Alarm over Moody's downgrade threat is focusing on the smoke rather than the fire. The international credit ratings agency is only pointing out what tens of thousands of unemployed, underemployed and frustrated Bahamian workers and entrepreneurs in this country already know. And that is that the Bahamian economy stinks to the high heavens. Our economy is sucking fumes and there is no fuel in sight. Under these circumstances who could honestly be surprised at Moody's mood (pun absolutely intended)?
Moody's contradicts the Christie administration's boast about its fiscal progress, economic optimism and financial prowess to date. The agency is essentially saying that all the talk and gesturing about an economic and fiscal turnaround is "much ado about nothing". It echoes sentiments by this writer that talk of cutting the deficit by more than $300 million was a "false sense of achievement" and that the real issue confronting this country is its floundering economy.
The Bahamian economy is not receiving a high enough level of capital injection to generate jobs at the clip necessary to impact the double-digit unemployment plaguing it. It lacks innovation to spark new enterprise that can add to job creation and income growth. Its level of productivity is low by competitive standards and therefore produces a lacklustre appeal to the truly dynamic investor. Its service standards are mediocre making its high cost a double threat to its international competitiveness. Add to these the fact that the government, in its wisdom, choose to extract from the productive economy more than $500 million in new taxes (VAT) annually, while at the same time entrepreneurs faced rising cost of inputs which they sought to pass on to struggling Bahamian consumers through higher prices. The perfect storm!
Any international credit ratings agency worth its weight in salt would see the danger of this economic situation and have doubts about the future prospects of that economy, at least in the short and medium term. All of the Christie administration's projections, under these circumstances, would be held suspect. The government's projections about balancing the budget, halting the growth rate of debt-to-GDP and improving the financial position of the country seem like mere hocus-pocus by an amateur magician - "voodoo economics", if you will.
We better wake up! Our economic failings are real. When I first started writing these weekly articles, I stressed the great need for robust economic growth. Nothing has changed. The Bahamas is on the precipice of falling back so far that catching up will take nothing short of a miracle, as poverty entrenches itself in our system. A whole generation of Bahamians is now living in an extended period of limited opportunity and faded prosperity. Their hearts grow wary and they are looking outside the country for better. Those who are looking inside the country are developing a new ethic and divergent values? The consequence of the choices of both groups of Bahamians will deflate the promise of a better future and produce a troubling social dynamic for the present.
Moody's threat to downgrade us to just above or at junk status means precious little, given that the effects of a poor economic environment are already having a real impact on the people of this nation. The suffering is real. All Moody's downgrade would do is make it more expensive for the government to borrow more money to do what it is now doing, spending lots of money without any discernible positive impact on the social and economic fortunes of the country. The government said it is making progress economically and financially; Moody's is saying otherwise. If the government does not want to listen to Moody's it could ask the people of The Bahamas and it will get as clear an answer as it would need. Things are extraordinarily bad.
There is a saying that goes, "Where you stand often depends on where you sit." Minister of State in the Ministry of Finance Michael Halkitis said that the government is not worried about Moody's downgrade threat. He said that this is just "one of those things". He further noted that the government knows what to do to satisfy Moody's and that they are already at the point where they have "stabilized" things.
My word! Had this downgrade come under the FNM this would have been an apocalyptic event. In fact, when it did happen and this writer was minister of state in the Ministry of Finance, the PLP in opposition fumed, criticized and belittled the government, treating it as nothing short of the utter failing of the FNM administration and the end of the world. Thank goodness that now it's just "one of those things".
Halkitis is right to be unperturbed about Moody's threat to downgrade our credit rating, because that threat (or the downgrade itself) is far from the real issue. The real problem is that the economy of The Bahamas is under water and the government has for the last four years failed miserably in rescuing it; in fact, it has been seen from time to time pouring water into the vessel. One thing is certain, the group that does not have a great plan to produce a robust economy should not get any of our votes in the upcoming general election. The reality is that stark. The hopes, dreams and aspirations of our children and their parents must be funded and only a surging economy will do that. Voting for any group that cannot deliver on this is simply foolish. For my part, I will be sure to let you know what I hear and see. Stay tuned.

o Zhivargo Laing is a Bahamian economic consultant and former Cabinet minister who represented the Marco City constituency in the House of Assembly.

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