The Inter-American Development Bank (IDB) Bahamas Country Office, officially launched a new book entitled “Nurturing Institutions for a More Resilient Caribbean” during a ceremony Monday, March 4, 2019.

Edited by Diether W. Beuermann and Moises J. Schwartz, the publication provides a comprehensive review of the quality and impact of institutions in The Bahamas, Barbados, Guyana, Jamaica, Suriname and Trinidad and Tobago.

It explores the historical development and status of political and economic institutions of these countries with special emphasis on politics, rule of law, human capital development, and economic institutions.

The main objective is to offer positive aspects and institutional areas in need of improvement that could facilitate a sustainable development path in the Caribbean.

The Hon. K. Peter Turnquest, Deputy Prime Minister and Minister of Finance said the central message of the publication is “to place the region on a more sustainable path that spurs growth and development, [that builds resilience and fosters sustainable prosperity], many of the institutional aspects discussed require attention.

“Some elements are more urgent than others, and some of the countries have already made significant progress in implementing them, so the work of policymakers and the various stakeholders is to chart a course forward for each country.”

The DPM described the publication as a well-written, thought provoking, interesting piece of literature and academic contribution that will eventually form the basis of add-on research.

“[It] gives a very good history of how we have arrived at the point where we are at, and the vulnerabilities that have arisen as a result of that history and concludes with some suggestions as to how we can go forward,” he said.

He credited the researchers for recognizing the significance of the cultural development and nuances of the individual countries.

“While we are one region and very similar in a lot of ways there are some differences among us that have affected our development and where we are,” he said.

The ceremony was held at IDB House, East Bay Street. Representatives from the government, private sector and civil society were present. Among those in attendance were Rodney Smith, President, University of The Bahamas and John Rolle, Governor, Central Bank. Presentations were made by the editors and Daniela Carrera-Marquis, IDB Country Representative.

DPM Turnquest remarked, “Importantly, the publication examines the nuances of Caribbean colonial history and the diverse outcomes created by the institutional experiments of plantation slavery, globalization and extractive colonialism. This analysis shows the marked differences and cross-country variations in the institutional setting of ‘extractive states’ and that of the ‘settler colonies’. It shows the different vulnerabilities faced by commodity-dependent countries (CCB-C: Guyana, Suriname, and Trinidad and Tobago) and non-commodity-dependent Caribbean countries (CCB-NC: The Bahamas, Barbados, and Jamaica).

“As a region, previous studies have shown, Caribbean countries face persistent challenges such as weak fiscal positions, crime and violence, a sluggish private sector, weak productive development policies, skill-biased emigration, and recurrent natural disasters. All of these problems have significantly affected the countries’ growth paths.”

He said, “When it comes to public sector performance, Caribbean countries as a group have unfortunately performed below their peers. Perhaps the most sobering statistic is the average level of public debt of Caribbean countries, which rose to the equivalent of 73.5 per cent of GDP in 2016–2017, compared with 52 per cent for the 164 emerging and developing economies.

“Poor fiscal performance led to a sustained decline in GDP growth, which has averaged 1.9 per cent a year since 2000, compared with 4.3 per cent for the emerging and developing economies and 2.9 per cent for Latin America and the Caribbean.”

As to the future of countries in the region, Minister Turnquest suggested that the answer is to correct institutional weakness in the following areas: Public Financial Management, Budget Credibility, Comprehensiveness and Transparency, Policy-Based Budgeting, Predictability and Control of Budget Execution, Accounting, Recording and Reporting, External Scrutiny and Audit, Fiscal Management and Fiscal Rules and Public Debt Management.

Furthermore, the DPM underscored that The Bahamas has made institutional strengthening a key governing priority.

He said a Public Financial Management Bill, a Public Debt Management Bill, and a Public Procurement Bill are in the process of being drafted, the Fiscal Responsibility Act, 2018 was recently enacted and steady efforts are being made to modernize financial reporting and align the Chart of Accounts with best practices.

Moreover, DPM Turnquest explained that the publication notes the wage bill and the mounting transfers to State Owned Enterprises (SOEs) as two of the main areas of public sector weakness in The Bahamas, and the SOEs’ debt also entails increasing contingent liabilities for the central government.

“Historically, successive governments have not had the effective means to evaluate the fiscal stewardship of SOEs. Some 15.4 percent of the government recurrent expenditure is allocated to these SOEs, which translates to some $398 million. Yet, even as their share of the public purse has grown the framework to obtain the timely and consistent information necessary to assess the value for money obtained by these SOEs simply has not been developed,” he said.

“The Government is moving in an aggressive way to address this issue. In the Mid-Term Budget Statement I announced that the Government is kicking off a project this month that will result in the formation of a comprehensive strategy to cost rationalization and cost recovery for SOEs—in line with international best practices—as well as an efficient Financial and Management Reporting Model. The project will also include the implementation of the strategic model, and the roll out of new budgeting, accounting and performance management for SOEs.

The DPM said The Bahamas does better than comparator regions, including the Organization for Economic Co-operation and Development.

“The share of individuals between 25 and 65 years old in The Bahamas with no education or incomplete primary or secondary education is the lowest among all the groups studied. The country has the second highest share of population between 25 and 65 years old with tertiary education among the Caribbean-6 - The Bahamas, Barbados, Jamaica, Guyana, Suriname and Trinidad and Tobago.”

He said while the institutional performance of The Bahamas remains in line with international standards in many areas, there are still many areas where opportunities for improvement exist.

The Hon. K. Peter Turnquest, Deputy Prime Minister and Minister of Finance speaks at the presentation launch of a new publication by the Inter-American Development Bank. (BIS Photos/Derek Smith)