Wednesday, October 30, 2013

Why has banking in The Bahamas become such an ordeal and so dysfunctional?

Our dysfunctional banking system

Consider This...


PHILIP C. GALANIS
Nassau, The Bahamas


The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another. – Milton Friedman

Once upon a time, banking in The Bahamas was a relatively pleasant experience.  One could meet with a banker, solicit prudent financial advice and, with relative ease, obtain a loan to start or expand a business, purchase a home or a car and even address challenging financial matters facing the customer.  But that was a very long time ago and today, that has all changed.  Therefore this week, we would like to Consider This… why has banking in The Bahamas become such an ordeal and so dysfunctional?

What has changed?

Following the blacklisting of The Bahamas by the Organisation for Economic Co-operation and Development and with the passage of the compendium of financial services legislation in 2000, The Bahamas entered a new banking era, one that was characterized by over-regulation by the Central Bank and a private sector gestapo-like gatekeeper, nominally called the bank compliance officer.

This relatively new bank compliance officer that has recently emerged has rapidly joined the ranks of threats to the progressive development of our financial services sector by imposing extraordinary and often ridiculously rigid requirements on prospective customers, some of whom have had long-standing relationships with their banks.  Like many faceless bureaucrats, it appears as if some compliance officers take a delight in thwarting positive bank-customer relationships.  Instead of seeking to find a happy medium between due diligence and sensible regulation, the insistence on some of their non-negotiable requirements seems to be a zero-sum exercise.  Banking in The Bahamas could be an experience where everybody wins.  However, recent experiences have resulted instead in chasing business away from the jurisdiction.

Some examples

Many persons who bank in The Bahamas have experienced those institutions imposing stringent reporting requirements over the past few years.  Long-standing customers complain about banks requiring them to provide excessive information on a regular basis, even though much of the same information requested has previously been submitted.  Equally vexing is requiring customers to provide the same information if they wish to open new accounts at the same bank, notwithstanding that they have operated an account or various accounts for many years.  Some customers complain that they are treated like strangers at best and criminals at worse just to open new accounts.

This writer recalls a recent frustrating experience of opening a bank account to service a client which took more than a month, despite providing all the information that was requested by the compliance officer at the bank.  The client became so frustrated with the constantly changing additional requirements of the Compliance Department that the person gave up on The Bahamas and this writer had to open an account in a major New York bank in order to satisfy the client’s needs.  It took exactly one week to complete the account opening procedures in New York, the same procedures that took over a month in The Bahamas, and the Bahamian bank still has not yet opened the account.  The frustrated client wrote: “I thought that The Bahamas was a very investor-friendly jurisdiction.  I simply don’t understand why it’s so difficult to open a bank account there.”  The client, a major South American multinational, reputable company with banking relationships all over the world, had intended to transfer millions of dollars to The Bahamas for management here, but that business and those funds will now move to New York.  We believe that this experience is replicated many times each week.

It is unfortunate, but reasonable, to assume that these harmful practices are allowed to persist with the full knowledge and complicity of some of the banks whose head offices are located in North America, principally in Canada.  While those banks have significantly contributed to the national job market here, they have invested very little in The Bahamas, compared to the enormous profits that they earn in our country.  The unfortunate fact is that too many of our Bahamian bankers have become nothing more than glorified paper pushers with impressive job titles but very little authority.  Sadly, they seem determined to frustrate their customers, domestic and foreign.

The fallout

The short- and long-term consequences of the attitude of some compliance officers are that the jurisdiction is fast becoming an increasingly difficult and undesirable place to do business.  Considerable losses are resulting from this behavior on the part of some Bahamian bankers.  Not only are we losing an enormous amount of banking business, we are also losing legal and accounting fees and government taxes because of the attitudes of some compliance officers in Bahamian banks.  In fact, some Bahamian professionals are now advising their clients to incorporate and bank in another jurisdiction and not to conduct business in The Bahamas because of the inordinately difficult and ridiculously rigid scrutiny to which they are subjected.  And the word is rapidly spreading internationally.

The implications for our financial services sector are ominous.  If we are not careful, we will experience a larger number of banks leaving The Bahamas because of the over-regulation of the jurisdiction and the generally unfriendly attitude of some bankers.  This cannot be a positive development.  It is therefore critically important to arrest the behavior of some of our banks and to change the harmful attitudes of their compliance officers.

Conclusion

It is ironic that a large Bahamian delegation is presently in the United Arab Emirates on a business promotion trip, encouraging high-net-worth individuals and businesses to establish their businesses here.  Therefore, while this delegation is doing all it can to encourage business to come to our shores, here at home we seem to be doing little to make it easy for them to actually conduct business should they decide to invest here.  If we are not careful, and if we do not arrest the negative attitude by some of our banks and compliance officers, there will be little need to have a Ministry of Financial Services.  Instead of the influx of business that we need, we will experience the exodus of sound businesses from our jurisdiction.

As a part of the global village, we need to remember, in the words of Milton Friedman, the famous United States economist, that business activity, including banking, does not have to be a zero-sum experience where one party can gain only at the expense of another.

• Philip C. Galanis is the managing partner of HLB Galanis & Co., Chartered Accountants, Forensic & Litigation Support Services.  He served 15 years in Parliament.  Please send your comments to pgalanis@gmail.com.

October 28, 2013

thenassauguardian

Saturday, October 26, 2013

Marcus Garvey is still relevant today

 Why Marcus Garvey is still relevant today



BY MELODY CAMMOCK-GAYLE




"WE must canonise our own saints, create our own martyrs, and elevate to positions of fame and honour black men and women who have made their distinct contributions to our racial history."

As the National Heroes' Day celebrations take centre stage, and our heroes are brought to the fore, I thought this a fitting time as any to explain why for me, Marcus Garvey is as relevant today as he was 80 years ago, albeit in a different time and social context.

And I'm not suggesting that the achievements and contributions of our other heroes and heroine are less significant, because undoubtedly each, in his/her own right, has done much for our development as a people and a country.

And no, I'm not a racist, nor do I believe in emigrating to Africa. In fact, I see past colour and I do try to judge each person on the content of his/her character. I am a Jamaican and the world is my oyster. But Garvey stands out, because many of the dreams he wanted for the black race in the 1900s, I want for Jamaica today.

"The ends you serve that are selfish will take you no further than yourself, but the ends you serve that are for all, in common, will take you into eternity."

Born in St Ann, in 1887, Marcus Mosiah Garvey is celebrated as the first black man to lead and develop a mass movement of people. He was the first man, on a mass scale, to give millions of blacks a sense of dignity and destiny. He was a visionary, whose teachings and philosophies are as relevant today as they were a century ago, especially for a country with a 90 per cent population of black people, though in a totally different time. Among the main tenets of his teachings were: a sense of pride in self, as a black race; respect for each other and the idea of black enterprise and entrepreneurship. If we would get these right, then Jamaica and the conceptual framework referred to as Brand Jamaica would be unstoppable.

Garvey taught self-belief, positive self-esteem and self-respect to black people at a time when the black race was considered less than second-class citizens. Such a concept was revolutionary then, and in some ways still revolutionary now. He emphasised education, and an awareness and appreciation of our rich African heritage, as avenues to locate a deep sense of self-identity, which engenders personal and national growth. To achieve greatness, Garvey believed that a people needed to believe in themselves, understand history and arm themselves with the knowledge of how to move forward co-operatively.

