By NEIL HARTNELL
Tribune Business Editor
THE Bahamas “could easily have saved the financial services industry” had it introduced the Commercial Enterprises Bill six to eight years ago, a prominent attorney is arguing. Terence Gape, the Dupuch & Turnquest law firm’s managing partner, told Tribune Business that the Bill’s liberalised work permit regime placed the Bahamas “on a path” that its Caribbean international financial centre (IFC) rivals adopted up to 30 years ago.
Describing the legislation as “phenomenal progress” compared to previous bids to reignite the stalled Bahamian economy, Mr Gape argued that the Bill’s critics were attempting “to protect jobs that don’t exist”.
“I think it’s a phenomenal progress from where we’ve been, and finally an acknowledgement that the country needs foreign direct investment,” he told this newspaper of the Minnis administration’s proposed reforms. “This is amazing for the Bahamas.
“If we had pushed for this six to eight years ago, we could easily have saved the financial services industry, which now we need to rebuild. It puts us on a path that has been so successful for the Cayman Islands for the past 30 years, and been so successful in Providenciales (Turks & Caicos) for the past 15 years. Those two places have outstripped us in offering fully employment for their people.”
The Commercial Enterprises Bill, which the Opposition sought to embroil in political controversy through the weekend, will enable a ‘specified commercial enterprise’ to obtain an Investments Board certificate granting it a specific number of work permits for certain positions.
The ‘certificate’, which will initially be issued for one year and can be renewed, would allow key personnel to set up the company’s physical operations in the Bahamas before they obtained a work permit.
Such a permit must be applied for within 30 days of their entry, and the Bill mandates the Director of Immigration to make a decision on approval within 14 days of receiving the application. Should the Director not respond within that timeframe, the work permit is “automatically deemed to have been granted”.
Work permits issued under the Bill’s provisions will be for a three-year period, and are renewable for the same duration. They can only be revoked on grounds of “public safety, public morality or national security”.
Mr Gape said the real “value” of the Commercial Enterprises Bill was that it mandates, by law, that the Immigration Department approve and issue work permits for senior executives, managers and specialist personnel within a clearly defined timeframe.
He suggested that this would provide certainty, and potentially a major confidence boost, to prospective investors in the Bill’s targeted industries who are eyeing the Bahamas.
Pointing out that uncertainty over work permit approvals, and issuance timeframes, is one of the biggest obstacles cited by the private sector, Mr Gape told Tribune Business: “If this was announced as a policy, the Immigration Department would not live up to it.
“The fact it’s in statute is a critical thing. It’s a mandate. The investor would not have taken any comfort in a change in policy, but they’re going to feel extremely enthused because it’s a statute and part of our law.
“The Immigration Department, for the past 50 years, has been able to limit work permits. Their culture has been to limit work permits granted, not realising the negative effects it has on the Bahamas compared to Bermuda, Cayman, BVI, Providenciales and the Dominican Republic, which have far outstripped the Bahamas over the past 20 years in particular.”
The opposition Progressive Liberal Party (PLP) has argued that the Commercial Enterprises Bill, and its ‘fast track’ work permit approvals process, will undermine the concept of ‘Bahamianisation’ by pushing out local workers and expatriates in favour of foreign-owned rivals.
However, Mr Gape echoed Brent Symonette, minister of financial services, trade and industry and Immigration, by arguing that since the Bill’s provisions applied only to industries that are largely not present in the Bahamas, its opponents are attempting to protect jobs and businesses that do not exist.
“They believe they’re protecting Bahamian jobs when in fact they’re killing the jobs,” he said of the Bill’s critics. “I hope the culture is changed, but it may not happen for 10 years.”
The Government’s decision to push the Commercial Enterprises Bill through without any major public consultation beforehand is an indication of the haste with which it 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.