One year after the current administration assumed office, the economy remains challenged.
According to the preliminary results of the Labor Force Survey for May 2018 recently released by the Department of Statistics, there has been deterioration in macroeconomic indicators since this administration was elected.
While this is not surprising for a Government that lacks an economic growth plan, it is detrimental to Bahamians who continue to be disenfranchised and face significant hardship.
There is no need for political rhetoric in these serious times as the numbers tell the story.
In May 2017, the national unemployment rate was 9.9%. In May 2018, the unemployment rate was 10.0%.
In May 2017, the unemployment rate in Grand Bahama was 12.4%. In May 2018, the rate remains high at 12.4%.
In May 2017, the unemployment rate in Abaco was 7.8%. One year later, that rate has increased significantly to 10.7%.
In spite of the employment of thousands by Baha Mar over the past year, unemployment in New Providence remains effectively the same; falling merely from 10.4% to 10.0% in May 2018.
Youth unemployment has risen from 20.1% in May 2017 to a whopping 24.1% in May 2018.
The number of discouraged workers has risen from 1,925 in May 2017 to 2,175 in May 2018.
The unemployed labor force has increased to 23,190 in May 2018 from 21,880 in May 2017.
Government recurrent expenditure has increased from a projected $2.1B for 2017/18 to an estimated $2.6B for 2018/19.
Government capital expenditure has risen from a projected $233M in 2017/18 to approximately $300M for 2018/19.
These statistics show that in the absence of policy initiatives aimed at incentivizing the private sector, the economy has remained stagnant. The increase in the unemployment rate between May 2017 and November 2017 was attributed in part to the termination of 2,555 individuals from the public sector by the Government in a struggling economy. The May 2018 report suggests that there has been no correction to the labor market as the private sector has not created enough jobs to compensate for these losses and new entrants into the labor market.
Bahamians are waking up to the reality that electing a Government without a plan in general and an economic growth plan in particular has serious consequences. It is simply impossible to tax and borrow our way out of our fiscal predicament. Further, austerity without an accompanying plan to grow the economy could imperil the economic fortunes of a nation.
The recent labor force survey in May 2018 follows a significant employment drive by Baha Mar and what has been touted as a spectacular and record breaking first quarter for the tourism industry in The Bahamas. We can only imagine what the labor force survey would have shown had Baha Mar not been the main driver of economic activity since May 2017.
The IMF has been quoted as stating that The Bahamas needs 5.5% economic growth to absorb all new entrants into the Bahamian workforce and to cut existing jobless rates in half. Deliberate actions, steps and initiatives have to be undertaken to achieve the desired and target growth levels. It is reckless and irresponsible to leave this important policy making role of the Government to chance, luck or coincidence. The Bahamas needs a plan that will ensure sustainable economic growth and insulate the nation from external shocks. We join all Bahamians to implore the Government to produce and implement such a viable economic growth plan.
It should be noted that the dismal record of the Government on the economy was achieved prior to the implementation of a 60% increase in the Value Added Tax rate to 12%. The labor force survey took place between April and May of 2018. The VAT increase and other revenue measures which came into effect on July 1, 2018 are expected to impact investor and consumer confidence while threatening the job security of Bahamians. This targeted assault on a shrinking middle class and anticipated reduction in the disposable income of consumers could further dampen demand to the detriment of an already fragile economy.
Indeed, the numbers don't lie and Bahamians are saying what a difference a year makes. The Democratic National Alliance stands ready to assist the Government in developing an economic plan that will result in sustainable economic growth.
Arinthia S. Komolafe, Deputy Leader
Democratic National Alliance