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‘Entire Economy Shuts When Atms Go Down’

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THOMAS SANDS

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Eleuthera Chamber of Commerce’s president yesterday urged the Government to stiffen “the backbone” of Bahamian-owned banks, adding: “When the ATMs go down the entire economy shuts.”

Thomas Sands, addressing the Bahamas Business Outlook conference, urged the Davis administration to “incentivise” the locally-owned institutions to establish physical branches wherever needed across the Family Islands given the vital role they play in facilitating commerce for already hard-pressed economies.

Eleuthera presently has bank locations in Rock Sound via Bank of The Bahamas; CIBC FirstCaribbean in Governor’s Harbour; Royal Bank of Canada (RBC) in Harbour Island; and Commonwealth Bank in Spanish Wells. 

Noting that some Eleutherans have to travel miles to conduct their financial services business, Mr Sands said: “With these locations, when they open they are overwhelmed by the numbers outside the door. When the ATMs (automated teller machines) go down, it essentially shuts down the entire economy.

“Banking is a major challenge, and what we’re seeing in Eleuthera is that the Canadian-owned banks have made up their minds to exit the Family Islands and downsize in The Bahamas. We live in the Family Islands and understand the challenge of doing business here. As we move forward, part of the solution is to incentivise the Bahamian banks to be our backbone.

“We hope they won’t leave us. Whatever concessions are needed to make that happen short and long-term, the Bahamas government needs to make that happen. If we have positive commerce, we will have a positive return,” he continued.

“These Bahamian banks, incentivise them to be here. Bank of The Bahamas, let’s get it together. Encourage international partnerships with that institution and incentivise it to be in places where we need banking services.”

The past decade has seen a steady consolidation and downsizing of the Canadian-owned banks’ branch networks in both New Providence and the Family Islands, as RBC, CIBC and Scotiabank all seek to cut costs and achieve economies of scale by exiting loss-making bricks and mortar locations while driving customers to digital and online banking channels.

However, this has raised fears that many of the less-populated islands will become “banking deserts”, with residents struggling to access routine financial services and get to grips with online banking, even though digital payment providers such as Omni Financial Services, Island Pay and Sun Cash are moving to fill the gap. Basic commerce for businesses is also being impacted.

Mr Sands, meanwhile, said the failure to include Family Islands in the decision-making process on projects targeted at their respective locations meant The Bahamas was failing to maximise its capture of foreign direct investment (FDI) dollars while also neglecting “to empower” local communities.

Citing the proposed $350m Disney Cruise Line port at Lighthouse Point as a prime example, he added that the major contractor, American Bridge, was only now starting to seek worker housing and mobilise equipment on Eleuthera.

Arguing that the project had been “in limbo for the last two to three years”, with seemingly no major decisions made to progress it, Mr Sands said the failure to keep Eleutherans informed had left the island ill-placed to obtain all the potential benefits.

“The community is not prepared, and could not prepare as there was no definitive answer as to when it would start and there was no contract with anybody to provide product,” the Eleuthera Chamber chief argued. “We encourage it, we support it, but we have to prepare our communities in advance. Knowing in advance is key.

“When major developers come in, they need services tomorrow; they’re not going to wait. If we as a country are going to retain as much of the FDI as possible and keep putting it in the hands of Bahamians, we need to engage Bahamians in a real positive way. The reset is we have to empower Bahamians, empower communities.”

Noting that a friend from the UK, who had not been in Eleuthera for 15 years, had recently produced a newspaper report featuring a discussion on the same issues back then, Mr Sands said: “The time is now. Eleuthera is on the cusp of real major investment..... but how are we empowering Bahamians to have the greatest chance and reinvest in our communities? The reset is now.”

While investments such as Disney’s were set to make Eleuthera “a truly better place than it has been for many, many years”, Mr Sands said local businesses were operating at a disadvantage because of the high input costs they faced. The barriers to entry for new businesses, as a result, were unsustainably high.

Pedro Rolle, the Exuma Chamber of Commerce’s president, told the same conference that his island and others frequently faced “manpower challenges” and skilled worker shortages when meeting the demands of foreign direct investment (FDI) projects because such developments were imposed from Nassau without proper consultation.

As a result, Exumians too often found themselves “supplementing” labour imported from elsewhere in The Bahamas and overseas when, Mr Rolle argued, it should be the other way around with outside workers supporting those hired on the island.

“We are kind of blessed but at the same time cursed. It’s the same old song; we’ve just got to be singing a different verse,” he said. “These challenges exist because no consultation is made with locals. Local governance is key to this.”

Too often, Mr Rolle said, Family Islands were informed “six months down the road” and “it’s a scramble to get things done” and educate residents on the economic opportunities that may be available to them.

“It’s a disservice to the local economy,” he added. “We have to import people. I know people will say they are also Bahamians, but to help the local economy we need to use the skill-sets on the ground and then supplement them. 

“We are importing the skill-sets and supplementing with locals. I accept this is a challenge, but we are going to be discussing this ten years from now if we do not have local input into decision-making.”

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