Rick Fox Declares His Intention to Enter Frontline Politics in The Bahamas

The prosperous future of The Bahamas depends on the choices we make right now

The Bahamas: It’s Better To Be Number One

The Bahamas Must Be First and It Must Start Now.

Today, I’m announcing that I will be a candidate in the next general election.

For months, I’ve been listening closely to the hopes and frustrations of my fellow Bahamians.  One truth is clear: the future of The Bahamas will depend on the choices we make right now.

You’ve shared that you want more  transparency, a modern economy that prioritizes affordability and security, and a country where opportunity is our reality, not just a promise.

I share that vision. 

And I’m stepping forward today because we cannot wait any longer to realize a Bahamas that we all envision is possible.

Why Now?

We are running out of the one resource we can never get back: TIME.

•⁠ ⁠The time we need to empower our youth with real opportunities.

•⁠ ⁠The time we need to build a nation that runs efficiently, innovates boldly, and leads globally.

•⁠ ⁠The time we need to deliver world-class healthcare, affordable housing, and safe communities.

•⁠ ⁠The time we need to compete on the global stage.

Hurricane Future isn’t coming.  Hurricane Future is here. 

Our Direction

Scripture teaches: “Honor your father and mother, so that your days may be long upon this earth.”

We should also honor the fathers and mothers of our nation.  Their legacy brought us to this moment.  Our responsibility now is to move The Bahamas forward. 

We must move with clarity.  We must move with courage.  We must move with honor and integrity.

We will embrace innovation, education, security and opportunity as the pillars of our future.

We will build a future where Bahamians can compete, influence, and lead globally without having to ever leave home.

We will trust in the lord with all of our hearts.  We will not lean on our own understanding and in all of our ways, we will acknowledge him and he will direct our path.

This is Our Moment 

As a candidate and as a leader for The Bahamas I will demand transparency, honesty, integrity while demanding a level of excellence from all of us.

This is bigger than party politics.  This is The Bahamas versus the world.  Imagine a nation where every Bahamian feel secure, safe, empowered, and proud.  Where opportunity flows, innovation thrives, and our people shape the world from home.

More is on the way. 

The Bahamas will lead.  The Bahamas will rise.  The Bahamas will be #1.

It’s Better to Be Number One in The Bahamas.

Source / Comment

The Bahamas Rising National Debt

The Bahamas is grappling with a substantial national debt that is above 100% of GDP

A Debt Pitfall 

By Dr. Kevin Turnquest-Alcena
Nassau, The Bahamas

"Deo adjuvante,non timendum" "with God as my helper,I have nothing to fear "  

To fully assess the financial challenges facing The Bahamas, we must learn from countries like Argentina, Jamaica, Zimbabwe, and Venezuela, all of which suffered economic crises due to unsustainable debt and currency devaluation.  The Bahamas must be cautious with its public finances to avoid similar pitfalls.

With the Bahamas' current debt at $11 billion and a debt-to-GDP ratio exceeding 100%, we are at risk of entering a debt trap.  Lessons from other countries show that failure to manage debt and implement necessary reforms can lead to economic instability, inflation, and currency devaluation.

The IMF has warned about The Bahamas' rising debt and recommended measures such as economic diversification, improved tax compliance, and controlled public spending.  To prevent financial collapse, we need to ensure borrowed funds are invested productively, and strategies must be based on accurate, empirical data.

1. Bahamian Debt Levels (2023): 

   - According to the International Monetary Fund (IMF),the Bahamas' public debt was around 102% of GDP at the end of 2022.  The IMF continues to express concerns about the nation’s fiscal trajectory if corrective reforms are not implemented. 

   - The Bahamas Ministry of Finance released an update stating that as of mid-2023, the country’s debt reached approximately $11 billion, a substantial figure for a small economy.  This includes external debt and domestic borrowing.

   

2. Debt to GDP Ratio:

   - The debt-to-GDP ratio has been hovering above the critical 100% mark, which signals high vulnerability in terms of debt sustainability.  Many countries face economic instability when their debt exceeds their GDP, making it harder to service debt without growing the economy or reducing deficits.

3. Recent Borrowing and IMF Support:

   - The Bahamas has received financial assistance from various international organizations, including the IMF, during the COVID-19 pandemic.  This support aimed to stabilize the economy during the collapse of tourism, which constitutes a significant portion of the nation's revenue.

   - The IMF’s 2023 Article IV Consultation on The Bahamas stresses that the country still faces significant fiscal challenges, and while the tourism sector is recovering, the public finances are far from sustainable.  Recommendations include diversifying revenue sources and structural reforms to curb public spending.

4. External Debt:

   - The external debt of The Bahamas accounts for a significant portion of its overall debt, with borrowing from multilateral institutions and private lenders.  External debt servicing remains a concern given the currency peg and dependence on foreign reserves to maintain it.

5. Fiscal Outlook:

   - Both the IMF and Bahamian government stress that while the short-term recovery appears promising due to the return of tourism, without structural fiscal reforms, such as tax reform or expenditure cuts, the country’s debt levels could lead to long-term financial instability.

In summary, The Bahamas is grappling with a substantial national debt that is above 100% of GDP, with external borrowing playing a major role.  The reliance on tourism for revenue, coupled with ongoing fiscal deficits, exacerbates the risk of unsustainable debt levels unless structural economic reforms are enacted.

References:

•  [IMF Bahamas 2023 Article IV Consultation Report] (https://www. imf.org/en/Publications/CR/Issues/2023/02/07/The-Bahamas-2022-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-528453)

•  Bahamas Ministry of Finance Debt Update (2023)

•  Central Bank of the Bahamas Reports (2023) on fiscal trends

Source

The Crux of The Bahamas National Trade Policy

The Bahamas Ministry of Economic Affairs Launches First-Ever National Trade Policy

The New Bahamas Trade Policy is intended to lower trade deficit and empower local Bahamian businesses

After years of stakeholder consultation and collaboration with local and international experts, the Government of The Bahamas has launched the National Trade Policy, an initiative that has been spearheaded by the Ministry of Economic Affairs.

The National Trade Policy was formally unveiled at a press conference hosted by the Ministry of Economic Affairs on Thursday, 25th of May, 2023.  At this press conference, members of the media were afforded the opportunity to hear from the Minister of Economic Affairs, Senator, the Hon. Michael Halkitis, Bahamas Trade Commission Chairman, Philip Galanis, and other technical experts who highlighted the work that went into crafting the policy, as well as the impact it is projected to have.

