Congratulations to the newly elected Prime Minister of the Bahamas, Philip “Brave” Davis, who led his Progressive Liberal Party (PLP) to a convincing 32-7 victory in last Thursday’s election.
There is no doubt that the people of the Bahamas spoke loudly, about who and which team has the better plans and policies to lead them in this calamitous environment, brought on by the covid pandemic.
The people of Bahamas must also be congratulated for braving the consequences of the covid pandemic, to exercise their voting rights. From the margin of victory, it is evident that they lost confidence in Dr. Hubert Minnis and his Free National Movement party (FNM). It was an acute about-turn by Bahamians, who had given Minnis a 35-4 margin mandate in 2017.
From all indications, the election was fair and free of fraud or suppression, as no adverse assessment has been reported by neither CARICOM nor the OAS observer teams.
In accepting the victory, Davis was confident, conciliatory, and inclusive in his speech, promising that his “government will serve all Bahamians.”
The 70-year-old lawyer, who sold himself as a contrasting leader to Minnis, made other promises to the people of Bahamas as well. He told his voters that his government is “going to work hard to make sure that every year that passes” they will “feel prouder and prouder of the votes.” And for all Bahamians, he committed to “work so that opportunities reach out to every home.”
But the new government will have no honeymoon to enjoy. The country is still recovering from the devastation by Hurricane Dorian in 2019 with an estimated $3.4 billion in damages. The country’s national debt was US$10.356 billion at the end of June which is six times larger than its annual revenue. Its fiscal deficit is projected to reach $951 million for 2021-2022, and unemployment is slated to reach 18 percent by the end of 2021, based on figures from Trading Economics global macro models.
On September 18th the US-based rating agency, Moody’s downgraded the country’s sovereign creditworthiness when it changed its long-term issuer and senior unsecured ratings to ‘Ba3’ from ‘Ba2.’ The agency warned that the devastation caused by the coronavirus (COVID-19) pandemic and Hurricane Dorian in 2020 will have “lasting consequences.” It added that “The pace of the economic recovery, and particularly tourism activity, will directly affect the pace of fiscal consolidation and how quickly debt begins to decline.”
Moody’s stated that: “The reliance on indirect taxation — VAT and excise taxes — makes government tax collection more sensitive to the speed of the economic recovery.”
Bahamas depends heavily on tourism, accounting for about 80% of gross domestic product (GDP), with financial services accounting for 15% according to Moody’s.
As part of his ‘Blueprint for Change’ the new prime minister touted “a bold vision for a more dynamic, more inclusive, more resilient economy.” He promised to reduce the VAT to ten percent and raise revenue by asking the wealthiest to pay more rather than taxing others.
There is no doubt that Mr. Davis and his team, along with the people of Bahamas have their work cut out for them. We wish the new government all the success, and trust that with the help of its people, prosperity will be achieved in the interest of all Bahamians.