What did CARICOM get from Canada?

The greatest foreign affairs prank by the Caribbean Community, CARICOM on Canada

By Ian Francis:

CARICOM Press Communiqué 98/2012 of April 16, 2012 under the caption “CARICOM lobbies Canada for G20 help” has caught my interest and curiosity, which warrants a Caribbean News Now Article on this critical issue.

It is important to state that my curiosity meant reading over the press communiqué several times in order to avoid criticisms from my analysis and response. Therefore, it is incumbent upon my part to address the content of the release in a chronological manner.

Paragraph one of the release highlighted that a meeting was held between the heads of government of the Caribbean Community (CARICOM) and the Right Honourable Stephen Harper, prime minister of Canada. At the meeting, CARICOM heads requested Canada to continue the lobby to the G20 nations to focus on the plight of small vulnerable economies and highly indebted middle income countries. Harper nodded and maybe there is a reason why he opted for a non-verbal response.


Paragraph two lamented that it was the second meeting with a G20 nation, citing Mexico as the previous one. Again, there are no indicators as to how Mexico responded. Given the fact of increased drug trafficking, crime and lawlessness, human rights violation and recent natural disasters, one wonders if Mexico is seen as a reliable partner within the G20 community. Given this situation, it will be interesting to see future political development in Mexico and its relations with CARICOM states.

Paragraph three highlighted four topics that apparently consumed Prime Minister Harper’s time. These were 1) economic issues; 2) the ongoing negotiations for a trade and development agreement between the two sides, which it is believed is the CARIBCAN trade agreement; 3) security cooperation; and 4) an acknowledgement of the special relationship between Canada and CARICOM, which has existed for almost a century and described the relationship as “dynamic and evolving based on mutual respect and shared interests, from which the respective nations have benefitted.”

Paragraph four is very interesting as CARICOM states expressed appreciation to Canada for its assistance in advocating CARICOM’s views in a global forum such as the G20. Canada was asked to continue its advocacy role with even greater urgency, taking into consideration the seemingly endless global economic and financial woes that continue to wreak havoc on the small, vulnerable economies in the Community.

Paragraph five outlined an information sharing mechanism aimed at increasing Prime Minister Harper’s awareness about some of CARICOM initiatives. The prime minister was advised of CARICOM’s efforts to use its collective strengths to combat the challenges and secure the future through diverse measures. They emphasized the CARICOM Single Market and Economy (CSME) although they were not able to indicate its current status; establishment of CARICOM enterprises, which fell short of details even when the prime minister sought information about future participation by Canadian entrepreneurs; and, of course, they took the opportunity to express appreciation for the support provided to the CARICOM Secretariat through the CARICOM Trade and Competitive Project, which will likely integrate Haiti into the CSME.

Post Summit Perspective on the Canada-Caribbean Meeting:

The communiqué’s synopsis gives a clear indication about the Caribbean Community and Canada meeting. Once again, Canada should be commended for affording the opportunity to meet with a group of leaders who three months ago was unable to show guts by telling Venezuela and their misguided Latin nation allies that Canada should be invited to attend CELAC meeting in Caracas. They went along and joined the Latin pariah states in excluding Canada. In my view, Canada will always remain a friend of the Caribbean Community irrespective of their transience when El Presidente speaks.

The meeting with Canada demonstrated the show of regional collectivity, cooperation and leadership given by the CARICOM Secretariat. However, those who attended should understand that, although Prime Minister Harper was impressed by the show of solidarity, his briefing books and three ring binders would have indicated a totally different situation. So, Caribbean Community leaders, do not be fooled. The same applies to Mexico and the United States.

The Caribbean Community leaders who participated in the meeting need to clearly understand Canada’s role in the Caribbean. Traditionally, in the conduct of its foreign relations, Canada has always recognized the region as two distinct vantage points. Canada has traditionally maintained strong bilateral and multilateral cooperation with Barbados, Jamaica, Trinidad, Belize and the Republic of Guyana. They have established diplomatic missions in each of these nations as well as strong cooperation agreements ranging from military to education.