"The black skin is not a badge of shame, but rather a glorious symbol of national greatness."

It is therefore surprising that, more than 70 years after Marcus Garvey's death, we are still struggling with issues of love for our black self, so much so that skin-bleaching is a near epidemic. As Jamaicans, we need to draw pride from somewhere; pride in ourselves, pride in our country, pride in our achievements. Thus my strong belief is that Garveyism should be taught in schools from the primary level. Too many of our youth have little sense of identity, no idea of their past, and no interest in their future.

Understanding that the theoretical construct of national identity is about collectivity and connectivity, Garvey's teaching will help to provide that cognitive, moral, and emotional connection, which must be made between an individual and his/her broader community or category. With this in place, we would have created a system of meaning which allows people to feel a sense of oneness, security, inclusion, and belonging. Collective identity guides individual action, provides a moral compass and emotional connection with other people who share similar interests and ideologies in a broader community. Self-belief affects self-image, which affects nation development. A people who love themselves don't deface their skin. A people who love their nation don't deface national symbols, throw garbage on roads or in gullies, or urinate at every street corner or display blatant disregard for law and order. Pride in self must overflow to respect for each other. A people working together for the development of self and nation have no time to annihilate the brother working beside him.
 
"The Negro will have to build his own government, industry, art, science, literature and culture, before the world will stop to consider him."

Garvey also believed in economic self-sufficiency and financial independence, seeing this as the black race's only protection against discrimination. Once this economic foundation was created, they could then move on to social and political pursuits. Still, 50 years after Independence, Jamaica has neither economic self-sufficiency nor financial independence. Sadly, we have not been able to curb spending, while our taste for everything foreign continues to drive us deeper into debt. Last year the food import bill alone stood at US$959 million. Despite the Government's campaign to 'Eat what we grow; Grow what we eat' there has been little overall traction in encouraging demand for locally produced products or injecting enthusiasm in local manufacturing. But, this is where we need to look if we are to experience any economic success as a nation. Garvey truly got it right.

So, as the great visionary Marcus Garvey said: "We Are arbiters of our own destiny. God and nature first made us what we are, and then out of our own creative genius we make ourselves what we want to be." So, I guess the question is what do we want to be?

"Intelligence rules the world, ignorance carries the burden."

Melody Cammock-Gayle is the director — business development and marketing at Communications & Business Solutions (CBS) Limited. cbsmarketingja@gmail.com

October 21, 2013

 Jamaica Observer

Tuesday, October 22, 2013

Value-Added Tax (VAT) in The Bahamas ...and its “positive” impact on the Bahamian economy’s growth and employment prospects ...in the medium-term

Idb Study Shows Vat 'Positive' For Jobs, Growth






By NEIL HARTNELL
Tribune Business Editor
Nassau, The Bahamas




An Inter-American Development Bank (IDB) study has shown that Value-Added Tax (VAT) will have a “positive” impact on the Bahamian economy’s growth and employment prospects in the medium-term, a senior official said last night.
 
John Rolle, the Ministry of Finance’s financial secretary, said that despite the IDB study being incomplete, the ‘preliminary results’ showed the Government’s tax reform centrepiece would also result in reduced inflationary pressures.
 
“While the IDB study is ongoing, we have seen the preliminary results, which attest to the projected positive economic impact of the fiscal reforms (growth and employment over the medium term), and to the reduced inflationary pressures to which the budgetary consolidation would contribute,” Mr Rolle told Tribune Business.
 
“Additional historical data is being added to the economic model, which will allow the researchers to fine-tune their results. Afterwards the results of the study will be published.”
 
Mr Rolle was commenting after the IDB used its October quarterly bulletin on the Caribbean to confirm it is working with the Government on implementing VAT in the Bahamas. It said its study on the new tax’s impact on the economy and wider society was only “underway”.
 
“The IDB has been working with the Government of the Bahamas to assist with Value-Added Tax (VAT) implementation,” the Bank’s October missive said.
 
“Using an econometric model, the IDB has provided specific input on the effects of the changes in revenue of the proposed VAT rates and the base on which the VAT will be charged.
 
“An economic impact study that assesses the effect on prices, economic growth, poverty and income distribution is currently underway. Consultations on the creation of the Central Revenue Agency, which will administer the VAT and select the IT system, are currently underway.”
 
Despite Mr Rolle’s assurances, the IDB’s comment is still likely to raise eyebrows in the private sector, as it indicates that the true ‘number crunching’ on VAT’s impact on the wider Bahamian economy and society has yet to be completed, and with implementation of the new tax now less than eight-and-a-half months away.
 
It is also unclear whether the Government internally, via the Ministry of Finance, has completed ‘VAT economic impact’ studies of its own, or whether this work has been done by other agencies, such as the International Monetary Fund (IMF, or external consultants.
 
A Ministry of Finance press statement earlier this year referenced work done by the IMF and its regional affiliate, CARTAC, on a Bahamian VAT, although no specifics about the nature of their work were released.
 
One observer who raised such questions was Rick Lowe, an executive with the Nassau Institute economic think-tank, whose own study on VAT’s likely impact on the Bahamas has been belittled by various government officials.
 
Suggesting that the Government’s moral authority to do this was diminished by the absence of any completed studies of its own, Mr Lowe argued that the burden of VAT collection/administration was being placed on those companies that were already 100 per cent compliant with their taxes.
 
And, noting the contents of the 2010-2011 Auditor General’s Report, which found that another $95 million in unpaid real property tax was added to the existing ‘sum owing’, taking this to over $500 million, Mr Lowe questioned how the Government expected to collect everything due to it under a VAT.
 
“It’s a basket case, it really is,” Mr Lowe told Tribune Business. “How do we expect to implement a more convoluted tax system if we can’t administer the basics?”
 
He added that the experience of other countries that had implemented VAT was that new taxes did not stop there, often being followed by income taxes and other revenue-raising measures.
 
“It’s a never-ending way to tax people,” Mr Lowe added. “It’s the thin end of the wedge. If we’re not capable of collecting basic taxes, heaven knows, not to mention the underground economy.”
 
He added that VAT would likely drive more Bahamians to online shopping and trips to Miami, and said of the IDB’s comments on the economic impact study, or lack of it: “How can they [the Government] stand up there and berate anyone who has concerns based on the impact of VAT on other countries in the region, and they’ve not done a study yet? It speaks volumes.
 
“They berate anyone who stands up and raises questions, and those questions result from government’s lack of information. We’re beeped down as if we’re dummies.
 
“They’ve [the Government] been forging ahead as if it’s a fait accompli, and haven’t done a cost benefit analysis. Have they considered the impact on businesses close to the edge? Obviously they haven’t. Is it going to destroy the economy and they get less revenue? Is that the Government’s intention?
 
“If they haven’t done the basics yet, how can they just think they can throw their hands up and say: ‘We can take more money from the citizens?’ It’s unconscionable. I weep for our country.”
 
Questioning why the Government had allowed “this large swathe” of non-real property tax payers to exist, Mr Lowe said VAT would impose an even greater tax burden on those who were already paying their bills.
 
“To say we can’t collect the taxes already on the books, and to tax more people who legally do what’s right and pay the taxes they ought to pay, something’s wrong with that reasoning,” he added.
 
