Did the PLP build institutions and people in The Bahamas?

Rick Lowe

This post... on June 18, 2010 has encouraged some good discussion.

One of our frequent visitors noted that the PLP have built institutions and people.

Pushed a little further he responded:

"As far as institutions and people goes, I'll show you what I mean."

-The NIB
-The Bahamas Mortgage Corporation
-The College of the Bahamas
-The Archives Department
-The Bahamas Development Bank
-The Bahamas Tourism College
-The Industrial Training College (BTVI)
-The RBDF
-Bahamasair
-The Bank of the Bahamas
-ZNS etc."

He also advised that the PLP created many millionaires and a middle class that now own businesses etc.

I certainly take no issue with the fact that when the PLP were in power the middle class expanded at a substantial pace, other than the drug trade during the 1970's and 1980's.

There was also significant expansion of the middle class during the 1990's when the country growth rate was exceptional.

With regard to the "institutions" created let's quickly go through them one at a time.

The NIB - While it served the needs of many initially, it is becoming an albatross around the necks of taxpayers.
The Bahamas Mortgage Corporation - Served as a cash cash cow for many unpaid loans I understand. Maybe our reader can confirm the uncollected loans?
The College of the Bahamas - Lots of potential here.
The Archives Department - No complaints from me here.
The Bahamas Development Bank - Like the Bahamas Mortgage Corporation no?
The Bahamas Tourism College - Not sure the effects this has had.
The Industrial Training College (BTVI) - A failure.
The RBDF - Pluses and minuses here.
Bahamasair - A failure.
The Bank of the Bahamas - So far so good.
ZNS - A failure.

If all these "institutions" had been roaring successes and had returned the borrowed funds to establish them and they were profitable and self sustaining, you'd get little argument from me.

The problem is most of them are adding to the country's debt and deficits every year.

The debt levels and out of control government spending that brought about the Budget on May 26, 2010, is now bringing the country to its knees and reducing the middle class that the PLP supposedly "created". (I think the industrious people that have become wealthy or middle class deserve the credit for their hard work?)

The big question that is always left unanswered is how the country will face these challenges going forward.

More government borrowing and spending does not seem to be the answer.

Ever expanding government does not seem to be the answer.

Dwelling on the past will not be the answer.

Improving education is certainly a key starting point, and reducing the size and scope of government is another.

More ideas can be found in a wonderful little book published by The Independent Institute titled Making Poor Nations Rich: Entrepreneurship and the Process of Economic Development, edited by Benjamin Powell with a foreward by Deepak Lal. Get your copy here...

Highlights of the book include:

• Economists have often grappled with the question of how to help impoverished countries prosper, but they frequently overlook the central driver of economic growth: the entrepreneur. A close examination of entrepreneurship is especially timely, since the effectiveness of traditional development aid is increasingly being debated. Government-instituted economic reforms intended to stimulate economic growth often succeed or fail due to the extent that they help or hinder entrepreneurship. An international and historical comparison of policies and institutions that affect the productivity of entrepreneurs is invaluable for understanding how to make poor nations rich. (Introduction, ch. 1-4)

• After more than a decade of research, the empirical evidence is clear: economic freedom fosters economic growth. Countries that have climbed the Economic Freedom Index (e.g., China, India, Ireland, and Botswana) have brought more prosperity to their people, whereas countries that have reduced economic freedom (e.g., Venezuela, Zimbabwe) are poorer than they were a generation ago. (ch. 5)

Read more here...

The difference between the FNM and PLP are little more than colours and personalities. The free market generally ignores politics as they are transactions between individuals who decide what they each prefer. No government intrusion is necessary there.

As a people we must set hero worship aside and not lose sight of the burdens we are placing on future generations.