What $500m ‘shortfall’?
The technical issues surrounding the WTO are difficult enough to help people understand but inserting outright inaccurate information into the matter can really handicap efforts at public education.
The most recent case in point is a story now going around that the recently released Oxford Economics Report commissioned by the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) claims that a “$500 million” shortfall on the country’s trade account will put pressure on the Bahamian dollar’s one-to-one parity with the U.S. dollar. It would be easy to see how someone might mistakenly pick up such a thing through some technical reference to a $500 million shortfall in the document except there is no such suggestion, reference or hint to such a thing.
The report does make reference to a possible $100 million revenue short fall but this is hardly news, since the same was made known in the government’s Revenue Impact Study discussed at the University of The Bahamas last year by the consultants who produced the report.
I attended the event held by the BCCEC yesterday morning where the Oxford Economics report was released. The presenters provide a summary of the report which essentially concluded that in the most conservative scenario, accession to the WTO can offer modest gains and in a more liberal scenario might provide much higher gains. In the case of the former, in 10 years The Bahamas might realize economic growth of some 0.8 percent higher than if it did not accede to the WTO, all things being equal. If it took on more progressive reforms in the accession process, growth would be some 5.6 percent higher. Presenters cautioned the government to look at the way it conducts business when it comes to facilitating investments and seek to be less controlling but more transparent, predictable and efficient.
One presenter was quite keen to point out the high cost of living in The Bahamas, point to the fact that in our most dominant sector, tourism, average salaries could range from $1,000 per month to some $2,500 per month. However, when one considers the cost of items in the food store – this is his assessment – one wonders how such workers are able to survive. He, not me, suggested that introducing some form of additional competition into our economy was necessary to drive down prices but did believe a wholesale liberalization of retail trade was recommended.
I do not now intend to get into the details of the Oxford Economics Report on WTO accession; I cannot, as I have not had opportunity to read it fully and in any depth. I do commend us all to take a close look, though I suspect that its headlines will be more widely read than its actual contents. If this is the case, shame unto us, for it will be as difficult to kill rumors that the Bahamian dollar’s value will be as greatly diminished from WTO accession as it has been to kill the untruths that free movement of people is part of joining the WTO.
I am confident, however, that there are those Bahamians who will take the time to read this report fully and will, on that basis, be able to critically assess its findings, concluding for themselves whether they are net positive of negative. I therefore leave you with this: “Read Bahamas.”
• Zhivargo Laing is a Bahamian economic consultant and former Cabinet minister who represented the Marco City constituency in the House of Assembly.