Mouth can say plentyWhat to make of the PM’s national report
If you were looking for excitement, inspiration or something revealing or revolutionary then you were likely left disappointed by the prime minister’s national report on the economy, delivered on Monday night.
The report nonetheless encapsulated the government’s plan for economic and jobs growth. It was largely a repeat of much of what we have heard before, but it may be too soon to write it off as a “nothing burger”, as was the predictable response from the official opposition.
It is also too soon to do cartwheels and to get hopes up too high, as many supporters of the governing party seem to be doing.
The simple truth is, if all — or even most — of the initiatives outlined by Dr. Hubert Minnis bear fruit, then that would auger well for more robust economic growth.
But we do not yet know that they will, or how soon we will see results.
Minnis patted himself and his administration on the back for the estimated 2.3 percent growth in 2018 and the projected 2.1 percent growth this year, but sensibly pointed out “we need even more robust growth to bring down unemployment across the board”.
The Bahamas, in the last year or so, has benefited from a strong U.S. economy and from the boost created by Baha Mar, the Cable Beach project Minnis and the Free National Movement criticized highly while in opposition.
But governments, as we know, are continuous. As former Prime Minister Hubert Ingraham pointed out one time, “Some sow; others reap.”
Not surprisingly, there was more spinning of the recent unemployment numbers.
Minnis said while the unemployment rate increased from 10 percent in May to 10.7 percent in November 2018, “the country is making progress”.
“This is seen in the fact that the number of discouraged workers decreased by 6.7 percent,” he said.
“This indicates that more Bahamians have confidence in the country’s economic recovery. More people are actively looking for work.”
During the entire five years of the most recent Christie administration, discouraged workers also declined every time the survey was taken.
Of course, this was not a noteworthy fact for the FNM in opposition.
While declining numbers of discouraged workers seemed to point to growing optimism in the national economy, that optimism was not well-placed, as the economy recorded no appreciable growth in the most recent Christie years.
While it is always about the economy, a strong economy and low unemployment do not always mean the people are happy and ready to re-elect you either. In 2007, unemployment was at 7.9 percent when voters kicked the Progressive Liberal Party (PLP) out of office. They were fed up with persistent scandals and perceived corruption.
Minnis happily reported that the jobless rate in Grand Bahama is down from 12.4 percent to 11.9 percent.
“This is the first time since 2008, the year of the Great Recession, that the unemployment rate is below 12 percent,” he said.
The prime minister added: “We have a comprehensive and aggressive agenda to boost growth and jobs in Grand Bahama, including transforming the island into a technology hub.”
He also noted that the jobless rate in Abaco has come down from 10.7 percent to 7.7 percent.
“This is considerable progress,” Minnis declared.
According to the Labour Force Survey, the employed labor force on Abaco increased from 12,180 in May to 13,155 in November. Accepting the numbers as is, that means nearly 1,000 jobs were created on Abaco in the six-month period. It is not clear where.
Minnis claimed his government is focusing on boosting growth and employment throughout the Family Islands.
Again, mouth can say plenty. We take a wait-and-see approach.
The prime minister has promised more infrastructure on a number of islands, including aviation infrastructure improvements and new airports to be developed on North Eleuthera, Exuma and Long Island.
Minnis acknowledged that there is a lot of work left to do on New Providence, where the unemployment rate rose from 10 percent to 11 percent.
He also acknowledged that while youth unemployment decreased from 24.1 percent in May to 23.1 percent in November, this is still “a major and persistent problem”.
Of course, Minnis had stronger language for the state of youth unemployment under the Christie administration.
In February 2017, several weeks before the general election, Minnis noted that unemployment among youth, ages 15 to 24, was a “staggering” 25 percent.
“This is more than an economic crisis,” he said. “This is a moral crisis. It is a personal and family crisis for thousands of Bahamians.”
As part of what he sees as his government’s ambitious economic agenda, the prime minister highlighted various investment projects.
Some projects were started under the Christie administration.