Minister Halkitis stated that the primary objective of the national trade policy is to tap into the unexplored areas for the international trade of goods and services where there is vast potential for Bahamian businesses to benefit.

He noted that this policy will supplement the economic development and diversification initiatives that the Davis administration has taken on since taking office.

“The National Trade Policy is a key component of a wider developmental strategy to diversify the economy, empower Bahamian businesses domestically and internationally, and lower the trade deficit.  Key areas that are being targeted by the government, such as niche agricultural and fisheries products, uniquely Bahamian crafts, food, and goods, and green, blue, and orange economy products and services will all benefit from this policy.”

Acknowledging the calls by local businesses for greater ease in conducting international business and exporting goods and services abroad, Minister Halkitis said that the National Trade Policy will help to facilitate the import and export of in-demand goods and services, ushering in a new era for trade in The Bahamas.

“We know that many businesses have called for the government to reform existing processes to make exporting their products more seamless.  Through this policy, we believe that we have put the right mechanisms in place.  We will expand awareness through stakeholder education to arm local businesses with everything they need to expand their customer base beyond the borders of The Bahamas.”

As the policy moves from the development phase to the implementation phase, Minister Halkitis noted that the government will continue to keep its ears open to local businesses and its eyes open for international opportunities.

“The policy we have before us today is the product of continuous stakeholder engagement.  We have incorporated much of that engagement to ensure that the policy before us today is as strong and comprehensive as possible.  As we implement the policy, the key is to remain agile and open to ways we can continue to strengthen the policy in response to local needs.”

Minister Halkitis encouraged all local businesses and aspiring entrepreneurs who are interested in engaging in international trade to stay tuned as the government continues to engage with the local business community to empower businesses of all sizes to take advantage of the new national trade policy framework.

“Ultimately, the true measure of the effectiveness of this policy lies in its ability to empower Bahamian businesses, lower the trade deficit, and contribute to the creation of a more resilient and diverse economy. We encourage all businesses to get informed and get involved.”

Any business owners who wish to learn more about the National Trade Policy can download a full copy of the policy document at https://moea.gov.bs/the-bahamas-national-trade-policy.

Source 

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

nhartnell@tribunemedia.net

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

Tribune 242

 

The Oil Drilling Referendum in The Bahamas ...and Pontius Pilate

No Referendum For Oil Drilling


Tribune242
Nassau, The Bahamas

ALREADY they are discussing how to share the oil wealth, even before the first vein of oil has been discovered to make the discussion relevant.

 

In our opinion politicians are putting the cart before the horse or, as the farm hand would say, “counting their chicks before they are hatched.”

 

What they should be giving serious thought to is whether they should even be playing russian roulette with the future of these islands, whose wealth lies in the extraordinary beauty of its waters, powder soft beaches and colourful marine life. One slip of the drill and our future is gone forever.

 

Already, the livelihood of our fishermen are threatened with the overfishing of the conch, and the threat of a US ban on its importation as a food delicacy to save the species from extinction. Now enters King Oil with its offshore rigs which could further pollute — despite safety precautions — the natural habitat of the conch.

 

We need only one slip — equipment failure, staff error, a hurricane — and the purity and beauty of our shallow seas are gone forever.

 

As pointed out in the book Environmental Impact of the Offshore Oil and Gas Industry, the “main hazard is connected with the spills and blowouts of oil, gas, and numerous other chemical substances and compounds.

 

“The environmental consequences of accidental episodes are especially severe, sometimes dramatic, when they happen near the shore, in shallow waters, or in areas with slow water circulation.”

 

Offshore rigs, said another report, “can dump tons of drilling fluid, metal cutting, including toxic metals, such as lead chromium and mercury, as well as carcinogens, such as benzene, into the ocean.” And yet another report claims that “exploration for offshore oil involves firing air guns which send a strong shock across the seabed that can decrease fish catch, damage the hearing capacity of various marine species and may lead to marine mammal strandings.” It is claimed that “drilling activity around oil rigs is suspected of contributing to elevated levels of mercury in Gulf of Mexico fish.”

 

The big oil companies will extol the benefits of oil drilling, the elaborate safety measures taken around the wells, until the big blow comes and then they are in such a state of confusion that their tongues are tied to find an explanation of what went wrong. In 2010 the world watched in horror the explosion of BP’s Deepwater Horizon oil rig in the Gulf of Mexico. As the thick oil spread south, even the Bahamas trembled. The talk then was who would our government hold responsible to clean up the mess that Bahamians feared might touch our shores. Fortunately the Bahamas was spared.

 

But in that disaster 11 workers were killed and more than three million gallons of crude oil poured into the Gulf.

 

Don’t say that it can’t happen here. It can happen here and this is where it is most likely to happen because, as we know in the Bahamas no one observes the rules for long, and security will soon slip.

A news report recently suggested that the Gulf accident happened because the US interior department “exercised lax oversight in approving BP’s operations in the Gulf, accepting too readily the company’s claims that there was little risk of an accident.”

 

It is almost obscene to think that the politicians are discussing the financial returns before investigating whether the dangers are too great for us to subject our fragile tourist economy to the oil consortiums.

 

As for a referendum. This is one problem that should not be put to a referendum. All Bahamians will see is the possibility of quick wealth — as in the drug peddling years — they will not even consider the possibility of these islands being covered in thick tar — off limits to everybody.

 

When Bahamians went to the polls on May 7th they elected Perry Gladstone Christie as prime minister, not Pontius Pilate, who washed his hands and walked away from the problem. Rather than leaving such a weighty problem to voters, who do not have access to the necessary information, it is for MPs to study the pros and cons, the benefits and the dangers, and with a vote of the Assembly, where they represent the people, make a rational and considered decision. If they are incapable of doing that then call it quits, go back to the people and give them a second chance to find someone willing to do the job they were elected to do.

 

This is not a vote for a referendum. This is a vote for members of parliament — all of them.

 

September 13, 2012

 

Tribune 242

Legal gambling versus illegal gambling in The Bahamas

The Bahamian gambling saga

By Arinthia S. Komolafe

The election season is well in full force in The Bahamas.  All of the major political parties have cranked up their machinery and politicians are making their presence felt on the talk show circuit.  No one would argue that crime and the economy are two of the biggest concerns on the electorate’s mind as we move toward the 2012 general election.  However, politicians should not make the mistake of campaigning on these issues alone.  The Bahamian electorate want answers and proposed policies on a multitude of issues including immigration, exploration of natural resources for economic benefit and future plans to address our failing education system.  One of the issues that the next government of The Bahamas must confront is the more than half a century topic of gambling by Bahamians in The Bahamas.