October 21, 2013
 
 
 

Sunday, October 20, 2013

Latin American communications routed through the United States, affirms Assange


THE journalist and creator of the Wikileaks website, Julian Assange, affirms that virtually the totality of communications from Latin America are routed through the United States, and that this country intercepts them in order to consolidate its influence in the world.

It is a fact that 98% of telecommunications from Latin America to the rest of the world, including text messages, telephone calls, emails etc, pass through the U.S, Assange noted, in an interview with Russia Today conducted within the Ecuadoran embassy in London, where he has been granted refuge.

Washington’s objective is to obtain information on how Latin America is behaving, where it is making economic transactions and the activities of leaders and major players, the Australian activist added.
 
In Assange’s opinion, this espionage allows the U.S. to predict, to a certain degree, the conduct of Latin American leaders and interests, and also to exert coercion on almost any significant person.
 
He explained that the United States had aggressively tried to disprupt economic exchange through intervention and its control of Swift, Visa, MasterCard or monies sent to Latin America via the Bank of America.
 
The United States is appropriating economic and telecommunications interactions and this poses a threat to national sovereignty, he observed.
 
In relation to the former CIA technician Edward Snowden, who is living in exile in Russia after having revealed mass espionage on the part of U.S. secret services, Assange noted that Wikileaks was formally and informally implicated in Snowden’s requests for asylum made to approximately 20 countries.
 
Assange believes that Snowden had a genuine possibility of gaining asylum in several countries and Wikileaks noted others to inform the public of rejections and thus generate debate, and to report how governments were responding to Snowden’s applications for asylum.
 
The Wikileaks founder recalled that Venezuela, Bolivia and Ecuador were the Latin American countries which indicated interest in granting asylum to Snowden.
 
The activities revealed by the former CIA analyst include espionage on Latin American leaders such as Brazilian President Dilma Rousseff, who cancelled a visit to Washington, scheduled for October 23, since she considered the explanations offered by her counterpart Barack Obama insufficient.
 
According to these leaks, U.S. secret services also spied on Mexican President Enrique Peña Nieto. (EFE)
 
October 17, 2013
 
 
 

Friday, October 18, 2013

NO SMOKING ALLOWED at Her Majesty’s Prisons (HMP) ...soon to be renamed The Bahamas Department of Correctional Services

 Smoking To Be Eliminated At Prison




by Macushla Pinder
Jones Bahamas
Nassau, The Bahamas




Prison inmates who smoke will soon be forced to kick the habit, saving taxpayers a “considerable” amount of money.

Once passed, the Corrections Services Bill will eliminate smoking at Her Majesty’s Prisons (HMP), soon to be renamed The Bahamas Department of Correctional Services.

Wrapping up debate on the proposed legislation in the House of Assembly yesterday, Prime Minister Perry Christie acknowledged that while such a change may present some initial concerns for some inmates, over time, it will aid in saving more lives and promoting better health.

“Provisions will be put in place to ensure that those inmates who may be addicted to smoking are provided with every measure to assist them to quit, as there is clear evidence that smoking and second hand smoke are injurious to one’s health,” he said.

“So, insofar as people who are confined at Her Majesty’s Prisons, they are not going to be allowed to smoke and so the tradition of being able to trade cigarettes or get cigarettes will be eliminated because the cost to the taxpayer increases considerably.”

Mr. Christie said in the long term, inmates would be better prepared to re-enter society as productive citizens, thereby reducing the prison’s recidivism rate.

At last count, there were more than 1,500 Bahamians imprisoned at HMP, twice as many as the Fox Hill compound is designed to hold at capacity.

According to National Security Minister Dr. Bernard Nottage, there are 800 inmates in the prison’s Maximum Security wing.

Of that figure, 92 people are awaiting trial for murder, 200 inmates are under the age of 17, 44 of whom are 16-years-old.

Commenting the issue of persons on bail, Mr. Christie acknowledged that it is a matter of urgency that these people be tried more quickly.

“We need to prevent the haemorrhaging. We need to prevent these people from being out on bail, so we need to have better trials, a more effective disposition of justice,” he said.

“At the same time, I think it is clearly understood that…our won children are going into those facilities….We have an obligation to recognise that we must constantly work at ensuring that the punishment matches the crime. But in the process, there must be a corresponding effort on a sustained basis to expose these young men in particular to the conditions that ought to pertain in our country, in their lives. We have to condition them to somehow understand that they made a mistake, but they can recover from that mistake and education, training and exposure helps that.”

Government officials stress that the proposed legislation reflect the realities of a modern day correctional facility.

This includes the composition of prison officers.

Once passed, the head of the prison will be recognised as the commissioner of corrections.

The bill was left in committee stage.

October 17, 2013

The Bahama Journal

Wednesday, October 16, 2013

A Response to David Jessop, Managing Director of the London-based Caribbean Council ...on Bahamian Foreign Affairs Minister Fred Mitchell’s handling of the allegations ...of beating of Cuban detainees ...at the Carmichael Detention Centre in The Bahamas

 How Not To Damage A Country's Reputation



Tribune242
Nassau, The Bahamas



“WHAT stands out as a lesson to other governments is how reaction, if not thought through, can actually exacerbate a situation and, turning it into a matter unlikely to be forgotten and which in this case, may, in time, come to affect Bahamas-US relations.”
 
So wrote syndicated columnist David Jessop, Managing Director of the London-based Caribbean Council, in commenting on Foreign Affairs Minister Fred Mitchell’s handling of the allegations of beating of Cuban detainees at the Carmichael Detention Centre several months ago. The investigation has retreated behind closed doors, although even the accused marines’ defence attorney has urged that the trial be open to the public.
 
According to Mr Mitchell, there will be no fall-out from this unhappy affair on our tourist industry. “The universal experience,” he said, “has been that of a destination which looms large in the popular imagination as a place for fun and relaxation.”
 
However, Tourism Minister Obie Wilchcombe, closer to our tourism industry than Mr Mitchell, had other views. In his opinion, the Bahamas will, in the end, suffer from the Cuban-American boycotts in Miami in retaliation for the treatment of their fellow Cubans in our detention centre here. In Mr Wilchcombe’s opinion, “the impact of this on our economy will not be good”.
 
And although National Security Minister Dr Bernard Nottage was confident that the matter would be satisfactorily resolved, he too saw that it was a incident that could not be brushed aside. “We cannot ignore it because cumulatively, if the matter is not resolved in a matter consistent with good relations, then we will suffer the results of it,” he said.
 
Nor did Mr Jessop think that the issue would easily evaporate without leaving a stain. He used the Bahamas’ mishandling of the Cuban affair as a lesson on what a country should not do in the delicate arena of foreign relations. Mishandling, as in the case of the Bahamas, can do untold damage to a “nation’s image and reputation.” he said
 
And wrote Mr Jessop, in a cautionary note to the rest of the Caribbean: “Throughout, the issue has not been helped by the response of The Bahamas government which went from denial, to seeming misinformation, to anger, to announcing a public enquiry, to returning the detainees who might have given evidence, to unfortunately voiced exasperation on the part of government about what to do next: all against a background of representations from the US Government, the deepening involvement of human-rights NGOs, and opposition criticism then support.”
 
In Miami, a group of anti-Cuban, Cuban-American activists had organised a boycott outside the Bahamas consulate, at the airport and docks from which tourists leave for the Bahamas. They have presently called off the boycotts as they tentatively await the outcome of the promised investigation of the accused defence force officers.
 
