The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Retail sales declines of between 20-30 per cent for the 2015 half-year are compounding an already-weak investment climate that will now be hit by Baha Mar’s travails, a well-known businessman warned yesterday.

Robert Myers told Tribune Business that retail sales in his business, and those of other retailers, were “down significantly” year-over-year due to a combination of Value-Added Tax (VAT) and an economy still struggling to recover.

He added that Baha Mar’s Chapter 11 bankruptcy protection filing threatened to further undermine private sector confidence, and could lead to a further spiral of employee lay-offs if the resort developer had to let its several thousand staff go.

With Bahamian contractors owed a multi-million dollar sum by Baha Mar, and local investors in the latter’s retail and restaurant outlets yet to realise an investment return, Mr Myers said many in the private sector would be focused on survival instead of growth.

“These guys are hardly going to try to expand businesses and take on more employees, especially in light of the fact that retail sales are down significantly; by double digits,” he told Tribune Business.

Referring to his own company, Caribbean Landscaping, Mr Myers added: “In our own retail, we’re down 20-plus per cent, and I’ve heard of people down by 30-plus per cent.

“I know we’re down and, again, we’re trying to provide for that and hold on to good people and weather the storm, but it’s challenging.

“I think VAT has contributed to that. Generally, as we said at the Chamber prior to VAT, the economy is not recovering as robustly as the US, and this is what I wrote the position on.”

Mr Myers said the economy’s continued weakness, and slow recovery from the 2008-2009 recession, caused the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) to warn the Government that implementing its initially-planned 15 per cent VAT rate “would have collapsed the economy”.

The Christie administration heeded its advice by opting for a broad-based 7.5 per cent VAT, but Mr Myers said: “It remains to be seen if the economy rebounds enough to cope with VAT and what’s happening now.

“You’ve got to figure that on the back of this, with what’s happening with Baha Mar, a hell of a lot of companies will be hurting.

“You’ve got a large amount of Bahamian contractors, service providers and restaurateurs and retailers that are going to be hurting,” he added.

“It means you may have further lay-offs in the private sector to compensate.”

Mr Myers said the Government, and the Bahamas in general, had yet to come up with answers on how to “attract business, investment and growth”, and achieve the GDP expansion rates this nation required.

“The one thing we have to focus on is GDP growth,” he told Tribune Business. “How we’re attracting business, investment and growth.

“It’s very hard to think about growth when your revenues are down and you’re getting clipped by things like Baha Mar and taxes.

“But I think it would be important for the Government to consider how they’re going to get people to invest and reinvest in business and growth, and how they’re going to stimulate the economy,” Mr Myers said.

“That’s a big question, and I’ve not heard any answers to that. We’re very lucky. Had we been invested in Baha Mar at the level some of those guys are at, it would have been a very tough pill to swallow.”