The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive yesterday said he “refuses to accept” the notion that this nation has exhausted its economic potential, arguing that it must stop treating diversification as a “taboo” subject.

Edison Sumner, speaking after the International Monetary Fund (IMF) slashed its 2015 and 2016 growth forecasts for the Bahamas, told Tribune Business that this nation needed to foster greater entrepreneurship and develop new industries to expand the economy.

And he urged the Bahamas to use the proposed National Development Plan, with its ‘Vision 2040’ component, to “plan for the future” and chart the economic development course it wanted.

Mr Sumner said it was likely that the IMF’s decision to cut the Bahamas’ 2015 GDP growth forecast again, this time from 1.8 per cent to 1.2 per cent, was prompted largely by the $3.5 billion Baha Mar resort’s failure to open on time.

Looking beyond this, he said: “We should be consistent with what we are planning for the future of the country, and find new industries to grow the economy so we’re not dependent entirely on traditional industries.

“We’ve got to find ways to grow the economy through entrepreneurship, find ways of exporting certain services that others can benefit from and bring income into the country. It’s all about planning our future economy.”

The Bahamas has traditionally relied on its ‘twin pillars’ of tourism and financial services, both of which link into the development and real estate sectors that feed the construction industry.

However, the IMF’s World Economic Outlook, released yesterday, reveals that the Bahamas’ GDP growth forecasts pale alongside those for Caribbean rivals such as the Dominican Republic, whose economy is predicted to expand by 5.5 per cent this year.

Haiti and Grenada are forecast to grow by 3.4 per cent and 2.5 per cent, respectively, while even St Kitts and Nevis is set to see 5 per cent GDP growth.

By contrast, the Bahamas and the rest of the region’s larger and more developed economies, such as Barbados, Jamaica and Trinidad & Tobago, will be firmly stuck with growth rates hovering between 1 per cent and 2.5 per cent over the next five years.

Mr Sumner, suggesting that the Bahamas was likely the “most developed nation in the region and the Caribbean”, said in response: “I’d hate to think we have exhausted our growth potential for the economy.

“I refuse to accept that’s the case, and the way to address that is to develop through entrepreneurship, and develop new economic activities and industries.

“While we have relied on the traditional industries, we need to look beyond that and stimulate activity through new industries we can develop,” he added.

“The challenge I hear is that we’ve been talking about diversity for some time, and the topic seems to be taboo, as if we have not accepted the country has an ability to diversify away from tourism and financial services. It will require planning and the will to find and develop new industries.”

Mr Sumner said many of the Bahamas’ peers were now copying its development model, and seeking to lift themselves out of depression via the attraction of foreign direct investment, and a focus on manufacturing, agriculture and exporting.

He added that the Bahamas had been “talking about farming for a long time”, yet had not developed a fully-fledged industry that can meet the demands of both the domestic and export markets.

And he suggested that fisheries, too, was not realising its export potential and the ability to bring even greater amounts of precious foreign exchange into the Bahamas.

“The Chamber is doing its part, driving the development of the entrepreneurship to grow the small and medium-sized business sector so they can contribute in their own way to the development of these various industries in the country,” Mr Sumner told Tribune Business.