PM Davis says Regional UNFCCC Meeting Attendees share a ‘determination to make important progress’ on climate change issues
By ERIC ROSE
Bahamas Information Services
#NASSAU, The Bahamas, August 16, 2022 – – During his Official Remarks at the Opening Plenary Session of the Caribbean Regional Heads of Government Meeting in Preparation for the United Nations Climate Change Conference of The Parties 27 (COP 27), on August 16, 2022, Prime Minister of The Bahamas and Minister of Finance the Hon. Philip Davis noted to attendees that they all shared a determination to make important progress together in the coming days.
“As many of you know, the end of August and the beginning of September has become a very poignant time on the Bahamian calendar,” Prime Minister Davis pointed out, at the Meeting, held at Baha Mar Convention Centre. “September 1st will make three years since Hurricane Dorian landed on our shores.”
“The physical, psychological, social, and economic damages are still very much with us,” he added. “Across the world, we’ve seen the intense heatwaves, wildfires, and droughts that are further, terrible evidence of the accelerating impact of climate change.”
Prime Minister Davis said that, with the climate changing faster than predicted, the challenges they all faced were stark; but they were “not insurmountable”.
“One thing is clear: success will require collective action,” he said.
“If we advance our interests merely as individual Small Island Developing States, our voices will be dispersed, unable to be heard above louder, wealthier, carbon-producing interests,” he added.
Prime Minister Davis said: “Friends: There really is strength in numbers; and if we stand together, we are less likely to fall apart. And so this regional meeting is critical. Our shared characteristics go beyond our physical geography.
“We need to find effective, efficient ways to adapt to new realities,” he added. “We have to re-structure our lives and our living environment to mitigate against the disasters which are becoming more frequent and more severe.
“Easy to say – much harder to pay for.”
Prime Minister Davis noted that the Caribbean had been identified as the region with the largest number of indebted countries. He said that while there were multiple reasons for this, in many cases a major contributor to debt is borrowing associated with recovery efforts from the impact of climate change.
“Here in The Bahamas, we undertook an exercise which revealed that more than 50% of our outstanding debt can be linked to the impacts of the hurricanes which descended on us between 2015 and 2019,” Prime Minister Davis said. “Our countries are struggling with debts accumulated by climate disasters.”
He added: “What does this mean for the development of our nations, when our risk profile is becoming so severe that insurers question their willingness to offer risk facilities to offset climate disasters? Put simply, we are in danger of becoming uninsurable.”
Prime Minister Davis said that many, if not all, of the countries represented at the Meeting had already faced challenges in accessing climate-related funds.
By acting in “common cause”, he said, they could move with more authority and with greater impact to address legacy issues which have held them back from making meaningful progress.
“This is not to say that there aren’t differences among us,” he noted. “With some issues, we can agree to disagree. With others, we can use this forum to find and build consensus before we engage with our colleagues around the world.”
Prime Minister Davis said that COP26 in Glasgow promised a renewed commitment to act. He noted that in the prior two weeks, both the United States and Australia had taken “historic” steps forward to address emissions.
“But the conflict in Ukraine, spiraling inflation in energy costs along with other goods and services, and significant disruption to supply chains, have put pressures on the promises to restrain carbon emissions around the world,” Prime Minister Davis said.
“The progress in the United States and Australia is important,” he pointed out. “The world’s wealthiest and most powerful countries generate 80% of global emissions. They can act – when they choose to.”
“Their progress also shows nothing is inevitable, in this great fight of our time,” Prime Minister Davis pointed out. “We cannot get stuck, or allow others to languish in inaction, when forward motion is required.”
Prime Minister noted that there was much room for innovation.
“I don’t just mean technological innovation – I also mean innovation in the way we think about climate challenges and solutions,” he said. “Consider, for example, the Call to Action on Living Lands (CALL), which emerged from the Commonwealth Heads of Government meeting in Rwanda earlier this summer.
“The Call to Action highlights the importance of building natural resilience by stopping and reversing biodiversity loss, and developing nature-based and ecosystem-based approaches to combating climate change.”
Prime Minister Davis noted that, if it was true that almost all of the hard work fighting climate change lies ahead of them all, it was also true that their ingenuity was up to the challenge.
“And so, Friends, I encourage your most active and vigorous participation in these discussions. Let us bring our best ideas to the table,” he said. “Let us work together to construct a joint solution in respect of climate risk insurance and other climate risk facilities.
“And let us take practical steps to improve access to climate finance.”
Prime Minister Davis noted that they were well-aware that, going into COP27, work was underway to advance the implementation of a Santiago Network on Loss and Damage, along with the establishment of a Loss and Damage Facility.
“These are important tools to support our countries,” he said.