What was previously known as the Windward and Leeward grouping, which is now the Organization of Eastern Caribbean States (OECS), Canada has opted to allow its High Commission in Barbados to handle OECS Affairs. There, OECS states must understand that, although Canada recognizes and understands the plight of the OECS, there are indeed preferential treatments to the five nations mentioned above. Unfortunately, OECS leaders have not spent the time to re-orient Canada’s strategy in the region. A clear indicator of OECS deficiencies is accepting the suggestions of a soon to be retired Canadian diplomatic official to close the OECS diplomatic mission in Ottawa as a cost containment effort. To many diplomatic observers, it is an extremely dumb move to close a vehicle that provided an OECS diplomatic presence in Ottawa. The decision to close the OECS diplomatic mission in Ottawa was ill-fated and many leaders are now privately expressing regrets at the decision made in St Vincent.

The Caribbean Community’s desire to see Canada continue lobby efforts with G20 countries is laughable and could be considered the greatest foreign affairs prank by the Caribbean Community on Canada. Why is it laughable? Many of the G20 nations have bilateral diplomatic relations with most of the independent nations that constitute the community. While the exchange of diplomatic personnel might be at a non-resident level, the mere fact that all community members have flourishing and active diplomatic missions at the United Nations and in Washington should provide them the opportunity to access G20 nations to discuss economic and vulnerability issues on a bilateral level rather than begging Canada to ensure that the regional economic plight is mentioned in the final communiqué of G20 meetings.

Three other issues caught my attention. These are: 1) Canada’s significant multilateral assistance to the CARICOM Secretariat to implement the Caribbean Single Market and Economy (CSME) program, and the inability of the Community leaders to give an accurate progress report on the status of the CSME to Harper; 2) Canada’s false belief that OECS nations’ economic problems can only be effectively resolved by plowing more multilateral assistance within the CARICOM Secretariat, knowing full well that such assistance is not impacting on daily conditions faced by the poor and disadvantaged; and 3) the OECS Caribbean Community leaders shortsightedness, and lack of an economic development bilateral strategy for presentation to Canada.

To conclude, I will not add any further comments about the revised CARIBCAN trade agreement. However, I am curious about what OECS nations will sell and market in Canada, as the Caribbean rum environment in Canada is very competitive.

So, personnel in OECS foreign ministries need to become more visionary and place less emphasis on the next foreign posting.
April 23, 2012

caribbeannewsnow

A modern Bahamas must adopt modern ways of conducting its affairs... and if we are to contemplate a reform of our tax structure... we ought to look at all forms of taxation ...and select the most efficient and the most appropriate for the benefit of all Bahamians

Pursuing tax reform

thenassauguardian editorial

 

Nassau, The Bahamas

Given the fiscal performance of the economy over the past few years and especially in the midst of the global recession, it has become increasingly clear that the days of relying on customs duties for the majority of the government’s revenue are rapidly coming to an end.

The arguments against, and the analyses of, the current tax regime are as numerous as they are compelling.

The more often repeated reasons are that customs duty as a major source of government revenue has outlived its usefulness because the system is extremely insensitive to changing circumstances in the economy; it is unintentionally unfair and regressive in its impact, particularly on low-income households, and at best it distorts the orderly and efficient working of a market economy.

To which we can add: In the context of the predominantly retail and wholesale services sector of the Bahamian economy, it ties up too much of the cash flow in advance of the first sale or turnover of the imported goods.

Some have argued, rather convincingly, that consideration ought to be given to introducing a more progressive tax regime, such as the value added tax (VAT), a tax regime that is used in more than 170 countries and that is generally considered less onerous on low-income households and small businesses.

Since the tax is levied on both goods and services, it is believed that the government’s overall take could increase without having to increase the tax rate.

Indeed, there may be scope for reduction in tax rates and fees in some specific categories.