Gambling no doubt is one of the most controversial topics of discussion in The Bahamas.  There are many proponents and critics.  It remains uncertain, however, what percentage of the Bahamian population is for or against legalizing gambling by Bahamians.  The reality is that we as a nation continue to go round and round in circles on this matter, while thousands of Bahamians patronize the multitude of what are commonly referred to as ‘number houses’ in The Bahamas.

The arguments

An argument against the legalization is that it will bring with it a myriad of social issues that are opposed to Christian values and will cause a decadence in Bahamian society.  While it is accepted among some that gambling may not be an outright sin in the Bible, gambling done in excess is sinful.

Others opposed to the legalization of gambling have put forth an economic argument claiming that gambling is an open form of regressive taxation that will affect those of the lower income brackets more than those of the middle and upper class.  As a result, those of the lower income class will fail to take care of their financial obligations at home such as paying necessary bills and caring for their families.  A perception exists that individuals below the poverty line gamble more than persons who are not poor.  However, studies in America suggest that the reverse is true as it was found that more persons of the middle class played the lottery as opposed to those of the lower income class.

Proponents of legalizing gambling assert that government cannot legislate morality.  Further, proponents claim that there are many potential benefits including an increase in government revenue which can contribute toward charitable purposes, infrastructure and most notably education.  Advocates of the legalization of gambling also argue that it is another legitimate source of income for a government that has limited ability to increase its revenue intake.  Although this argument has been successful in persuading a lot of Americans to vote in favor of a national lottery, it was found that the eventual revenue was not utilized in the manner that many had hoped for.  For instance, the additional revenue from the lottery did in fact go towards education; however, many states reduced or offset the allocation to the educational budget against revenue received from the lottery.  Hence, the education budget was not increased overall but education was merely funded by another source of revenue.  To remedy this effect, a few states in America have passed legislation to ensure that a certain percentage of revenue received from the lottery is allocated for the specific purpose of education.  This ensures that the funds are used for the purpose intended on the one hand, and on the other hand it ensures that the states do not decrease their allocation to education.

The greatest issue with gambling in The Bahamas is the fact that there is much hypocrisy surrounding the point.  Several decades ago, the government of the day approved policy for hoteliers and casino operators to provide gambling services, however casino gambling and ‘playing numbers’ was outlawed for Bahamians.  It is interesting to note that civic organizations, churches and schools still have the ability to distribute raffle tickets as a major fundraiser.  However, provisions have been made for such activities under the Gaming and Lotteries Act.  Over the years, law enforcers have conducted random raids of ‘number house’ establishments in an attempt to discourage the practice of gambling by Bahamians otherwise called ‘buying and selling numbers’.  However, the truth of the matter is that neither the government nor the law enforcers have done an adequate job ‘shutting down’ the number houses.

There is widespread hypocrisy in that the government allows foreign investors to enter the country and provide amenities for casino gambling for their guests, but Bahamians though guests of these hotels quite often are unable to utilize these gambling facilities.  It is unclear whether the operators of ‘number houses’ want gambling by Bahamians legalized.  Any potential legalization will certainly decrease their profits, reduce market share and relinquish their current control to a government authority.  Liberalization of the gambling market will foster competition and encourage the entrance of more competitors.  Hoteliers and casino operators may not prefer any gambling policy that allows Bahamians to gamble not because of a threat to their market share, but because it will provide Bahamians with the licence to enter these establishments and patronize all the amenities just as the foreign tourists and non-residents do.  Arguably, hoteliers and casino operators may not find such a policy good for their businesses.

It appears that there are arguably many special interests who prefer to keep the status quo.  However, maintenance of the current state of affairs will increase hypocrisy and anarchy among Bahamians.  It is advisable for the next government of The Bahamas to ascertain the gambling appetite of the Bahamian population and propose a referendum on the matter.  We must take a “what is good for the goose is good for the gander approach”.

Legal gambling in The Bahamas should benefit both Bahamians and non-residents alike.  The same is true for illegal gambling; neither Bahamians nor non-residents should benefit.  If Bahamians agree to legalize gambling, it follows that the government must take the necessary steps to comply with the wishes of the people.  However, if the overwhelming response is to keep gambling by Bahamians illegal, the government and relevant government agencies must enforce the law and uphold the provisions of the Gaming and Lotteries Act.  This is the essence of democracy – a government of the people, for the people and by the people.

 

Arinthia S. Komolafe is an attorney-at-law.  Comments can be directed at: arinthia.komolafe@komolafelaw.com

Mar 01, 2012

thenassauguardian

The political campaign season is well underway in The Islands... ...The governing Free National Movement (FNM) has officially launched its full slate of candidates for the upcoming general election... ...Its apparent messages were ‘We Deliver!” and that the FNM is, ‘Best for Bahamians and Better for The Bahamas’

Will the FNM deliver?

Erica Wells
Guardian Managing Editor
erica@nasguard.com

Nassau, The Bahamas

When Prime Minister Hubert Ingraham addressed the nation last week in his annual New Year’s address, there was something decidedly different about the tone of his presentation.

Outside of political rallies, formal communications such as an address to the nation are often relatively void of emotion.

Last Wednesday’s address was different.  It sought to give Bahamians a reason to believe.  At a time when many are struggling under the weight of a sluggish economy, and some are simply hopeless, it could not have been more appropriate.

Ingraham assured Bahamians that despite the tumultuous times brought on by the global economic downturn in 2008, and the impact that it has had — and continues to have — on The Bahamas, the country is headed in the right direction.

“Despite the severe economic shock of 2008 and the challenges of tomorrow, we are a fortunate country and we are moving in the right direction,” the prime minister said.

“So I say to you... that as a people, we can rightly feel a spirit of gratitude for the many blessings of our Creator.  Let us build on this spirit of gratitude with a spirit of hope.  Let us do so in grateful acknowledgment of the many blessings and the promise of our beautiful Bahamaland.”

This could turn out to be a hard sell for the hundreds of unemployed and underemployed Bahamians who are finding it difficult to meet the most basic of necessities.  Many cannot afford to pay their utility bills and are laboring hard to buy groceries.  Some have lost their homes.  Others have given up any hope of finding a job after months and months of searching.

