by Richard Coulson

First published in Tribune Business and posted here with the author's kind permission.

Here’s a quick way for our Government to show they’re on the ball with modern ideas: abolish  the physical  penny! It would be a simple, inexpensive step, visible to all, and ending the frustrating  inconvenience and cost of handling  those pesky coins.

Our sensible neighbor Canada did it in 2012, and so have other countries like the Netherlands and Australia. In the USA,  typical  Congressional log-jams  have killed all  rational initiatives,  although it costs the Mint  about 1.8 cents to produce every penny and about 7 billion are made  every year since over a quarter of them disappear from circulation.  It seems many Americans, particularly from Illinois, fight for the penny through  sentimental attachment  to the handsome profile of Abe Lincoln. Our own starfish is well designed, but a sea urchin won’t generate the same nostalgia as Honest Abe.

Cashiers at supermarkets and bank clerks hate the time (that means money) spent handling, sorting,  bagging and re-delivering these tiny  pieces of copper, useless even in vending machines. Waiters sneer at penny tips. The typical consumer  just sweeps his  pockets and dumps his pennies in a jar at home.  He rarely makes the  effort  to wrap a couple of hundred   in the neat paper cartridges demanded by banks. So they sit, removed from the economy,  at a cost to our Central Bank who has  to buy them from the Royal Mint in London.

Canada did  it rationally.  Issuance of new coins came to an end. Penny pricing of items paid by check or wire transfer  was not affected,  but any cash payments  had to be adjusted up or down to the nearest nickel. The oft-stated fear that poor people might  suffer because they make more  small cash purchases proved illusory. Even losing three cents each on,  maybe, 30 cash transactions per month won’t eat up the  kids’ breakfasts.   And it’s  easier  to give a couple  of dollar bills to charity than to round up  two hundred pennies.

Discipline about handling pennies could lead to discipline in handling dollars, thousands or millions of  them. Much of  our Bahamian public sector enjoys a cavalier disregard for tracking  finances and reporting them to the public  Here are a  few examples:

-BEC (Bahamas Electricity Corporation): The latest available financial statements are dated Sep. 30,     2010, heavily qualified by auditors Deloitte.
-Bahamas Air: No financial statements available, although every year the press reports a loss, such as     $12.7 million in 2012
-Water & Sewerage: operating figures,  though not full audit, shown through 2011, then nothing.  
– Bahamas Broadcasting Corp.: No figures available
-Nassau  Flight Services: No figures available.
-BAMSI (Bahamas Agricultural and Marine Sciences Institute) an “autonomous corporate body”: Although big bucks have been spent, not even a balance sheet or budget has been published for this     mixture of school, research center, and commercial farm.
-BTC  (Bahamas Telephone Company): Full accounts are reported  because BTC is  now consolidated      with Cable & Wireless, a UK company listed on London Stock Exchange. However, no information is         available about the  2% of C&W shares contributed  to  a Bahamian foundation “for the benefit of the     Bahamian  people”  about which  its Chairman, Cabinet Secretary Wendell Major , refuses to disclose      any facts.

All  our investor-owned public companies listed on BISX and regulated  by our Securities Commission  are rigidly required to disclose full financial and operating details on exact deadlines.  Even  private  concerns with just a few shareholders  are run this way. We can be certain  that Rupert Roberts of  Supervalue Stores and Nancy Kelly of Kelly’s  Home Centre  know the positions of their companies to the penny at the end  of every month,  maybe every day.

By contrast, the shareholders of our Government companies, who are ultimately the citizens of the Bahamas, are given information several years stale, if anything. All these companies are burdened with  politically appointed  boards of directors, honorable  citizens rewarded with a director’s  fee who know next to nothing about the business they are supposed to govern. The obscure company,  Nassau Flight Services, names six  of  these people, in  addition to the  Chairman.  Its straightforward  business  of ground handling  commercial  aircraft  should long ago have been sold off to the private  sector, of course at the painful loss of patronage.

One refreshing  exception to this litany of mis-management is NAD-Nassau Airport Development Company. A comprehensive annual report and  financial statements are current, doubtless because it is managed under formal contract  by a Canadian airport operating company.  This should be the pattern for all true public-private partnerships, but whether it will be feasible for the catastrophe  known as BEC remains in doubt. After several weeks, there is no evidence that the new “manager”  Power Secure will really take control.  No date has been set for ending the present management-by-dogfight, with Brave Davis, Leslie Miller, and  the union leaders all snapping at each other, with board members only able to sit by and watch   the fray, and staff doing their best in the absence of leadership.

Failure to file financial reports is not  itself   an act of corruption, but it certainly shows the ethical  sloppiness and love of secrecy that breed corruption   It is truly amazing that, well into the 21st century and the electronic age, while our private sector business is governed by full and accurate accounting standards, our public sector business abandons these practices whenever the results look unpleasant.

The worst is: nobody seems to give a damn.   The public is kept in the dark about its own assets, and yet the same political leaders are kept in office  to continue the darkness. Great hope  is placed on the Freedom of Information Act inching  its way towards passage, but it’s  likely to be hedged with so many  exceptions that it will do little good unless there is a fundamental change about disclosure  on the part our leaders.

The Bahamas thank goodness are still far from the dire straits of that  historic democracy  the Hellenic Republic of Greece. This very week, it is facing another of the  political/financial cliff-hangers that have bedeviled it for the last five years: a struggle between the Greeks  demanding to continue to “do it my way”, and their partners in the Eurozone demanding  to impose discipline and austerity. Perhaps once again a last-minute stopgap compromise will emerge,  but as a New York Times editorial succinctly put it “what the nation needs for long-term stability  is the end of tax evasion, clientelism  (i.e. cronyism) and bureaucratic inefficiency.”

The same words could apply to our much newer democracy, where elections are always the ultimate lever available to an aroused citizenry.

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Mr. Coulson has had a long career in law, investment banking and private banking in New York, London, and Nassau, and now serves as director of several financial concerns and as a corporate financial consultant. He has recently released his autobiography, A Corkscrew Life: Adventures of a Travelling Financier.