Year of Pain
As the final weeks of 2018 roll along, The Bahamas will end the year as it began: Tremendously challenged.
The government of Dr. Hubert Minnis saw its popularity wane as it made tough decisions and multiple missteps, with some in the government becoming blinded by the arrogance that often sets in among those in power and others demonstrating a striking lack of competence in their respective roles.
While the government has not been an abject failure this year, it has struggled to remain connected to the masses and often comes across as tone deaf. Many of the wounds the Minnis administration suffered in 2018 were self-inflicted.
It has had a hard time getting out of its own way. In the process, it has provided some hope for its opponents who are sniffing at the prospects of the electorate continuing its trend of one-term administrations in a few years.
Whereas voters in large numbers were feeling hopeful and inspired after ridding the country of the Christie administration in May 2017, 19 months on, many find it hard to have faith in the government they elected to run their affairs.
Many have lost trust in the Free National Movement (FNM) in office even if they do not regret their decision to vote out the Progressive Liberal Party (PLP).
As a result of the Minnis administration’s decision to increase value-added tax (VAT) from 7.5 percent to 12 percent in July, many Bahamians are being swallowed by the terrifyingly high cost of living.
They struggle to pay their electricity bills, while facing higher fuel costs at the gas pumps and increased prices for goods and services all around. There is an increasingly desperate cry for relief, but there is no relief in sight.
In July, the consumer price index, which reflects the rising increase of the cost of basic goods and services, hit an all-time high, the Department of Statistics reported.
The good news is that we are no longer on a fast track to economic doom.
The national economy is far from robust, but it did record some gains this year.
On Monday, a statement from the International Monetary Fund (IMF) after its latest review of our economic developments said, “The Bahamian economy continues to recover, with real GDP growth projected to reach 2.3 percent in 2018 and 2.1 percent in 2019.”
It said growth is driven by an increase in tourist arrivals, paired with an expansion of hotel room airlift capacity, and against the backdrop of the continued expansion of the U.S. economy.
Baha Mar, which became a political tool used by Minnis and the FNM ahead of the election last year, has been an important driver in the creeping recovery. In opposition, Minnis had harsh words against the Chinese owners, even threatening to “execute” a “real” sale of the Cable Beach property.
In government, he quickly abandoned the nonsensical talk and recognized the importance of pushing for the resort’s success.
The government’s response to the IMF on Monday came from Deputy Prime Minister Peter Turnquest, who said the Minnis administration will stay the course in its fiscal strategy to boost economic growth, strengthen the fiscal balance and increase transparency and government accountability.
Unpopular decisions and embarrassing missteps
The challenge the government faces is maintaining that growth pattern so that Bahamians begin to feel that things are actually getting better.
Its decision to raise VAT – after voting against its implementation in 2015 – hurt the Minnis administration tremendously this year. The government argued that the tax hike was absolutely necessary to prevent The Bahamas from going over the fiscal cliff.
It claimed it will balance the budget in three years.
In May, Turnquest, the finance minister, said, “We did not settle on that (12 percent) rate arbitrarily.
“We fought about this. We ran models, looking at what would happen if we took the rate to nine percent or 10 percent and ultimately we decided on the 12 percent rate because it gave us the best opportunity to get through this period of consolidation as quickly as possible and begin to reduce the pain on the Bahamian people.”
He spent weeks defending the tax hike, at times seemingly coming close to losing his cool.
The decision again exposed the hypocrisy of the FNM administration, which had accused the Christie administration of placing an unconscionable burden on the poor when it put VAT in place.
It its statement on Monday, the IMF spoke of the need for the government to maintain strong fiscal and financial policies to bolster the Bahamian economy’s resilience and build buffers should external conditions become less favorable, and for advancing reforms to achieve more inclusive growth over the medium term.
After making the tremendously unpopular decision to raise VAT, the government took a gamble and purchased Grand Lucayan resort in Grand Bahama. The purchase price was $65 million, but the government is spending millions more to renovate the property, pay severance to workers and keep Lighthouse Pointe – one of the hotels that make up the resort – operating every month.
The Minnis administration attracted significant backlash over that decision, especially given that it previously claimed the fiscal cupboard was bare.
It now claims there are at least a dozen prospective buyers for the property. It has not yet fully accounted for all of the tax dollars it has spent to date on such a risky proposition.
There are fears that in the long run, taxpayers will be stuck with the short end of the stick.
After the budget communication this year, the government also ended up in a nasty public spat with web shop bosses over its plan to sharply increase taxes on web shops.
The owners viewed the increases as a death warrant for the industry.
In June, hundreds of protestors stormed Rawson Square protesting the decision to increase VAT by 60 percent and to significantly raise taxes on web shops.
The year is ending with the web shop tax hike still embroiled in a legal dispute between the government and the web shops.
This year, the Minnis administration also embarked on an ambitious plan to rid The Bahamas of shantytowns.
Minnis appointed a Cabinet subcommittee headed by Labour Minister Dion Foulkes to address the prickly and longstanding issue.
In August, as the government was aggressively moving ahead with its plan, a Supreme Court judge ordered the government and utility companies to hold off on evicting residents from shantytowns and disconnecting their utilities.
It was a major win for residents, led in their legal fight by human rights attorney Fred Smith.
The injunction left the government with yet another black eye.
A major screw-up this year for the Minnis administration came in February when it signed an agreement with Oban Energies for an oil refinery and storage facility in East Grand Bahama.
The deal was questionable on multiple levels. It was signed without any environmental studies, yet involved environmentally sensitive land. It was signed without consultation.
