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Mr. Speaker, this is the 33rd Budget Exercise in which I will have participated in this Parliament as an MP; the 14th as the Prime Minister and the 6th as Minister of Finance. Such extensive experience in this country’s fiscal affairs has enabled me to observe the many ebbs and flows of economic life in The Bahamas and the attempts by successive Ministers of Finance to grapple with them. I have learned many profound lessons and made a number of keen observations, none more so than these:
Great Exuma, Bahamas - Under the theme "Restore Exuma: Sustainability there,
greater sustainability everywhere", the 5th Exuma Business
Outlook is scheduled to take place on Wednesday, October 27 on Great Exuma at
the beautiful Sandals at Emerald Bay. The organizers, TCL Group, promise an
intense review of the island's needs and potential and a look the island's
former glory of which few Bahamians, even younger Exumians may know little.
TCL's president Joan Albury spoke recently of the reasons
for the choice of focus for the forum...
THE ABACO Business Outlook 2010 is expected to focus on strengthening the island's economy through Entrepreneurship, Technology and Tradition
The forum, which is scheduled to take place on September 22 at New Vision Ministries in Marsh Harbour, will focus on social, government and tourism issues facing the island.
Already confirmed for the event are minister of tourism, Vincent Vanderpool-Wallace, chairman of the Bahamas Electricity Corporation, Michael Moss, and director of the National Insurance Board, Algernon Cargill.
"Central to TCL's (The Counsellors Limited) philosophy and practice in organising the Outlook is to respect and examine the whole picture of a community - interna ...
The 2010 World Cup held in South Africa this past June 11- July 11 mesmerized millions of onlookers around the world.
It was a spectacular event throughout. Andres Iniesta’s goal in overtime to give Spain the 1-0 win over the Netherlands in the final was a fitting climax to one of the greatest sports/entertainment shows on earth. It was Spain’s first Federation Internationale de Football Association (FIFA) world title.
While watching the game I pondered the possibility of The Bahamas one day reaching that prime time stage in soccer.
Thus far, in the Caribbean, Jamaica, Haiti and Trinidad & Tobago have been in the World Cup spotlight. Quite frankly, The Bahamas’ progra ...
This contribution is by far been one the most difficult communications I have ever presented to this Parliament. It has not been easy to absorb all that is in this budget and then to present my reasons to support it I will admit took some effort. I say this being painfully aware of the difficulties people are facing. I understand that more people are unemployed,
Moody's, the international credit rating agency, yesterday downgraded its outlook for the Bahamian economy from stable to negative, pointing to the significant run up in government debt levels in recent years and the country's limited growth prospects.
However, Moody's affirmed The Bahamas' A3 bond rating -- a move the government last night welcomed as any downgrade in this regard would have negatively impacted the country's credit worthiness. The ratings of these agencies affect interest rates when borrowing money, and also the ability of countries to borrow.
In revising the outlook from stable to negative, Moody's also cited the challenges the government is likely to face in raising revenues.
Moody's said while the pace of the increase in the government's debt levels is likely to slow in the coming years, a failure by the government to reverse the recent trend of rising debt would likely result in a downgrade of The Bahamas' rating.
"In order for the outlook to return to stable, the government would need to demonstrate a credible plan not just for stabilizing debt, but for reducing it to a level more consistent with the current A3 rating," Moody's said.
The government in a statement last night said it is pleased to learn that Moody's has affirmed its A3 bond rating, and acknowledged the rating agency's revised outlook of the Bahamian economy.
The government noted that the recent global economic and financial crisis profoundly impacted the Bahamian economy and required extraordinary levels of spending on the part of the government to safeguard the financial system, boost economic activity and provide assistance to Bahamians badly in need of help in these trying times, at a time when government revenue experienced precipitous declines.
"The unusually high rise in debt levels therefore was not surprising and in fact was forecasted by the government in light of the worst global economic and financial crisis since The Great Depression.
"Despite this, we maintain in the circumstances a debt-to-GDP ratio that is one of the lowest in our region," the government said.
Moody's noted in its statement that the government's debt increased by almost 150 percent over the past decade to nearly 50 percent of GDP at the end of 2010.
Debt rose steadily between 2000 and 2008, but over 40 percent of the increase occurred in the past two years alone, Moody's said.
"As a result, The Bahamas' debt levels, which were at the median for its rating range until 2006, are now nearly 40 percent higher than the median," the rating agency said.
"Its relatively high wealth levels -- The Bahamas' GDP/capita is nearly twice the median for the rating range -- enable The Bahamas to support a somewhat higher level of debt at a given rating level relative to other countries, but not 40 percent higher."
Moody's said that given The Bahamas' historically low growth rates it is unlikely that it will be able to grow out of its debt burden, notwithstanding certain recent developments that may give a lift to the economy over the next few years.
