THE Bahamas was yesterday exposed as the only Caribbean nation to suffer a decline in per capita GDP this century, while also being the “notable exception” to major tourist arrivals growth.
An International Monetary Fund (IMF) book, Unleashing Growth and Strengthening Resilience in the Caribbean, found that real per person GDP in the Bahamas had declined by an annual average of 0.4 per cent between 2000-2015.
It was the only nation to suffer such a reverse, according to the book, which noted that average regional per capita GDP had risen by an average of 1.2 per cent over the same period.
And, while tourism arrivals to the Caribbean had more than doubled in the 20 years between 1995 and 2014, the Bahamas was identified as the only country to miss out on such growth due to the “maturity” of its main industry and relative lack of new hotel rooms over that period.
“The volume of tourists has more than doubled in the Caribbean, from 12 million in 1995 to 26 million tourists in 2014, fuelled by steady growth in key advanced economies and strong inflows of foreign direct investment,” the IMF book said.
“The notable exception is the Bahamas, where tourist arrivals have remained mostly flat since the mid-1990s, largely because of the maturity of its market.”
The relative lack of growth in this country’s main industry likely provides part of the explanation for why the Bahamas has struggled for economic growth, especially in the decade since the 2008-2009 recession.
The IMF book identified a variety of factors, common to most Caribbean nations, that were inhibiting economic growth such as high crime, debt, unemployment and non-performing loan levels, coupled with bureaucratic bottlenecks and obstacles to the ‘ease of doing business’, plus vulnerability to natural disasters such as hurricanes.
It suggested that the Bahamas needed to tackle all these weaknesses, and more, to achieve greater GDP expansion, arguing that most emphasis should be placed on improving the ‘ease of doing business’ climate and reducing banks’ non-performing loans (NPLs) to free up the credit markets.
Other priorities for this nation were identified as greater investment and development of the Bahamian workforce; cutting crime; and reducing vulnerability to hurricanes and natural disasters. Cutting debt and trade integration were regarded as less important.
On tourism, the IMF book noted that the Bahamas’ share of total tourist arrivals had decreased from 13 per cent of 12.3 million in 1995 to 5 per cent of 26.1 million in 2014. This means the Bahamas is getting less of an expanding market, with worrying implications for this nation’s economy moving forward.
When it came to annual airlift, the IMF book revealed the Bahamas as receiving the third-most flights from the US in 2014, behind Cancun and the Dominican Republic. It was also behind those two, and Jamaica, on passengers with 1,286,118, and had the smallest average plane size of all Caribbean destinations - apart from Dominica and St Kitts - with 86 seats.
While the Bahamas had service from the highest number of cities at 18, its ‘vacancy rate’ was also near the top at 28.