There is no “immediate concern” that The Bahamas will end up in a similar situation as Haiti where riots broke out over a 50 percent increase in fuel prices mandated by the International Monetary Fund (IMF), Minister of Finance Peter Turnquest indicated yesterday.
While speaking to residents in Inagua on Saturday on the 2018/2019 budget, Prime Minister Dr. Hubert Minnis pointed to the Haiti situation and said the government’s decision to raise value-added tax (VAT) from 7.5 percent to 12 percent was to prevent such an occurrence in The Bahamas.
Asked if there is a real possibility that something similar could happen in The Bahamas, Turnquest said, “Our reserves are strong, our fundamentals are strong, so there is no immediate need for concern.
“However, again if we did nothing there was a certain result because we can’t keep building debt year after year and not believe that it’s going to at some point collapse on ourselves.
“But again we are not focused on that. We are focused on the positives in this budget.
“And I want to encourage people to read that budget, to make sure that they understand what the opportunities are and where they are able to take advantage of savings that are in the budget in the first instance, and where there are actual opportunities for entrepreneurial activities in that budget because I think that’s much more important when we talk about the risks that exist in terms of our future outlook.”
During a press conference on Monday, PLP Leader Philip Brave Davis and PLP Chairman Fred Mitchell called the comments made by Minnis “incorrect” and “perverse”.
The PLP called on the government to provide the scientific data that proves that if it didn’t raise VAT, the country would end up like Haiti.
When asked about the prime minister’s comments outside Parliament on Wednesday, Turnquest said, “There’s no doubt that The Bahamas has had some challenges.
“There is no doubt that if we continue on the path that we are on, that we will end in a certain unsure position.
“We have crafted our budget to ensure that the remote possibility does not even arise, to ensure that we get our finances back on track in a positive direction and to arrest the debt situation that we have.
“So we are focused on the positives of that.
“We are focused on the benefits that are included in this budget for the ordinary Bahamian, which contrary to the narrative that has been going out, is a real benefit to the most marginalized in our communities and we’re focused on that and on expanding our economy so that people have real opportunities. That’s our focus.”
The government’s announcement of the increase in VAT was met with heavy backlash from the public.
The increase, which took effect July 1, is expected to bring in an additional $400 million in new revenue.
On July 6, riots broke out in Haiti over the announcement of a plan to end fuel subsidies, which could have driven prices up by 50 percent.
According to the Miami Herald, the IMF required Haiti to “enact a series of economic reforms in exchange for $96 million”.
Reports indicated that at least seven people were killed.
Following the riots, Haiti’s prime minister resigned.
Education: Vrije Universiteit Brussel (University of Brussels), MA in Mass Communications