In a country such as The Bahamas, that has historically boasted of its distaste for imposing direct taxes on income, the VAT has a certain amount of appeal in the sense that it has the potential to increase the tax yield to government without having to concede its historical adherence to no tax on income.

Given the developments over the past few years with the removal of the veil of secrecy and confidentiality as regards to bank accounts in The Bahamas, and more recently the almost 30 tax information exchange agreements (TIEAs) signed by the government and other foreign jurisdictions, perhaps the time has come to re-examine tax reform in The Bahamas beyond the consideration of a VAT.

Consideration could be given to a broad-based or selective income tax regime which would permit the country to enter into double taxation agreements, and by so doing obtain tax income from foreign companies operating in The Bahamas without increasing the overall tax burden to those companies since — because of the double taxation treaty — the existing tax would be shared between our Public Treasury and that of the company’s home country.

Such a move could also provide added protection against the Organisation for Economic Co-operation and Development’s constant threats to destabilize the so-called “tax haven” countries.

A modern Bahamas must adopt modern ways of conducting its affairs, and if we are to contemplate a reform of our tax structure, we ought to look at all forms of taxation and select the most efficient and the most appropriate for the benefit of all Bahamians.

Apr 23, 2012

thenassauguardian editorial

 

Caribbean Blog International

Bahamas Petroleum Company (BPC) stock has lost a fourth of its market value on the heels of a declaration from Prime Minister Hubert Ingraham that his government would not allow BPC to drill for oil in Bahamian waters

Oil company’s stocks plummet

Drop in market value follows PM’s comments

By Candia Dames
Guardian News Editor
candia@nasguard.com

Nassau, The Bahamas

Bahamas Petroleum Company (BPC) stock has lost a fourth of its market value on the heels of a declaration from Prime Minister Hubert Ingraham that his government would not allow BPC to drill for oil.

The company recently said it would seek to renew its licenses with The Bahamas government.

BPC wants government approval to drill an oil well in Bahamian waters by April 2013.

In 2005, BPC began its negotiations with the Christie administration for its various permits and licenses to look for oil in the country’s territorial waters.

Since then, the company has only done 2D and 3D underwater seismic testing to figure out the best areas to drill for oil and get a better handle on the country’s oil potential.

The Nassau Guardian asked the prime minister on Wednesday whether his administration would allow oil drilling in Bahamian waters, and he responded ‘no’.

Ingraham also said, “We are undertaking studies and after that we will see, but we don’t have any plans to drill for oil in The Bahamas.”

He also said certain senior members of the Opposition Progressive Liberal Party (PLP) have direct links to BPC.

“They (BPC) are very much tied to Perry Christie and those,” Ingraham said.

“In fact, I think he may be a consultant for them. He is certainly involved with them.”

Ingraham also suggested that attorney Sean McWeeney, a former PLP attorney general, is also tied to BPC.

On its website, under company advisors, BPC lists the law firm Davis & Co., run by PLP Deputy Leader Philip Brave Davis, as part of its Bahamian legal team.

McWeeney’s law firm Graham Thompson & Co. is listed as the second firm representing BPC in The Bahamas. McWeeney is a partner in the firm.

On Thursday, Christie told The Nassau Guardian he is a legal consultant for Davis & Co., the law firm which represents Bahamas Petroleum Company.

Christie confirmed that the company benefits from the advice he provides to BPC’s legal team.

Christie said the working relationship with Davis & Co., the law firm owned by Brave Davis, began after his party lost the 2007 general election.

Christie would not say definitively if his administration would allow any company to drill for oil if the PLP wins the election. He said that decision would depend on environmental studies presented to government on the issue.

While in opposition, the PLP has been relatively quiet on the issue of oil drilling in The Bahamas.

Former Minister of Trade and Industry Leslie Miller, however, recently accused the current administration of failing to keep the Bahamian people properly informed on the matter.

