating it could undermine up to 60 per cent of active real estate developments. George Damianos, Damianos Sotheby’s International Realty’s president, told Tribune Business that the Bahamas would likely lose an entire segment of its real estate market if the
Warn that it will ‘kill’ 60% of ongoing projects And drive investment to Caribbean rivals Say Bahamas can’t just rely on high-end millionaires Christie administration followed through with the proposed changes. Emphasising that “it
would be a mistake” for the Government to take such action, Mr Damianos said the permanent resident market between the $500,000 and $1 million price points was “key to the economy”, helping to “drive” growth. His concerns were echoed by Larry Roberts, NAI Bahamas Realty’s chief executive, who warned that the Government’s plan threatened “to kill the only developments that we have”. Warning that foreign buyers had numerous alternatives to the Bahamas, Mr See pg b8
Larry Roberts
Govt’s fixation on Baha Mar sending ‘dangerous message’
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
The Chamber’s chairman yesterday warned the Government it is sending a “dangerous message” by continuing to focus solely on Baha Mar, which was used as “the whipping stick” for the ‘junk’ downgrade. Gowon Bowe told Tribune Business that by con-
tinuing to emphasise the $3.5 billion project, the Christie administration was effectively reinforcing the perception held by Standard & Poor’s (S&P) that the Bahamas’ economic and fiscal rebound was totally dependent on Baha Mar. He implied that this was effectively undermining the message that the Chamber has tried to convey to S&P and its fellow rating agency,
Moody’s, which is that Baha Mar is not the Bahamas’ sole growth engine. However, the Government’s response to the S&P downgrade continued to perpetuate the opposite, as the only foreign direct investment (FDI) project it mentioned was Baha Mar, and its sale and phased opening beginning in April 2017. See pg b12
Chamber chair: Perpetuates S&P ‘whipping stick’ Points out project not sole ‘saving grace’ But agency urged to take opening ‘into consideration’