The Tribune

SPEAKING to reporters at the opening of Bahamas Agricultural and Industrial Corporation’s executive offices last Thursday, Prime Minister Christie exuded confidence in a buoyant economic future for these islands.

“We are going to have the most wonderful experience in the next two to three years and unemployment will continue to go down... over the next 18 months, it will continue to drop to around 10 per cent or less,” the prime minister had said.

“The unemployment rate has come down to around 14.2 per cent. I am more than optimistic, almost now certain, that it will continue to drop and the Bahamas is in for a wonderful period of transformative development. One in which people will have jobs and entrepreneurs will have money for opportunities moving into the future. I see a wonderful experience happening in the country in the next two to three years and it is going to have a positive impact. This is nothing to do with politics. Just simply the reality that there are increasing numbers of people with money who have recognised that the Bahamas is the best place to be in this region and the best place to invest and they are trying to do so. The challenge for us is not whether or not there are people to invest, but it is how do we ensure that Bahamians will benefit in a maximum possible way. I am very excited about this.”

So would we all be if we could believe in the dream. But the days when Bahamians had the luxury of two or three jobs went out in the mid-sixties.

It would be nice to be able to buy into Mr Christie’s dream, but we can find no rainbows in the business community, rather, with VAT hanging like a Damocles sword over their heads, all we hear is talk of cut backs and close downs.

We even question Mr Christie’s assertion that there is an increasing number of people with money who recognise the Bahamas as the best place to invest in the region and are anxious to do so. This is not what we heard over the weekend.

We were told that by the end of the year, for example, the UBS AG group — the largest Swiss bank headquartered in Basel and Zurich, Switzerland — will have closed its doors on the Bahamas and resettled in Panama. The reason given: “The business climate in Panama is far friendlier.”

Of course, we believe that the unfortunate treatment experienced by the bank’s executive director Emmanuel Flaux during a routine immigration check in January, followed by death threats – expressed in rather gruesome terms – to two other members of the bank’s foreign staff, hastened the retreat.

Our readers will recall that Mr Faux was stopped in his car and asked to produce his work permit as proof that he was legally in the Bahamas. He did not have the permit on him. However, within 20 minutes, according to a statement from the bank, “he was provided with an electronic, certified and notarised copy of his work permit”. This was not accepted as valid. It was claimed that Mr Faux was “roughed up”, thrown into a government vehicle and taken to the Carmichael Road Detention Centre. There was near panic in government circles. Needless to say he was quickly released.

A short while after this, we learned that two other UBS staff members had received death threats. Plans were made to get them and their families out of the country as quickly as possible. Meanwhile, they had police protection. We understand that Mr Faux himself left this weekend. And so after 54 years, UBS has folded its tent and, by the end of the year, will have quietly crept away.

“Can you imagine what just these people leaving the country has meant to the incomes of so many Bahamians — rentals, maids, groceries, gas, travel to the out islands, and so many other things that benefited Bahamians,” said a friend of one of the bankers. The friend understood that one of the Swiss families had planned to purchase a $1.4m home to settle here. Apparently, there are now many vacant apartments in various areas of the island.

We were told another story of yet another company — this time a reputable US company — that was interested in creating another branch of its business in the Bahamas. However, after getting the lay of the land, it walked away. Why? “Because,” we were told, “the Bahamians discussing the business with them were more interested in what they would get out of it themselves, rather than how the country and its citizens would benefit.” Is this an echo from the ugly past come to shatter the PM’s dreams for our country?

However, in all fairness it’s the various anti-secrecy laws that have destroyed our offshore banking business. For example, the 34 members of the OECD countries are now governed by a single global standard for the automatic exchange of information. In the United States, the new act is the Foreign Account Tax Compliance Act (FATCA). This law requires US citizens, including individuals who live outside the US, and foreign financial institutions, to report to the Internal Revenue Service (IRS). And so, gone are the days for offshore accounts and shell corporations. Really there is no longer need for places like the Bahamas, as an offshore centre, to exist.

And so, while many of these banks will leave, others can reinvent themselves and remain in another branch of banking or trust business. But why make the effort when places like Panama are friendlier, cheaper, and anxious to welcome new business? Because Bahamians do not understand how important these institutions are to their own welfare, they and the country stand to lose everything.

Mr Christie and his government seem to be pinning their future on Baha Mar. We hope they are not disappointed. All during the construction we have heard complaints from local suppliers that they have not received the expected business from the Baha Mar construction. Apparently supplies are imported from China.

However, according to a recent interview given to Tribune Business Editor Neil Hartnell, Robert Myers, the Bahamas Chamber of Commerce and Employers Confederation’s chairman, commented that it will take “five Baha Mars going on” simultaneously to achieve the 5.5 per cent GDP growth to reduce today’s unemployment by 50 per cent and absorb thousands of annual school leavers into the workforce.

And in the same edition of The Tribune – Friday, July 25 – in which Mr Christie expressed great hope for the Bahamas, there was an interview with a young Bahamian woman who was preparing herself to join the Bahamas’ job market concluded:

“The Bahamas does not have enough opportunities in place to provide jobs for the unemployed.

“Even visiting home during the summer is a stressful process because people aren’t very interested in hiring summer students.”

Unfortunately for these young people, because of VAT, few Bahamian owners are contemplating expanding their businesses, or launching new ones that would have need for additional staff.