Sunshine in the storm

Throughout a week so far of the Davis administration adding yet another layer of confusion to the Bahamas Power & Light fuel charge debacle and a growing storm of bad international press regarding the collapse of the FTX crypto currency empire, there was some sunshine for The Bahamas.

And while it will make the stench of neither of those issues go away for the government, there are still some positive developments to note.

We heard coming out of the the United Nations Climate Change Conference (COP27) in Sharm El-Sheikh, Egypt, an agreement to establish a fund to pay for loss and damage suffered by developing countries most impacted by climate change – something The Bahamas has long-agitated for and one of the signature thrusts of the Davis administration.

Under the new agreement, the committee will make recommendations for consideration by COP28 set for November–December 2023.

The committee will have 24 members, including three members from Latin America and the Caribbean.

Though Barbados Prime Minister Mia Motley has come off as the Caribbean’s superstar for many international gatherings over the past two years, we believe the efforts of Prime Minister Philip Davis to insist that larger countries pay for their actions that have impacted countries like ours, have made waves and placed The Bahamas in position for a place on the committee.

Good news also came in the form of S&P Global Ratings’ affirmation of our B+ sovereign credit rating and a stable outlook for the Bahamian economy.

If we are being honest, by normal standards, a stable outlook would not be heralded as good news, but since Hurricane Dorian and the pandemic our sovereign credit ratings have fallen precipitously, and stability after such unstable times should be news welcomed by all.

“The stable outlook reflects our view that economic growth will support government revenues and reduce pressure on government expenditures, leading to smaller fiscal deficits over the next 12 months,” S&P said.

“The stable outlook also assumes no material adverse impact on The Bahamas, including to the local banking sector, from the recent bankruptcy of FTX, a crypto-currency exchange with a presence in the country. We expect continued, but decelerating, growth in the national debt. We expect the country’s relatively large financing needs will be met by the domestic market and multilateral lenders.”

S&P did predict that economic growth would slow over the next year or two, but it gave the current administration solid marks for its handling of the nation’s finances, though our external debt service burden in the medium term remains challenging.

In terms of FTX, we have had continued developments in that saga, which can most succinctly be described as a mess.

It appears though that temperatures have cooled between the new management of FTX US and the joint provisional liquidators the Securities Commission of The Bahamas had appointed through our Supreme Court.

FTX US attorney James Bromley revealed during a bankruptcy court hearing yesterday that an agreement was reached with the Bahamian-appointed joint provisional liquidators to transfer their Chapter 15 bankruptcy petition in New York to Delaware and he hopes to engage in constructive dialogue with the liquidators in the future.

He revealed during the same hearing yesterday that an FTX entity in the US bought almost $300 million in real estate in The Bahamas, mainly homes and vacation homes used by senior executives.

For our part, we have been able to identify more than $130 million in real estate transactions in The Bahamas on behalf of former FTX CEO Sam Bankman-Fried and other company associates.

That’s only what The Nassau Guardian has been able to track so far.

When one considers how much money FTX spent in The Bahamas in under two years, it is enough to make a king blush.

Though there were bright spots for the Davis administration so far this week, we believe there is a reckoning yet to come on Bahamas Power & Light, as the public demands answers and the current administration must show that it is an accountable and trustworthy steward of our affairs that is willing to be transparent even it if that does not paint it in the best light.

We also believe that as the FTX story continues to unfold there will be rocky times ahead as the world examines what happens, and those who seek to cover their own failings seek to paint us in the worst possible light.

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