The Tribune

By TRAVIS SWEETING

Establish a Sovereign Wealth Fund

A sovereign wealth fund, sovereign investment fund, or social wealth fund is a state-owned investment fund that invests in real and financial assets such as stocks, bonds, real estate, precious metals, or even alternative investments such as private equity funds or hedge funds. Sovereign wealth funds invest globally.

The primary function of a sovereign wealth fund for The Bahamas will be to stabilise our country’s economy through diversification while generating wealth for future generations.

How we fund this:

• Ten percent of total VAT income in any given year

• Central Bank reserves

• Currency operations

• Privatisation of state-owned enterprises such as Bahamasair

• Transfer payments

• Natural resource exports.

How we do this:

1. Develop the “Investment Corporation of The Bahamas (ICB)” to invest internationally, independent of government/political interference
2. Create a healthy capital investment mix in world economies inclusive of stocks, funds, crypto (digital) assets, business capital and private placements etc.
3. Fund Bahamian-led businesses overseas such as restaurants, fisheries and e-commerce warehousing etc
4. A healthy portion of profits to be deposited into the Central Bank’s reserves with a goal of reaching $250bn in foreign reserves in 20 years
5. Appoint a management team headed by a Bahamian financial and investment professional
6. Appoint a board of directors (five members) plus ex-officio positions by Ministry of Finance and the Central Bank (two members each)
7. Appoint an advisory board (seven members) made up of private sector finance, investment banking, legal and economic professionals at staggered three-year intervals
8. Enact legislation to implement all of the above

Government Reform

In order for our country to come into the modern age, we must put in place reforms to safeguard any progressive measures that come out of this pandemic. In addition to many outdated laws that reside on our books, we must also decentralise concentrations of power and Members of Parliament (MPs) also sitting as ministerial members of the Cabinet. This creates a lack of support and development in one or both areas and stunts the progress we deserve as citizens.

How we do this:

1. With the removal of all MPs from ministerial positions, we recommend that Cabinet/Ministry portfolios be immediately revamped and filled with persons who possess the respective qualifications to run that portfolio. Our new Cabinet make-up would include the ministries of agriculture and marine resources; culture; digital development; youth and sports; education; environment and disaster response; finance; immigration and citizenship; international trade and innovation; foreign affairs; health; housing and social care; national resources; national security; office of the attorney general; office of the governor-general; office of the prime minister; public works; public service and economic development; tourism; transport and aviation.
2. Enact legislation that divorces MPs from also being ministers in Cabinet with the exception of the prime minister. Allow MPs to focus on their individual communities, with ministers to be appointed based on skill sets and experience in their respective portfolio areas. An example would be appointing Dr Nikkiah Forbes, the current head of infectious diseases, as minister of health.
3. Enact legislation that separates the elections of the Prime Minister and Members of Parliament. Also establish permanent election dates and boundaries based on the formation of municipalities.
4. Pass the Freedom of Information Act
5. Review all laws on the books, in conjunction with the Bahamas Bar Association, University of The Bahamas and The Chamber of Commerce, to update and bring them current to deal with the modern-day Bahamas.
6. Enact legislation to allow all of the above.

Rapid Population Growth

At our current estimated population level of 390,000 we will never develop sufficient economies of scale to increase our GDP, pay our debts and enhance the livelihood of every Bahamian. We have the land mass to carry our population to at least ten million across 17 major islands.

As a comparison, Grand Bahama alone is 1.9 times’ the size of Singapore’s land mass, yet the latter has 5.6m citizens and $323bn in GDP compared to Grand Bahama’s 50,000-odd population. The GDP of the entire Bahamas is $12bn. Likewise, Manhattan alone in New York state is only 59.1km square with a population of 1.6m and a GDP of $600bn. Grand Bahama is 23 times’ larger than Manhattan. Using these comparisons, it is clear we have been in an economic coma. With the addition of the other 16 major islands, we have more than enough room for growth while making our resources benefit us as Bahamians and enabling the country to compete with the best of them.

A World Bank blog post by Wolfgang Fengler says: “Population growth increases density and, together with rural-urban migration, creates higher urban agglomeration. And this is critical for achieving sustained growth because large urban centres allow for innovation and increase economies of scale.”

No country has ever reached high income levels with low urbanisation.

How we do this:

1. Terminate the Hawksbill Creek Agreement
2. Increase the Bahamian population by 5m persons over the next ten years. They can only move to islands other than New Providence, and remain there for a minimum of seven years, before they can move off that island. Exceptions exist only for job transfers.
3. Create a skilled entry visa with the following criteria: A maximum 200,000 visas available per year, a pass skills points system, language test, and minimum of $12,000 available.
4. Create a start-up visa with the following criteria: A maximum 50,000 visas available per year, the holder must reside in Grand Bahama, set up a business and only work for that business. They must employ a minimum of seven persons within five years, have minimum capital of $25,000 plus $12,000 personal funds per founder.
5. Create a West Indian diaspora visa with the following criteria: A maximum 150,000 visas per year from Caribbean countries and African-Americans, skills points tests, language test, minimum of $15,000 available.
6. Fast track economic/foreign direct investment visas for organisations establishing companies that can employ 500 and more persons
7. Automatic citizenship for persons born on Bahamian soil
8. Use the Ministry of Culture to keep Bahamian culture alive and vibrant, integrating it into schools and communities
9. Enact legislation to allow for all of the above

The Commonwealth of The Bahamas can not grow further in the shadows of Sir Stafford Sands. I implore the prime minister to serve the people and make these necessary decisions to reshape and revitalise our economy.

No better landscape has existed for us to effectively and efficiently reshape our economy. There is a 35-seat majority in the House of Assembly, a global economic pause, $2bn in foreign reserves, strong commercial bank liquidity, and an unprecedented $2tn stimulus package to the US economy, our most intimate trading partner. With these advantages and some elbow grease, we can raise aggregate demand and supply to grow our GDP 40-fold.

If we say this is “The People’s Time”, and we wish to not ever hear the question: “Which people?”, then the government needs to move on these strategies and show us they possess the fortitude for positive productivity over baseless publicity.

NB: The views expressed are those of the author, not The Tribune.

Travis Sweeting is a publishing professional with experience in financial services, marketing, political and business strategy. Travis welcomes feedback at travissweeting@gmail.com.