The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Chamber of Commerce’s president yesterday said it was “tragic and ironic” that other countries had used the model pioneered by Freeport to surpass this nation as international free trade zones.

Barry Malcom told Tribune Business that while the likes of Singapore, Panama and Dubai had embraced the Hawksbill Creek Agreement type-model, the “pioneer” - the Bahamas - had “managed to impede the growth and functioning” of its own free trade zone.

He added that the combined investment in Freeport by its top 10 industrial companies was “staggering”, exceeding that of Atlantis and Baha Mar, yet the Bahamas had failed to focus on developing this sector of its economy.

Speaking after the Grand Bahama Chamber had released its ‘The Future of Freeport - 2015 and Beyond’ paper, Mr Malcolm urged both the Government and the Grand Bahama Port Authority (GBPA) to read its recommendations “fully and carefully”.

“There’s a strong view, and I think it’s correct, that if Freeport was allowed to flourish as a free trade zone, as envisaged by the Hawksbill Creek Agreement, it would benefit Freeport, Grand Bahama and the Bahamas as a whole,” Mr Malcom told Tribune Business.

“What’s tragic and ironic is the model for the free trade zone followed by so many other countries right now was pioneered by Freeport and the Hawksbill Creek Agreement in 1955.”

Mr Malcolm said it was “absolutely unbelievable” how the Bahamas had effectively squandered its competitive advantage, and allowed other states to bypass it.

“We managed to impede the growth and functioning of Freeport as an international trade centre,” he added.

Tribune Business revealed earlier this week how the Chamber paper suggested that Freeport’s contribution to the Public Treasury could increase five-fold to $500 million if the city reaches its planned population size, and help solve both the Bahamas’ fiscal and ‘free trade’ issues.

It called for Freeport to become a true ‘free trade zone’ by expanding the Freeport Container Port’s existing rights to include the Sea/Air Business Centre and Grand Bahama International Airport.

This, the paper argued, would be “a game changer” and lead to the creation of a major international logistics/transhipment hub that could lead the Bahamas into the era of rules-based trading regimes.

With the Bahamas preparing to become a full World Trade Organisation (WTO) member, and already signed on to the Economic Partnership Agreement (EPA), the Chamber paper implied that Freeport gave this nation the perfect platform to maximise the potential benefits from these rules-based trading regimes.

Calling on the Bahamas to look to the world, rather than fall back on protectionist policies from the past, the Chamber said fulfilling Freeport’s international ‘free trade zone’ potential would help grow the city to ‘critical mass’ and boost the Public Treasury.

“WTO is a forgone conclusion that the Bahamas must organise itself to embrace. Gone are the days of inward looking, protectionist policies,” the Chamber warned.

“As seen with the Asian countries, unrestricted engagement in international trade through designated free trade zones has the effect of economic improvement to the entire population to create a better standard of living.

“The liberalised use of Freeport/Lucaya for this same purpose is in the best interest of the country, and is congruent with WTO principles.

“This is best facilitated by expansion of the Freeport Container Port’s foreign trade zone to include the adjacent Sea/Air Business Centre and the GB International Airport, providing for a major international logistics hub to be developed. Acquiring US Customs preclearance of cargo from this proposed sterile zone would also be a game changer.”

The Chamber said Freeport’s US and shipping lane proximity, together with the Hawksbill Creek Agreement; the city’s deep water harbour; a container port compliant with international safety and security standards; and an airport that met all US requirements, provided the building blocks needed to execute this strategy.

Mr Malcolm, meanwhile, confirmed that the Chamber had shared the paper with both the Government and the GBPA.

“These recommendations really represent the consensus view of the licensees of the Port Authority. This is what the licensees feel, big and small,” he told Tribune Business.

“The intent of the ‘vision paper’ is simply to lay out what the licensees of Freeport see as the most viable options for Freeport in the remaining years of the Hawksbill Creek Agreement.”

The GB Chamber president said the paper deliberately provided the historical background and context to how Freeport had progressed to-date, as many policymakers who will have the responsibility for deciding the city’s future “don’t know the future”.

Mr Malcolm said the Bahamas’ ‘three-pillar’ economic model of tourism, financial services and industrial/international trade services had “flourished for a while” in the 1960s.

He added that, combined, the “top 10 industrial companies in Freeport” - the likes of BORCO; the Grand Bahama Shipyard; the Container Port; Polymers International; Statoil; and Quality Services - “have as much bricks and mortar invested in the ground as Atlantis and Baha Mar”.

“The numbers are staggering,” Mr Malcolm said. “But, as a country, we’ve not focused on developing industry and the free trade zone. We push it forward with one hand, then yank it back with a chain. It’s ridiculous.’

The GB Chamber chief expressed hope that the weight of GBPA licensee involvement in the report would ensure the Government and Port Authority took it seriously.

“I certainly expect they will consider very carefully, and fully, the recommendations made, particularly as they reflect a broad cross-section of views of licensees that are heavily invested in Grand Bahama,” Mr Malcolm said.

“More than 80 per cent of the licensees in the Port area are Bahamian investors. It’s a huge contributor to a lot of people who have a lot of skin in the game in business in Freeport.”