Progressive Liberal Party (PLP) Deputy Leader Chester Cooper said yesterday that the government should borrow $1 billion to $2 billion in order to bolster The Bahamas’ economy for the long-term, given the negative economic effects on the horizon for the country as a result of COVID-19.
Cooper, who made the remarks in the House of Assembly, suggested the money be allocated to a myriad of programs designed to keep the economy afloat and argued that this would be justifiable borrowing, given the local and global economic crises.
“The government should, in my view, identify borrowing facilities in the area of $1 [billion] to $2 billion in this low interest environment, in order to shore up the economy,” Cooper said.
“This can be a combination of direct borrowing and through public private partnerships for projects that will create much-needed jobs and stimulate the domestic economy.
“If the crisis is shorter of flatter than we now anticipate, any excess may be used to pay-down existing high interest debt, reducing future debt servicing pressure.”
According to Cooper, $1 billion of the borrowed funds should be used for temporary employment programs that could enhance the country’s physical and virtual infrastructure.
He said the COVID-19 crisis has exposed the country’s public service systems’ weaknesses and the lack of technology use.
“This turning point must be for us to innovate and to reimagine a more progressive and competitive Bahamas,” said Cooper.
“At least $150 million of the borrowed funds should be used to build a state-of-the-art digital infrastructure.
“E-government must cease to be a buzz word and we should target making 90 percent of government services fully available online, taking advantage of the Central Bank’s digital currency and the private sector providers of mobile wallets.
“Many Bahamians with this expertise can be employed in this area.”
Cooper suggested other targets for the allocation of money, including $250 million invested in food security; $200 million in grants and loans for small and medium-sized enterprises; $50 million in food and rental assistance for the next six months, and expansion of the unemployment assistance plan to $50 million dollars for at least 13 or longer, if the need arises.
He added that government should hedge the low price of oil, which he said is trading at about $20 per barrel, and invest in a two-year supply in order to reduce the cost of energy in the country.
“I am confident that if we can reduce light bills by a minimum of 25 percent, we can dramatically improve competitiveness and increase GDP (gross domestic product) by at least one percent on this alone,” said Cooper.
He said while some might “scoff” at his $2 billion plan, there is a case to be made for the injection of cash into the economy.
“We must inject a large amount of money into the economy in the short-term in order to stop prolonged long-term economic fallout,” he said.
“It is not borrowing our way to prosperity. Rather it is borrowing to stop a catastrophic, calamitous economic situation.”