Mr Jessop warned the Caribbean: “News and comments are now instant and global, and social media, 24-hour rolling news channels, and the Internet, have enabled cross-border citizen activism.
 
“For the most part,” he continued, “Caribbean governments seem transfixed by this, unable to respond in real time, or to recognise that opinions and news items on YouTube or Twitter can go viral in hours, and that their traditional and often pedestrian response, let alone an entrenched desire to brush aside bad news, is no longer adequate.”
 
This was Mr Mitchell’s pitfall.
 
From the moment it was determined that the “fake” tape of the beatings went viral from Miami, Mr Mitchell clutched to the “fake” tape straw, refusing to accept that the video was actually a recreation of what was meant to have taken place in the detention centre on that fateful night. Mr Mitchell insisted that the tape was not recorded at the centre. As it turned out, the re-enactment was filmed at the centre with one of the Cuban actors wearing a uniform loaned him by one of the Bahamian guards. But to the bitter end, Mr Mitchell clung to his broken reed and the statement that a friendly Bahamian government never beat anyone — as if the government were ever accused.
 
In the end, he was sucked down in the quagmire of his own oft contradictory words railing against treasonous Bahamians and enemies of the country. His pathetic show torpedoed the country’s cause. Let’s hope that he will now leave the conclusion of this matter to safer hands.
 
It is probably too early to estimate what damage, ­if any, this long drawn-out fiasco has had on our tourist figures. However, we understand that there has been a critical fall-off in tourist arrivals, both by air and by sea.
 
It has been a long time since these figures have been published. It is now time for reporters to start asking questions. Bahamians have a right to know the state of our tourist industry.
 
In case our readers missed Mr Jessop’s column commenting on the Cuban situation in the Bahamas, it was published in The Tribune on Monday, October 7, in the Insight column under the heading “Reputational Damage.”
 
October 10, 2013
 
 
 

David Jessop, Managing Director of the London-based Caribbean Council ...on Bahamian Foreign Affairs Minister, Fred Mitchell’s handling of the allegations ...of beating of Cuban detainees ...at the Carmichael Detention Centre in The Bahamas

Reputational Damage





By DAVID JESSOP
Managing Director of Caribbean Council:
 


ALL Caribbean nations have well-developed contingency plans in the event of a natural disaster. However, few have established procedures to address the issue of the damage caused to a nation’s image and reputation.
 
Yet, that is just what is required if the Caribbean is not to experience long-term economic and political damage from the type of campaign that is under way against The Bahamas over the alleged mistreatment of detainees.
 
What follows is not to seek to minimise the ill treatment of anyone; or to question the importance of freedom to comment; or to avoid suggesting that nations in the region need to get their houses in order and observe international norms. Rather, it is to make clear that the need for reputational management has changed absolutely and governments need to consider how politically, and better, they should react.
 
News and comments are now instant and global, and social media, 24-hour rolling news channels, and the Internet, have enabled cross-border citizen activism.
 
For the most part Caribbean governments seem transfixed by this, unable to respond in real time, or to recognise that opinions and news items on YouTube or Twitter can go viral in hours, and that their traditional and often pedestrian response, let alone an entrenched desire to brush aside bad news, is no longer adequate.
 
Neither do those in the region who seek to manipulate situations for domestic political advantage appear to recognise that in some cases what may appear usefully self-serving in relation to sensitive domestic issues such as the probity of the police service or matters relating to migrants, also have an external dimension that may have wider political and economic consequences.
 
The case of The Bahamas is informative. In March of this year, protests began in Miami about the need for better treatment of a group of Cuban women being held in a detention centre previously the subject of concern and investigation by Amnesty International. Later, in June, the protests escalated after a video circulated in Miami showed, it was alleged, Cuban detainees being beaten by guards at the same detention centre.
 
In response, a group of anti-Cuban, Cuban-American activists, the Democracy Movement, began to organise demonstrations outside The Bahamas consulate in Miami and began to take other actions to obtain publicity. Their cause was supported by Cuban-American politicians, who not only have significant influence in the US Congress, but include in their number a future US presidential candidate. More recently, their protests have escalated to include representations to the cruise-ship companies and demonstrations in front of departing cruise-ship passengers.
 
Throughout, the issue has not been helped by the response of The Bahamas government which went from denial, to seeming misinformation, to anger, to announcing a public enquiry, to returning the detainees who might have given evidence, to unfortunately voiced exasperation on the part of government about what to do next: all against a background of representations from the US Government, the deepening involvement of human-rights NGOs, and opposition criticism then support.
 
While hopefully an enquiry commissioned by The Bahamas government will be thorough and honest, the allegations, as Amnesty International’s involvement indicates, are serious and, irrespective of the political complexities surrounding the nationality of those involved, should be answered sooner rather than later.
 
What stands out as a lesson to other governments is how reaction, if not thought through, can actually exacerbate a situation and far from closing down an issue, can add fuel to the fire, turning it into a matter unlikely to be forgotten and which in this case, may, in time, come to affect Bahamas-US relations.
 
In its own way, the event is a tip of an iceberg of potential damage that the Caribbean has the capacity to self-inflict, unaware that the world is watching or that, whether the region likes it or not, tourism and the tourism industry are its Achilles heel; one that will become subject to constant external attack if the region fails in meeting international norms in everything from human rights to health and safety.
 
At the heart of the issue is a failure to understand what tourism, brand creation and reputation now mean in a world in which perhaps unfortunately, perception has come to matter more than reality.
 
Tourist boards, governments and the industry across the world spend millions of dollars to create a positive picture of “The Caribbean Experience”: a sense that all is well in a country and that a destination and a vacation will be a happy and memorable experience.
 
But recently, damaging coverage about the unfortunate reality of crime, sexual assault, and the behaviour of some police and immigration officers has led pressure groups and the media in key feeder markets to begin to question safety, disseminating messages that cannot be controlled and, if inaccurate, are hard to refute.
 
Incidents apart, one element of the problem lies in the fact that increasing numbers of visitors are coming to expect the politics, the judicial system, personal safety, and the rule of law to be equivalent to where they reside, and for their government or embassy to afford them the same protection and treatment as they might receive at home.
 
This is particularly the case when it comes to North American and European travellers who, in a sometimes oversimplistic manner, travel the world expecting the same behaviour, basic rights, responses, norms and safety to match what they have in the wealthy developed nations from which they have come.
 
But beyond this, and more alarmingly for a tourism-dependent region, has been the appearance of the first social media campaigns mounted by NGOs that actively aim to turn visitors against specific countries. For example, in the case of the Maldives, there is a global campaign which has near to two million supporters, including Sir Richard Branson, proposing a tourism boycott, and raising funds to develop an advertising campaign which, it says, will aim to “threaten the islands’ reputation”.
 
The point here is not to suggest that governments should hide or find ways to exonerate themselves from the consequence of their responsibilities; it is to indicate that apart from ensuring that abuses do not occur, that only a well-considered, fair, rapid, appropriate and measured response will avoid such situations becoming potent and damaging.
 
(David Jessop, Managing Director of the Caribbean Council, writes a weekly column providing a European perspective on Caribbean events).
 
October 07, 2013
 
 
Tribune 242
 
 

Monday, October 14, 2013

Death of the 20th century General

 

• Given his victories in the field of battle, the legendary Vietnamese General Vo Nguyen Giap was called the Red Napoleon by his enemies, and by his compatriots, Volcano under the Snow




A press report from Hanoi, the Vietnamese capital, notes that the legendary General Vi Nguyen Giap, one of the most eminent figures in Vietnamese history and a great friend of Cuba and revolutionary causes, died at the age of 102 on October 4.

