The Bahamas Post Office

First Published: 2004-07-01

During the recent Budget Debate in Parliament the Minister of Transport & Aviation, Mrs. Hanna-Martin, lamented the post office's decline in revenue. Neither the decline in revenue, nor the expenditures were detailed or they were not reported. However, The Nassau Institute was provided with the following numbers from the governments 2004/2005 Budget in an attempt to understand what might be going on with taxpayer dollars:

Budget Years

Expenses

Income

Profit/(Loss)

 2001/2002  $  6,355,734  $  3,849,735  ($2,505,999)
 2002/2003  $  6,790,288  $  8,115,931   $1,325,643 
 2003/2004  $  7,487,798  $  6,329,700  ($1,158,098)
 2004/2005  $  7,834,230  $  6,324,755  ($1,509,475)
 Totals  $28,468,050   $24,620,121  ($3,847,929)

Obviously the country cannot afford to pay deficits like those above year after year. The simple answer to this dilemma is privatisation.

The revelation that a post office is losing money is not a new phenomenon and neither is the move toward privatisation. Scott Esposito an economics and political science major at the University of California at Berkeley and a Public Affairs Intern at The Independent Institute, a non-profit, non-politicized public policy research and educational organization based in Oakland, California, wrote back in February 2002 that "Internationally, privatization of the postal service is hardly a new idea. New Zealand, the Netherlands, Germany, and Sweden have had quasi-privatized post offices for years, and the European Union has set January 1, 2003 as the deadline for all its member states to have privatized post offices."

The United States Postal Service (USPS)

The US has reportedly wasted billions of their taxpayer dollars on the USPS. Although the USPS is a legal monopoly, hope for privatisation is not lost. James L. Gattuso Research Fellow in Regulatory Policy, Roe Institute for Economic Policy Studies, The Heritage Foundation wrote in August 2003, that a presidential commission reported, among other things that the USPS:

– Provide more postal services at non-post office locations, such as banks and grocery stores.

– Reform procurement rules to reflect commercial best practices.

– Bring bloated workforce levels down through attrition.

– Restructure management to eliminate redundant positions and clarify job functions.

– Create a "Postal Regulatory Board" with broad powers over USPS activities.

Ideas The Bahamas Can Use

Of course these are valuable ideas that the Minister of Transport & Aviation might consider but the country has come to expect the typical government responses like:

– They will not force Bahamian postal workers to the unemployment line, because they care about Bahamians. (Despite the opportunities that will be created for these same workers with privatisation this excuse is still provided.)

– It might not work, so why lose political capital by trying it. (Why not be proactive?)

– They will set up a corporation to manage the post office. (How many of these corporations actually fulfil their mandate?)

Other ideas include:

– Selling the post office to private investors.

– Sell shares in the post office to the general public. This will help make the management more accountable to the taxpayers.

– End all deficit spending at the post office.

– Offer door to door courier services like private suppliers.

– Provide Internet services.

Of course, the fact that the government might consider the concepts outlined is an important step toward improving the services provided and reducing the cost of the Post Office to Bahamians.

It is self evident that the monopoly on the mail is not providing the service that is required. Like monopolies in the private sector are not in the best interest of the consumer they are no different if they are government owned.

The Nassau Institute understands the political ramifications that could accrue in the near term, however, if Parliamentarians were genuinely concerned about Bahamians they would free the country from the weight of one more government money pit and privatise the Post Office.

Reference Material:

(i) The Privatization Revolution, Lawrence W. Reed, President, Mackinac Center for Public Policy. (www.privatization.org)

(ii) Privatize the US Postal Service, James L. Gattuso. (www.capmag.com)

(iii) US Postal Service: A Government Protected Monopoly, Edwin Feulner. (www.capmag.com)

(iv) Time for the Mail Monopoly to Go, Scott Esposito. (www.fee.org)

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