The Tribune

EDITOR, The Tribune.

Some months ago, I predicted that the Economic Recovery Committee would (in part on account of its composition) do little more than repeat and amplify some of the same misguided ideas that got this country into the mess exposed (though not caused) by Hurricane Dorian and the COVID-19 crisis.

I predicted that the common strand weaving through all of their recommendations would be the false premise that this and every crisis can be resolved by simply opening the floodgates to ever more foreign investment – even where that means dissolving or weakening the linkages that make foreign investment beneficial to The Bahamas in the first place.

While it gives me little satisfaction to be proved right so quickly, I cannot help but note the brazen and unabashed manner in which co-Chair Marlon Johnson has now made my point for me.

His solution to the COVID-19 crisis? Give away ten percent of the (‘reserved for Bahamians’) domestic economy to foreigners in order to attract more investment.

At present, a company doing business in The Bahamas must either have on its face a permit or approval from the cabinet, or a statutory declaration that it is at least 60 percent Bahamian owned. Mr Johnson proposes reducing that threshold to 50 percent, so that a company owned in equal parts by a Bahamian and a foreigner is treated as Bahamian for all regulatory purposes.

Combined with the widespread and pernicious phenomenon of Bahamians “fronting” for foreigners and permitting them to drain opportunity out of our domestic economy, this proposal, if enacted, will deal a death knell to the last meaningful semblances of Bahamianisation. We will go the way of Puerto Rico.

As a Bahamian businessman, I am very aware that there is no level playing field between Bahamians and foreigners once the latter are permitted to compete with us within our domestic economy. Unlike them, we are subject to tortuous foreign exchange rules and a psychopathic banking industry which not only does not support business investment, but smothers us with fees and restrictions.

As an example, my business is charged cumulative fees amounting to four percent to make a simple wire transfer abroad, while my colleagues in the United States pay a standard 40-dollar fee, no matter what the amount. On a $100,000.00 wire, the difference is 100-fold.

Even worse, I am not the first Bahamian businessman to be told that a local Canadian bank is closing his account because of too much deposit activity! We are simply regarded by these (foreign) banks as fee-paying consumers of dead-end trinkets. As businessmen, we are regarded with contempt or suspicion.

In short, the difficulties of doing business (or indeed of just living) within the domestic Bahamian banking and regulatory eco-system render it unconscionable to subject Bahamians to competition from others facing none of the same encumbrances and to pretend that this is somehow good for the economy. It clearly is not.

From a macro-economic standpoint, the Bahamian economy will not grow by being sold to others. We will simply see more of the profit remitted abroad as the vital linkages that once sustained a growing middle-class continue to be eroded.

ANDREW ALLEN

Nassau,

November 10, 2020.