The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

RESEARCH by the National Development Plan Secretariat has found that only about 20 per cent of profits from foreign direct investment in the Bahamas trickles down throughout society, shedding a dim view on the prudence of decades worth of decisions via partnerships between the Bahamian government and foreign investors.

Among other things, the figure accounts for salaries paid to Bahamian workers employed by foreign investors.

The conventional wisdom in the country has long been that much of the profits made through foreign direct investment (FDI) is repatriated outside the country, but the National Development Plan’s (NDP) findings put this into a statistical context for the first time, Secretariat member Gowon Bowe told The Tribune yesterday.

“At every stakeholder briefing there was shock at how low the (trickle down rate of FDI) is,” he said. “We’ve taken what we knew as a gut feeling and put a statistical analysis on it.”

The finding, he suggested, should make the government rethink the way it offers concessions to foreign investors, particularly by way of heads of agreements.

“When you consider the social benefit of employment and the income Bahamians derive from it, but then consider the concessions given away to investors for free, real property tax reductions, and the various forms of exemptions we give, what is the opportunity cost and the real impact of the development to the Bahamas? It’s a negative impact going into the government’s coffers when you consider the profits made that we don’t benefit from. It would’ve been cheaper to tax foreign investors at a full rate and just give the (Bahamian) workers a stipend.”

The finding is a key one contained in the NDP plan, an ambitious project initiated by the Christie administration, supported by the Free National Movement, and designed to revolutionise the way the nation’s affairs are run –- or so stakeholders hope.

After months of research and compiling of data, the NDP Secretariat is working to fact-check its findings, whittle down a 2,000 page document to an executive summary, and release its findings in February during a State of the Nation address that is expected to be attended by Prime Minister Perry Christie and other members of the government.

It covers a range of important issues, including crime, education, social services and the economy.

Mr Bowe said he hopes politicians will use the findings to carve out new policies, even as the next election looms.

“We said to each of the parties, dismiss this at your own peril,” he said. “The Bahamian people are having greater expectations for more mature discussions, decisions and analysis. If they are seen to be opposing something that will craft decision making, they should be careful when they look at the young electorate who they want to support them lest they find them discouraged.”

As for the degree of support the Secretariat has had from politicians, Mr Bowe said: “I wouldn’t say we’ve encountered resistance from either side but there is scepticism as to whether there will be support from the government as we move to the election.”Among other things, the figure accounts for salaries paid to Bahamian workers employed by foreign investors.

The conventional wisdom in the country has long been that much of the profits made through foreign direct investment (FDI) is repatriated outside the country, but the National Development Plan’s (NDP) findings put this into a statistical context for the first time, Secretariat member Gowon Bowe told The Tribune yesterday.

“At every stakeholder briefing there was shock at how low the (trickle down rate of FDI) is,” he said. “We’ve taken what we knew as a gut feeling and put a statistical analysis on it.”

The finding, he suggested, should make the government rethink the way it offers concessions to foreign investors, particularly by way of heads of agreements.

“When you consider the social benefit of employment and the income Bahamians derive from it, but then consider the concessions given away to investors for free, real property tax reductions, and the various forms of exemptions we give, what is the opportunity cost and the real impact of the development to the Bahamas? It’s a negative impact going into the government’s coffers when you consider the profits made that we don’t benefit from. It would’ve been cheaper to tax foreign investors at a full rate and just give the (Bahamian) workers a stipend.”

The finding is a key one contained in the NDP plan, an ambitious project initiated by the Christie administration, supported by the Free National Movement, and designed to revolutionise the way the nation’s affairs are run –- or so stakeholders hope.

After months of research and compiling of data, the NDP Secretariat is working to fact-check its findings, whittle down a 2,000 page document to an executive summary, and release its findings in February during a State of the Nation address that is expected to be attended by Prime Minister Perry Christie and other members of the government.

It covers a range of important issues, including crime, education, social services and the economy.

Mr Bowe said he hopes politicians will use the findings to carve out new policies, even as the next election looms.

“We said to each of the parties, dismiss this at your own peril,” he said. “The Bahamian people are having greater expectations for more mature discussions, decisions and analysis. If they are seen to be opposing something that will craft decision making, they should be careful when they look at the young electorate who they want to support them lest they find them discouraged.”

As for the degree of support the Secretariat has had from politicians, Mr Bowe said: “I wouldn’t say we’ve encountered resistance from either side but there is scepticism as to whether there will be support from the government as we move to the election.”