Wednesday, October 26, 2011

The Economist magazine's Intelligence Unit predicts that the governing Free National Movement (FNM) party in The Bahamas will win the 2012 general election

Magazine predicts FNM will win in 2012

Tribune Staff Reporter

Nassau, The Bahamas

THE analysis arm of a renowned financial publication has predicted the FNM will win the 2012 election.

The latest update by The Economist magazine's Intelligence Unit said that while the global economic outlook remains pessimistic, 1.8 per cent growth is expected in the Bahamas in 2011 and 2.3 per cent in 2012 - which should put the FNM in a favourable position for the next general election.

The report said: "With economic conditions improving and the opposition discredited by its own scandals, The Economist Intelligence Unit expects the FNM to retain a majority in the election."

The Intelligence Unit, a sister organisation to The Economist, provides forecasting and advisory services that help "business leaders prepare for opportunity, empowering them to act with confidence when making strategic decisions."

According to the report, the political scene in the Bahamas will be dominated by campaigning for the general election over the next six months.

It said: "The Free National Movement (FNM) led by the prime minister, Hubert Ingraham, has a small but workable majority in parliament and the election will indicate to what extent the FNM's support base has been eroded by the sharp economic contraction in 2008-09 and the government's privatisation programme, which is unpopular among much of the population.

"We forecast growth to pick up in 2012-13, although the more pessimistic outlook for the global economy and particularly the US, which will impact negatively on tourism, will hamper more rapid growth.

"We expect activity to expand by 1.8 per cent in 2011 and 2.3 per cent in 2012. Growth will pick up further thereafter, in line with more benign global conditions.

"Stronger growth will boost tax receipts, but spending will increase in the run-up to next year's election, causing the fiscal deficit to widen to 3.5 per cent of GDP in fiscal year 2011/12.

"The current-account deficit will start to narrow in 2012, as an easing of commodity prices offsets a rise in demand for imports."

The report also spoke of the government's efforts to crack down on crime, noting that on October 3, Mr Ingraham announced the establishment of two new courts to deal with crimes relating to drugs and illegal firearm possession, and a 30-day gun amnesty programme.

It said: "The ability of magistrates to hand down tougher sentences has also been strengthened, with the possibility of sentencing offenders -- including those on drugs and weapons charges -- to up to seven years in prison (raised from five years previously).

"Mr Ingraham also announced that amendments to the Firearms Act and the Dangerous Drugs Act are in the planning stage and that new legislation will strengthen law enforcement powers to address the sale of stolen goods and the proceeds of crime via third parties."

The Intelligence Unit described the new measures as "long overdue".

The unit said: "Considering the country's heavy dependence on tourism, there is widespread concern over the impact that such a deterioration in the security situation will have on the struggling economic recovery."

When informed of the report, FNM chairman Carl Bethel said: "While I have not seen it, let me say that we welcome any confidence from The Economist or other well respected institution, and are gratified that after examining our record the Intelligence Unit came to the same conclusion that we have: that the Bahamian people respect the good governance of the FNM and will reward it in the next general election."

October 25, 2011