the bahamas — still booming - business .the bahamas — still booming ... the bahamas’ economic
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Sustainable projects are continuing to come on stream for the island paradise.
The Bahamas Still booming
country built on a thriving tourism industry, the Bahamas has made signifi cant strides into diversifi cation in the last
decade. With government estimates putting foreign direct investment in the last 15 years at around the U.S.$8-10 billion mark, the paradise archipelago continues to be one of the most successful economies in the Caribbean.
As he approaches the end of his fi rst year in offi ce, Prime Minister Hubert Alexander Ingraham remains committed to keeping the
Bahamas attractive for investment, and creating jobs for the Bahamian people. Deputy Prime Minister Brent Symonette says, The Free National Movements policy is that government should not
be in business. Investors here feel confi dent and safe. They know they can take their investment back in U.S. dollars and it is for this reason we
have a high GDP. Tourism, and our second economic pillar, fi nancial services, have provided some high-end jobs. We have been fortunate in being able to make sure the Bahamians hold those jobs. It is hoped that double-digit unemployment fi gures are in the past.
Zhivargo Laing, Minister of State for Finance notes, Essentially, the Bahamas economic model hasnt changed in 60 years and it is unlikely to change in the future. Much of our focus is therefore on fi ne-tuning the advantages we have, enhancing the tourism and fi nancial services sectors. Given our investment track record, we want to ensure international investments have the kind of integration and synergies with local investments that allow greater retention of foreign reserves, thus spreading the generated wealth throughout the islands.
Fiscal prudence is a signifi cant focus of this administration, Laing says. We recognize there is a need for us to manage the fi scal affairs of the country so that we can continue to give ourselves a kind of security cushion in the face of a dynamic worldone that will allow us to respond better to any external shocks.
The governments desire to distance itself from entities that might better function as private businesses is best exemplifi ed in telecommunications and power. The Bahamas
Telecommunications Company Ltd. (BTC) celebrated its most successful year in 2007, with revenues reaching a record U.S.$327.4 million, showing that its customer-focused approach is paying off. Five years worth of solid investment, that includes a U.S.$60 million submarine fi ber
optic cable installed to link the nation in 2005-6, means that today, BTC can provide the whole gamut of telecoms services on each of its major islands.
Leon Williams, BTCs president and CEO says, When you look at the major conference centers in the Caribbean right now, one would certainly be the Atlantis, one of the mega developments currently under construction in the Bahamas. From an occupancy and size level, it has all that is required. As a telecommunications provider for the Atlantis, we are hoping to provide ubiquitous GSM coverage there very shortly and have spent more than U.S.$5 million on this already. When
Zhivargo Laing, Minister of State for Finance
Brent Symonette, Deputy Prime Minister
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we replicate the Atlantis service to other hotels, the Bahamas will be in a position to compete. But from a business perspective, we have all the connectivity.
As Williams notes, the Bahamas is one of the
best-connected island nations in the region. There are four cables connecting us to the U.S. he says,
and besides that, we have satellite back-up to the cables. Now that we have the Bahamas Domestic Submarine Network, we no longer have an issue getting bandwidth to any one island. An investor coming here can be assured of connection to the rest of the world, via DSL, high-speed Internet, GSM and so on. We are deploying a mesh WiFi network which is bringing to fruition the concept of lying on the beach while connected to your laptop.
BTC has been in business for over a century, and while it may no longer have the monopoly, its role as telecoms provider is more important than ever. Corporate social responsibility and equality are integral parts of the company philosophy. BTC is bigger than the company. BTC IS the Bahamas, says Williams.
My job is not about trying to install fi xed lines and bring in new technology. It is about ensuring that every resident has a right to ICT. There are parts of the country where residents have a BlackBerry, GSM phone, TDMA phone and a CDMA phone. Then there are citizens who dont even have dial-up access. It is easy to marginalize citizens in the same country, and then you end up growing the digital divide.
My role is also to ensure the connectivity is affordable. In the Bahamas, implementation is asymmetrical but if you dont have universal rates, those people who can least afford it are the ones who end up being charged more.
As a manager, you need to listen to the voice of the customer. I need to have town meetings, I need to be doing polls to fi nd out what the
customer wants. You need to put the customer at the center, to hear what the issues are. You need to address the common issues, instead of getting side-tracked. It has to be for the betterment of the entire population, not only for the individual.
Giving more power to the people is also the mantra of the Bahamas Electricity Corporation (BEC), an entity that is being kept increasingly busy with demand from the numerous boutique and mega resorts coming on stream. Minister of Public Works and Transport, Earl Deveaux says, We meet with all developers to get an indication of their needs and then plan for the investment and infrastructure to accommodate the demand. That might mean constructing new plants or licensing additional facilities. We are currently installing new powering capacity.
Kevin Basden, general manager of BEC, speaks of the challenge of supplying power to new projects while taking care of existing customers. From a planning perspective, we have a 5-10 year forecast which will take care of the ordinary growth, but we have to factor in the major projects as well, he says. If developers give us the information ahead of time, it allows us to complete the design and make the necessary procurement because all of our products are imported. To date, we are doing okay and have been able to have it ahead of time.
There are defi nitely opportunities for foreign investors in terms of building power stations, and for the provision of spares or supplies and materials. There is also potential for fi nancing, especially the major capital projects. Do we do it by means of a bond, a loan or supplier fi nancing, for example?
There are also some major road construction projects under way. Minister Deveaux says, One of our key strategies is to complete a new corridor system in New Providence, to ensure the bridges and airports bringing in tourists are well-connected so that both tourists and the local population travel the shortest distances possible.
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The Central Bank of The Bahamas (CBB) has played a pivotal role in theBahamian economy for more than 33 years. Having been established lessthan a year after the Islands gained independence from Britain, the CBBhas worked to promote a stable economy for the population and investorsalike. Moreover, as The Bahamas financial services sector has grown, theCentral Banks goal to promote high standards of conduct andmanagement has become a crucial and important one.
Wendy Craigg has been Governor since June 2005, and has been closelyinvolved in initiatives that enhance the delivery of domestic bankingservices, such as the modernization of the ongoing payments system,including the Real Time Gross Settlement System and the AutomatedClearing House. Seven years ago, much of the CBBs legislation wasoverhauled to strengthen The Bahamas examination and supervisoryregime. As Governor Craigg explains, The Bahamas undertook a numberof legislative and regulatory initiatives to ensure that our financial servicesregime was aligned with best practices in the international financial arena,and we are presently engaged in other measures aimed at maintaining arobust, reputable, and business-friendly environment.
Evidently, it has been successful. With an unprecedented amount offoreign investment being channeled into the islands in recent years,investors are already putting their trust in The Bahamas, and have found acountry with a long history of political and economic stability, an excellentworkforce, a first-rate legal system, and a government that encouragesbusiness growth and development.
Although tourism is the largest sector, making upapproximately 50% of the economy, GovernorCraigg notes the sizeable direct and indirectcontributions being made by the financial services
sector. It is not unusual for persons who come hereon financial business, for example, to eventuallyhave a second home in The Bahamas, and then visitmore frequently, she says. Therefore, when one considers the secondaryeffects, there is significant value added, derived from financial servi