By NEIL HARTNELL
Tribune Business Editor
The Opposition's deputy leader has called for an "orderly unshackling" that will allow the National Insurance Board (NIB) to allocate ten percent of its assets to financing "start-up" businesses.
Chester Cooper, pictured, in an address to the Progressive Liberal Party's (PLP) "think tank" earlier this week, said his proposal was part of a wider strategy to "disrupt" the Bahamian economy's "status quo" because "isn't working for the majority" of citizens.
He also called for an end to "petty political immaturity" across all parties, acknowledging that "politics is stifling our country" and preventing the development of a broad consensus on essential reforms for unlocking The Bahamas' growth potential.
The Exuma MP told the National Progressive Institute that access to capital, on better terms and lower interest rates, was just one of the changes required if Bahamian entrepreneurs were to realise their dreams.
While the Government-sponsored venture capital fund had sought to fill the gap for such financing, Mr Cooper said the Bahamas "needs more of this" given the risk-averse approach of commercial banks to financing small and medium-sized businesses (SMEs).
"We also need to develop an asset allocation model for NIB, and allocate a minimum of 10 percent of total National Insurance Board assets to alternative investments which will target local entrepreneurs and start-ups with appropriate oversight," the PLP deputy leader urged.
"Pension funds exist to invest, to find new avenues to grow, and where such pools of funds exist like in the hotel industry their contribution to capital markets and economic development is well-documented. The similar, orderly unshackling of NIB's potential is key to that growth."
Some observers will likely question whether financing SMEs and start-ups is an appropriate use of assets belonging to a social security system as NIB, given that such investments are typically perceived as high-risk.
Ten percent of NIB's assets is equivalent to $160m of its estimated $1.6bn reserve fund, and social security systems worldwide historically adopt a conservative investment approach that avoids funding entrepreneurial ventures because of their long-term obligations to pay due pensions and benefits to beneficiaries.
Mr Cooper, meanwhile, argued that the Bahamian economy's "status quo" needed radical reshaping because it was not working well enough for the majority of Bahamians - especially the lower and middle classes.
Focusing on land, labour, capital and entrepreneurship as the economy's key ingredients, the PLP's deputy leader argued: "The economy simply does not work well enough for enough of us.
"I think many of us would look at our economy and see unease and uncertainty. Most of us are more educated than our parents, earn more than our parents, work longer hours than our parents, but have a harder time making ends meet than most of our parents - and my mother was a janitress on Exuma.
"We are less likely to own land than our parents. We find it more difficult to educate our children than our parents. Many of us dream of opening businesses and working for ourselves, and carving our way in the world, but we are cut off from the resources that many of our parents or those in the generation before would have had access to."
Mr Cooper continued: "To me, the test of an economy is how well it works for the majority; how well it works for the average person who wants to own a home and raise a family.
"And, to that effect, our economy has a long way to go. And indeed the status quo, if we define that status quo as a reluctance to act or make tough or abrupt decisions, then it needs to be disrupted."
He warned, though, that long-elusive political unity on key reforms and long-term goals was necessary if the Bahamian economy was to be made to work for more citizens.
"Remaking our economy into something that works better for the majority isn't something that will take five years. It will take consistency and buy-in from many stakeholders over successive administrations," Mr Cooper said.
"This is why the petty political immaturity on important national issues frustrates me to no end. In the national interest, I don't think it's too much to ask that we - FNM, PLP and civil society -set up some broad parameters where we can agree on long-term objectives. Politics is stifling our country, our growth and our people, and our people aren't pleased.
"To make this economy work for all, it will take goals that we agree on and have the will to implement and subject ourselves to change."
Mr Cooper hit out at the Bahamian commercial banking for becoming "usury" with its fees and lending policies, while criticising many institutions for focusing on consumer credit as opposed to more productive mortgages and commercial loans.
"Many of our banks have become unfair, imposing ridiculous fees, disadvantaging the vulnerable," he argued. "Many of the banks have become usury, harming and isolating those who are often at their weakest point and those who are unbanked or underbanked.
"If I have to pay $3 to withdraw my money from an ATM, and I make $210 a week, what's the likelihood of me doing that?"