By Malcolm Strachan
FACED with the crumbling of an imminent sale of the Grand Lucayan, the government’s decision to purchase the resort has polarised the public. Some Bahamians have been very vocal in expressing their bewilderment via social media and on local radio talk shows. Concurrently, others have praised the government for its decision to purchase the beleaguered resort and save the jobs of those that would have been affected.
Nonetheless, the government’s rather questionable decision to purchase the Grand Lucayan could not come at a more peculiar time. Though the government, while on the campaign trail, promised a land of “milk and honey” to Grand Bahamians, when the rubber met the road, delivering on their many promises has proven not to be easy. In fact, the Minnis administration has made it look near impossible to provide an economic stimulus for Grand Bahama.
The sale of the Grand Lucayan to the Wynn Group went from being all but certain, to shaky, to both sides leaving the negotiating table in a matter of months. With the people of Grand Bahama left holding the bag, the government, perhaps in desperation, felt as though their hands were tied. Maybe they knew that with the amount of strikes their image has taken thus far in this administration’s term, they would not be able to withstand the backlash that came about if more people lost their jobs as a result of the resort shutting its doors.
Surely, after promising the people of Grand Bahama the sun, moon and stars, the government had to do something. However, getting into the hotel business is quite the head-scratcher. If nothing else, making $65m appear in a “bare cupboard” should make for an entertaining magic trick.
Truthfully, this may be the hardest pill to swallow for the Bahamian people – trying to make us understand how purchasing the Grand Lucayan will grow the Bahamian economy. How can the other job losses in the public service be justified when compared with this expense? How does the government look into the some 400,000 faces in the electorate and rationalise purchasing a hotel when VAT has just increased by 4.5 percent in the name of fiscal responsibility?
A hotel purchase at this time could not be more fiscally irresponsible. While the $65m purchase price is the number being bandied about, the costs for renovations and ongoing operating expenses will very quickly eclipse what the government is going to spend to become the new owners.
With Moody’s antennas also being raised, the government, which has barely been treading water thanks to Baha Mar, might be mistakenly making a decision which they presume to be politically expedient. Shadow Minister of Finance Chester Cooper has deemed the next few months “critical” for the government. This much is true as the ratings agency has warned the country about the effect state-owned enterprises could have on the country’s creditworthiness.
As there is no inkling for economic growth, we can only wonder how the government’s plan to purchase a resort will affect us in the long-term. Certainly, purchasing the Grand Lucayan forces the government to divert a great deal of resources to do the heavy lifting in lieu of a more practical owner having to do so.
It is truly an unfortunate situation. While we do not want to see anyone else unemployed, we equally don’t want to see our government in the hotel business for any period of time. Their job description is clear – governing the Commonwealth of The Bahamas.
However, no amount of Monday morning quarterbacking will change what the government has already committed to.
Minister of Tourism Dionisio D’Aguilar admitted this course of action is not ideal, calling it, “making the best of a bad situation”. It is definitely a bad situation. As for making the best of it, we are not so sure.
We would like to see the government have the same concern for being their brother’s (and sister’s) keeper extended to all Bahamians. Further, we would also like to see a more well-rounded plan implemented for Grand Bahama, as the tourism model is simply not a natural fit.
The lack of diverse incoming foreign investment either speaks to a lack of interest on the part of international investors, or an outright gap in creativity by the government to promote the island.
While there have been few reports on the Oban deal of late, the government continues to promise a better iteration of that controversial deal. Other than that, no landmark developments are slated for Grand Bahama, where the economy has been on its last leg for years.
No one should doubt the prime minister was honest in his assessment that if the Grand Lucayan were to close, the impact would reverberate throughout that island. Understandably, he was not fond of those prospects.
That being said, the government must, now more than ever, explore what other economic possibilities exist for Grand Bahama. Their existence as the island’s newest investor signals exactly how desperate is the state of the nation’s second city.
As it stands, this is the course we will be led by the Minnis administration. Hopefully, when the prime minister reveals the government’s plan, it is one the Bahamian people can make sense of and support – even if reluctantly.
Until then, transparency will have to wait.