The Tribune

By Roderick A. Simms II

An advocate for sustainable Family

Island Growth and Development

E-mail: RASII@ME.com

This pandemic has many lessons, but an important one not to miss is that the centralised business approach is flawed. Developing economies should continue to adopt the concept of decentralisation for local industries and markets. Decentralisation is the even distribution of power and authority at every level of management. This approach is often done through blockchain technology, which is a non-destructive way to record data in an ever-changing database that allows for transparency across all sectors of a business. Decentralisation and blockchain are often linked because they create an autonomous environment which, as a result of COVID-19, appears to be the new way of working for many businesses and organisations. A decentralised economy will lead to an institutional revolution because blockchain is an institution technology. This segment will explore how a decentralised economy would promote social and economic development for the Family Islands.

Decentralised economy: The role of Family Islands

Decision-making in a decentralised economy is performed in a peer-to-peer manner rather relying on a central command. Human civilisation has operated, and relied on, centralised operations because they were deemed to be organised and cost-effective. Some of these include automation, games, banking, securities exchanges, media, currency, security, retail and logistics. The point is that everything around us has been restricted to some form of control. For developing economies such as The Bahamas, this approach can be very restrictive to the ease of business, administrative functions and fiscal/monetary operations. But, as we enter into the new era of a technology revolution, more processes are expected to become decentralised due to decentralised technologies such as blockchain. The first major technology shift towards decentralisation came from the Internet, which opened doors to new business models that changed the "brick and mortar" approach to business. However, the internet is still part of the centralised economy because information on websites are sent from a server. A decentralised internet means that everyone controls the internet rather than a particular entity (such as government), which offers more protection for data and privacy.

To summarise what a decentralised economy looks like, Johann Gevers, chief executive of Monetas (2014), outlines the four pillars of decentralisation. These include decentralised communication, which is communication without censorship through the internet. The second is decentralised law, which speaks to the choice of our law, judge and enforcer. Third, decentralised production means that anyone is allowed to make products such as using solar panels to get your own energy. Finally, decentralised finance, which means decentralisation over currency, digital financial products and services and legal contracting platforms.

Using these guidelines, and expanding on them, would help developing countries to transition to a decentralised economy. The Bahamas could adopt this approach considering it has 14 inhabited islands, which means that running a decentralised economy on a Family Island should be easy to do with proper planning in place. The option of decentralisation is favourable for those in the Family Islands because their contribution to the nation is as significant as those in the capital. Some projects should not require years of approval or political interference if proven to bring about greater economic and social development. That is why it is important for each Family Island to have its own development plan. The initiative of each Family Island having its own plan has actually made some headway. In fact, there are 11 pending drafts created under the government's national development team. There has been no public update on the status of these drafts, even though Andros and Eleuthera's plans were partially privately funded. This progress indicates that the government understands the importance of each island having its own development plan.

Decentralisation: Survivability of small businesses on Family Islands

As a result of COVID-19, the Small Business Development Centre (SBDC) rolled out the Government's Business Continuity Loan $20m response, targeted at providing credit to small businesses. These loans range in size from $5,000 to $300,000, with approved loans having a grace period of four months before they have to be repaid. While these efforts are commendable, it also highlights the significant GDP contribution made by small to medium-sized enterprises (SMEs). On the Family Islands, their importance is even greater. Yet in providing loans, and applying forgiveness programmes to business owners, taking a decentralised approach to the lending process could increase the supply of credit by crowdsourcing capital. According to an article on COVID-19 and lending, accessibility to crowdsourcing capital would require the efficient structuring of two different processes: Becoming an eligible lender and processing loan applications. In addition, businesses that adopt decentralised technology (blockchain) can cut overhead costs by creating smart contracts and platforms that better track the performance, shipment and purchases of goods/services

Conclusion

In closing, whether COVID-19 occurred or not, the country is no stranger to disasters and should already be in the process of taking steps towards a decentralised economy. Any planning should consider this approach because it is the future, and economies will either have to adapt or be left behind. Decentralisation will allow for more inclusiveness and collaboration among Family Islands, and can play a pivotal role in enhancing each island's ability to do business.