“However, we also need to ensure that risk or insurance facilities are also in the toolbox of solutions to help our people,” Prime Minister Davis added. “Access to climate finance should not be unclear or cumbersome. And the application of per capita overseas development assistance eligibility should not be taken as the main consideration for offering climate finance; if so, means that many Caribbean states would be frozen out from the start.”
Prime Minister Davis said that they should all work together to advance the use of a Multi-Dimensional Vulnerability Index to reflect the true needs of Small Island Developing States; and work to persuade donors and partners to ensure that all SIDS are eligible for access to bilateral climate financing.
“Colleagues, we are at an important time, when the New Collective Quantified Goal on Climate Finance is currently being assessed by countries operating within the UNFCCC framework,” he said.
“If we can do the heavy lifting here, our chances of success are greatly improved,” he added. “We are more likely to avoid the mistakes of the past.
“And we will have a greater chance of securing better futures for us all.”
Prime Minister Davis said that it was his “fervent hope” that the meeting becomes an annual event, one where common interests, shared objectives and mutually-accepted protocols, lead to “outcomes which will ensure our very survival”.
“It is no exaggeration to say that our very lives depend on it; and the only way forward is together,” he said.
Photo Caption: Prime Minister of The Bahamas and Minister of Finance the Hon. Philip Davis speaks, on August 16, 2022 at Baha Mar, during his Official Remarks at the Opening Plenary Session of the Caribbean Regional Heads of Government Meeting in Preparation for the United Nations Climate Change Conference of The Parties 27 (COP 27), which will take place in Sharm El Sheikh, Egypt in November.
(BIS Photos/Eric Rose)
Kamala Harris to meet with Caribbean leaders in The Bahamas
#USA, June 5, 2023 – Kamala Harris, United States Vice President will journey to Nassau Bahamas in June for a top level meeting with Caribbean leaders, marking the first time she will visit the region since occupying office in 2021.
According to the White House in a statement, the meeting will bring attention to a range of regional issues. Harris and the Caribbean leaders will continue talks on the shared efforts to address the climate crisis, such as promoting climate resilience and adaptation in the region and increasing energy security through clean energy.
Additionally, the statement informed that Harris’ trip “delivers on the Biden-Harris Administration’s commitment to advance cooperation with the Caribbean in pursuit of shared prosperity and security, and in recognition of the common bonds and interests between our nations.”
The June 8th meeting builds on and strengthens the U.S.-Caribbean Partnership to Address the Climate Crisis 2030, which was launched by the Vice President and Caribbean leaders in Los Angeles at the Summit of the Americas as further mentioned by White House Statement.
PM Davis ‘confident’ that Revenue Outturn will near $2.9 billion
By ERIC ROSE
Bahamas Information Services
#NASSAU, The Bahamas, May 30, 2023 – Prime Minister and Minister of Finance the Hon. Philip Davis said in the House of Assembly, on May 31, 2023, that public revenue receipts were strong over the nine-month period of July 2022 to March 2023, due to legislative reform, effective policy decisions, strengthened economic conditions and more efficient collection efforts.
“Analysis of the trends of the first three quarters of this fiscal year, and the years prior, suggest that the government is potentially set to exceed the $2.85 billion target set forth in the February 2023 Mid-year Supplementary Budget,” he said, during his Communication on Budget 2023.
“I am confident the revenue outturn at the end of the Fiscal Year 22/23 will near $2.9 billion.
Public spending has remained on track, and is well within the budgeted amount,” Prime Minister Davis added. “For this reason I am confident that expenditure at end of the Fiscal Year 2022/23 will almost reach the target of $3.1 billion set in the Supplementary Budget.”
He pointed out that the primary balance will, therefore, record a surplus of $68.4 million at the end of the fiscal year, a $54.8 million increase from the $13.6 million surplus projected in the supplementary budget.
“Likewise, the overall deficit is expected to improve to $520.6 million, down from the $575.4 million outlined in the supplementary budget,” he said.
Speaking of Government financing, Prime Minister Davis said that The Bahamas’ borrowing costs had begun to experience a downward trend in the previous quarter; but the cost of borrowing rose at the end of March 2023.
“At the end of the third quarter, the total average cost of borrowing for current outstanding debt had risen to an interest rate of 5.55 percent,” he pointed out. “This is notably higher than the previous year’s rate of 4.93 percent at the end of March 2022.
“This increase in borrowing costs is primarily attributable to the higher costs associated with external loan facilities.”
He added that, more specifically, the average interest rate for external financing had risen by 1.99 basis points, resulting in a rate of 5.55 percent as of March 2023, compared to the preceding year’s 3.56 percent.
