Mr. John Rolle Presentation State of EconomyThe Bahamas_Outlook Presentation_Chamber of Commerce_Short_v2 JTurunenREPORT – State of the Economy 2017
The Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) held its first State of Economy Report Forum on February 16, 2017. The Chamber of Commerce held “State 2017” in an attempt to offer a comprehensible view of the fiscal year in the Bahamas, providing a forum for Bahamian business owners to ask questions and address concerns to those who had a part in creating the rules regarding the country’s wealth. The Chamber’s CEO, Edison Sumner highlighted the importance of this forum, not from a political viewpoint, but from the mindset of those who have actually advised policy makers on how the Bahamian Economy should operate.
Speakers included Governor of the Central Bank of The Bahamas, Mr. John A Rolle; Economics Sr. Specialist for the IADB, Allan Wright; Executive Director for Caribbean Countries for the IADB, Jerry Christopher Butler; GFO of Fidelity Bank (Bahamas) Ltd., Gowon Bowe; Financial Secretary of the Bahamas, Simon Wilson; and Keynote Speaker Chief to The Bahamas in the Western Hemisphere Department of the International Monetary Fund (IMF), Jarkko Turunen.
Highlights of the event included the overview of the Bahamas’ economic standing as reported by the IMF, as well as an explanation from Mr. Turunen, who stated that IMF reviews are meant to “exchange views with the government and the central bank” to consider whether there are risks to stability that argue for adjustments in economic or financial policies focusing on monetary, fiscal and financial policies and exchange rates as well as macro-critical structural reforms. “With the goal to promote global economic and financial stability”.
On a visit to the Bahamas in December 2016, Mr. Turunen and his team apprised the nation’s financial outlook, post-Hurricane Matthew. As a result, Mr. Turunen and his team concluded that “structural impediments continue to constrain” economic growth in the Bahamas.
Mr. Turunen advised those in attendance that this country should seriously consider the implementation of a Fiscal Responsibility Act to reform the finances of the Government. Emphasizing that the Bahamas’ liability to natural disasters does not automatically present a barrier, he clarified that there are ways that the country can design ‘Fiscal Rules’ to allow the Government the ability to respond to a natural disaster appropriately.
The Fiscal Responsibility Act would essentially force the government to return to Parliament to explain and gain authorization for exceeding previous budget limits. ‘Fiscal rules’ also sets ‘caps’ for debt with accompanying ratios that the Government would not be able to surpass. He noted that in order to safeguard fiscal and external stability “continued fiscal consolidation is critical” this would not only rebuild fiscal and external policy buffers it would also boost investor confidence in the Bahamas.
A significant shift towards implementation of structural policies would raise human capital and reduce skill mismatch, reduce cost, and strengthen the business environment. Mr. Turunen and Mr. Simon Wilson, Financial Secretary of the Ministry of Finance came to an agreement that there should be a revision as it pertains to the taxing of private businesses in the Bahamas.
Mr. Wilson charged that Business License fees for private businesses should be reviewed and lowered. Stating that there are other ways that the government can tax Bahamian businesses while noting that there are not currently any positions in terms of an alternative to taxing as the current taxing does not recognize company profitability.
Mr. John Rolle, Governor of the Central Bank of the Bahamas stated that the Central Bank maintains that the notion that The Bahamas is in the “danger zone” for devaluation is false. Noting that investment inflows and tourism are expected to strengthen the Bahamian economy over the “medium-term” despite recent credit ratings posing increased rate challenges for the Government. Mr. Rolle sustained that the government will continue to enjoy access to external financing depending on its willingness to accept higher interest premiums. He also pointed out that fiscal consolidation will continue to be the dominant determinant of whether we as a country achieve success in this area. Lastly, Mr. Rolle stated that any transition from the currency peg to a position of dollarization would require substantial improvements to our structure and a level of modification that would resemble an exciting private sector and an economy with superior foreign net exchange earning capacity.
Mr. Sumner indicated that the success of the State of Economy has led him to consider making the forum an annual event. With the Motto for the Chamber, this year being “The Ease of Doing Business” the success of the State of Economy shows that the private business sector has an interest in the direct impact the Bahamian Economy has on business.
Mr. John Rolle Presentation State of EconomyThe Bahamas_Outlook
Presentation_Chamber of Commerce_Short_v2 JTurunenREPORT – State of the
REPORT – State of the Economy Report 2017