Convincing Bahamians that the country is headed in the right direction may prove to be a difficult task.  Yet, as a general election looms, convincing voters that the country is headed in the right direction will be crucial to the Free National Movement’s success at the polls.

Progress

Even Ingraham’s harshest critics would have to admit that the Free National Movement in the last five years has accomplished a number of items on its ‘to do’ list.

Whether it has been enough to secure another term in office, and whether the party has been effective in communicating what it views as its major accomplishments, remains to be seen.

In his New Year’s address last week, Ingraham took the opportunity to remind Bahamians of the FNM’s accomplishments.  The New Year’s address reads a lot like a progress report.

The list of accomplishments highlighted by Ingraham was extensive.

It included job preservation and creation, the re-development of Lynden Pindling International Airport, the Airport Gateway project, the New Providence Road Improvement Project, an increase in funding for the resources for formal education, an increase in youth development programs, and sports funding.

Ingraham’s list also cited transforming the country’s crime fighting and judicial legislative structure and facilities, investment in healthcare through the prescription drug benefit and the upgrade of facilities at the Princess Margaret and Rand Memorial Hospitals, improved public educational facilities, the relocation of the downtown container port, the dredging of Nassau Harbour, the construction of a new straw market, and infrastructural improvements in various Family Islands, among others.

While Ingraham has not articulated the ‘national plan’ that many have called for, the significant infrastructure projects on which he has placed a priority in this term in office provide some insight into his vision for the country.

“Investing in infrastructure is a means to achieving essential national goals and creating jobs,” said Ingraham.  “Investing in infrastructure and in housing is an investment in people and communities.  It is an investment in the quality of life, livelihoods and life spans.  It is an investment in the future of The Bahamas.”

But some of the significant infrastructure projects, such as the New Providence Road Improvement Project, may do more harm than good when it comes to the party’s re-election prospects.

This point has not been lost on the prime minister, seen in his public apology to motorists during last week’s address.  Many have been greatly angered and inconvenienced by the extensive roadworks undertaken in the troubled project.

“I again thank you for your patience and apologize on behalf of the Government of The Bahamas for the delays, inconveniences and disruptions,” said Ingraham.

“Despite these challenges, we believe that in the end it will be well worth the sacrifice.”

But by the end of the project will it be too late for some voters?

The message

The address also provided an insight into how the party plans to convince the voting public that it deserves another term in office.

It attempted to drive home a message of action, a message of an administration that “gets the job done”, in comparison to a PLP administration which the FNM has labeled as indecisive and slow to act.

Referring to what he described as a response to “urgent infrastructure requirements” in the context of the global economic crisis, Ingraham said in the address: “No responsible government could have followed the path of delay, indecision and half measures.  We had to act decisively and comprehensively.  Not only was a collapse (of the Bahamian economy) prevented.  We are now moving forward.”

The campaign season is well underway.  The Free National Movement officially launched its slate of candidates for the entire Bahamas last night.  Its apparent messages were ‘We Deliver!” and that the FNM is, ‘Best for Bahamians and Better for The Bahamas’.

One is a familiar refrain from the “Delivery Boy” slogan used when Ingraham first joined the FNM as its leader.  The other seems a clear strategy not to cede any ground to the PLP on which party is more committed to the interests of Bahamians.

But it remains to be seen if these messages will deliver to the FNM and Hubert Ingraham a fourth election victory.

 

• Log on to thenassauguardian.com and take part in our regular web poll: Do you agree with Prime Minister Hubert Ingraham that the country is headed in the right direction?

Jan 30, 2012

thenassauguardian

If we are to empower Bahamians in the 21st century Bahamas, creating jobs alone from foreign direct investments and empowering a handful of Bahamians is not the course of action to be taken... ...Bahamians need a government in place that is sensitive to the needs of its people at large... ...Sir Clifford Darling, Sir Randol Fawkes, Sir Milo Butler, Sir Lynden Pindling and Arthur D. Hanna, among others are men who were radicals of their time, understood the needs of the people and fought for majority rule

The Bahamian Dream II

By Arinthia S. Komolafe

The hope and expectation of every parent is to produce offspring who attain higher levels of success than they did.  The genuine desire of each generation should be one that is built around the attainment of higher heights and charting of new territories by successive generations.

The Bahamian Dream was born out of dissatisfaction with a substandard life and discomfort with the status quo.   It is one of deep aspiration, a cherished desire, unique ambition and daring vision of a Bahamas in which the average Bahamian can be all that he/she hopes to be.   It is a dream embedded in the minds of our forefathers and defined by the achievement of feats unimaginable in that era, but conceived in the hearts of our founding fathers.  This dream peaks at the juncture where Bahamians hold their destinies in their own hands and their strength lies in their unity, fortitude and beliefs.

It has afforded Bahamians like myself, born in Farm Road to parents who formed part of the working class at the time, educated in Bain and Grants Town at the Willard Patton Primary and C.R. Walker Secondary schools with opportunities to receive tertiary level education, command decent salaries and become homeowners.   The pursuit of this dream has also encouraged some of us to take risks and become entrepreneurs in spite of the challenges associated with such endeavours – a sacrifice made willingly to provide a better way of life for our children and generations yet unborn.   However, as impressive as this may sound, reality dictates that far too many Bahamians, particularly of my generation, have yet to claim the same testimony.

It appears that the Bahamian Dream is met by roadblocks due to an inability to foster ownership of the economy by a wide cross-sector of Bahamians.   This is ‘the tragedy of the shrinking middle-class and select upper class’ that characterizes the 21st century Bahamas and threatens the very essence and crux of the dream.   There is the accepted fact that there are more educated Bahamians up to post-graduate levels today than there were before, as well as more Bahamian entrepreneurs.   In addition, we acknowledge that The Bahamas has the third highest per capita income in the Western Hemisphere and it can be argued that we enjoy a decent standard of living as a result.  However, one may ask the following questions: Why aren’t we satisfied?   What more do we want?  The reality is that as a people collectively, we are yet to lay hold of the entire dream.  There is still much more to be achieved, more grounds to cover and we owe it to ourselves and future generations not to stop until we have done so.   The dream encourages us not to become complacent or lackadaisical, but to continue pressing until we have witnessed widespread prosperity.   To many this is a utopian outlook and nearly impossible, but I belong to the more optimistic crew of believers who dare to believe that it is possible and at the least, we should attempt to make it possible.

