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Advertisers Dupuch & Turnquest & Co.
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The Bahamas: An established tourism and tax-free financial services center experiences a renaissance
It is a new era in The Bahamas. In the last few years, investment topping more than one billion dollars has poured into the 700-island archipelago located just 60 miles from the east coast of Florida, bolstering tourism, diversifying the economy and creating new jobs.
Much of the credit for the revitalization of The Bahamian economy has been given to Prime Minister Hubert A. Ingraham and the Free National Movement government.
When the FNM came to power in 1992, it inherited a country that had a poor international image and whose economy, so tied to that of the United States, was suffering from the U.S. recession and the Persian Gulf War. The country needed reform on several fronts.
Under Ingraham, the FNM government has worked diligently to improve the Bahamas image abroad, investing more than $100 million in infrastructure, cutting red tape for investors, creating dialogue between the private and public sectors, and updating and strengthening financial services legislation, establishing The Bahamas once again as the top tourism and offshore financial services jurisdiction in the world.
Some of the government's major achievements have been the creation of the Bahamas Investment Authority, the Bahamas Maritime authority and the Financial Services Board, a myriad of legislation to strengthen and enhance the financial services sector, incentives to encourage and promote development in hotel resorts, manufacturing, agriculture and light industry; a progressive second-home residency program; and completion of the electrification of all of the Outer Islands or "Family Islands" as they are also called and the establishment of a minimum wage.
There has also been an effort to shrink government by selling off government-owned hotels and beginning the privatization of several government-owned corporations.
In 1992, the government owned 20 percent of the hotel room inventory in the country; it now only owns five percent.
Currently undergoing privatization is the Bahamas Telecommunications Corp. (BaTelCo), which should be completed at the end of the year. Indications are that the Bahamas Electricity Corp. and Bahamasair will soon follow.
A move has also been made to create local government. Frederick Smith, partner at Callenders & Co., a leading law firm based in Freeport, noted that Freeport generates more than $150 million in income, for example, and that only $20 million comes back to the city because the government is administering everything from Nassau, the capital of The Bahamas. Local government will allow each community to allocate money as it sees the need.
"In 7 1/2 years, the government has done a lot to improve its international reputation and image. We have ensured that there has been established here a transparency, accountability and a degree of proficiency of which we can be singularly proud," said the Honorable Janet Boswick, minister of foreign affairs.
"We have succeeded in creating a country that is investor friendly, in which investors can be secure in their return and in which they are able to have efficient service. We think that we have one of the most attractive investment climates that there is anywhere in the world and with the privatization of our services, we will be more than on the cutting edge of technology and in a position in which future growth can be assured," she said.
The government's success can be measured in numbers. While tourism makes up 60 percent of The Bahamas gross domestic product, the financial services industry is contributing more each year. Trade, agriculture, fishing and light manufacturing round out the balance.
Unemployment in the nation is less than eight percent and the average income per capita is close to $13,000, the third highest in the hemisphere, following only the United States and Canada. Reserves are more than $500 million and the debt is approximately $1.73 billion.
"A key ingredient to our success has been the excellent relationship of mutual respect and trusted interdependence that has evolved between the public and private sectors," said Ingraham.
"Today, The Bahamas is an active and respected member of the international community," he said. "We must continue to evaluate our policies to equip our economy to continue to perform well in the face of customs liberalization, export promotion, privatization and financial sector reform so that we, like so many other modern countries, can recognize our position and be prepared to compete in the fast-paced stream of world developments."
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Table of Contents The Bahamas: An established tourism and tax-free financial services center experiences a renaissance |
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It is 8:30 on a Monday morning. People living in Nassau, New Providence are on their way to work in the Financial Center; in Freeport, a cargo ship docks at the newly expanded Freeport Container Port and thousands of tourists land at one of the many airports throughout the islands, ready to begin a day in paradise.