In an “Address to the Nation” on Sunday, May 19, newly-appointed Minister of State within the Ministry of Finance, Sen. The Hon. James Smith, announced that his responsibility will be to advise and assist the Prime Minister in the management of the economy and the fiscal affairs of the Nation.
*”In my capacity as Minister of State I will receive information and analyses from the technicians in the Ministry of Finance and other agencies of Government,”* said Minister Smith. He continued, *”I will also consult widely with all interests in our economy and with international financial organisations in order to ensure that my advice is soundly factual, and based on clear and balanced analyses and judgements.”*
Minister Smith presented a brief assessment of the present economic and fiscal situation of The Bahamas, outlining the challenges facing The Bahamas in the years immediately ahead.
The “horrifying” terrorism events of 11 September were said to have cast a long shadow over the global economy and particularly over small economies such as that of The Bahamas, which rely on tourism as their main industry. Other damaging setbacks during 2001 were listed as the impact on the financial services sector of the uncertainties generated by international initiatives; the impact of the Straw Market Fire; and the impact of Hurricane Michelle.
*”The challenge facing the Government is to reverse this deterioration and to restore growth in employment and incomes,”* said Minister Smith.
Based on economic considerations alone, the outlook for global and US economies is still somewhat uncertain; hence, The Bahamas must be prudent and realistic in viewing the prospects for the next 2 or 3 years. Noting that it is only by way of a strong economy that the necessary level of employment can be sustained and increased, Minister Smith pointed out that the priority task must be to get the economy moving forward as rapidly as possible. This can be done by promoting and competing more effectively in the market place for tourism and financial services, by stimulating other forms of economic activity, and by maintaining an attractive investment climate.
With the appointment of a Minister of Financial Services and Investments on Thursday, May 9, the Progressive Liberal Party (PLP) addressed one of the key issues it identified for the country’s financial services sector in its election campaign. In its Covenant with the People, “Our Plan”, the PLP had said it would appoint a person of Cabinet rank to head the promotion of the Financial Services Industry and significantly increase the budget for financial services promotions. It also pledged to secure the financial services sector; expand economic opportunities for Bahamians through diversification; to welcome foreign investors, replacing red tape with a red carpet to stimulate investment; and to promote real estate development.
The Government is expected to present the 2002/03 Budget Communication to Parliament on Thursday, 30 May, 2002. That Communication will review fiscal performance in 2001/02 and present the fiscal programme for 2002/03.
Economic growth in the immediate period ahead is likely to be small, but the Government fully intends to see that the fiscal deficit is reduced in the coming years. *”Provided that we as a nation are realistic and prudent,”* said Minister Smith, *”we will succeed in growing the economy in the years ahead. In that way we will have a strong and stable economy which will generate the resources necessary not only to eliminate the fiscal deficit, but more importantly, the resources required to implement all of the programmes and projects in the Government’s “Plan For A Stronger Bahamas and A Brighter Future.”*