  

Banks and the government

The global economic crisis is real and has impacted us severely.  Atlantis, the country’s largest private employer which has created thousands of jobs for Bahamians and effectively improved the standard of living and quality of life for many, has been plagued with rumors of possible defaults on their obligations which can place thousands of jobs at risk.  There is a rising concern that the inability to bring this matter to a quick resolve can have a negative impact on an already depressed Bahamian economy.  The inability of successive governments to diversify the economy and reduce our vulnerability and dependency on employment by foreign employers has contributed to the catastrophic position that we find ourselves in today.  A robust small-medium sized business sector would have safeguarded to some extent against such possible misfortunes.  We are still waiting on the government to pass legislation concerning SMEs and it is unclear why such an important piece of legislation has not been enacted to date.  In the same manner that we passed vital legislation to save the turtles and the sharks almost overnight to preserve our marine resources, the passage of legislation to make Bahamians more self-sufficient should have been met with equivalent and perhaps more priority.

It is challenging for today’s Bahamians to become entrepreneurs being faced with start-up costs that many of them are unable to meet.  There are insufficient venture capital funds to provide access to seed money and there are limited alternative sources of funding.   Bahamians complain regularly that financial institutions won’t lend them money to start a business, but instead are quick to provide funds to finance the purchase of vehicles, vacations, grocery, furniture, etc.   If this is in fact true and the facts suggest that it is, why do they continue to enjoy our patronage?  After all, they have made millions and billions of dollars which some of them have expatriated back to their home countries or issued in dividends.   We must come together to demand more from these institutions and in the mean time patronize the financial institutions, banks, co-operatives and credit unions that will assist us in achieving the Bahamian Dream and provide more attractive rates and offers based upon the credit risk posed to each customer.   The power rests with the people and this power should be activated to make this dream a reality.

  

Empowering Bahamians

In recent times, the government has made several moves that will delay the economic advancement of the average Bahamian and defer the attainment of the Bahamian Dream.  In addition to the questionable levels of borrowing, the country’s fiscal position forced the government to carry out what was viewed by many as a fire sale of the Bahamas Telecommunications Company (BTC).   The firm was sold to foreigners reportedly under value and the bidding process appears to have been tainted.   A Bureau of Public Enterprise should have been formed to oversee the privatization process to ensure transparency in the bidding process and lack of political interference by politicians who are primarily concerned about the electorate’s and/or special interests’ concerns.   It is worth considering the approach adopted by the U.K. in privatizing its equivalent of BTC about three decades ago.   In 1981, then British Prime Minister Margaret Thatcher’s government announced that her government would be privatizing British Telecommunications (BT), which held the monopoly on telecommunication and informed the public of a program to phase in liberalization of the market prior to the sale.   The irony of this transaction from a Bahamian perspective was that Cable & Wireless, who bought BTC, was the first firm to offer alternative telephone service and receive an operating license through their subsidiary Mercury Communications in this newly liberalized market.   In 1984, legislation was passed empowering the state to sell BT.   In the same year, up to 51 percent of BT shares were sold to “British” private investors.   Legislation was also enacted that enabled BT to be in a position to succeed in the midst of an already established local competition by allowing BT to form joint ventures, expand globally and manufacture its own apparatus.   The remaining government shares were eventually sold in 1991 and 1993.

What Thatcher effectively did was expand the middle class and create wealth for hundreds of thousands of Britons through liberalization and eventual privatization.   Contrasting the U.K.’s approach to the government’s modus operandi in choosing to sell to foreigners, one wonders whether the government is a proponent of the Bahamian Dream or whether it has a vision for its people.   It is little wonder that we are faced today with a tragedy of the shrinking middle class and select upper class.

If we are to empower Bahamians in the 21st century Bahamas, creating jobs alone from foreign direct investments and empowering a handful of Bahamians is not the course of action to be taken.   Bahamians need a government in place that is sensitive to the needs of its people at large.   Sir Clifford Darling, Sir Randol Fawkes, Sir Milo Butler, Sir Lynden Pindling and Arthur D. Hanna, among others are men who were radicals of their time, understood the needs of the people and fought for majority rule.  They denied themselves and swallowed their pride to meet those needs.   That is why, more than half a century later, they are still loved by many Bahamians.  We cannot allow our progress in advancing economically to be retarded.

This generation and future generations will not be satisfied with just a job in the civil service, hotels or banks, which are not owned by Bahamians.   An economy dominated by job seekers, as opposed to job creators, will not experience the rebuilding or expansion of the middle class.   The lack of ownership within The Bahamas’ economy by a broad spectrum of Bahamians fosters job insecurity and impedes the chance for a better way of life thereby choking the Bahamian Dream.

  

•Arinthia S.Komolafe is an attorney-at-law.  Comments can be directed to: arinthia.komolafe@Komolafelaw.com

Jan 26, 2012

thenassauguardian

The Bahamian Dream pt.1

...how The Bahamas could effectively create a new industry by focusing on renewable energy...

RENEWABLE ENERGY 'AMAZING CHANCE' FOR DIVERSIFICATION

By NEIL HARTNELL
Tribune Business Editor

Nassau, The Bahamas

THE Bahamas has an "incredible opportunity" to diversify its economy by becoming a renewable energy exporter, a leading Caribbean expert yesterday saying it could emulate Israel's 92 per cent penetration rate if it acted now to prevent the competition "blotting it out".

Jerry Butler, chairman and principal consultant of the Caribbean Renewable Energy Forum (CREF), said matching the likes of Israel on sustainable energy take-up was "not a pipe dream" for The Bahamas if the political will and leadership were there, and the correct plan implemented.

Noting The Bahamas' renewable energy export potential, given its proximity to the US, the world's largest energy consumer with 25 per cent of the global market, Mr Butler added that a substantial domestic industry could be created through cutting this nation's annual $1.2 billion fuel import bill by 25-33 per cent.

Noting the regional lead established by the likes of Trinidad & Tobago and Barbados, the latter of which has a 95 per cent residential solar water heater penetration rate, the CREF chairman said his organisation had helped the latter nation to create a $10 million smart fund for renewable energy investments.

After the CREF conference was staged in Barbados last year, that fund attracted another $80 million, funds now available for Barbadians to partner with international financiers and developers on renewable energy projects.

Explaining how The Bahamas could effectively create a new industry by focusing on renewable energy, Mr Butler said: "It's a policy and never-ending journey that starts from the top....."