Ge Luo means Volcano under the Snow; the name given by his compatriots to this exceptional man, who defeated the Japanese, then the French at Dien Bien Phu and, decades later, forced the U.S. army to flee from Saigon, thus completing the reunification of Vietnam.

His life is indissolubly linked to the struggle for national liberation, to the history of the training, growth and development of the Vietnam People’s Army. For his victories the French themselves nicknamed him the Red Napoleon.

Vo Nguyen Giap was one of so many sons and daughters of campesinos who became figures thanks to socialism, not without much personal sacrifice. In 1926 he became a member of student organizations involved in the underground struggle. He joined the Indochinese Communist Party (ICP) and quickly grew close Ho Chi Minh, a personal friend.

At the end of 1941, Giap left for the Vietnamese mountains in order to create the first guerrilla groups. There he established an alliance with Chu Van Tan, the leader of Tho, one of the fighting formations created by a national minority in northeast Vietnam. At Christmas 1944 he captured a French military post, after having trained the first battalions of his armed forces.

By the middle of 1945 he already had 10,000 men under his command, and could move onto the offensive against the Japanese, who had invaded the country.

The French police arrested his wife and sister-in-law, using them as hostages to put pressure on Giap and force him to surrender. The repression was ferocious: his sister-in-law was guillotined and his wife sentenced to life imprisonment. She died in prison after three years as a result of torture. The French also killed his newborn son, his father, his two sisters and other family members.

But Giap was resolute. He defeated the French during the Dien Bien Phu campaign, which was the first great victory of a colonized and feudal people, with a primitive agricultural economy, against an experienced imperialist army sustained by a vigorous and modern military industry. The most eminent French generals (Leclerc, De Lattre de Tasigny, Juin, Ely, Sulan, Naverre) failed one after the other facing troops who were poor campesinos, but determined to fight to the death for their country and for socialism. Vietnam was divided and Giap was appointed Minister of Defense of the new government of North Vietnam which, while the people’s war continued, made every effort to build a new socialist society.

As the Commander of the new people’s army, Giap led the struggle in the Vietnam War against the U.S. invaders in the south of the country, a struggle which, once again, began as a guerilla war. The first U.S. soldiers died in Vietnam when, on July 8, 1959, the Vietcong attacked a military base at Bien Hoa, northeast of Saigon.

Four U.S. presidents, one after another, fought against Vietnam, leaving behind a bloody trail of 57,690 dead American troops. In 1975 the country was reunified, when a tank of the revolutionary army charged the protective barrier of the U.S. embassy, while the last imperialists fled precipitously in a helicopter from the roof of the building.

General Giap was not only a maestro in the art of directing revolutionary warfare, but also wrote a number of valuable books about it, such as his famous work People’s War, People’s Army, a manual on guerilla war based on his own experience. In the manual, he established three basic fundamentals which a people’s army must possess to attain victory in the struggle against imperialism: leadership, organization and strategy. The leadership of the Communist Party, an ironclad military discipline and a political line adapted to the country’s economic, social and political conditions.

He defined the people’s war as "a war of combat for the people and by the people, while the war of guerrillas is simply a method of combat. The people’s war is a more general concept. It is a synthesized concept. It is simultaneously military, economic and political." The people’s war is not just made by an army, however popular this might be, but is one made by all the people because it is impossible for a revolutionary army, alone, to achieve victory against reaction. All of the people have to participate and help in a struggle, which necessarily, must be prolonged."

As a good guerrilla fighter, Giap knew that military success, when there is such a large disproportion of forces, is based on initiative, audacity and surprise, which demands that a revolutionary army has to constantly displace itself. He stood out as a genius of logistics, capable of constantly mobilizing troop contingents, following the principles of the war of movement. He acted in this way against the French colonialists in 1951, infiltrating an entire army across enemy lines in the Mekong Delta and again by bringing forward the Tet offensive in 1968 against the U.S. forces, when he placed thousands of men and tons of provisions for a simultaneous attack on 35 strategic centers in the south.

Both his followers and adversaries considered Vo Nguyen Giap as one of the great military strategists of history.

Marcel Bigeard, the most decorated general in the French army, who was his prisoner, has said of the Vietnamese military chief: "Giap victoriously commanded his troops during more than 30 years. This constitutes an unprecedented feat (...) He extracted lessons from his errors and never repeated them"

William Westmoreland, commander in chief of the U.S. army in Vietnam and an adversary of Giap, stated that the qualities which make a great military chief are the aptitude to make decisions, moral strength, capacity for concentration, without forgetting the intelligence which unifies all of the foregoing. Giap possessed them all. (SE)
October 09, 2013
 
 
 

Wednesday, October 9, 2013

“I don’t have any trepidation of doom and gloom” about the implementation of Value Added Tax (VAT) in The Bahamas

Lawyer: I Don't Fear Vat.. It'll Be A Boost




By NEIL HARTNELL
Tribune Business Editor
Nassau, The Bahamas




A former Bahamas Bar Association president yesterday predicted that Value-Added Tax (VAT) would “boost” the legal profession, and said: “I don’t have any trepidation of doom and gloom.”
 
Providing something of an antidote to the general mood on uncertainty surrounding the Government’s tax reform plans, Wayne Munroe said VAT’s implementation would create a whole new area of work for attorneys - revenue and tax law.
 
The Munroe & Associates principal told this newspaper that employment in the legal profession might also increase, as many attorneys who currently lacked ‘back office’ accounting systems would likely have to hire extra persons to track, and capture, the VAT due to the Government.
 
Since the Government’s VAT ‘White Paper’ does not treat legal services as ‘exempt’ or ‘zero rated’, Bahamian law firms and attorneys - most of whom generate over $100,000 in annual turnover - will have to add a 15 per cent levy to their client billings and remit this to the Central Revenue Agency, minus the tax paid on their inputs.
 
Asked whether VAT’s introduction might result in reduced demand for legal services, and a loss of business, Mr Munroe suggested it would not.
 
He likened legal services to tobacco and alcohol, implying it was a product many clients could not do without, meaning there was an ‘inelastic demand’ and tax increases would make little difference to this.
 
And, with over 1,000 licensed attorneys in the Bahamas and multiple law firms, Mr Munroe said there was enough competition in the market to keep prices down and dictate how much of the VAT was ‘absorbed’ by the profession.
 
The former Bar president also described the Free National Movement’s (FNM) opposition to VAT as “laughable”, given that the party had previously gone on record as saying it would have implemented the tax had it been re-elected in 2012.
 
Mr Munroe added that what was missing from the VAT discussion was a debate on the ‘size of government’ that the Bahamas needed, as this determined the level of taxation and revenues required to fund it.
 
Arguing that he “can’t imagine” VAT’s impact on the Bahamas would be different from that in the UK, Mr Munroe told Tribune Business that one area he studied while at university was revenue and taxation law.
 
“It’s going to provide a boost to the legal profession,” Mr Munroe told Tribune Business of VAT’s implementation. “If you look at other jurisdictions, there’s a bunch of cases around VAT.
 
“We have very few areas of revenue law here to be explored by attorneys. Now there will be cases of people accused of VAT fraud; collecting VAT and not paying it over; and issues of interpretation of the legislation that is passed and introduced.
 
