The International Monetary Fund (IMF) states in its most recent mission report on its visit to The Bahamas that it is willing to make $200 million available to this country through its Rapid Financing Instrument “at low cost and without policy conditionality”, to carry on rebuilding the economy after Hurricane Dorian. But yesterday Deputy Prime Minister Peter Turnquest told Guardian Business that the government is not considering the loan offer through the IMF.
“Not at this time,” is all Turnquest would say on the issue.
The IMF’s report, penned by mission team leader Fabian Bornhorst and released yesterday, states that the organization stands ready to support The Bahamas through the emergency financing facility.
“Our heartfelt sympathies are with the victims of Hurricane Dorian and with those who face the arduous task of rebuilding their livelihoods,” Bornhorst said.
“We are confident that the people of The Bahamas will rebuild a stronger and more resilient economy. The IMF stands ready to support The Bahamas, including through its emergency financing facilities. Through the IMF’s Rapid Financing Instrument up to US$200 million could be available to The Bahamas at low cost and without policy conditionality.”
The report continues: “Higher spending to support those affected by the disaster and to rebuild the infrastructure puts fiscal consolidation on hold. A timely return to the fiscal targets remains key to ensure debt sustainability.”
Bornhorst and his team visited The Bahamas from January 27–31 to look at how the country has progressed economically since Hurricane Dorian destroyed parts of Abaco and Grand Bahama; and to prepare for the IMF’s 2020 Article IV consultation that is planned for next month.
While the government is still seeking assistance with redevelopment since Dorian, Turnquest would not explain why government is not considering the IMF loan.
However, one economic insider, who spoke on condition of anonymity, explained that Caribbean governments are often reluctant to accept such financing vehicles from the IMF because the public could misconstrue it as a restructuring exercise by the organization.
In the government’s six-month snapshot on budgetary performance, it explains that it has borrowed more than half a billion dollars in Bahamian dollars and foreign currency.
“Borrowings were in the form of bonds, short-term bank advances, treasury bills and foreign currency loans from international development agencies,” the snapshot reveals.
The government borrowed $89 million in foreign currency.
According to the snapshot, the country’s national debt stands at $8.2 billion.