Government to Provide Relief to Struggling Homeowners
Prime Minister Discusses Impact of Global Financial
Crisis on National and Regional Economies
Following full consultation with mortgage lenders, the Government will implement a relief programme for homeowners who due to unemployment, underemployment or other unforeseen circumstance are unable to remain current with their mortgage payments, Prime Minister the Rt. Hon. Hubert Ingraham announced Sunday.
Mr. Ingraham, in his capacity as the Caricom Head delivering the Caribbean Community’s statement to this year’s annual International Monetary Fund/World Bank Group meetings, took part in a breakfast meeting with IMF Managing Director Mr. Dominique Strauss-Kahn where the impact of the global financial crisis on the region was discussed, as was the need to provide social safety nets for the most vulnerable in society.
Of the third element of his Government’s social safety net, the Prime Minister said: “For persons who would have lost their jobs, persons in the hotel sector who would be on short work weeks, and persons who for some other unforeseen circumstance are now unable to keep current in their mortgage payment, but who ordinarily sought to make their mortgage payments for their homes, we would like to ensure that these persons don’t end up losing their homes because of what we consider to be this temporary setback – even though we do not know how long this temporary situation is likely to exist.”
Mr. Ingraham said he expected this new dimension of social assistance to be implemented as early as the beginning of November. In September the Prime Minister announced a major social assistance programme for electricity consumers in the country and followed that announcement with that of new increases in various forms of Department of Social Services aid including food and rental assistance.
As for the nation’s unemployment, the Prime Minister said the Government will accelerate its public infrastructure projects to create jobs and stimulate the housing sector by restarting the Government’s Housing programme currently underway in Nassau, Grand Bahama and Abaco.
Fifteen million of the $75 million bond the Government secured for that housing programme has already been issued for the work in progress, and the Government will also construct 60,000 sq. ft. office buildings in Nassau, Grand Bahama and Abaco.
This week in Washington, world leaders comprising officials of the IMF, the Group of Seven (G7) and Group of 20 (G20) are meeting to find solutions to the ongoing financial crisis sweeping global markets.
In discussions with IMF officials the Prime Minister pointed out that evidence of slowed tourism growth and rising levels of unemployment can be seen throughout the region, adding that such trends, if they continue, would lead to less than favourable outcomes in various sectors.
“I raised on behalf of the Caribbean Group a concern that some countries have that they may need IMF assistance for balance of payment support and the Fund responded that it would be prepared to provide support through a rapid access line.”
Prime Minister Ingraham acknowledged that while the region’s economies need increased growth, that growth as well as the securing of private sector capital inflows for its tourism and real estate sectors would be slowed due to current financial events.
Provided that the global financial sector does not deteriorate further, recovery could commence in mid-2009.
“The IMF,” he noted, “continues to project that the price of oil over the medium term is likely to average around $100 per barrel. If that proves to be accurate that is a manageable proposition for the region.
“The IMF is also projecting that economic recovery is likely to take place in the major economies of the world from mid-2009.”
The IMF indicated that the US corporate sector is in reasonable condition and can respond as soon as the financial crisis eases.
“In our case in The Bahamas, the tourism growth up to August had been reasonably aligned with expectations,” he advised. “September was substantially below what we expected. And depending on what continues to happen in the American economy, we are likely to see some part of a continuation of what happened in September.
“So we are putting contingency plans in place to be able to deal with the situation if a worst case scenario arises,” Mr. Ingraham noted. “Should circumstances require it, The Bahamas would be able to make arrangements with the private banking sector to take care of any likely shortfall that we might experience.”
Prime Minister Ingraham will deliver Caricom’s Statement to the annual Joint Discussion on Monday.