Apr 21, 2012

thenassauguardian

Bahamas Blog International

US facing bold new calls for 'drug war' alternatives

by Ekow Bartels-Kodwo


Research Associate at the Council On Hemispheric Affairs.



At a poorly attended summit of Central American leaders, the host President Otto Perez Molina of Guatemala reiterated calls for the decriminalization of recreational drug use. Although some regional former heads of state have called for such a solution, President Molina became the first sitting head of state to openly advocate for such a controversial stance when speaking at the Central American Security Summit in Antigua, Guatemala.

Billed initially as a groundbreaking summit during which “alternative solutions” to the War on Drugs were to be discussed, the conference’s emphasis on how to manage the War on Drugs, as well as talk of decriminalization, were sidelined before the conference even began.

After accepting invitations to the conference, three heads of state, representing fully half of the countries in the region, pulled out of the conference on short notice. This was likely the result of pressure from Washington, which has long opposed legalization, and the reluctance of the Organization of American States, the (OAS) to face up to the issue of drug trafficking and related violence.

President Molina declared that the War on Drugs had failed, asserting that it was time to reconsider drug policy in the region. The summit, he hoped, would put an end to the stigma surrounding the discussion of decriminalization as a serious policy alternative to outright prohibition. He added that the conflicts surrounding their countries have cost Central American countries hundreds of millions of dollars annually and tens of thousands of lives.

Referring to the current policy, Molina opined “We have seen that the strategies that have been pursued against drug trafficking over the last 40 years have failed.” He added that there was a need to “look for new alternatives” and “end the myths, the taboos, and tell people we need to discuss this.”

Also in attendance was Laura Chinchilla, President of Costa Rica, who decried the cost in terms if human lives, asking rhetorically, “How much have we paid here in Central America in deaths, kidnapping, and extortion?”

The summit came in the wake of US Vice President Joe Biden’s trip to the region in early March, wherein he restated the United States’ opposition to the decriminalization of drugs in Latin America, and attempted to muster support for a renewed push in the US-led War on Drugs. Speaking in Mexico City, Vice President Biden told reporters that, while the discussion on decriminalization was a “legitimate” one, the dangers of legalization outweighed any benefits.

Biden’s visit came shortly after the OAS warned against the crippling social and economic effects that Central American and Mexican drug cartels are having on the region. In remarks to the OAS-sponsored Conference on Transnational Organized Crime in Mexico City, OAS Secretary for Multidimensional Security, Adam Blackwell said that the state of transnational crime in the region not only threatens to undermine institutional security and stability, but also poses a systemic threat to democracy.

In his further comments at the conference, Secretary Blackwell admitted that there had been an increase in the regions drug-related violence, but stressed the importance of remaining steadfast in the ongoing fight against the criminal organizations behind it. He stated, “I urge you to direct our efforts to the development and strengthening of our institutional capacities, through knowledge-sharing, the exchange of information and experiences, and wherever possible, joint action.

This increased pressure on area countries from the OAS and the US, as demonstrated by Mr Blackwell and Vice President Biden respectively, to stick to the script in regards to the war on drugs, is symbolic of how oblivious the hand-me-down US policy regarding her neighbours in the western hemisphere is to changing realities on not just the war on drugs, but on seemingly unrelated issues such as the US embargo against Cuba.

The calls by Presidents Perez Molina of Guatemala and Chinchilla of Costa Rica, while by no means unequivocal, signify a shift of tectonic proportions when it comes to dealing with the drug gangs that have terrorized the Central American countries from their bases in Mexico.

It remains to be seen, however, just how unyielding such calls for legalization will be in the face of strident US opposition. Already, President Molina has suggested alternatives to decriminalization. He proposed a tax levied on the US for all drugs seized in Central American countries because the US is the largest consumer of these drugs. He also proposed that Central American governments set up a court with regional jurisdiction that deals with transnational similar to the approach of the UN’s International Criminal Court.

