Being minister of finance today
It cannot be easy being Peter Turnquest, the minister of finance of The Bahamas. He has the herculean task of stabilizing a fiscal situation left woefully out of control by his predecessors, while at the same time providing money for a costly number of promises made by his team during the 2017 election campaign. To add to this, he has to satisfy creditors at home and abroad that their anxieties about the country’s deteriorated credit worthiness will not be worsened by the need to borrow more money to pay old bills and fund new ones. If this were not bad enough, he is a member of Parliament for one of, if not the most, economically challenged islands in our chain – Grand Bahama.
Imagine that – controlling the public purse but having to tell your own that you cannot help them because nothing is in the kitty. All this, and it gets even worse: the economy sucks, and its prospects for better seem limited at best.
Is there any wonder that none other than the prime minister himself, while sitting in his seat on the side of the minister of finance as the minister spoke, said to opposition members of Parliament, “See why I didn’t take finance?”
This comment, said no doubt in jest, was still remarkable in itself. The prime minister was essentially saying, albeit jokingly, that things were so bad in finance he wouldn’t take the job. Jest or not, this much is true: the prime minister is the first lord of the treasury, and as such, he has the responsibility for finance, no matter who holds it. The prime minister does have a point, though; his colleague, the minister of finance, is carrying quite a load.
I dare not presume to give advice to the minister of finance, whom I believe to be quite an experienced accountant and businessman. I do, however, offer three observations borne of my own work in the Ministry of Finance: First, keep first things first and make sure you are clear what should be first.
Moody’s Investors Service and Standard & Poor’s have their value in the world, but cannot trump the value of the satisfaction of Bahamian voters. The public purse must serve the needs of the taxpayers of The Bahamas, as a matter of priority. If we are going to run deficits – and we will for the foreseeable future – let the taxpayers of this country feel, experience and see the results thereof. Mandates are given by the people, while ratings are given by the agencies.
Second, Standard & Poor’s downgraded our credit rating and economic outlook some time ago. Moody’s kept our rating and downgraded our outlook to negative in recent times. The two agencies differ on our creditworthiness but agree on our economic prospects. What they agree on is what should truly matter most right now – our economic issues. Expenditure cuts and tax raises can improve the government’s fiscal situation, but only to a limited degree.
Only a soundly growing economy can fix both the fiscal situation and many other problems we face. Doing the tactical work necessary to grow our economy with the level of dedication we cut spending or collect taxes is what is most needed now. Nothing but urgency in this regard will do.
Third, the government’s budget has flexibility. There are in the government’s budget relatively small expenditures that can make huge differences to people. There is insufficient room in the fiscal space of the country to make big swings right now, but a number of strategic small swings can be very helpful. Using some funds to engage apprentices, fund small business start-ups, support small and medium-size businesses, support government vendors, encourage home ownership, promote international investments, improve our environment, fight crime and engage voters can go a long way.
Twenty million to 30 million dollars strategically employed right now can go a long way. Maybe some of these things are in train, maybe not. Whatever the case, a robust effort to get them fully in motion could be the start of something helpful.
Being minister of finance is tough in the best of times. In the worst of times, it’s brutal. But once you have the job, you are cloaked in immense power. What is necessary is strategic focus. No one wants to hear or will believe a minister of finance who says his hands are tied, no matter how others left the purse. All they know is that the hundreds of millions spent yearly is under the minister’s charge. It’s best such a minister keeps them believing he has the power, for a powerless politician is a rainless cloud. As minister, you may not be able to do everything but you can do something. Do something; for God’s sake, don’t do nothing. Time flies in politics. It flies even more quickly when voters grow weary of you. Trust me, I know. Nuff said!
• Zhivargo Laing is a Bahamian economic consultant and former Cabinet minister who represented the Marco City constituency in the House of Assembly.