Caribbean & Central America - January 2017 (ISSN 1741-4458)

The Bahamas is due to hold a general election no later than May this year. On the face of it, the Progressive Liberal Party (PLP) government led by Prime Minister Perry Christie has a difficult economic record to defend, but the opposition Free National Movement (FNM) is in considerable disarray, with a split between the parliamentary party and the party in the country over the leadership.

The PLP won the 2012 election by a sizeable 29-9 seat majority, ousting an FNM government led by then-prime minister Hubert Ingraham. Ingraham had led the FNM to a 21-19 victory in the 2007 election and had previously served as prime minister from 1992-2002. However, he went into the 2012 election with unemployment at 15% and following a 30% rise in the number of murders in 2011. On the other hand, GDP growth in 2012 was 3.1%.

The economic cycle has not treated the PLP well. The country experienced zero growth in 2013 and suffered two years of contraction in 2014 (-0.5%) and 2015 (-1.7%). Many of the economic problems have been caused by the travails of the Baha Mar megaresort, with a close-to-direct hit from category four Hurricane Matthew in September 2016 completing the misery.

This was all reflected in a downgrading of the country’s sovereign credit rating to ‘junk’ status by Standard & Poor’s in December. In what was the fourth downgrade from a major ratings agency since the current Christie administration took office, S&P dropped the credit rating to “BB+/B” from “BBB-/A-3”. It also threatened to lower the rating further over the next two years if public finances continue to deteriorate. However, the country’s outlook was raised from negative to stable, partly no doubt because of the planned phased opening of the Baha Mar resort following its emergence from bankruptcy and the finding of a purchaser.

Just before Christmas the prime minister announced that the resort had been sold to CTF BM Holdings, a subsidiary of Hong Kong conglomerate Chow Tai Fook Enterprises Ltd (CTFE). One of the positives about the new agreement was the settling of nearly 2,000 claims by laid-off workers and hundreds of claims by unpaid suppliers. Making the announcement, Christie said that he expected 1,500 people to be hired by the resort in the New Year and that a phased opening would begin in April 2017.

There is continuing controversy, however, with the news that the government has exempted the resort’s lead construction company, China Construction America (CCA) Bahamas Ltd, from paying value added tax (VAT). All subcontractors and suppliers of CCA have been told by the government that they have the benefit of the full exemption and need not include VAT in any invoices related to work on Baha Mar.

The FNM’s response has been to describe the deal with CTFE as being “of questionable value for the Bahamian people”, noting that the government has also waived stamp tax on the deal. The original developer of the resort, Sarkis Izmirlian, added his own criticism. He was quoted in the local media as saying: “What is the country getting from this deal? Don’t say jobs, because we need more than that after giving away 1,000 acres of Crown land, beachfront property, to a Communist state which now has complete control over our tourism product. It’s clear as day that the Chinese got everything they wanted to facilitate an opening right before the general election.”

The government says that the VAT exemption was a justifiable trade-off for the US$100m that had been allocated to settle some 2,000 claims by unpaid subcontractors and former Baha Mar employees. The government adds that 1,500 people are due to be hired in early 2017 to work on the project, and a phased opening will begin in April.

The FNM’s chances of capitalising on the PLP’s mixed economic record appear to have been significantly reduced by a vitriolic contest for the leadership of the party. The official party leader remains Dr Hubert Minnis, who took over from Ingraham. There was a challenge to his position in the summer which was meant to have been resolved by bringing forward the party’s convention from November to July. The three-day convention duly opened on 27 July in the full expectation that a vote would be taken on the leadership. But then, on the third day of the convention, the leadership challenger, Long Island MP Loretta Butler-Turner, and her proposed deputy, Dr Duane Sands, withdrew their challenge, and this was followed swiftly by a conciliatory statement by Minnis. He said he was offering “the olive branch once again to our sister and brother”, and he was reported to have offered Butler-Turner the post of leader of opposition business in the House of Assembly, a prominent role in the FNM’s general election campaign, and a senior position in the cabinet should the FNM win the election.

But that was far from the end of the matter. Four days later, on 2 August, Butler-Turner suddenly declared that her support was “not for sale”. She declared: “There are a lot of offers on the table and I want to state emphatically…that Loretta Butler stands on principle and on conviction. I am not a pawn that can be bought and sold.” The next day she repeated the statement, saying: “I am not for sale and if in fact the leadership of this party feels that they are so secure in their win, then why is it so important to offer me gifts?”

This all seemed very categoric, and not at all helpful to the FNM’s cause. But then came yet another dramatic U-turn. On 7 August, Butler-Turner issued a press statement saying: “Those of us who offer for public service must acknowledge error, learn from our mistakes and then set out to become better public servants. In this spirit, I take account of public criticism and hope that any errors of mine will be forgiven. My commitment to the common good of our country and to the greater good of the Bahamian people and the FNM remains unshakeable.” So all seemed settled, except that Butler-Turner had made no mention of her attitude towards, or the current status of, the other offers made by Minnis immediately after she had withdrawn her leadership challenge. It was a sign, and an accurate one, that not all was well.

The next major development came in December, when seven out of the FNM’s nine sitting members of parliament voted to accept Butler-Turner as their leader in parliament despite the fact that Dr Minnis continued to hold on as leader of the party.

Minnis responded by saying: “As the duly elected leader of the Free National Movement, I wish to assure our faithful, dedicated, hardworking and committed members that I am not moved by these tactics. I remain steadfast in my duty to you, our supporters and the Bahamian people, to return good governance to this country and to rid the Bahamas of this inept, arrogant PLP administration. That is and will always be our primary focus…. To our supporters in these seven constituencies, many of whom have contacted the party over the last few days expressing a sense of deep betrayal and disappointment in these representatives; please be assured that your party has not abandoned you. Indeed, we are energised and committed more than ever to ensure that you and our beloved Bahamians, receive what you truly deserve: the highest quality representation, with impeccable integrity.”

The result of all this is total confusion, not least in the minds of the voters. Many well-placed analysts believe the FNM was on target to win the election but that such a win must now be in doubt.