“It may provide a benefit to the legal profession......”
 
Accountants are the other profession likely to experience an upsurge in work with VAT’s arrival, and Mr Munroe hinted that both they and attorneys might also see the creation of another new business area - advising clients on tax minimisation, or ways they can legally reduce their tax burden.
 
And he added: “It may cause an increase in employment for those lawyers that do not have proper administration systems.
 
“If they’re going to deal with VAT, they have to have persons to administer the system. There will be an increase in the back office to deal with the administrative burden of accounting for the VAT regime.
 
“Some lawyers may have no one to day. It should create more work, and have an employment stimulus effect in the legal profession.”
 
Tribune Business sources have suggested one major query that attorneys have over VAT is whether it will have to be levied on billings charged to foreign clients, with some believing this does not happen in the UK.
 
Given that the Government’s philosophy is that VAT is levied in the jurisdiction where the product/service is consumed, and that such legal services were consumed in the Bahamas, it seems likely that foreign clients will have to pay VAT.
 
Another issue is that the price increases caused by adding 15 per cent VAT to legal billings may cause lower and middle income Bahamian clients to exit the market.
 
This would be especially concerning on land and real estate purchases, as it would expose Bahamians to deals where - if there was no title search by an attorney - they might acquire properties with bad title.
 
Mr Munroe, though, said it was unclear whether VAT would increase the cost of legal services, given that the Bahamian market was intensely competitive.
 
“The market will determine how much of the increase caused by VAT will be passed on,” he told Tribune Business. “I don’t have any trepidation of doom and gloom.”
 
Mr Munroe said what was missing from the VAT discussion was an “ideological” debate on the size of government and welfare state that was desirable in the Bahamas.
 
Since all three political parties backed the notion of some form of welfare state, he added that “some form of taxation” was necessary to finance it.
 
The issue then became one of form and alternatives to VAT, and Mr Munroe said he had only heard income tax being mentioned, which “comes with its own problems”.
 
“On balance, as a country we have to stop opposing and opposing things,” he said. “It’s laughable that the FNM is opposing VAT when it came out in support of it in government.
 
“We have to get past this thing. We seem to have a system where we have to oppose and oppose, and that’s not the Westminster system as I know it.”
 
October 09, 2013
 
 
 

Tuesday, October 8, 2013

What will be Perry Christie Legacy?

The evolving Christie legacy


The Nassau Guardian Editorial
Nassau, The Bahamas


The return of Hubert Ingraham to the leadership of the Free National Movement (FNM) in 2005 marked the beginning of an all-out assault on Perry Christie.  The then revitalized FNM branded deep into the political flesh of the Progressive Liberal Party (PLP) leader disparaging terms, describing Christie as inadequate as a leader and as a man.

When the FNM won the 2007 general election it continued the assault.  Christie experienced much torment in the House of Assembly for the next five years, a consequence of coming second in a two-party election.

Many people still regard Christie as weak.  Now, though, those people must at least acknowledge that he was strong enough to sit in Parliament for five years and take the taunts of men and women who had far fewer accomplishments than he did.  Some who describe themselves as strong don’t have what it takes to sit in Parliament out of power and face the criticisms of the other side.

Christie is now back in the post he lost in 2007.  He has also retired Hubert Ingraham, his friend and rival.  He is 70.  He has been in the House of Assembly from 1977, and was a senator before that.  In the winter of his political career, he now sits as “master of his own fate”.  Christie has a decision to make, the same decision Ingraham and Sir Lynden Pindling had to make.  Ingraham and Sir Lynden messed up that decision.

It is, of course, when to go.  Some may say it is too early to think of such a thing after election wins.  But for the wise, long-term planning is a constant companion.

After scrapping through a controversial 1987 general election, Sir Lynden ran again in 1992 and lost.  He ran yet again in 1997 and suffered a catastrophic defeat.  Ingraham made history in 2007, coming back and becoming prime minister for the third time.  In the face of a down economy, a roadwork debacle and a crime problem he ran again and was sent into retirement in defeat.

Christie can see what happened to his mentor.  He can see what happened to his friend.  He must now choose how it will end for him.

Hubris is the greatest threat to great men.  Thinking they are the best things ever and that they will always be loved, many leaders march over political cliffs confident that their greatness will sustain them.  When they fall and fail, many realize years later that it was obvious way back then that there was a noble and easy to choose exit point different from crushing defeat.

The choice of when to leave for undisputed leaders is a personal one.  No colleague can force you to go.  What must be remembered, though, is that it is not fun for defeat to be your last memory in political life.  For some it is like a nightmare that cannot be escaped.

If Christie chooses his exit strategy involving handing over power at a point of his choosing, and retiring at a point of his choosing, he would prove to be wiser than Ingraham and Sir Lynden in crafting his exit.  He must be careful that he does not wander through these years, having made no decision about his future and ‘accidentally’ running again five years from now because it is just too close to the election.

If Christie wants to run again as leader of the PLP, no one can stop him.  But, he should make that choice rather than drifting into such a decision.  If he departs he should do it properly giving the next PLP leader time to make some impression to the country before heading into the next election.

It will be interesting to see what Christie chooses.  Will he be like Sir Lynden and Hubert, or will he leave while he is on top?

October 08, 2013

thenassauguardian

Sunday, October 6, 2013

Bahamas Motor Dealers Association’s (BMDA) has “big concerns” over the Bahamian Government’s proposed 15 per cent Value Added Tax (VAT) ...given how the tax had impacted their counterparts in other Caribbean countries

Auto Dealers Fear 40% Sales Slump From Vat






By NEIL HARTNELL
Tribune Business Editor
Nassau, The Bahamas



Bahamian auto dealers fear Value-Added Tax’s (VAT) implementation will cause the sector to follow its Caribbean counterparts into a 30-40 per cent sales decline, with one arguing that the proposed tax was “not the right fit for our economy”.
 
Fred Albury, the Bahamas Motor Dealers Association’s (BMDA) president, told Tribune Business that its members had “big concerns” over the Government’s proposed 15 per cent VAT given how the tax had impacted their counterparts in other Caribbean countries.
 
Apart from the likely impact on new and used car sales, Mr Albury acknowledged that another concern - as had happened in St Lucia and Grenada - was that a 15 per cent VAT on auto service and parts bills would drive consumers to ‘bush mechanics’ and firms that did not have to register to pay the tax.
 
Suggesting that the Bahamas follow the lead established by Turks & Caicos and instead implement a sales tax, Mr Albury urged this nation not to “go down the hell hole” that other VAT-adopting Caribbean countries had fallen into.
 
“If you look at what happened in St Lucia and Grenada, and places where they’ve introduced VAT, it’s had a negative effect with sales down 30-40 per cent,” Mr Albury told Tribune Business.
 
Such a drop in auto sales in the Bahamas post-July 1, 2014, could have a calamitous effect on a sector that is still 50 per cent off its pre-recession high, likely sparking reduced working hours and lay-offs.
 
Mr Albury, the Auto Mall, Executive Motors and Omega Motors head, disclosed that VAT’s impending implementation was already having an impact on buyer behaviour.
 
Given that VAT’s introduction is supposed to coincide with the reduction of import duties and Excise Taxes, he explained that many purchasers were ‘holding off’ in the belief (possibly mistaken) that auto prices would fall due to cuts in the industry’s current tax structure, which ranges from 65-85 per cent.
 
