The country has to get to a place where there is a fiscal surplus before the government can tout an improved debt standing, and say that the economy is buoyant once again, Chief Executive Officer of Fidelity Bank Bahamas Gowon Bowe said recently, adding that there needs to be a national plan in place to protect against external shocks.
Bowe, who was speaking to the Rotary Club of West Nassau last week, said COVID-19 should have shown policymakers that any shock to the country’s tourism product could put the economy on a downward trajectory rather quickly, thus putting the country’s balance of payments in jeopardy.
“What happens in GDP [gross domestic product] contracts again. And when we talk about integrity, we should not be trying to sell what is a false dream, we should not be saying that our debt situation is much improved, we should be acknowledging the truth of the matter, that our economy is doing better,” said Bowe.
“And so, therefore, our level of debt is better manageable. But we have to be realistic that we have to pay the piper at some point in time, and start to repay the debt. And that means getting us to a point of fiscal surplus.”
He added: “Because if things change, we will have a problem.”
Bowe said since COVID-19, the country’s economy has not grown to a point where policymakers or citizens can feel like “we’re out of the woods”.
Bowe suggested a national development plan as a helpful tool to outline the country’s direction and formula for external shocks.
“Ultimately, what COVID demonstrated for us was the lack of a national development plan... that there are going to be periods when we do not have clear sight of all that has taken place. And you know what, a plan allows us to continue methodical steps even when we don’t have clarity.
“Because ultimately, as the sun rises, the clouds dissipate, and we have greater clarity. If we follow the trajectory that we were on, the clear plan, we hopefully will still be going in the right direction.
“The pilots among us and boat captains know that they set their course in a GPS. So, they don’t mind if the clouds come over. They don’t mind if they can’t see exactly where they’re going. And, you know what they trust? They call it the instruments. And in government that will be a national development plan.”