The agency noted The Bahamas' economy is highly dependent on tourism, particularly from the U.S. -- the near-term economic prospects of which appear increasingly uncertain. In addition, the offshore financial sector, The Bahamas' second most important industry, is facing a rising degree of competition, Moody's said.
"Consequently, the only way that debt levels will decrease is if the government is able to reverse the fiscal deficits it has generated over the past several years and begin to repay a portion of its debt. With expenditures still quite low despite recent increases, in all likelihood the government will have to rely on tax increases and/or the introduction of new taxes in order to accomplish this," Moody's said.
It added that while the high degree of political consensus that has historically characterized the country remains one of its most significant credit strengths, Moody's believes that tax increases could nevertheless become politically contentious and difficult to implement.
"The negative outlook reflects Moody's expectation that given the country's limited growth prospects, the government will have difficulty achieving a meaningful reduction in currently elevated debt levels in the near-to-medium term unless it is able to significantly increase revenues," Moody's said.
In its statement last night, the government emphasized its continuing goals: To reduce the level of deficit spending, as is proposed in the 2011/2012 fiscal budget relative to the crisis period; reduce the growth rate of the debt-to-GDP ratio as again is proposed in the current budget and eventually decrease the debt to-GDP levels in order to re-establish the fiscal space the country enjoyed prior to the onset of the crisis.
"We acknowledge that there are challenges in the global economic environment generally, but more particularly that of the United States of America to pursuing these aims but our focus in achieving them will not be diminished," the government said. "Both the medium term and long term well-being of our people depend on our achieving these objectives."
The government said its efforts in this regard are focused on promoting broad economic growth, through innovative marketing programs in tourism and pursuing new opportunities for international financial services and increased investment promotion.
The government has also pledged to expand support to and opportunities for small and medium size enterprises, increase the ease with which business is done in The Bahamas, modernize the nation's infrastructure and pursue a fiscal policy that reduces the debt burden and creates an optimum environment for economic growth and prosperity for Bahamians.
The Atlantic basin is expected to see an above-normal hurricane season this year, according to the seasonal outlook issued by NOAA's Climate Prediction Center - a division of the National Weather Service.
Across the entire Atlantic Basin for the six-month season, which begins June 1, NOAA is predicting the following ranges this year:
12 to 18 named storms (winds of 39 mph or higher), of which:
6 to 10 could become hurricanes (winds of 74 mph or higher), including:
3 to 6 major hurricanes (Category 3, 4 or 5; winds of 111 mph or higher)
Each of these ranges has a 70 percent likelihood, and indicate that activity will exceed the seasonal average of 11 named storms, six hurricanes and two major hurricanes.
"The United States was fortunate last year. Winds steered most of the season's tropical storms and all hurricanes away from our coastlines," said Jane Lubchenco, Ph.D., under secretary of commerce for oceans and atmosphere and NOAA administrator. "However we can't count on luck to get us through this season. We need to be prepared, especially with this above-normal outlook."
Climate factors considered for this outlook are:
The continuing high activity era. Since 1995, the tropical multi-decadal signal has brought ocean and atmospheric conditions conducive for development in sync, leading to more active Atlantic hurricane seasons.
Warm Atlantic Ocean water. Sea surface temperatures where storms often develop and move across the Atlantic are up to two degrees Fahrenheit warmer-than-average.
La Niña, which continues to weaken in the equatorial Pacific Ocean, is expected to dissipate later this month or in June, but its impacts such as reduced wind shear are expected to continue into the hurricane season.
"In addition to multiple climate factors, seasonal climate models also indicate an above-normal season is likely, and even suggest we could see activity comparable to some of the active seasons since 1995," said Gerry Bell, Ph.D., lead seasonal hurricane forecaster at NOAA's Climate Prediction Center.
Photo: Hurricanes Karl, Igor and Julia (from left to right on Sept. 16) were part of the onslaught of Atlantic storms last hurricane season (2010). (Photo Credit: NOAA)
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By NEIL HARTNELL
Tribune Business Editor
The Bahamas has been urged to postpone planned 2011 fee increases at Lynden Pindling International Airport (LPIA), the major body representing the global airline industry warning this could threaten Nassau's "economic viability", especially given the "grim outlook" that saw ticket revenues from Bahamas-bound flights fall by 14.6 per cent during the first five months of 2010.
An August 11, 2010, letter sent to the Nassau Airport Development Company (NAD) and Vincent Vanderpool-Wallace, minister of tourism and aviation, by the International Air Transport Association's (IATA) Miami-based representative, warned that the proposed L ...
Remarks by The Right Hon. Hubert A. Ingraham Prime Minister and Minister of Finance Commonwealth of The Bahamas at Bahamas Business Outlook 2011