By NEIL HARTNELL
Tribune Business Editor
The Bahamas Investment Authority (BIA) must be empowered to issue approvals “independent of Cabinet”, the FNM’s deputy leader said yesterday, arguing that this nation was “far away” from providing the necessary investor-friendly environment.
K P Turnquest told Tribune Business that the US government’s concerns, set out in its 2015 Investment Climate report on the Bahamas, were “pretty much in line” with the views he had expressed in his 2015-2016 Budget contribution.
Backing the State Department’s assertions about a “lack of transparency and undue political interference” in bidding for, and the award of, government contracts, Mr Turnquest suggested these problems had increased under the Christie administration.
He alleged that participants invited to bid on government tenders were “weighted” towards Progressive Liberal Party (PLP) supporters, citing the Bahamas Agriculture and Marine Science Institute (BAMSI) construction contracts and Grand Bahama fire station as two such examples.
Mr Turnquest said the fact that the US government had repeated its concerns for a second consecutive year showed the Bahamas was failing to improve both the “fairness and openness” of public contract bidding processes, and the ‘ease of doing business’ in this nation.
Arguing that these factors would create “obstacles” for the Bahamas’ proposed accession to full World Trade Organisation (WTO) membership, Mr Turnquest suggested both issues could be solved by the decentralisation of power.
The FNM deputy leader urged the Government to devolve decision-making authority, and the ability to issue permits, to the BIA as a means to ensure investment-related approvals were issued in “a timely manner”.
“There are any number of investors that complain about the slowness of the system, the lack of clarity and what is required to gain approval for various projects,” Mr Turnquest told Tribune Business.
“We have a lot of work to do to ensure the system thrives with efficiency, both from a government and investor perspective. We have to eliminate the red tape, and as a government we have to be setting guidelines for investment and delegating that authority to make decisions subject to review by Cabinet.”
Mr Turnquest said the BIA and similar agencies must “have the power to make decisions, certainly approvals in principle, and certainly independent of Cabinet”.
Cabinet, he argued, had other priorities to deal with that were more important that investment-related approvals. It should “at best” merely receive a summary of the approvals issued by the BIA, its role being to hold the agency to account on behalf of the Bahamian people.
The US State Department’s Bahamas investment climate report criticised “cumbersome” government approvals processes as barriers to investment in the Bahamas.
It added that the US Embassy in Nassau continues to receive complaints from American companies about the “time consuming” wait for Government permits, which complicates investment decisions and adds to costs.
While acknowledging that the Government had refuted such assertions, the US State Department report said: “Other areas of concern noted by companies include the discretionary issuance of approvals and licenses from various government authorities.
“Companies complain that in many instances these approval processes are confusing and opaque, with little to no possibility for review or appeal of a decision.”
Mr Turnquest’s call for a ‘decentralisation’ of investment approvals authority is designed to eliminate the ‘bottlenecks’ created by the need for all decisions to come from Cabinet, or at least a Cabinet committee or sub-committee.
Currently, all foreign direct investment (FDI) related approvals come through the Investments Board (for all standard real estate purchases) and the National Economic Council (which deals with major investment projects).
Both bodies, in effect, are the Cabinet. Mr Turnquest suggested that devolving decision-making power to the BIA and would not only ensure more rapid approvals, but also eliminate concerns over politically-related interference and influence in the process.
“It shouldn’t take more than a month to two months from the start of the process to the end,” the FNM deputy leader said. “Once the guidelines are in place, everyone knows what the goal posts are.
“I don’t believe it’s justifiable for approvals to be held up by Cabinet for six months, nine months, a year.
“We have to get out of the boxed way of thinking that Cabinet has to have sight of everything, approve everything. That’s when you get claims of political interference. Let’s hire the professionals, give them their mandate and let them do their work.”
Mr Turnquest said the US State Department report further reflected that “the ease of doing business and the transparency of doing business in the Bahamas are declining.
“It [the report] supports the feelings of most Bahamians with respect to the awarding of contracts, particularly over the last few years,” he added, “and the impression that contracts are reserved for party supporters.
“Even in the process of tendering, the participants selected to participate seem to be weighted towards supporters of the Government.”
Mr Turnquest said the US report showed the Bahamas had “not made any advances in ensuring the systems are open, and seen to be fair and open”.
He added: “The Bahamas is supposed to be advancing to WTO accession, and these issues are going to become more and more of an obstacle to that end and the way we are perceived as an investment decision.
“The Bahamas depends on foreign direct investment. It’s a concern not just for the Government, but all Bahamians, that we are seen as a destination that’s favourable towards FDI, open to FDI, as well as one seen as fair, transparent and open, and that values creativity and new ideas.
“I think we’re far aways from that at the moment.”
Tribune Business was once again unable to contact Khaalis Rolle, minister of state for investments, for comment on the US report.