Overall, two factors remain to be weighed. First, will the United States encourage some of the new alternative solutions presented by President Perez Molina? But even more important to the verifiably bona fide post-colonial sovereignty of these countries is whether or not those Latin American states ultimately do genuinely favor decriminalization and whether or not their leaders were bold enough to raise the issue at the Summit of the Americas this April, at which the United States was represented by its Diplomat-in-Chief, President Obama and not Joe Biden as was the case in early March.

Whatever be the case, it is time to stop throwing away the baby with the bathwater and to put heads together in order to put a halt to the menace that has plagued, and continues to undermine the fundamental and systemic national security of the entire Central American region. The time has come for the United States to allow the region to start seriously looking at less costly policy alternatives to the war on drugs, in order to remove this deepening stain on the conscience in order to move the society that we live in from one that we have cause to be ashamed of living in to one that future generations can be proud to be a part of.

The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being "one of the nation's most respected bodies of scholars and policy makers." For more information, visit: http://www.coha.org/ or email coha@coha.org

April 19, 2012

caribbeannewsnow

Bahamas Blog International

Bahamas Prime Minister Hubert Ingraham ...says that there would be no oil drilling in Bahamian waters if his party - the Free National Movement (FNM) is re-elected to office

The Bahamas PM: FNM government won’t drill for oil

By Taneka Thompson
Guardian Senior Reporter
taneka@nasguard.com

Nassau, The Bahamas

Prime Minister Hubert Ingraham said yesterday - there would be no oil drilling in Bahamian waters if his party is re-elected to office.

Asked if his administration would allow drilling if returned to power, he said ‘no’.

Ingraham added that Bahamas Petroleum Company Plc. (BPC) — the company licensed to explore for oil in Bahamian waters — has direct ties to Progressive Liberal Party (PLP) Leader Perry Christie and other senior members of the party.

In 2005, BPC began its negotiations with the Christie administration for its various permits and licenses to look for oil in the country’s territorial waters.

Since then the company has only done 2-D and 3-D underwater seismic testing to figure out the best areas to drill for oil and get a better handle on the country’s oil potential.

However, in 2010 the Ingraham administration placed a moratorium on new oil exploration or drilling licenses. The moratorium came after the disastrous Deepwater Horizon oil spill in the Gulf of Mexico.

“We are undertaking studies and after that we will see, but we don’t have any plans to drill for oil in The Bahamas,” Ingraham said.

He was responding to questions put to him by The Nassau Guardian after he completed a tour of Bains Town and Grants Town yesterday.

“They (BPC) are very much tied to Perry Christie and those,” Ingraham said.

“In fact, I think he may be a consultant for them. He is certainly involved with them.”

Ingraham also suggested that attorney Sean McWeeney, a former PLP attorney general, is also tied to BPC.

On its website, under company advisors, BPC lists the law firm Davis & Co., run by PLP Deputy Leader Philip Brave Davis, as part of its Bahamian legal team.

McWeeney’s law firm Graham Thompson & Co. is listed as the second firm representing BPC in The Bahamas. McWeeney is a partner in the firm.

A press release posted on BPC’s website and published in Offshore magazine, said the company “now looks forward to the outcome of the Bahamian elections.

“Whatever the result, it anticipates a refreshed mandate to support exploration,” the press release said.

Ingraham said yesterday The Bahamas’ waters are too pristine and important for the country’s tourism product to risk drilling for oil.

“We’ve seen what happened in Louisiana with oil drilling,” Ingraham said, referring to the Deepwater Horizon oil spill.

BPC’s CEO Simon Potter recently told Guardian Business that drilling an oil well by April 26, 2013 was an important benchmark for the company. However, BPC’s current oil drilling license is set to expire this month.

Potter said he was confident that the company would receive an extension from the government; the renewal is subject to the company meeting certain obligations, terms and conditions.

Last September, the company began compiling its 3-D seismic data.

There is reportedly a 25 to 33 percent chance of oil being found under The Bahamas’ territorial ocean floor.