“I’ve already got customers, a rental car business, saying: ‘Why buy any vehicles now at 65 per cent, 75 per cent, 85 per cent? When VAT comes along, the duty will be reduced. I’ll wait’. It’s already having a ‘wait and see’ effect for business out there,” Mr Albury said.
 
And he confirmed to Tribune Business that this newspaper was “absolutely correct” in its understanding that VAT’s introduction in St Lucia and elsewhere had resulted in auto owners there taking their vehicles to ‘bush mechanics’ and small operators in a bid to escape VAT on services and parts.
 
“That would be a big concern,” Mr Albury acknowledged. “If they go to a one-man operation, and not have to pay VAT rather than go to an authorised dealer, we will have to start cutting heads. It will have a spin-off, trickle down effect.”
 
He expressed hope, though, that this would be “offset” by the quality he and other new car dealers offered.
 
“Probably the customers we don’t want will go that way,” he added. “We’ve put a lot of money into technology and training, and a lot of vehicles have to go back to the dealer for diagnosis.”
 
Noting that he had just brought in a $3 million spare parts shipment, with a likely duty rate of 55 per cent, Mr Albury said his “biggest concern” was the timing of VAT implementation, and the impact on unsold stock he had already paid existing tariff rates on.
 
“Do I have to eat the portion of duty that I’ve already paid,” Mr Albury asked. The Government, in fairness, has talked about addressing this issue via the use of bonded warehouses or companies managing their existing inventory such that they ‘run it down’ before VAT implementation.
 
Mr Albury said the BMDA had already had one meeting with the Ministry of Finance on VAT, and was now drawing up “a list of concerns” in response to the latter’s request. A further meeting is supposed to be held.
 
“Right now, we’re picking straws out of the sky,” the BMDA president said on VAT specifics, due to the fact that the legislation and accompanying regulations have yet to be published.
 
“I know the Government has a thirst for revenue, but the VAT tax is not the right fit for our economy,” Mr Albury told Tribune Business. “It’s a service-oriented economy. If it was an economy where we produced manufactured goods, maybe.
 
“I hate to predict doom and gloom, but I don’t think VAT is a good fit for our type of economy, and I don’t see why we have to rush into something that has destroyed other economies.
 
“It [VAT} sounds good on paper, but when you factor in the underground economy..... The Bahamas is already known as a country of pirates, and they will find a way to get around paying VAT,” Mr Albury added.
 
“They might catch a few, but when people start bartering services and goods, it’s going to be like an organised underground market out there.”
 
Mr Albury said both the Cayman Islands and Turks & Caicos had successfully resisted the implementation of VAT, and the latter had instead implemented a sales tax “geared towards tourism” and the industries it hosted.
 
“That might be the best way of doing this,” Mr Albury said, backing a sales tax for the Bahamas.
 
He added that the Turks & Caicos had witnessed a major public education campaign on what VAT meant for them, complete with bumper stickers, t-shirts and petitions, and 
“that might possibly have to happen here”.
 
Mr Albury noted that countries that had tried to increase their VAT rates, such as Barbados, the Dominican Republic and the UK, had either suffered a fall in revenues (driving consumers to the underground economy) or experienced such public pressure that they ultimately reversed course.
 
Calling on the Bahamas not to follow the advice of the International Monetary Fund (IMF) and other multilateral institutions like sheep, Mr Albury told Tribune Business: “We’re one of the jewels of the Caribbean.
 
“Why should we aspire to be like the others going down into the hell hole, the sceptic tank? Let’s do something different, and not be dictated to be the WTO and IMF.... Is it worth joining the WTO for what the consumer is going through?”
 
Urging the Government to work with the private sector to find other, non-VAT, ways to raise revenues while also cutting spending, Mr Albury said: “VAT will have a negative effect on us for a couple of years.
 
“We were just starting to come out of recession, and if we will be hit by VAT a lot of [business] places will not survive.”
 
October 03, 2013
 
 
 

Saturday, October 5, 2013

The implementation of Value-Added Tax (VAT) in The Bahamas ...without a reduction in current revenue measures ...is a recipe for recession

Vat Move 'A Recipe For Recession'





By AVA TURNQUEST
Tribune Staff Reporter
aturnquest@tribunemedia.net
Nassau, The Bahamas




THE implementation of Value-Added Tax without a reduction in current revenue measures is a recipe for recession, former finance minister and economist Sir William Allen said yesterday.

Sir William said that a 2014 roll out of the new tax system was “not doable”, and likely to result in disappointment and frustration for both the government and the taxpayers.

He maintained that the economy was still “too weak” for an increase of the minimum wage as a way to offset the “pain” of VAT.

Sir William said: “Economic performance is very weak, the economy has not yet recovered from the 2007/2008 period. It is still very weak and the recovery is very anaemic. An increase to minimum wage will be contrary to improvement in the economy, it would work against the improvement of the economy. You have to consider the timing.”

He added: “I agree that VAT will not be without pain, because the very nature of VAT, it’s going to impact everybody in society.

The Government is proposing to implement VAT on July 1, 2014, at a rate of 15 per cent, with the hotel industry to be subject to a lower 10 per cent rate. The Government’s White Paper on tax reform proposes to exempt those companies with an annual turnover of $50,000 or less from having to pay VAT.

Sir William called on the government to clarify whether or not it intended to reduce current taxes to make room in the economy for VAT, adding that whether or not officials could strike a balance between existing taxes and the new structure would ultimately determine the strategy’s success.

“The public is not expecting to pay the same level of custom’s duties along with everything. If that is so, there is gonna be hell to pay in this economy.”

“They’re not speaking to that clearly enough.”

Another worrisome component of the government’s VAT initiative is it’s timeline, according to Sir William, who posited that an ideal roll out would be three to five years.

He said: “My concern with the VAT is that they are seeking to put in place much too short a schedule. I don’t think that sufficient time has been given to putting it in place – to put into effect a VAT system by July 1, 2014, with the best of intentions, that is not doable in my view.”

Sir William said: “It is not doable, or if it is done it will be very inefficient and it’s going to lead to considerable disappointment on (government’s part) in terms of revenue that they collect and a lot of frustration on the part of the taxpayers.”

While Sir William noted that it was obvious the government was hard pressed to close the some three per cent gap between GDP revenue and expenditure, he maintained that it was highly improbable that the government could recoup that figure within the 2014/2015 fiscal year.

Sir William said: “You know what they do when you can tell something is wrong in an economy– if you look at the buildings or parks and they’re not maintained and if you listen to people and they’re not being paid - that’s how you know something is wrong, that’s an indication of fiscal pressure, money pressure.”

“And in light of that it’s going to be difficult to see how they are going to reduce their expenditure. There is going to be pressure for further expenditure.”

Pointing to the cost of the government’s anti-crime initiatives, which he commended, Sir William said: “I see nothing that permits them to reduce their expenditure, I don’t see any possibility on the horizon that permits for that.” 

Sir William said: “I think there’s a very valid rationale for putting [VAT] in place, the government is running a capital deficit and a current account deficit. The current account deficit is the most worrisome because that means that your revenue is not covering your ordinary expenses.

He said: “In the context of a household, if you have to borrow money to pay your rent you’re in trouble. If you have to borrow money to buy food you’re in trouble - that’s a current account expense.”