Minnis pointed to the 100-room condominium hotel and marina at The Pointe in downtown Nassau. This project is being developed by China Construction America (CCA), which Minnis and the FNM had dubbed “Christie’s Chinese ally”.
In fact, the FNM had repeatedly criticized the Christie administration for approving CCA for The Pointe development, suggesting the company, which also built Baha Mar, could not be trusted.
But that was 20-plus months ago when Minnis and the FNM had an election to win. They were seemingly prepared to say just about anything to sway voters.
Over the last 20 years, much has been said about the urgent need to revitalize downtown Nassau.
The Pointe will be an important driver of that, as will other projects, including the upgrade and expansion of the Port of Nassau, the new Central Bank and a new Supreme Court complex (on the site of the old post office building).
Those projects won’t happen overnight. The government, for example, will likely not prioritize the construction of a new court facility, unless it goes to the same secret stash it pulled tens of millions of dollars from to purchase the troubled Grand Lucayan resort in Grand Bahama.
In his national address, the prime minister also pointed to the Wynn group project on West Bay Street and the Sterling Hurricane Hole Community Resort and Marina, which recently broke ground.
Over the next five years, the development is projected to provide 3,000 construction jobs.
Jobs are of course important, but what many Bahamians are hungry for is meaningful economic empowerment, which has been a challenge for successive administrations.
The prime minister noted the Small Business Development Centre is up and running. The government has pledged support in the amount of $5.5 million for loans, grants and equity injections into Bahamian small businesses this fiscal year.
So far, seven companies have been approved for funding to either begin or expand their businesses for a collective total of $1.5 million, with more credit to be extended, Minnis said.
That’s an important start for those who benefit, but it is not likely to have any appreciable impact on economic activity.
Minnis claimed his government’s growth and expansion agenda includes “a dynamic mix of Bahamian and foreign direct investment”.
Since coming to office, he said, his government has approved an estimated $3.7 billion of foreign investment projects.
“Many of these projects, once approved, immediately contracted Bahamian firms for legal, accounting, project management, engineering, environmental, architectural, consulting and other professional services,” the prime minister said.
New Providence received 55 percent of the inward flows of foreign direct investment since 2017, according to Minnis.
The prime minister also pledged to promote Family Island and rural development with “the same intensity and focus” that have been historically applied to New Providence and Grand Bahama.
“We will invest in strengthening agriculture infrastructure, inclusive of farm feed roads and facilitating access to power and water in farming areas,” Minnis said.
He added that the Family Islands are attracting tens of millions of dollars and significant projects to energize their economies. Among them are the controversial Disney cruise port at Lighthouse Point in Eleuthera.
For those who have faith in Minnis and the FNM, the declarations that we are headed for better times were comforting and encouraging.
But we do not yet know when we will begin to “feel” the impact of all these projects. If they do come to fruition, they will represent a significant economic boost.
Robust growth would mean an improvement in the quality of life for more Bahamians.
Right now, many are burdened by high taxes and stagnant wages. The most significant impact the Minnis administration has had on the lives of the people since taking office has been hiking value-added tax to make it more difficult for them to survive.
Many do not feel that their government is working to improve their living standards and to provide greater opportunities. Better jobs and economic empowerment would mean more people can qualify for their own homes, send their children to better schools and have disposable income to enjoy the finer things in life.
The high cost of living is making all of that difficult at the moment.
Last May, the Central Bank of The Bahamas released the results of its Financial Literacy Survey 2018.
When respondents were asked to reflect on the last 12 months and indicate whether their incomes were generally sufficient to make ends meet each month, 47 percent stated that their earnings were usually insufficient to cover their living expenses.
No one should be fooled into thinking we will see a reversal of these circumstances any time soon.
The 2.1 percent growth the International Monetary Fund projects for 2019 means we won’t likely begin to see the economy pick up a lot of steam in the near term.
At its midterm, the Minnis administration will continue to struggle to deliver the tangibles.
The best reaction anyone should have to the prime minister’s national report, then, is cautious optimism.
Communicating one’s plan to the people is good. Delivering on that plan is another thing entirely.