The Tribune

A STATEMENT made by the Chinese Embassy in Nassau in January 2011, brushed off America’s growing concerns — revealed in cables released by WikiLeaks – that developments such as Baha Mar would “leave The Bahamas indebted to Chinese interests for years to come”.

Although, there was no comment from the Chinese Embassy on the content of those leaked cables, the Embassy stressed that the China-Bahamas relationship “is based on equality, mutual respect, mutual benefits and win-win”.

Although claiming that it was not commenting on America’s concerns, the Chinese Embassy went on to say that the China-Bahamas relationship “is open, transparent, non-exclusive and non-detrimental to other countries’ interests. Developing China-Bahamas cooperative relationship is in the fundamental interest of the two countries and has brought and will surely bring, substantial benefit to both peoples.”

Words, words, words … it’s now time to show us!

What is happening at the western end of the island certainly does not benefit this country and its people — especially those awaiting employment. Not only has it embarrassed The Bahamas in the eyes of the world — it should also be a major embarrassment to the Chinese government, which wanted Baha Mar to be its showpiece for future construction opportunities in this hemisphere. By its own admission China Construction has deliberately slowed Baha Mar’s completion, thus missing at least three opening deadlines. It must also be a personal rebuff to Prime Minister Christie, who, as mediator, has been trying to get the project back on course. Baha Mar was to be the Christie legacy. It was to provide much of the employment promised Bahamians if they elected his party to office. Bahamians elected the PLP. But, so far the PLP government has not kept its end of the bargain. There is going to be heavy unemployment in the tourism sector within the next few weeks, with One & Only on Paradise soon closing for renovations – some of the lay offs started this weekend with the permanent closing of the Courtyard Terrace.

Our credit rating listings is also hinged to Baha Mar’s successful future.

The Bahamas’ $6.248 billion national debt as of December 31 was equivalent to 73.4 per cent of the Bahamas’ gross domestic product (GDP).

“This,” reports Tribune Business recently, “puts The Bahamas’ national debt above the 70 per cent benchmark, which the International Monetary Fund (IMF) has previously described as the threshold where countries are in increasing danger of losing control of their financial affairs and sovereignty.

“It is also a point where increasing amounts of government revenue are sucked away from public services to pay debt servicing costs, potentially trapping countries into a debt spiral.

“The Bahamas has now entered this dangerous territory, but the Central Bank predicted it will not be here for long. And Moody’s seems to agree, judging by the analysis contained in its report.

However,” reported Tribune Business a few weeks ago, “the credit rating agency appears to have missed entirely the delayed opening of the $3.5 billion Baha Mar resort, and the disputes that have caused this.

“Baha Mar’s economic impact is crucial to the Bahama’s 2015, and short-term, growth forecasts, and lower-than-expected GDP expansion will have consequences that manifest themselves in higher debt ratios.”

However, in a statement yesterday it is obvious that Standard & Poor are having second thoughts. According to S&P the delayed Baha Mar opening has eliminated any chance that it will raise its “negative” outlook on the Bahamas, as it prepared to “revise downward” growth estimates for this nation.

And so the Baha Mar dispute has escaped the environs of its vast property and is hurting every segment of our economy.

We do not see a win-win situation for The Bahamas, nor do we see a win-win situation for China, unless, of course, China has an ulterior motive to eventually remove its development partner. These street whispers are growing louder.

We understood that China Construction (CCA) undertook to see Baha Mar opened before it turned its attention to its Panama City project. However, according to the news reports, “tasked with supporting CCA’s development and expansion in Latin America, CCA Panama is committed to contributing to the economic growth of Panama through participation in the nation’s ambitious development initiatives.”

We certainly hope that Panama has better luck than has The Bahamas.

To our surprise on April 29, not only was there a ceremony in Panama for CCA’s grand opening, but none other than our Deputy Prime Minister Philip “Brave” Davis was there giving a congratulatory speech and helping to cut the opening ribbon. Mr Davis even told his audience that as the financier, investor and builder of the Baha Mar project, CCA has helped create thousands of jobs for the Bahamian people and hundreds of millions of dollars in revenue for local businesses. Finances, dedication, network capability, and other resources are major assets of CCA; and these assets accomplish the seemingly impossible, Mr Davis was quoted as saying.

Meanwhile, CCA, instead of accomplishing what Mr Davis termed the “seemingly impossible” was in dispute with the principal owner, and on a go-slow. Baha Mar staff were trying to explain why visitors’ bookings had to be cancelled.

And then there was CCA’s most recent purchase, the historic downtown British Colonial Hotel. It was claimed that this project was to create 250 Bahamian jobs during construction and 500 permanent jobs after completion, contributing $750 million to the Bahamian GDP in 20 years.

It was also understood that China Construction, like the stipulation with the Panama project, was not to work on the British Colonial (BC) site until Baha Mar had been completed. Over the weekend we took a drive out to both sites. There seems to have been more work done at the British Colonial than at Baha Mar, where there is a tremendous amount of work still to be done. However, at the BC already the site has been fenced in as far as Junkanoo Beach and cleared ready for construction of a five-storey car park, two condominium hotels, retail stores, a broad walk, and a restaurant and marina, extending into the water.

If CCA has all of its government permits for this ambitious project, then the red carpet was rolled out for them with lightening speed while Bahamian property owners complain that they have been waiting for years to even get an answer from government about their plans to develop their own Bay Street properties.

In January this year, while at a meeting in Beijing, China, Prime Minister Christie announced that he planned to request funding from China to support our national budget, and refinance and restructure the country’s debt. If that should ever happen China would certainly own us, hook, line and sinker.

With the current situation of Baha Mar as a bitter example, we suggest that Mr Christie look elsewhere for his funding and get out of China’s grasp as quickly as possible.

On November 18, 2010, then prime minister Hubert Ingraham was speaking in the House of Assembly on the resolution for the Baha Mar project when the question of a foreign state owning Crown land came up.

“It is the view of my government,” Mr Ingraham replied at the time, “that it is an untenable position to permit any foreign State to own land in The Bahamas. Under the law, any financial institution providing funding for a development in The Bahamas has a number of alternatives to protect their interest should that project fail. One of these protections is foreclosure. As I said at my press conference on Sunday past, should this project not succeed, and I have no reason to believe that it will not, and should I be in the position that I now hold, my government would not agree to foreclosure on these properties (previously Crown Land) to any foreign State or any entity which is owned by a foreign State.”

The public would now like to know Mr Christie’s position should such a situation arise during his administration.