NASSAU, Bahamas — A prominent Bahamian businessman has urged the government not to implement an overly-huge economic stimulus package or open the economy too soon in the battle against COVID-19, The Tribune reported on March 27.
Sir Franklyn Wilson told Tribune Business that The Bahamas simply cannot afford to copy the US by throwing hundreds of millions, or even billions, of dollars at propping up the economy because it would ultimately create devaluation pressures by undermining the one:one fixed exchange rate peg with the Bahamian dollar.
The Arawak Homes chairman also warned that opening up certain sectors of the Bahamian economy, amid the escalating COVID-19 threat, would be futile unless the pandemic was extinguished and both Atlantis and Baha Mar were able to re-open with “high occupancy levels”.
Speaking as the number of confirmed COVID-19 cases in The Bahamas jumped to nine yesterday, Sir Franklyn argued that opening back up too soon would be equivalent to “shooting ourselves in the foot” — especially since this nation “does not truly have an economy” without its number one industry, tourism.
He added that “the long-term future of the country is pretty much in the hands” of K Peter Turnquest, deputy prime minister and minister of finance, and said: “If we don’t take care of the Public Treasury at this point, the long-run consequences could be very, very serious.”
Warning that Mr Turnquest “has to be careful about how aggressive he seeks to be,” Sir Franklyn said The Bahamas’ economic structure meant the Government “cannot” contemplate a financial bail-out — scaled in proportion to its economy — along the lines of that being initiated by the US.
“There’s a complication,” he argued. “Bahamians are watching TV. They are seeing the US government doing a lot of things for its citizens. A narrative that’s important for this country to understand is our circumstances of reality is very different from the US in very fundamental ways. Our reality is that the more money the Government pumps out, the more pressure it places on the foreign currency reserves. The Government pays money out in Bahamian dollars. Because we produce so little, we take these dollars to the food store, the drug stores and the gas station. See full Tribune story at http://www.tribune242.com/news/2020/mar/27/bahamas-left-facing-god-awful-situation/