Noting the "age old focus on diversification" of the economy, Mr Butler, the former Inter-American Development Bank (IDB) country head for The Bahamas, added: "I truly believe that given what I've been able to accomplish with my team elsewhere in the Caribbean, a diverse sector of opportunity The Bahamas should focus on is renewable energy, both for domestic and security needs, and opportunities for international export."

This nation's proximity to the US, the nation that consumes 25 per cent of the world's energy supplies, meant "an incredible opportunity exists for us to provide a client base and financing to help the Bahamas' prosper".

Mr Butler, giving a preview of his contribution to this Thursday's Bahamas Business Outlook conference, said: "The incredible opportunity we have in the Bahamas will be lost to other jurisdictions if we do not take the chance to move on it on an erstwhile, consistent and well thought-out method. "

When asked by Tribune Business how long The Bahamas' window of opportunity to become a renewable energy leader would last, Mr Butler said: "Our window of opportunity will last as long as oil prices continue to rise, and as long as the competition remains in a working condition that has not blotted us out."

Multiple jurisdictions had plans to not only embrace renewable energy domestically, but export it. As examples, Mr Butler referred to Trinidad's 2020 policy, which aims to build on its own substantial gas and energy reserves to pave the way to renewables, and Barbados's 2025 policy, which speaks to growing this as a sector.

A Barbadian renewable energy company, he added, already had two representatives in The Bahamas, and was looking to export some 100,000 solar water heaters to other Caribbean nations.

"A Bahamian could very much have been involved in doing that," Mr Butler said. "The window of opportunity is there as long as the competition does not blot us out."

Apart from export opportunities, the CREF chairman said The Bahamas' annual $1.2 billion fuel import bill gave it the chance to develop a sustainable renewable energy sector for supplying the domestic market.

Just seizing a 30-40 per cent market share from fossil fuels would free up $300-$400 million annually for a renewable energy industry, Mr Butler said. "That's a lot of people they can employ," he added.

The CREF chairman added that he had driven from south to north Brazil without having to fill up his car once with fossil fuels. The Latin American nation, which has one-quarter of the Bahamas' per capita GDP, had reduced its fossil fuel reliance through ethanol and ethanol derivatives, and there was no reason why this nation could not follow suit.

Pointing out that The Bahamas Electricity Corporation's (BEC) financial and generational inefficiencies were not new, Mr Butler said its reliance on fossil fuels to run generators that were primarily slow speed diesel was "unsustainable".

"BEC cannot continue to be subject to world oil prices and pass them on to you as a surcharge," Mr Butler added. But, if it was able to derive a percentage of its generation needs from renewable sources, the impact of oil price volatility would be reduced, and the outflow of US dollars and foreign currency reduced.

Describing this as "a win-win" for utilities such as BEC, Mr Butler suggested the Bahamas could even split off power generation from its distribution and transmission. Depending on how it was implemented, this could permit businesses and homeowners to receive credits for selling excess power back to the BEC grid, and allow independent power producers (IPPs) to reach commercial agreements with BEC to supply it with electricity.

This would ultimately reduce electricity prices for Bahamian consumers, who have to put up with fuel surcharges that have averaged $0.28 per kilowatt hour (KwH) over the past two years. This compared to $0.42 per KwH in Jamaica, but just $0.18 per KwH in Miami.

Mr Butler said Bahamian homeowners could likely install solar power to run their homes at a $0.19 per KwH cost, "empowering" themselves and steering the country in "a totally different direction" on energy.

Noting that it was not impossible to see the day when the likes of the airport, hotels and government buildings had solar panels installed on the roof, Mr Butler said Germany - which saw sun for just two-thirds of the year maximum - already had a 26 per cent renewable energy penetration rate.

"It's a totally different visionary concept for what could be in the Bahamas," Mr Butler said. "It's not a pipe dream. This is workable for the Bahamas. We just need a vision that can be implemented with the right people, and need Bahamians behind it to sustain it."

Mr Butler added that by just focusing on energy conservation and efficiency, though initiatives such as replacing incandescent light bulbs with CFLs, and placing timers on hot water heaters, the average electricity bill could be cut by 40 per cent.

January 10, 2012

tribune242

When we look out on the world... and back at The Bahamas, we agree with those who say that Bahamians -- despite hard times -- have much to be thankful for

The Bahamas has much to be thankful for

tribune242 editorial

Nassau, The Bahamas

IN his Christmas message, published in The Tribune on Thursday, Catholic Archbishop Patrick Pinder pointed out that compared with other nations, the little Bahamas has much for which to pause and give thanks this Christmas. And so, although the dark clouds of crime threaten our islands, yet there are still many signs to encourage Bahamians to believe that there is reason to hope for a brighter future.

The Archbishop shared with our readers the contents of an e-mail, which had been sent to him. It said: "If you woke up this morning with more health than illness, you are more blessed than the million who will not survive this week.

"If you have never experienced the danger of battle, the loneliness of imprisonment, the agony of torture, or the pangs of starvation, you are ahead of 500 million in the world.

"If you can attend church without fear of harassment, arrest, torture or death, you are more blessed than three billion people in the world.

"If you hold up your head with a smile on your face and are truly thankful, you are blessed because the majority can, but most do not.

"If you can hold someone's hand, hug them or even touch them on the shoulder, you are blessed because you can offer the healing touch.

"If you can read this message, you just received a double blessing in that someone was thinking of you, and furthermore, you are more blessed than over two billion people in the world who cannot read at all."

When seen in this light Bahamians have much to be thankful for. Our economy started to drag after the Lehman Brothers bank crash at the end of 2008. The seismic shock was felt worldwide. It was like a bowling alley gone wild, with one international house after another displaying warning flags until eventually Wall Street was hit and took a tumble. The world banking system is so interwoven that when one stumbled, the others came tumbling after. Not only was the world in financial trouble, but it was also in political turmoil with the Middle East on fire and headed for destruction.

Analysts blamed the financial crash on the "greed, ambition and reckless risk-taking that is now carrying the economy into the worst recession for a century."

The Bahamas was not immune. It too felt the shock waves. Greece was in meltdown, unemployment was out of control with the civil service being cut to bring spending into line. Around the world the first people to feel the belt tightening were the civil servants whose jobs disappeared almost overnight.

The civil service is the first place that governments look to cut costs when their treasuries are under pressure.

Here in the Bahamas, the Prime Minister would have been justified in trimming what for years has been recognised as a bloated and inefficient civil service. He did not.