The company has also submitted its environmental impact assessment to the Bahamas Environment, Science and Technology Commission (BEST).

Apr 19, 2012

thenassauguardian

General Election in The Bahamas: ...Bahamians are expected to turn up at the polls in record numbers to vote in a new government - May 07, 2012

2012: The FNM’s new plan

The governing party puts forward its vision for the next five years

By Taneka Thompson
Guardian Senior Reporter
taneka@nasguard.co

Nassau, The Bahamas

With three weeks left until the general election, two of the three major parties jockeying for your vote on May 7 have released their blueprints for governance.  Last Thursday night, before thousands of jubilant supporters who converged at R.M. Bailey Park for a mass rally, Prime Minister Hubert Ingraham unveiled the Free National Movement’s Manifesto 2012.

The FNM’s extensive, 120-page document touches on the party’s plans to reduce and prevent crime, tackle illegal immigration, improve the country’s educational system, diversify the economy, reform the tax system and improve life for all Bahamians.  It places a heavy focus on youth development, national volunteering, business expansion and economic development of the Family Islands.

On Thursday afternoon, the Democratic National Alliance (DNA) released its Vision 2012 and Beyond – a document which sets out that party’s policies on crime, immigration, the economy and social issues.  At the time of writing this article, the official opposition Progressive Liberal Party (PLP) had yet to release its five-year blueprint, called “Our Plan”.  However, the party asserted that it had been releasing critical components of Our Plan, such as its crime fighting platform Project Safe Bahamas and a mortgage relief scheme for homeowners facing foreclosure, over the past several months.

While this is by no means an exhaustive look at Manifesto 2012, I have highlighted a few areas which should be of concern to voters.

Crime

In no other area has this administration faced more criticism and backlash than its crime fighting strategy.  Murders climbed to record levels under the FNM’s watch and incidents of other violent crime and anti-social behavior grabbed headlines during the past five years, in spite of the myriad of policies the government put in place to curb violence.

Critics from the opposition maintain that the government failed to deliver on its 2007 mandate for crime fighting and continue to lay the blame for the crime statistics at the government’s feet.  It is not surprising then that the fight against crime is listed as the main concern of the next FNM administration.

“Ensuring the safety and security of all Bahamians is our number one priority,” the manifesto says. “The business of police must be preventing crime not simply responding to it...  Our aim is not just to control bad behavior but to change it.”

In the document, the FNM lays out 11 ways it plans to ensure that the Royal Bahamas Police Force (RBPF) not only responds to crime, but also helps to prevent criminal behavior.  The FNM plans to accomplish this by increasing the police’s visibility and presence on the streets.  Low visibility is a common complaint from many in society who feel that officers spend too much time in their squad rooms and not enough time patrolling known criminal hot spots and neighborhoods which have become targets for housebreakers and armed robbers.

The FNM said during its next term in office, it will boost the ranks of the Royal Bahamas Police Force by 250 officers; require officers to spend half of their weekly shifts working the beat; and require police to spend as much time on the streets at night as they do in the daytime.  The FNM also said it will marry community policing with modern technology to increase the predictive capability of the police force and expand closed circuit television to assist in crime prevention and criminal detection. The FNM also says it will require district constables to hold monthly meetings in their areas to keep residents aware of crimes committed in their communities.

While placing more police on the streets and beefing up the command of the RBPF may put some residents at ease and catch a few criminals in the act, it will do nothing to root out the spirit of lawlessness, disorder and general disregard for human life that so many in our society are afflicted with. Focusing on at-risk youth, instilling positive values, education and affirmative life skills are the only long-term solution to the crisis our country is faced with.

There are several long-term initiatives in the FNM’s agenda that could lead to positive results if they are properly introduced and maintained.  One such policy is identifying troubled youth when they display anti-social or violent behavior in the school system.  The FNM says it plans to create “a fast and effective program in the school system and at the community level to address the early display of anti-social behavior by young persons as well as a targeted program for repeat offenders”.

