A well-known businessman has compared the Government’s Commercial Enterprises Bill to “fighting cancer with a band-aid”.
Sir Franklyn Wilson, the Sunshine Holdings and Arawak Homes chairman, in a recent interview with Tribune Business said the legislation would not address the root causes of the Bahamas’ economic stagnation over the past decade.
While praising the Minnis administration for “thinking out of the box” in trying to kick-start economic growth and job creation, Sir Franklyn said the Bill would do little to change the habits identified in a recent government memorandum.
That document, penned by acting financial secretary, Marlon Johnson, and revealed by Tribune Business, reiterated the ‘75 per cent of salary’ limitation on civil service salary deductions after the Ministry of Finance was “inundated” with demands that it be waived.
Sir Franklyn said this again highlighted the harm caused by over-borrowing to meet personal consumption needs, suggesting that this had undermined the housing market and investment in the economy’s productive sectors.
“I believe the Government has to be commended about this idea of thinking out of the box,” Sir Franklyn told Tribune Business, “trying to find and do something.
“But the response to this Bill is at best: ‘Man, we’ve got cancer and you bring a band-aid’. Worse than that, the country has cancer and the Government brings a band-aid.
“The Government has to be commended for thinking out of the box; that’s a good thing, but the country has cancer and you bring a band-aid. The country has cancer and you bring a band-aid.”
Outstanding Bahamian consumer credit stood at $2.223 billion, or 37.4 per cent of the total, at end-October 2017. Sir Franklyn said Mr Johnson’s memorandum showed “the relationship between lack of policy enforcement and lack of economic growth”, suggesting that numerous civil servants had been allowed to exceed the 75 per cent threshold under both PLP and FNM administrations.
“It has eroded so many of our core values and destroyed the housing market,” the Arawak Homes chairman argued of the consumer borrowing binge undertaken by so many Bahamians.
Sir Franklyn also urged that “partisan politics” be removed from the national economic discussion, arguing that the statistics showed economic growth had been elusive under both FNM and PLP administrations since the turn of the century.
“The reality is that there has been no growth from 2000,” he said. “2000. The important point for the public to reflect on is it covers a period of time when Ingraham was the Prime Minister and Christie was the Prime Minister.
“I would not reflect on what Minnis has done. If the conclusion is that we’ve not had growth for that protracted period, this is not a case of blaming Christie or blaming Ingraham. That is important because I believe that if we are going to get through the issues we face, we have to get past partisan politics.”
The Commercial Enterprises Bill is designed to liberalise the granting of work permits by allowing senior executives and specialist personnel in targeted industries to enter the Bahamas without first obtaining such approvals.
They must apply for the necessary work permits within 30 days of arriving, and the Bill mandates that if the Immigration Department fails to approve them within 14 days of application receipt they will be deemed as automatically approved.
The Bill is an indication of the haste with which the Government feels it must move to break the Bahamas’ depressing cycle of low-to-no-growth and high unemployment since the 2008-2009 recession.
The Minnis administration’s belief is that the economic ‘status quo’ is not working, as shown by three years of recession between 2013-2015, and a GDP per capita figure that has declined since the turn of the century.
It is now proposing ‘radical surgery’, with the Commercial Enterprises Bill intended to signal that the Bahamas is both ‘open for business’ and serious about improving the ‘ease of doing business’ - in this case, the granting of work permits by Immigration.
This feeds into a wider strategy that appears to be centred on liberalisation and deregulation of the Bahamian economy, via measures such as exchange control relaxation and World Trade Organisation (WTO) membership.
The ‘specified commercial enterprise’ legislation is targeted at specific industries - chiefly foreign exchange earners, and those which have been cited by the Minnis administration as part of its economic growth and diversification strategy.
Financial services leads the way with reinsurance; captive insurance; investment fund administration; arbitration; wealth management; international trade and international arbitrage included in the ‘fast track’ work permit sectors.
Also listed in the Bill are technology-related industries such as computer programming; software design and writing; bioninformatics and analytics; nano technology; and biomedical health facilities.
The Government has targeted Grand Bahama as a technology hub, and the inclusion of ‘boutique health facilities’ on the ‘fast track’ list adds to the focus on health. Data storage and warehousing are also present, as is aviation registration and ‘approved’ aviation maintenance operations - again sectors that have been identified by the Minnis administration as potential growth drivers.
The list is concluded by ‘call centres’ and manufacturing and assembly/logistics businesses.