CFAL report: Infrastructure improvements must precede growth

While the government mulls ways to increase its revenue in the midst of the COVID-19 pandemic, it must first look to improve critical infrastructure in order to attract the factors that will lead to improved earnings, CFAL stated in its Local Economic Review for the third quarter of 2020, adding that improving the country’s current economic condition without improving infrastructure would be an exercise in futility.

CFAL’s review explained that improvements in electricity, water, telecommunications and land, maritime and air transport must be fixed before the country can experience diversification and growth.

“Any attempt to navigate the country out of the current crisis without addressing the inadequate and deteriorating infrastructure will be futile,” the document states.

“Research has shown that foreign direct investments are attracted to economies with favorable business climates, or better yet, economies that are ranked favorably on the World Bank’s Ease of Doing Business Index. Such an environment will help domestic businesses to thrive as well.”

“In its current state, The Bahamas has virtually hit ground zero,” CFAL states in the report.

“The country’s number one industry, tourism, which generated over $3.5 billion in foreign currency receipts in 2019 and accounted for about 30 percent of 2018 GDP, has almost come to a complete halt.

“The second major industry, international financial services, which is also a source of foreign currency earnings, albeit substantially less than that generated by tourism, contracted in 2019 by 26.3 percent to $183.8 million for the entire year. The reality is that during this time of crisis, big and bold changes in economic policies and management are essential for The Bahamas’ survival and economic growth in the aftermath of COVID-19.”

The CFAL report notes that given that the country will continue to rely chiefly on tourism for foreign exchange earnings, improvements in the quality of the country’s product and infrastructure are essential to “boosting our economy and increasing productivity in the country”.

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source https://thenassauguardian.com/cfal-report-infrastructure-improvements-must-precede-growth/