The Tribune

EDITOR, The Tribune

Certain so-called opinion leaders have worked themselves into quite a lather because the government has stepped into the breach to stop what surely looked like an economic tsunami hitting Grand Bahama.

Some seem to think that there is no role for the government in our economy, conveniently forgetting that around the world the government is often the largest player in the economy.

Candidate Dr Hubert Minnis came into our living rooms in 2016 and said he was going to govern with empathy and with an eye on protecting the displaced and downtrodden. It is surprising now how many people are shocked when as prime minister he is doing just that.

Since taking office, Minnis has put on his superman cape and is standing up for the so-called “small man” in our economy. Why then are we surprised when he throws a lifeline to Grand Bahama?

The ills that befall Grand Bahama did not start under this FNM Government. Previous governments have looked the other way because Freeport, the economic engine room of Grand Bahama, was always a quasi-public-private partnership.

That model worked for a time before an internecine war broke out between the second and third generation private sector owners of the Grand Bahama Port Authority. Then we enticed the deep-pocketed Chinese owners of the successful port operations there to branch out into areas that seemed outside their Bahamas remit.

Hutchinson Whampoa have their tentacles in many industries, including the hotel business in Hong Kong. Somehow, they allowed themselves to be swung and they bought hotels in Freeport.

One of their hotels, the Harbour Grand Kowloon, across the bay in Hong Kong is a super luxury five-star property where rooms average $500 a night but, while their Hong Kong hotels command top dollar, the Freeport hotels in their portfolio struggled with rooms reportedly being sold at wholesale to tour operators for as little as $50 a night.

Hutchinson also joined with the St Georges and the Haywards in ventures with the Port Authority on Grand Bahama including the Development Company and the international airport.

Imagine two private families and a foreign investor owning the Lynden Pindling International Airport in Nassau. But we subjected Grand Bahamians to this in the name of “efficiency”.

The experiment didn’t work. Today the airport has one of the highest costs for airlines in the entire Caribbean. Enough airlines don’t come because the costs are too high. And the costs are high because enough airlines don’t come. It’s a vicious circle.

Meanwhile, because previous governments were desperate to appease anyone interested in operating on Grand Bahama, even Hutchinson Whampoa, they negotiated “stop-loss” clauses and generous incentives that put taxpayer dollars into investors’ pockets even as it became harder to classify some hotels as “going concerns” in the accounting sense of the term.

When hurricane Matthew hit a few years ago, some investors took the insurance payout and bailed. Meanwhile our fellow citizens on Grand Bahama had their lives turned upside down from the attendant uncertainty and economic instability.

The prime minister would be guilty of political malpractice if he did not step in and try to right the sinking Grand Bahama ship.

For years Grand Bahama was essentially a cash cow sending probably billions of dollars to the national treasury. What’s wrong with us pitching in to throw them this lifeline in their time of need? Instead we pile on with superfluous drivel about the government not running or owning hotels. Any government when it is elected automatically inherits a mandate to keep the labour force in work.

What is conveniently forgotten is the fact that Hutchinson Whampoa purchased the hotels from the Hotel Corporation in the first place at a price no doubt way less than the $65 million we are now paying to buy them back

Ideally government should induce the private sector to provide jobs but when investors don’t, won’t or can’t then the government must step up to prevent the massive loss of jobs (and tax receipts) which lead to higher unemployment, a severe hit to our GDP and, as has happened elsewhere, could lead to currency devaluation

There are legitimate questions that the Government still has to answer to settle the country down and get us all behind this policy. We need to know how much it is going to cost to renovate and spruce up the hotel, retrench some staff and retrain others. Then there are marketing and promotional expenses. Together these could be as much as the purchase price.

The bigger question is the one hiding in plain sight. When is the government going to stop the dysfunction on Grand Bahama by facilitating the purchase of the omnipresent Grand Bahama Port Authority, or simply bite the bullet and buy it?

That should be the centre-piece of a northern strategy that will help first and foremost the people of Grand Bahama and, secondly, it will hand a political windfall to the party with the guts to do it.

And if they want to set the cat amongst the pigeons and keep Hutchinson Whampoa on their toes at the same time, government could ask an entity like Dubai Ports World to run it for them.

THE GRADUATE

Nassau

October 15, 2018