The Bahamas is under no obligation to adhere to the recommendations of the International Monetary Fund (IMF) and should rely more on its own capabilities as it navigates the issues impacting the economy, a leading economist has asserted.
Given that The Bahamas has managed to avoid entering into an IMF supported program – even at its most troubled position economically – and still achieve growth is indicative of the country’s strength, former Central Bank Governor and former Minister of State for Finance James Smith said.
“I think The Bahamas ought to take itself seriously, in spite of what we say about each other and our performances on the job, and I’m talking about successive governments. We could not have been all that bad in the sense that we are perhaps the one country in the region that has never been in an IMF program, meaning that the country screwed up so badly it was unable to get international or local loans, so the IMF would lend it money and in the end it would have to impose prescriptions that the IMF set. It usually calls for the cutting down of the size of the public service and reducing deficits. That works in some cases and may even work for us,” he said.
“But the idea is because we’ve been able to navigate ourselves out of trouble economically, we have no obligation to the IMF to take its advice, or to have its prescriptions for dealing with the economy. I think we should rely more on our own capabilities.”
The economy is expected to grow by 1.8 percent this year, according to the IMF.
The IMF’s Article IV Consultation on The Bahamas, released on Monday, recommended that The Bahamas adopt further tax reforms.