NASSAU — A Hurricane Matthew-type event could wipe out the IMF’s proposed national disaster fund and forever blow The Bahamas off its Fiscal Responsibility targets, a top insurer warned yesterday, Business Editor Neil Hartnell reported in The Tribune on May 18.
Emmanuel Komolafe, the Bahamas Insurance Association’s (BIA) chairman and a risk compliance specialist, told Tribune Business that the Government will struggle to hit – and maintain – the goals set out in the Fiscal Responsibility Bill unless it implements a “multi-faceted” national disaster risk management programme.
Arguing that the two initiatives needed to go “hand in hand”, Mr Komolafe warned that governments will frequently find themselves having to call on the Bill’s section 13 given The Bahamas’ increasing exposure to more frequent and powerful hurricanes.
This section, titled “Exceptional Circumstances”, allows the Government to “temporarily depart” from the Bill’s deficit and debt targets “when sudden and unexpected events arising from external shocks, resulting in a significant economic downturn, national security considerations, or natural disasters so require”.
Qualifying events would include the likes of the 2008-2009 global recession, plus major hurricanes, and the Bill requires the Government to outline both the measures and timeline needed to get “back on track” with targets that require it to maintain a 0.5 per cent deficit from 2021 onwards and, over the long-term, slash the debt-to-GDP ratio to 50 per cent.
But, with The Bahamas impacted by major hurricanes in each of the past three years, Mr Komolafe said the extent of the subsequent “fiscal correction” and time needed – as demanded by the Bill – would have increased each year had the legislation already been in effect.
