**Prime Minister Perry Christie**
When presenting the Budget Communication to Parliament last week, the Rt. Hon. Perry Christie took the opportunity to report on his Administration’s economic programme, the success of which he says has been verified by international review.
In addition to positive reports from the International Monetary Fund at the conclusion of a recent review, Moody’s Investor Services and Standard and Poor’s have continued to give investment grade ratings to The Bahamas. In the case of Moody’s, the rating for The Bahamas is the highest among the independent countries in the Hemisphere excluding the North American giants, the United States and Canada. In the Standard and Poor’s rating, The Bahamas is equaled by only one other country in the Region, excluding the two North American giants.
The Prime Minister says the benefits of the Government’s policies are apparent in the availability of employment opportunities, the expansion of essential services, and the improvement in conditions throughout the economy. Arising from the projected growth in the economy and improvements in revenue administration, there is no increase in taxation in the 2006/2007 Budget. *”We have ensured that our economic growth strategy generated the additional revenues which we needed,”* said Mr. Christie.
**Positive Economic Indicators**
Tabled as part of the Communication were economic indicators showing projections by the International Monetary Fund for a 5.8% GDP growth for calendar year 2006, compared with still strong 4.7% growth for fiscal year 2005/2006. For fiscal years 2006/07 and 2007/08, there is anticipated growth of 6.5% and 6.7%, respectively. Prime Minister Christie said, *”..it is clear that the IMF accepts the acceleration of the economy right through the next two fiscal years at least.”*
The strong economy has been attributed to the Government’s success in attracting productive investment in tourism projects in virtually every major Island of The Bahamas and, according to the Prime Minister who also serves as Minister of Finance, to the Government’s careful stewardship of this economic expansion, *”the likes of which are without precedent.”*
Describing the scale of inward investment as being without parallel anywhere in the world, Mr. Christie pointed out that the projected $8 billion over the next few years is in excess of the GDP of The Bahamas, estimated at $5.9 billion.
Other points of note in the Budget Communication:
• Unemployment is declining and will decline dramatically further when the major tourism projects reach full steam.
• A proposed manpower survey will assess the employment needs of presently unqualified young people, and then put in motion vigorous programmes to equip them with the education, skills and training they need to take up the employment opportunities coming on stream.
• External Reserves of the Central Bank have rebounded to almost $600 million today. This has permitted the Central Bank to relax certain exchange controls, further evidence of the growing strength of the economy.
• The Government is committed to improving the business environment recognising that a better investment climate pays off in good and sustainable business and employment opportunities for Bahamians. Already, a great deal is being accomplished in this regard by streamlining Government administration, and through the development of e-government.
• Government is committed to the sensible diversification of the economy.
• Government recognises the crucial importance of encouraging investment by Bahamian entrepreneurs not only as a significant and increasing growth factor, but also as a means of Bahamians exercising control over their own economic destiny. The Domestic Investments Board, the Bahamas Development Bank, the Bahamas Agricultural and Industrial Corporation, and the Venture Capital Fund will fully support the development and enhancement of Bahamian entrepreneurs.
Noting that the hallmark of the Government has been consultation, the Prime Minister said this will continue to be so in the areas of trade agreements and any change to the revenue system. On the latter, he emphasised that there will not be any major changes in the revenue system of The Bahamas without the fullest prior consultation. *”My Government has not made, nor will it make, promises which would undermine the economy and put at risk the future of every Bahamian.”*
The strategies as described are the means by which the Government seeks to build a strong economy – viewed as the lynchpin of a just and equitable social order.
*”The vision of my Government is that a strong economy, based on an equitable spread of employment and entrepreneurial opportunities, allied with a sound public financial system will secure the attainment and preservation of a just and equitable social order in our country.”*
Major priorities for recurrent expenditures will focus on the services which provide security for persons, property and our national frontiers; and on measures which provide employment opportunities and which seek to integrate every Bahamian more fully into society.
**Public Sector Reform**
Recognising that the scale of the projected investments and the required supporting infrastructure call for major changes in the culture and performance of the public sector, it was announced that the Office of the Prime Minister is providing the strategic planning and coordination function on this issue. The Prime Minister expressed confidence that the exceptional demands on the management of the public sector will be met.
Debate on the 2006/2007 Budget commences in the House of Assembly this week.