Cooper: FNM policies had very little to do with economic growth
Shadow Minister of Finance in the Progressive Liberal Party (PLP) Chester Cooper yesterday contended that the government has starved capital expenditure in order to reach a fiscal deficit target that the International Monetary Fund (IMF) said in its latest Staff Concluding Statement of the 2019 Article IV Mission is likely not to be achieved before the end of this fiscal year.
While government is lauding the growth currently occurring in the economy, Cooper said the Free National Movement’s (FNM) policies had very little to do with it, citing the opening of Baha Mar and a boom in the U.S. economy as the paramount reasons.
“What was not addressed by the minister (of finance) is the fact that the IMF has pointed to a looming contraction in GDP growth after the next fiscal cycle,” he said.
“Though there will be economic growth in this fiscal year, what has been achieved has been through growth in tourism driven in large measure by Baha Mar, a key plank in the former government’s policy achievements, and a roaring U.S. economy that may be poised for a slowdown.
“That the government seeks to pat itself on the back for something it had little to do with is amazing, though not surprising given the Minnis administration’s lack of accomplishments thus far.”
Cooper added that while the government seeks to meet its targets, its newly established Revenue Enhancement Unit will not be in a position to effectively carry out its mandate.
The government was delayed in collecting taxes levied on the gaming industry last year and some of the value-added tax (VAT) inputs were delayed until this year, both points which were spoken to in the IMF report.
“It should be noted that at the mid-year point, revenue underperformed to the tune of almost $200 million despite the 60 percent increase in value-added tax,” said Cooper.
“Hopefully, now that the IMF says the government must focus on economic growth, the Minnis administration will do that, notwithstanding the fact that we in the PLP have been saying exactly that for the past two years. The IMF also pointed out the need to reduce debt; we agree.
“We note that at the half-year point of its term, the government has borrowed in excess of $2 billion total, inclusive of restructured sums.
“This has actually increased the debt-to-GDP ratio to 57.4 percent from 53 percent in 2016, despite upward revisions in national accounts to reflect the overall size of the economy as at end of 2016/2017.”
Cooper also warned the government that it needs to focus on the “dangerous increase in the foreign currency component of the debt to 36 percent today versus 27 percent the year before”, and the excess liquidity in the banking system that is due to the commercial banks’ conservative lending policies.
Education: Florida International University, BS in Journalism