Other proposed policies in the FNM’s manifesto for youth development include a mandatory community service program for government school students; creating a summer institute for boys making the transition from primary school to junior high; and creating a youth outreach initiative.

Education

Under its education platform, the FNM promised to ensure that every child is adequately numerate and literate before he or she leaves the third grade.

The manifesto says the FNM will create a mandatory work experience program if elected for another term, which will ensure that all high school seniors complete a minimum number of apprenticeship hours before being allowed to graduate.

The FNM also plans to place a heavier focus on skills training by expanding technical and vocational skills training offered at public high schools and increasing the budget allocation to the Bahamas Technical and Vocational Institute (BTVI).  The next FNM administration also plans to bolster programs at BTVI so that it can certify skills levels and standards for Bahamians trained in construction, plumbing, masonry, electrical work, etc.

Jobs

Another key issue in this election will be job creation.  According to recent figures released by the Department of Statistics, the country’s unemployment rate was 15.9 percent as of November 2011.  The unemployment rate for young people was 34 percent and the unemployment rate in Grand Bahama stood at 21.2 percent.

Unemployment and crime go hand in hand and in order to stem the level of violence and theft on our streets, the government must focus on job creation.  In order to stimulate job creation, a responsible government must look out for small businesses and create grants and stipends which allow them to remain afloat and keep people employed.

In its manifesto, the FNM said it will foster small and medium business development by giving more incentives to the manufacturing and industrial sectors; it will promote and encourage small resorts and bonefishing lodges that are Bahamian owned; and give incentives to entrepreneurs to open up shops in the Family Islands and create employment in those communities.  If re-elected, the FNM says it will also offer a one-time apprenticeship financial incentive to manufacturers for each apprentice they take on.

Tax reform

Although tax reform is noted in the manifesto under its plans to modernize the economy, just how the FNM will address the issue if re-elected is not made clear.

“Accelerate taxation system reforms to reduce dependence on border taxes and broaden the tax base,” is all the manifesto says on the issue.

Financial analysts have long maintained that the country has to move away from its heavily customs based tax regime to another taxation system which makes us more competitive in the global trade market.  Tax reform is also needed so that this country can fully comply with international trade agreements such as the one signed with the World Trade Organization.

Vote wisely

Bahamians are expected to turn up at the polls in record numbers to vote in a new government.  This election cycle there are many choices.  Three parties are fielding 38 candidates each and there are a handful of independents and fringe party members all hoping to be elected to Parliament come May 7.

In New Providence, it is now impossible to avoid the billboards and posters with the smiling faces of political hopefuls which crowd every corner, or to ignore the political ads filled with promises and election pledges which play every few minutes on the radio and television.

However, voters should not be fooled by the fanfare and theatrics which are commonplace in “silly season”.  In between the gibes, wisecracks and blame laying which are thrown about at political rallies are slivers of the real issues that will affect this country for the next five years and beyond.  The concerned voter, and every Bahamian interested in the future of this country, should make an informed choice based on the policies and promises each party and candidate has made on the campaign trail, along with their records in office.

The discerning voter should decipher the grandiose promises from the probable initiatives that can be implemented over a five-year period before he or she makes a choice.

Apr 16, 2012

thenassauguardian

Caribbean cruise ships: The imbalance of risk/reward and a Trojan Horse

By Robert MacLellan



April’s annual Caribbean Hotel and Tourism Investment Conference in Puerto Rico provides a highly appropriate time and venue to raise questions about the future of the cruise industry in the Caribbean and its impact on the region’s hotel sector.

Since the beginning of 2012 alone, four cruise ships have now experienced very serious incidents that could have resulted in disastrous damage to the marine environment in tourism dependent areas of the world. One ship, the MSC Poesia, was stranded on a reef in early January while approaching Port Lucaya, Bahamas. The other three ships drifted helplessly, without power or steering capability. The Azamara Quest was adrift for 24 hours in late March near the UNESCO World Heritage Site of the Tubbataha Reefs in the Philippines. The Costa Allegra was adrift in late February near the pristine Alphonse group of coral atolls in the Seychelles, until towed to port by a fishing boat, and the Costa Concordia drifted until it capsized on rocks in mid January on the Italian tourist island of Giglio.