“Throughout the past year, the interest rate policies of the major Central Banks have been restrictive, with a series of interest rate increases,” Prime Minister Davis said. “These adjustments have been primarily motivated by the escalation of inflation, and the resulting upsurge in interest rates has had an impact on the Bahamas’ external borrowing costs.”
He added: “However, the cost of borrowing in the domestic market has been declining over the past quarters.
Looking at it in more detail, we can see that:
- The average interest cost for domestic loans subsided by 27 basis points to 4.62 percent at end of March 2023, from 4.89 percent in the previous year;
- And the average interest cost for domestic bonds subsided by 3 basis points to 4.63 percent at the end of March 2023 from 4.66 percent in the previous year.”
Prime Minister Davis noted that those statistics affirmed the Government’s latest medium-term debt strategy, which aimed to shift its borrowing away from costly external commercial debt.
“Such debt has seen a sharp increase over the past five years, including recent interest rate hikes,” he said. “This strategic move will enable the government to once again rely predominantly on the domestic market to meet its financing requirements.”
Prime Minister Davis pointed out that, when considering the maturity of debt, or the average time it takes to repay the principal amount in the government’s debt portfolio, a longer maturity period led to a reduction in refinancing risk.
“In essence, prioritizing longer maturities is key to managing debt effectively,” he said. “And so another element of the government’s medium-term debt management strategy is the goal of prolonging the average maturity time of its debt.”
Prime Minister Davis said that, in the face of “unprecedented turbulence” in the global financial markets, the Government was able to maintain its average time to maturity.
“At end of March 2023, the average time to maturity has decreased slightly to 6.7 years, down from the previous 6.8 years in March 2022,” he said. “This variance is due solely to the external loan component, as the average time to maturity on internal debt has remained steady at 7.1 years.”
“This highlights the significance of maintaining a prudent approach to debt management, and aligning this administration’s practices with the government’s optimal debt strategy,” Prime Minister Davis added.
“It is imperative that we continue to exercise prudence in this area to ensure financial stability.”
(BIS Photos/Ulric Woodside)
PM states HCA model not working during budget debate
By ROBYN ADDERLEY
Bahamas Information Services
#FREEPORT, Grand Bahama, May 30, 2023 – The model of the Hawkbill Creek Act, the agreement between the Government of The Bahamas and the Grand Bahama Port Authority, is not working, said Prime Minister the Hon. Philip Davis during the opening of the 2023 Budget Debate on Wednesday, May 31 in the House of Assembly.
The island of Grand Bahama, he said, contributes 12 percent of the country’s GDP, however, there was a decline by 9 percent when compared to the previous year. Tourism, he said, increased in 2022 showing a growth in accommodation and food service.
“Unfortunately, the statistics show a prolonged decline in the Grand Bahamian economy. The evidence confirms the view of my government that the Hawksbill Creek economic model, which was meant to attract foreign direct investment, does not work.
“Furthermore, in our view, the government model of the Grand Bahama Port Authority must change, in order to realize the promise, growth and prosperity we all desire.
“Additionally, the Government of The Bahamas has serious concerns regarding the compliance of the GBPA and its related companies with the terms and conditions of the Hawksbill Creek Act, and its subsequent amendments.”
In the past, said the Prime Minister, administrations have attempted to address the issues however they appear to be “systemic and fundamental.” Decisive action will be taken, he continued, and a separate detailed announcement will be made at another time.
Prime Minister Davis mentioned that even though the GDP for several islands has experienced growth, Abaco and Grand Bahama have not done as well. Abaco, he said, saw a decline of 6 percent in 2022 with its contribution to the economy at 2.8 percent ranking the island as the third largest contributor.
“While there was a slight improvement in Abaco’s economy compared to 2019, it has yet to reach the levels seen before Hurricane Dorian. The decline in the economic activity is directly related to the slowdown in the real estate and construction sectors.”
He continued, “Declines in the real estate sector are directly as a result of a shift to higher intermediate consumption in 2022 from that of the previous two years. In terms of declines in construction, it should be noted that in 2020 and 2021, Abaco experienced significant recovery efforts in the form of debris removal, site preparation and building of damaged structures.
Such efforts bolstered the value added to the island’s GDP during those years. As those efforts wrap up, the industry saw a gradual decline as construction tempered to normal levels in 2022, resulting in a lower GDP.
Additionally, the Prime Minister said the Grand Bahama International Airport will be repaired, and a new healthcare facility will be built. Provisions have also been made for the continuation of an employment program for $4.7 million, along with the construction of a 50-meter swimming pool facility.
The House of Assembly has adjourned until Wednesday, June 7, when the debate will continue.
(BIS Photo/Ulric Woodside)
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