The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An executive with a well-known Bahamian economic think-tank is questioning why the Government should favour manufacturers over other industries by giving them incentives not available to others.

Rick Lowe, of the Nassau Institute, in a letter to Tribune Business questioned why the Government should pick Bahamian manufacturers to “win” over other sectors by restoring their never-ending import duty exemptions.

He also questioned how long an industry remained ‘infant’, noting that the former Ingraham administration’s decision to graduate Bahamian manufacturers from the Industries Encouragement Act after a period of five years - to paying 10 per cent duty on raw materials and equipment - was totally reversed by the new government.

“What makes light manufacturing any different than other industries that they are entitled to ‘incentives’ and other industries are not?” Mr Lowe asked.

“How does the Government get away with picking one group of business people to ‘win’ over another?”

He added: “The investment that manufacturers make in their businesses, while important, is not more so than the investment other business people make in theirs. And other business people even have to buy the property they construct their business on if rental property is not available or unsuitable.

“Manufacturers decide to go into business just like other entrepreneurs. They make their business plan, borrow the money or invest their own capital, buy their equipment and inventory and go to work. But, for some reason, ‘manufacturers’ believe they are entitled to these tax breaks and other business people aren’t?”

Mr Lowe said manufacturers’ assertions that the duty incentives reinstatement would increase employment in the sector had not been determined.

“The country is not informed what the cost of all this is. How many people or companies benefit from the tariff reductions today would also be important for the government to share if they wish to be transparent,” he added.

“In one case they say the reintroduction of the tariff reductions will help them introduce a new product line. Most entrepreneurs take this risk as part of doing business. Sometimes the product line is a hit. Other times it’s a flop. That’s the risks and rewards of going into business.

“It begs the question: Why are manufacturers the ‘fair headed boys’ of government when other businesses have to face the consequences of going out of business if they can’t compete?

“As has been shown with this about face by the incoming government, when policies like this are adopted they become political fodder for all involved, and in many instances additional ‘incentives’ are found ‘necessary’ that only create more dependency on bailouts and handouts.”