As Prime Minister Ingraham said today in his Christmas message to the nation -- which will be broadcast by ZNS TV and radio at 8 o'clock tonight -- through prudent planning his government was able to "preserve jobs in the public service and to avoid salary cuts or lay-offs within the public sector as experienced in many developed and developing countries."

This is not to minimise the suffering of many Bahamians during this crisis. Many have lost their jobs, their homes, and really don't know where the next penny is coming from, but when one compares Bahamians' problems with the suffering of the world, the majority of our people have much for which to be thankful.

Government has been criticised for not investing in people during this lean period. However, not only is government investing in people by providing infrastructural jobs, but through these jobs it has enabled many workmen to maintain their dignity by enabling them to earn enough to support themselves and their families.

Government has been criticised for borrowing funds for roadworks. In the end, however, it will be money well spent -- not only will citizens see where their tax dollars have gone, but the infrastructure will have been so improved that it will raise the Bahamian's standard of living and enhance our tourist product -- better roads, better quality and delivery of water and electrical supplies.

Nor has the government neglected the youth. It staff has encouraged the business community to take on young people for training. And many have done so.

Next year, Bahamians face an election. When we look out at the rest of the world -- rioting and killing in the streets to overthrow governments -- we should be grateful for our democratic system. Every five years - although there is a lot of manoeuvring and name calling before hand - Bahamians go to the polls and in an orderly fashion vote their governments in or out. Just look at the turmoil and backwardness of the Middle East whose people have never experienced free elections. Earlier this year after months of street demonstrations and violence, Tunisia's president ended a 23-year rule by fleeing to Saudi Arabia. Tunisia was followed by the ousting of Egypt's Hosni Mubarak, again followed by a full scale civil war in Libya, that took out Mummar Gaddafi. That 42-year rule ended in Gaddafi's murder. And now the populace is beating at the doors of Syria's regime. A forest fire is sweeping across the Middle East echoing a people's cry against unemployment, food inflation, corruption, lack of freedom of speech, and assembly and other democratic freedoms -- all the freedoms that we take for granted in our society.

When we look out on the world, and back at the Bahamas, we agree with those who say that Bahamians -- despite hard times -- have much to be thankful for.

And it is on this note that we wish all of our readers a peaceful, and happy Christmas with family and friends, and hope that the New Year will be filled with many blessings.

We also thank our advertisers for their valued business and assure them that The Tribune will give them even better service in the New Year.

December 23, 2011

tribune242 editorial

...the health of the tourism industry and its myriad of impacts on The Bahamas

Surviving in These Hard Times
The Bahamas Journal Editorial


As in the case of any number of professionals working in the tourism industry, Robert ‘Sandy’ Sands has his finger on the pulse of this aspect of the nation’s economy; and here as everyone knows, tourism provides the very life-blood of this nation’s economy.

In good times, very many Bahamians flourished and prospered; thus that situation where today’s taxi drivers, straw vendors, jet-ski operators, hoteliers and a host of others are today parents and family to so very many of this nation’s professional classes.

Evidently, while this pattern might be maintained for a while yet, there are indicators suggesting that the industry will become more competitive; that it will demand more from those who work in it; and commensurately, that the government and its social partners should – as a matter of the most urgent priority – see to it that, this industry remains well-maintained.

Here we sincerely believe that, when all is said and done, Bahamians can and should be given a crash course in tourism; with the subject matter being focused not only on the safety and well-being of the tourist; but on the fact that, the tourist need not visit the Bahamas.

This is the fact that must be drummed in day and night and until such time as the vast majority of Bahamians get it that no one owes them anything; and that, they are obliged to work for every penny they take home.

This point is today being underscored by none other than, outgoing Bahamas Hotel Association (BHA) President Robert ‘Sandy’ Sands.

This man –as we learn – “… is calling the year“ a mixed bag of revenue gains, higher operating costs, and global uncertainty”, even as most tourism indicators inched up in 2010…”

Sandy Sands goes on to note that, “Indicators in general moved closer to our 2008 pre-recession benchmark…”

Here we note – albeit in passing- that, he made these remarks while addressing members of the BHA at its 58th annual general meeting on December 3rd at the Wyndham Nassau Resort.

As he explained, “Projections for next year show continued marginal growth as we slowly pull out of one of the most difficult economic periods in decades.”

This is the unvarnished truth about that matter currently concerning the health of the tourism industry and its myriad of impacts on the Bahamas.
But ever the optimist, Sands suggested that, despite the current slew of challenges, BHA members could and should be optimistic about the future; this due to the fact that, “foundational steps which have been and are being undertaken,” [are taken together] leading or tending in the direction of an “…emerging interest in tourism investments in The Bahamas…”

Here take note that, Sands also indicated that, measures that were put in place in 2010 by the public and private sectors should steer the industry out of the doldrums quicker than many of the nation’s competitors.

As he also pointed out, “These include major airport infrastructure improvements well underway in Nassau and Abaco and the liberalization of the telecommunications industry…”

And so, the conclusion beckons that, despite much of the noise in the market, things are trending in a positive direction for our country.

But for sure, this is not to suggest for even a moment that things are set to bubble up and that happy days are somewhere right around the corner.

Indeed, every indicator – social and otherwise- suggests that, the Bahamian people are in for a fairly rough ride as they adjust their life-styles and expectations to what is being termed in the United States, the New Normal.

In this regard, and as in the case of so very many other Bahamians, we can attest and affirm that this has been a very difficult year; and that, it has also been a time when one’s faith has been tested.

But as in all things human, we give thanks not only in good times, but also in these times of trouble. As we have been taught – and so do we believe- hard times bring with them very important life-lessons.

Among the lessons that are there to be remembered is the one that suggests that we should lay aside some of what we have earned or harvested so that when the hard times roll in; we need not trouble ourselves with unnecessary despair.

But even as we take note of the truth inherent this nostrum, we know it for a fact, that very many Bahamians are today mired in distress precisely because they dared yield and cling to the illusion that, things would always be good.

In the ultimate analysis, then, the times are changing; and as they do, some of our people will gird up their loins, take pattern after other industrious people and thereafter make some things happen.

This they must do if they are to prosper in conditions where the New Normal is the pervading reality.

December 16, 2010

The Bahamas Journal Editorial

Bahamas Blog International

Economic prosperity in The Bahamas and the Overseas Territories

By D. Markie Spring
Turks and Caicos Islands


The Bahamas and the overseas territories, especially the British Territories -- British Virgin Islands, Cayman Islands and the Turks and Caicos islands -- have always declined the idea of regional integration -- sometimes from an individual prospective and at times from governmental concerns.

