The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Full World Trade Organisation (WTO) membership is not a “silver bullet” to cure all the Bahamian economy’s structural problems, trade experts warned yesterday.

Lloyd Barton, head of global trade services at Oxford Economics, speaking at the release of its Bahamas Chamber of Commerce-commissioned report on WTO’s likely impact on the Bahamian economy, arguing that domestic policy reforms were essential to realising the “full benefits” of membership in the trade rules setter.

“WTO is not going to somehow cure the economy of all its structural problems,” said Mr Barton. “I think what the modelling shows is that WTO accession on its own would be beneficial for the economy, but moderately so. If you really want to get the full benefits from WTO accession then domestic policy reforms make the economy more competitive.

“That goes beyond just WTO. The economy itself has a number of structural bottlenecks which are holding back growth, and really what is needed is a kind of decisive policy reform of which WTO accession will be one element to really unlock growth going forward.”

Mr Barton continued: “I think the best approach is for these things to go hand in hand. It’s possible to have similar reforms which aren’t part of WTO membership, but the thing is the WTO framework makes you commit on an international basis to keep these reforms in place and really sort of commit the government going forward to maintain a business friendly environment. That’s one of the reasons why it would be beneficial and not subject to changes in government.

Ramesh Chaitoo, a trade and development expert who helped to produce the report, said: “It’s really about three things; transparency, accountability and predictably, of which you have very little here now to be honest.

“It is difficult to do business for a whole host of reasons; the cost of doing business, the time takes to register a business. If you look at the Bahamian economy and its regulatory infrastructure, is it geared up for the digital world? It is not. It’s telecoms is still C-minus at best. I don’t care who says what. It is extremely high cost.

“I sit at home in Brussels and my speed to the house is allegedly 100 megabits per second. What would that cost a home here? Is it affordable? The new value-added in the world will be in online digital-related things. No one is paying attention to that here. Do you have in place all the mechanisms, legal mechanisms, to do online business, electronic signatures, protection online. Is intellectual property protected in the digital medium? That’s the discourse that The Bahamas needs to get into quickly.”

Mr Chaitoo also suggested that The Bahamas revisit its policy on investment incentives to attract major foreign developers. “Look at the concessions, if you want to know what it does. To get these big investments you have to give away a lot to entice people to come,” he added.

“By the time all the concessions are given, what happens? There will be ‘x’ amount of jobs but that’s it. Then the big investor pays no taxes for 30 years. Is that sensible in 2019? When you’re in a no corporate tax jurisdiction, what do you get from these firms?”

Mr Chaitoo also suggested that The Bahamas look at its immigration policies regarding certain persons entering the country. “In the case of your business regime, I think it is necessary to review what you call visitors in The Bahamas because a lot of people face issues coming into The Bahamas to just conduct business meetings and communicate with people who have businesses here already,” he added.

“The procedures around entry of business persons, that causes a lot of problems. You don’t want to make access or the basic entry experience terrible.”