The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday urged to “stay out of the business of deal-making” by a well-known QC, and adopt a “free market approach” to the economy.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that the Minnis administration needed to focus on regulation rather than becoming involved in “the minutiae” of investment negotiations and business transactions.

Acknowledging the Government’s desire to eliminate bureaucracy and ‘red tape’ for Freeport-based investments by creating an approvals unit in the city, Mr Smith argued that rather than “repeat the same old bad habits” it should simply revert to the city’s original governance model.

Reiterating that its primary role should be to hold the Grand Bahama Port Authority (GBPA) and Hutchison Whampoa to account for their obligations, he added that the Bahamian economy would “continue to stagnate” if the Government continues to involve itself in investment “wheeling and dealing”.

“The Government should get out of the business of being in everybody’s business and govern,” Mr Smith told Tribune Business. “Whilst I am pleased that this administration is looking at ways to speed up the review of investment proposals, I don’t encourage repeating the same old bad habits by having an investment unit in Freeport.

“I urge the Government to be far more visionary in its approach to economic and investment construction in the Bahamas. I encourage it to adopt a far more free market, free enterprise approach to the economy, in which the Government does not get involved in business deals involving foreigners or Bahamians. I think the Government should allow free market forces to initiate and motivate commercial transactions.”

Mr Smith was responding after Kwasi Thompson, minister of state for Grand Bahama, pledged that the Minnis administration would eliminate the practice of Freeport/Grand Bahama investments having to be approved in Nassau, as well as by the GBPA, in a bid to reduce bureaucracy and ‘red tape’.

“It makes no sense to me… to file documents within the Office of the Prime Minister in Nassau, and have someone in Nassau do the processing, and do the follow-up in Nassau when we are quite capable of doing that here in Grand Bahama,” he said recently.

“It is our hope that business deals will become increasingly easier to facilitate if an investor does not have to go through Nassau, at least at the processing level.”

He promised that a unit of the Bahamas Investment Authority (BIA), which operates out of the Prime Minister’s Office, would be established in Freeport to process and approve projects specific to Grand Bahama.

Mr Smith, though, argued that this was unnecessary, and that the Minnis administration merely needed to revert to the GBPA’s ‘one-stop shop’ approval model as laid out by the Hawksbill Creek Agreement.

He added that the Government frequently became bogged down in approving deals such as the acquisition of one acre of land, or the creation of a business employing five persons, and as a result lost sight of “the bigger picture” regarding the economy.

The Freeport-based QC said the Government should instead focus on regulating commerce for the benefit of consumers and Bahamian citizens via existing statutory agencies, although some will argue that regulation of Immigration and foreign investor projects will have to remain under its purview.

“I think the Government should provide the funds, the human resources and the technical skills to the many statutory bodies that exist under legislation,” Mr Smith told Tribune Business, “and which deal with the quality of services, which deal with standards, which deal with the environment and health, and competition issues.

“The citizens of the Bahamas have not elected MPs in Parliament for their business acumen or their expertise in an investment capacity. The challenge the Bahamas has faced for many decades is the involvement of politicians, who may be well-meaning and well-intentioned, but don’t have a financial stake in or understanding of the business.”

Effectively calling on the Government to ‘leave the deals to the dealmakers’, Mr Smith said that its continued participation “in wheeling and dealing guarantees the Bahamas will continue to struggle economically, especially in Freeport, where we have central government oversight of every single deal, GBPA oversight of every single deal, and the involvement of local government licensing authorities.

“No matter what we do in Grand Bahama, unless the Government allows the GBPA and Grand Bahama Development Company (DevCo) to be the one-stop shop development and promotional authority, there will never again be a boom in Freeport, the likes of which occurred in the 1950s,1960s and 1970s.

“I urge the Government to get out of the deal-making part of investing. Stay out of the business deals, oh government, and let the business people who would have the profit impetus run the show while you regulate.”

Mr Smith added that by staying outside commercial transactions, the Government was telling the private sector to “make it happen”, and freeing itself up to hold the likes of the GBPA and DevCo to account.

“In dealing with the GBPA and DevCo, the Government has entered into an agreement with them to be the developer, be the promoter, be the one-stop shop authority, and go out and make the change,” he told Tribune Business.

“There’s nothing better to make the deals than to have people who are firmly invested in the success of the business transaction, creating it and giving birth to it.”