The Nassau Guardian soon revealed with video footage to prove it that while Oban’s controversial Non-Executive Chairman Peter Krieger signed the document as he sat next to the prime minister on February 19, he did not sign his own name, but signed the name of company President Satpal Dhunna.
We observed in this space in a piece titled “Charade” on March 7, that, “The Minnis administration’s poor handling of the deal with Oban Energies for an oil refinery project on Grand Bahama is today the most startling example of its lack of preparedness to govern The Bahamas and its stunning incompetence.”
Amid the public furor over the highly questionable deal, Minnis told Parliament that missteps had been made. He appointed a Cabinet subcommittee to examine the deal.
Yesterday, Foulkes told reporters it is likely that the renegotiation of the heads of agreement for Oban will start in January.
Another controversial decision made by the Minnis administration this year was the approval of a proposal by Disney Cruise Line for a cruise port at the pristine Lighthouse Point property in South Eleuthera.
That approval came in October after much debate, town meetings and heated arguments.
There had been an aggressive campaign against the project – led by environmental and other interests, including the One Eleuthera Foundation which was a part of a group that had submitted a counterproposal.
The Disney project, however, seemed to be popular among Eleuthera residents hungry for economic revitalization.
The firestorm over the project faded from the headlines in the days after approval was granted, but it embittered many, including some who supported the FNM.
Politics and Parliament
It was apparent to us that the Oban signing was rushed as a way to distract from a separate embarrassing matter that was making headlines.
In a bizarre moment in February, Speaker of the House Halson Moultrie delivered a disgraceful and unacceptable performance from his chair.
In his stunning and left-field attack on everyone and anything in his path, Moultrie, a first-time member of Parliament, degraded the speaker’s office and set the Parliament on an unfortunate course in which the people’s business was put on hold.
In a largely senseless rant, Moultrie launched a blistering and unfortunate attack on former House Clerk Maurice Tynes, who was critical of the speaker’s naming of Englerston MP Glenys Hanna-Martin the week before, without moving a motion to do so, as required by the House’s rules and procedures.
Moultrie also pulled out his cutlass for Opposition Leader Philip Brave Davis, who in a press conference days before, accused the speaker of being a misogynist in going after Hanna-Martin.
Continuing his bizarre rant, Moultrie also told Davis that he has no reason for divorce.
FNM MPs later voted against a resolution of no confidence in the speaker brought by the PLP MPs and Moultrie eventually apologized.
This year also saw other interesting moments in Parliament.
In June, four FNM MPs – Travis Robinson, Frederick McAlpine, Vaughn Miller and Reece Chipman – voted against the government’s decision to raise VAT. This resulted in the prime minister firing Robinson and Miller as parliamentary secretaries and McAlpine from his position as chairman of the Gaming Board.
Minnis had already fired Chipman as chairman of The Bahamas Antiquities, Monuments and Museums Corporation. Despite claiming to lead a transparent government, the prime minister arrogantly refused to explain to the Bahamian people why he made that decision.
More recently, Chipman and the other three MPs – known by some as the ‘rebel four’ – voted against a resolution brought by the government seeking parliamentary approval to rent premises at the Town Centre Mall – owned in part by Cabinet minister Brent Symonette – to relocate the General Post Office.
That decision was widely criticized in the public, further impacting the FNM administration’s already shaky credibility.
As the Minnis administration faced multiple challenges nationally and politically over these past months – punctuated by the unending blunders made by the prime minister himself – the opposition PLP has tried desperately to become relevant again, but still struggles to portray itself as credible and formidable.
It too voted against those key measures in Parliament, often taking the public’s temperature and reacting based on it.
Davis equals Minnis in terms of his lackluster leadership as opposition leader. Davis’ challenge is that he is still saddled by the many egregious decisions made by the PLP administration, which resulted in his party’s overwhelming loss at the polls last year.
Although unemployment at last reports remained in the double digits (10 percent as of May 2018), the Minnis administration is hopeful that the continued economic recovery will have meaningful benefit for Bahamians.
It also touts a decline in murders of around 30 percent this year compared to last year. The count stands at 84 with the most recent one taking place in the Fort Fincastle area in New Providence last night.
Police officials say crime overall is down, although they have not yet provided any statistics to support it.
When murders and crime overall are high, the government suffers the blame. It is thus understandable that it is taking credit for gains being made.
But Minnis is delusional if he thinks Bahamians no longer fear crime, as he recently claimed. This is not a time for anyone moving around New Providence in particular to let their guards down.
Government officials should also be careful not to celebrate too much. We will all continue to watch the trend and hope it continues to move in a positive direction.
One of the challenges the Minnis administration faces heading into 2019 is slowing the rapid erosion of goodwill. It continues to spend quickly from its political bank.
The government is banking on improvements in the national economy, improvements on the fiscal front and a continued reduction in crime to win back those it has lost, but it needs to properly craft a message that people can buy into and deliver more significantly.
Many have already had enough of this government and it has not yet been in office two years.
The economic growth projection for 2019 remains modest, energy costs remain high and crime is still a significant concern.
There is still much that this government has to do to make significant inroads in all these areas.
Whether it is able to succeed next year will set the tone for the second half of the term.
While the prime minister confidently proclaimed last week that the FNM under his leadership is set for another term after this one, he should not be so blinded by arrogance and the lingering taste of 2017’s dramatic election victory that he loses touch with reality.
It is far too soon to be making such declarations.
– After an eventful year, National Review breaks for the holidays and returns in January with more insight, news and views.