By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
A Donald Trump presidency will be “better for the Bahamas”, a well-known businessman said yesterday, given that he and the Republican Party will likely be less hostile towards international financial centres (IFCs).
Sir Franklyn Wilson told Tribune Business that while most Bahamians were likely to have supported defeated Democratic presidential nominee, Hillary Clinton, a Trump victory would better serve this country’s “national economic interests”.
Apart from adopting a less aggressive policy towards the Bahamas and other IFCs, the Sunshine Holdings and Arawak Homes chairman said Trump’s campaign pledges on taxes and trade may also benefit this nation.
Sir Franklyn argued that the president-elect’s promises to reduce tax rates for wealthy Americans would boost the Bahamas’ “target second home” and financial services client market by increasing their disposable income.
Apart from boosting a key investment source for the Bahamas, Sir Franklyn said Mr Trump’s campaign rhetoric, railing against trade deals and liberalised markets that have cost America jobs, implied that his government would pull back from the ‘globalisation’ drive.
This, the Arawak Homes chairman said, could also benefit by the Bahamas, as it may mean less US support for multilateral organisations such as the Organisation for Economic Co-Operation and Development (OECD).
“There are a number of reasons why it appears to me that a Trump victory is a significant benefit for this country,” Sir Franklyn told Tribune Business.
“First, there is the extent to which Trump’s policies will reduce taxes, which the Democrats may say is for the rich at the expense of the middle class.
“It’s not for Bahamians to decide whether that is good or not for America. It’s not for Bahamians to decide whether it helps the wealthy or not,” he added.
“But an increase in the disposable income of wealthy Americans has implications for the Bahamas, as they buy homes in the Bahamas and use IFCs for legitimate tax planning purposes.”
Mrs Clinton had already signalled that a US administration headed by herself would likely adopt a hard line towards IFCs such as the Bahamas, having singled this nation out while on the campaign trail.
She told MSNBC in a late 2015 interview: “We can go after some of these schemes … the kind of misclassifying of income, trying to make it look like it’s a capital gain, when it’s really ordinary income, going ahead and routing income through the Bahamas or the Cayman Islands or wherever.”
Republican administrations, such as the one that will be headed by Mr Trump, have traditionally adopted a softer policy towards IFCs such as the Bahamas, both for ideological reasons and the fact that some of their biggest corporate and individual backers make extensive use of them.
The George W. Bush administration, for example, blunted the OECD’s then-’harmful tax competition’ initiative when the US Treasury Department withdrew its support - a move that relieved the pressure on the Bahamas and other IFCs for some years.
The US, though, has already achieved what it wants in terms of tax information exchange via the Foreign Account Tax Compliance Act (FATCA), and a Trump administration may be less interested in the OECD’s antics.
That organisation, aided by the media and various surrogates, has in recent months targeted the Bahamas and sought to pressure it into agreeing to the ‘multilateral’ approach for the automatic exchange of tax information under the Common Reporting Standard (CRS).
The OECD’s CRS campaign is being driven by the European nations, eager for their own version of FATCA, and a Trump presidency - likely emphasising the promotion of US interests before all others - will be less inclined to rein in such initiatives than previous Republican administrations.
Nevertheless, Sir Franklyn last night saw potential benefits from Mr Trump’s stance on free trade, which he repeatedly blamed on the campaign trail for costing the US blue collar, working class jobs.
“Trump’s policies on trade call into question whether or not the US will continue to support the concept of globalisation the way it has done in the past,” he told Tribune Business.
“That is significant for the Bahamas. It’s this concept of globalisation that is giving organisations like the OECD the ability to make life very difficult for the Bahamas.
“To the extent that Trump acts in a manner that reduces the influence of organisations like the OECD, that can only help the Bahamas. It’s the OECD that is doing things which are unfair.”
Sir Franklyn added that with the Republicans controlling both the White House and both houses of Congress, the Bahamas was likely to finally have a US ambassador resident in Nassau.
The post has been vacant since Nicole Avant left, with President Barack Obama unable to get his nominee approved by a Republican-controlled Congress - an obstacle Mr Trump does not have.
Sir Franklyn added that Mr Trump’s previous business dealings with the Bahamas, particularly the attempt to purchase the Resorts International assets (now Atlantis), may also make him favourably disposed to the Bahamas.
“Regardless of what one may think is the best government for America or what may be the best US government for the Bahamas, the better American president for the Bahamas is likely to be Trump,” Sir Franklyn argued.
“His tax policies are favourable to persons who form the target market for the second home market in the Bahamas.
“There are at least six different reasons why, from our national economic interest perspective, this will be better for the Bahamas.”
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