By Professor Gilbert Morris
I have condemned the ratings agencies as corrupt and unfair:
I won’t change tune now!
The rating agencies aided in the near destruction of the global financial system in 2008; and shew themselves interested in money rather than clear crisp accurate analysis of the credit statuses for which they claimed expertise.
I have argued that we should rate ourselves according to the same mathematical and statistical benchmarks, determining for ourselves our financial and economic health and our prospects.
Alas, in the Caribbean and Africa we have no credibility on this front:
When Moody’s or the S&P gives us a favourable rating, we treat it like its front-room flowers.
When they call us frowsy, we say we know ourselves better with no evidence.
The fact is our situation is frowsy at the moment and has been so for sometime...that is because:
1. Our governments mistake government’s finances for the economy, and speak of the health of the fiscal state without due regard to the economic realities; particularly the ‘misery index’.
2. We have failed to innovate away from our one-legged plantation economic model, which requires hardly even a pulse to fashion or manage and is susceptible to even mild exogenous shocks, toward 21st century decentralised systems.
3. We seem clueless about the economics of the PEG, and are prioritising constantly away from the PEG and so away from the more efficient means of feeding the PEG - so the National Reserves - which is the ONLY means to broaden the capacity for economic growth. I emphasise: IT IS THE ONLY MEANS TO BROADEN THE CAPACITY FOR ECONOMIC GROWTH!
4. Our government’s focus has been constantly lusting after an even larger share of GDP through further regressive taxation; despite failing to collect taxes currently on the books!
5. We have failed to innovate toward a system in which investing in and through Bahamians becomes a driver of economic expansion.
6. Our government systems are sclerotic and nations that arose from nothing 20-years AFTER our independence, surpassed us 20 years ago from nothing to world leaders; as we make the same excuses we made 40 years ago.
I am on reactors on January 20th 2020, here in in other spaces Zoom Conference and the like, in urging government to borrow large...because the crisis would extend beyond 2020.
We did not follow that proscription!
At the moment, the Bahamas are at a precipice...and whilst Dorian and Covid 19 have driven economic prospects to some degree, our current situation arises from our own failures to have been proper stewards of the largess of these islands.