The Caribbean is THE most tourism dependent region in the world, marketing itself primarily on its pristine beaches and reefs. In total, over 60% of the world’s cruise ship fleet is in the Caribbean in the winter high season – a greater number of ever larger ships today -- but which, self evidently, have inadequate emergency back-up systems to allow safe operation of the vessel in the event of a major fire or severe grounding or collision.

Costa is a division of Carnival Group and Azamara is one of Royal Caribbean Group’s brands. Together, their ships call at every major tourist island in the Caribbean. These two groups completely dominate the world cruise industry and their financial resources dwarf the GDP of most island economies in the region.

Few resources exist in most Caribbean island ports to limit the effect of similar or greater cruise ship incidents -- a serious grounding or collision could result in a devastating and long term environmental disaster. Most cruise ships move to “high season” in other parts of the world at the end of the Caribbean’s winter season and detailed cruise itineraries within the region can be readily changed. Therefore, in the event of a disaster, it is a single island government or small group of governments that will bear the full environmental and economic impact.

How much cooperation or finance have Caribbean governments received from cruise lines even to help resource effective disaster planning in order to mitigate these risks? In overall terms, what is the actual economic risk/reward balance with cruise ships in the Caribbean?

Caribbean government port taxes have not even kept up with regional inflation rates and in recent years the shore-side spend per cruise ship passenger on each island appears to have declined significantly. Today, even the discretionary spend per cruise ship passenger in the Caribbean is estimated at 82% on board and 18% on shore. While the economic benefit to island economies has declined on a per passenger basis, cruise ships continue to operate in a virtual tax free environment within the region -- yet they require island governments to finance and build larger expensive piers for their larger, more cost efficient ships.

Furthermore, today’s cruise ship business model is now a highly aggressive one, operating from multiple home ports in the USA. Larger ships have lower levels of capital and operating unit costs and, thus, correspondingly lower fares -- as low as US$45 per passenger per day, including meals. Construction cost of the larger ships is around US$250,000 per cabin, compared to US$750,000 per room for a new 4/5 star resort in the Caribbean. Cruise ship food costs, liquor costs and comparable labour costs are lower than in Caribbean hotels.

The cruise industry’s overpowering competitive edge over Caribbean hotels in high season is a “Trojan Horse” with its resultant negative impact on inward investment for new resorts. This factor has been consistently and grossly underestimated both by governments and the private sector in the region. In the meantime, Caribbean hotels struggle desperately to absorb ever higher energy and food costs, while being the largest direct and indirect tax contributors and the largest employers in almost every economy in the region. The region’s governments tax their own major “export” industry, while allowing massive international corporations to make massive profits from the Caribbean’s natural resources.

Is it not time that the fiscal contribution by cruise lines to Caribbean governments more fairly reflected the industry’s impact on the local environment and, ultimately, their potential for environmental disaster in the region? If the Caribbean Tourism Organisation is evidently not powerful enough for that challenge, then CARICOM governments should act with the governments of Mexico and Central America to present a united front in negotiating with the cruise lines.

In today’s global cruise market from November to April there are virtually no realistic, alternative itineraries to the Caribbean -- relative to major passenger feeder countries, adequate port facilities, attractive tourism infrastructure and cruising distances. Cruise ships are currently “using” most Caribbean destinations almost for free. NOW is a highly appropriate time to end that scenario -- while the cruise industry is struggling hard to protect its image and to achieve good “corporate citizen” status. Even Alaska, on its own, negotiated a better deal for its ports. The countries of the Caribbean basin can and should dictate better terms with the cruise lines, while also helping to protect their own domestic hotel industry.
April 17, 2012
 
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