He added: “That’s a big number, if you consider a GDP of say $9 billion dollars, so that three per cent you’re talking about $270 million. You have to do something about that, it’s not a way that you can continue to operate for a long period of time and in fact we’ve been running like that for much too long.”

Nearly eight months after the release of the Government’s White Paper on Tax Reform, the former finance said he was still unimpressed with the PLP administration’s reform strategy.

Back in July, Tribune Business reported that Sir William was “doubtful” that the Government will hit the target timelines for its two key fiscal objectives – the introduction of Value-Added Tax (VAT) and eliminating the fiscal deficit by the 2015-2016 Budget year.

Sir Allen said that while he would prefer an income tax, the Bahamas has already sold itself as a “tax haven”.

“We boast,” he said, “all our marketing has been ‘no income tax’, and there is a certain fear in certain quarters that once you establish an income tax it’s only a matter of time before it impacts [offshore finance].

Sir William said: “We seek as much as we can to exclude the offshore sector from this tax on the assumption that one of the reasons why they come here is that they come to avoid income tax. One can argue whether that continues to be a valid position, but a lot has changed in the Bahamas.”

October 04, 2013


Friday, October 4, 2013

Welcome to the new Libya

By Abdel Bari Atwan:




WELCOME to the new Libya, a country ‘liberated’ by NATO which now finds itself without the oil revenues which could make it rich, with no security, no stability and assassinations and corruption at unprecedented levels.

Libyan cities destroyed

Last Friday [September 13], the Economist magazine published a report about the implosion of Libya. My attention was caught by the pictures that illustrated the piece – particularly one of some graffiti on the wall of a seafront cafe in the capital Tripoli. ‘The only way to Heaven is the way to the airport’ it read.


The joke is indicative of the troubled state of Libya nowadays following ‘liberation’ by NATO warplanes in the sky and the revolution on the ground which toppled the dictatorial regime of Muammar al-Ghadaffi.


A newborn showing effects of
 bombing with depleted uranium.

Recently I have met many people who are visiting London from Libya and they tell stories of life there which are hard to believe.

The capital Tripoli had no water or electricity for a whole week.

The armed militia dominate and rule the streets in the absence of a workable government, a national security establishment and basic municipal services.

Onoud Zanoussi, the 18-year-old daughter of Abdullah Zanoussi, the former chief of Ghadaffi’s security establishment, was kidnapped on her release from prison following seven months behind bars accused of entering her country illegally. She was abducted in front of the prison gates and the abductor was one of the guards!

Two years ago, the British and French business community sharpened their teeth and rubbed their hands with glee in anticipation of their share of Libyan reconstruction. Now there isn’t a single foreign businessman in Tripoli, all of them ran for their lives after the assassination of the American Ambassador and attacks on several foreign Embassies and Consulates.

During the NATO bombardment, news from Libya dominated the front pages and was the first news item on every Western and Arabic television station. There was 24-hour coverage about the Libyan Liberation miracle and the great victory achieved by NATO and the revolutionaries. Nowadays it is very rare to find a Western reporter there and even more rare to read a decent report about Libya and what is really going on there.

Oil was the main objective and the real reason for the NATO intervention; but oil production has all but ceased due to a strike by security guards on the oilfields and export terminal. The ostensible reason for this strike is the demand for a pay rise but there is another, equally powerful, motive – they are protesting the demands of various separatist movements who are calling for self-rule for oil-rich Barca (Cyrenaica) with its capital in Benghazi. Most of Libya’s oil reserves are situated here.

Rather than the local or national government, a militia is in control of most of the oilfields and the export terminal; it has started to sell huge amounts of oil on the black market and is trying to expand these activities leading Ali Zidan, the Prime Minister, to threaten to bomb any unauthorized oil tanker going anywhere near these sites.

The irony is that the same thing is happening now in Eastern Syria, where the militia and local tribes are in control of the oilfields in Deir Al-Zour, refining the oil themselves by hand and selling it on illegally. The same thing is still happening in the south of Iraq.

Iraq and Libya, of course, have ‘benefited’ from Western intervention and Britain and France have been proud to repeat what the mother of the West (the U.S.) used to say about Iraq; first in Libya and now – of negotiations fail – in Syria. That is: intervention will bestow great sophistication on the affected country which will immediately become a model of prosperity and stability and lead the way for other Arab countries, which are ruled by dictators, to invite and welcome military intervention. In fact, this model has produced the worst kind of anarchy, failed security, political collapse and disintegration of the state.

Chaos rules in Libya. The assassination of politicians and journalists has become normal news in today’s Libya, to the extent that Colonel Yussef Ali al-Asseifar – who was charged with investigating a rash of assassinations and arresting the people behind it – was himself assassinated on August 29 when men from an unidentified group put a bomb under his car.
On the anniversary of 9/11 last week, a huge bomb ripped through the Foreign Ministry building in Benghazi.

Human Rights Watch has highlighted another atrocity in Tripoli on August 26, 2013, at the Main Corrections and Rehabilitation Institution, known by its former name al-Roueimy, where around 500 detainees, including five women, were being held. The prisoners were on hunger strike to protest the fact that they were detained without charge and in the absence of a fair trial. Unable to produce its own security detail, the government called in the Supreme Security Committee – composed of former anti-Gadaffi militiamen – to put down the uprising. Militia forces stormed the prison and shot the prisoners with live ammunition, wounding 19 people.

The Prime Minister of Libya – Awadh al-Barassi – resigned on 4 August and was replaced by Ali Zeidan. Then, on 18 August, the interior minister, Mohammed al-Sheikh, resigned after only three months in post. He cited lack of support from Ali Zeidan and the government’s failure to deal with widespread unrest and violence, to gain the people’s trust, or to adequately fund state agencies to provide the most basic services.

Libya is simply disintegrating along tribal and geographical fault lines. Most of its people are in state of fury, including the Berbers in the south, and national reconciliation is a distant prospect.

Popular frustration is at its peak; yet when demonstrators took to the streets outside the barracks of the powerful ‘Libyan Shield Brigade’ to protest the unwarranted power of the militia, 31 people of their number were shot dead. The militia act completely outside the law.
Suleiman Kjam, a member of the parliamentarian committee for Energy, told a Bloomsberg reporter that the government is now spending its financial reserves after the production of oil dropped from 1.4 million barrels per day earlier this year to less than 160,000 bpd. He warned that if this situation continues, in the next few months, the government will not be able to pay the salaries of its employees.

The Gadaffi regime – and we say this for the millionth time – was an oppressive dictatorship but Libya nowadays, with corruption at it peak and security non-existent, is difficult to understand or accept. Especially when we remember that Libya was liberated by the most sophisticated and advanced countries on the planet, according to Western criteria.

Mr. Mohammad Abdel Azziz, the Libyan foreign minister, surprised many in the West and Arab world alike on 4 September when he objected to imminent U.S. air strikes on Syria at a special meeting of the Arab League he was chairing to discuss possible intervention.

Maybe Mr. Abdel Azziz, like many of his Libyan people, has formed his opinions as a result of the experiences of his own countrymen after Western military intervention.
We hope that the people of other Arab countries, and particularly Syria, will learn from the Libyan example.

It is true that some suggest that this is a temporary state of affairs for Libya and that following this transitory period, stability will reign. They advise us to be patient.

We hope their prophecy will prove to be correct but remain extremely skeptical with Iraq and Afghanistan also before our eyes. (Global Research

October 03, 2013