In fact, The Bahamas is mostly dependent upon tourism to grow its economy. This country’s proximity to North America has placed it in an ideal position, which ignites, propels and escalates the tourism industry there. Furthermore, its tourism industry accounts for about 60 percent of the country’s gross domestic product (GDP), whilst other important sectors of the GDP, such as tax and the financial sectors, make up the other 40 percent of GDP.

Let me stress that, although the economy there seemed vibrant hitherto, in years to come The Bahamas tourism industry will not be able to sustain its economy. From an economic prospective, The Bahamas economy is not diverse enough for future sustainability.

Recently, the global economic downturn has resulted in the loss of thousands of jobs in The Bahamas alone. Because its economy relies heavily on visitors’ arrivals, which experienced a sharp decline, hoteliers were then forced to lay off workers. Some hotels had more employees than guests in-house.

The government of The Bahamas has an obligation to further diversify its economic environment through regional integration. When the tourism sector is affected, whether by natural disasters or by an act of terrorism or by challenges derived from social, environmental, political and economic factors, The Bahamas must be able to turn to an alternative sector for economic sustainability.

Similarly, the overseas territories -- especially Britain’s -- have also illustrated lack of support for regional integration. With much focus on the Cayman Islands, this country’s economy relies heavily on its humongous financial services industry, which is ranked fifth in the world’s banking centers. In addition, the government also piled up revenues from its taxation system. This together has placed the Cayman Islands at the top in the region, relative to the standard of living.

Looking at Cayman’s economic environment allows me to conclude, hitherto, that this country’s economy is not diverse enough to maintain viability in the long run. With the financial challenges faced by the United States and the European Union, the financial sector there is gravely affected.

Additionally, the Cayman Islands were forced to regulate its banking operations under the principles of the European Union Savings Directives (EUSD), coupled with intense pressure from the Organization for Economic Cooperation and Development (OECD) to prevent Cayman Islands’ offshore financial centers from becoming a tax haven. In addition to this, the current US president has disclosed his intention to exert severe pressure of the use of Cayman’s financial centers by multinational corporations.

Moreover, the International Monetary Fund (IMF) has set up programs that regulate the money laundering regime, and the country’s banking, securities and insurance industries. Similar environments exist in the other overseas territorial states.

Constructively, I looked at the lack of interest in regionalism from a Bahamian and from the prospective of the overseas territories and I understand the reason. Picturing the many people who would move from countries with weak economies and high unemployment rates to seek jobs in those places; figuring the movements of other Caribbean national – creating mass migration – I do understand. However, if the situation is being looked from a wider prospective then it should be known that there will be many benefits to gain and that rules and other stipulations will be in place, which would govern the movement of foreign citizens, such as having an assigned job before taking up residence in another country where more jobs are available.

The Bahamas and the Caymans Islands along with the other overseas states must join the rest of the Caribbean to integrate their efforts in making the Caribbean a region a region to reckon with. I stress that individually we won’t be able to sustain our economy and these countries’ economies are not diverse enough to stay strong for much longer. Some citizens purported that too many Caribbean countries are economically disabled to have successful integration; this does carry some concerns; however, the EU has successfully integrated with only the countries in Western Europe having strong economies.

Interestingly, the US, the world economic power, has established many regional bodies to enhance the country’s economic sector.

December 15, 2010

caribbeannewsnow

Bahamas Blog International

Bahamas: Loan Arrears Hit $1 Billion

LOAN ARREARS HIT $1 BIL
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com:



Bahamians are now more than $1 billion in arrears on their loans as the public continues to struggle with keeping up mortgage payments.

In its latest economic report, the Central Bank said the banks'credit quality indicators deteriorated further in July.

According to the report--"Monthly Economic and Financial Developments July 2010"--this was buoyed by sustained high unemployment levels and a challenging business environment.

While there are no recent numbers on unemployment, it is widely agreed by those in government and in business that the rate of joblessness remains in the double digits.

With regard to the main components, the expansion in total arrears was due primarily to a rise in the dominant mortgage segment, which accounts for 52.0 percent of delinquencies.

The report said total private sector loan arrears rose by$22.4 million(two percent)to$1.2 billion, with a corresponding increase to 18.6 percent of total loans.

"The current numbers evidence the fact that the economy is still under some pressure and will probably continue to be for the near future,"said Barry Malcolm, chairman of the Clearing Banks Association and Managing Director of Scotiabank Bahamas Ltd., in an interview with The Nassau Guardian last night.

"Notwithstanding the current levels of delinquencies we're confident that the situation is stabilizing and will improve into 2011."

The Central Bank said that in terms of the average age of delinquencies, arrears in the short-term 31-90 day segment grew by$13.3 million(2.6 percent)to $534.2 million, resulting in an expansion in the corresponding loan ratio to 8.6 percent.

In addition, non-performing loans--those more than 90 days in arrears and on which banks have ceased accruing interest--rose by $9.1 million(1.5 percent)to $629.5 million, firming in the ratio to total loans to 10.1 percent.

Smaller gains were noted for the commercial and consumer categories, which comprise 23.3 percent and 24.6 percent of arrears, respectively.

Mortgage delinquencies expanded by $20.0 million(3.4 percent)to $606.8 million, owing to growth in both the 31-90 day, and non-performing segments of$11.3 million(3.5 percent)and $8.7 million(3.2 percent)respectively, the report added.

Malcolm told The Guardian that the absence of significant growth in the economy right now and the likelihood that growth will be slow in coming over the next year speaks to the need for prudence in how consumers save and spend.

In the United States, the economic outlook remains much more subdued than originally forecast.

Last week, Chairman of the Federal Reserve Ben Bernanke confirmed this.

Malcolm said,"To the extent that is the case in the U.S., it will as it always does have some direct effect on us."

Patricia Birch, who heads the Bahamas Real Estate Association, noted that it is impossible to tell from looking at the new numbers whether the majority of loans in arrears are for first-time property owners.

"Some of these may be properties that are not primary residences of Bahamians but may have been investment properties that they bought at a time when they were working steady and these may be lots or properties in the out islands or even here in Nassau,"Birch said.

"Certainly people are going through difficult circumstances, but in my opinion the banks do try to work with people as much as they can because banks are not interested in owning houses or property."

9/2/2010

thenassauguardian

Bahamas Blog International