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THE BIG QUESTION: Kickstarting the economy

With fears that the country's credit rating could be downgraded by Wall Street rating agency Moody's, what do you think should be done to kickstart the Bahamian economy?

Leave your answers in the comments section below . . .

Comments

DillyTree 7 years, 11 months ago

Easy -- make it easy for small business to flourish with less red tape and BS. Instead of wasting money on Carnival or other silly programs, why not use that as a startup fund for innovative entrepreneurs to encourage new ideas and developments. We need to diversify, as the golden eggs of tourism and offshore banking are fading fast.

And for God's sake, we need a better education system so that our Bahamian workers can compete on a world stage. They are way too complacent and feel entitled to a job, which in many cases, they are not qualified for. We've gotten lazy and have no idea what good service and initiative are.

And last, but not least, reduce the civil service to 1/2 of what it is now. It's bloated with people who aren't interested in doing their jobs (passport office, anyone?) and again, for many who aren't qualified to do the work in the first place. Clean up public service, and the money saved in salaries, waste and theft could be use to jumpstart the economy.

Honestman 7 years, 11 months ago

There is NOTHING that can be done whilst the PLP is in power.

If we had a responsible government in place then you would:

  1. Place an immediate embargo on all non-essential government spending.
  2. Reduce the bloated civil service.
  3. Reduce duty on motor vehicles.
  4. Enforce the collection of outstanding property taxes.
  5. Improve the efficiency of the VAT office by paying refunds on time.

Over the longer term you would:

  1. Prioritize greater spending on education.
  2. Introduce and enforce a proper Freedom of Information Act.
  3. Prosecute all MP's who fail to meet financial disclosure requirements.
  4. Place an embargo on any further investment by China in The Bahamas.
  5. Make it easier for investors (local and foreign) to do business in The Bahamas.
  6. Develop our eco-tourism product and ban all further large developments.
  7. Finally, hold a commission of enquiry over the PLP's blatant mis-management of the country's assets during this administration.
  8. After the enquiry is finished, tell the world, and specifically international investors, that The Bahamas has been cleansed of rodent politicians that have eaten away at our national assets and our value system.

MassExodus 7 years, 11 months ago

At this point it is almost inevitably. I recommend abandoning ship. Marry foreign and move to their country.

PLP in a single term has entirely destroyed the Bahamas. It will take a half century to recover from this mess...

John 7 years, 11 months ago

@ honestman: I'm sure you misread and/or misunderstood the question.

Honestman 7 years, 11 months ago

Not at all. My answer is covered by my first line.

ThisIsOurs 7 years, 11 months ago

Bring down the cost of energy, that would have an immediate impact on everybody's pocket books. Cost for fuel, cost for electricity. Create a program where Bahamian companies systematically solarize the Bahamas. That includes funding for installation and maintenance. This would require so much labour, you've killed four birds with one stone. Cost of business, Price of goods, unemployment, energy reform., new industry. That's five. And for Gods sake let qualified Bahamians spearhead it, not some foreign company so some politician can skim money off the program or some unqualified BAMSI like company set up by a greedy politician that would endanger people's lives.

Get serious about ICT. Stop the sound bites. Invest money in people. Train people. One year of paid training for eligible persons, with accountability.

Bulldoze the Pointe. Ok so maybe they won't do that one, but they should.

Stop the BAMSI fraud. "Sweet bananas". That's not food security.

kaytaz 7 years, 11 months ago

Cut the prime interest rate....simple as that

Islandboy242242 7 years, 11 months ago

Focus on safety, enforcing existing laws and tax collections instead of giving away $$ to people that haven't paid their bills (Real Prop Tax, BEC etc), FOIA, and work on reversing some of the terrible red tape that is making business so hard.

. Trickle down is that people don't feel safe in Nassau so less of the potential customer base is going out to restaurants, shows, parties, festivals etc. Persons looking to start a new business are apprehensive because of the level of crime, difficulty in doing business here, and worried about the overall outlook of the country. Its basically a revolving door until the country gets it's proverbial head out of its ass, finally opens BAHAMAR, gets serious about FOIA, and makes people feel better about going out and spending money, not scared to wear those gold earrings or that nice bracelet and looking over your shoulder every other step.

BaronInvest 7 years, 11 months ago

  • Remove/Heavily reduce import duties, instead increase the VAT from 7.5% to 15% to compensate the loss of import duties. This lifts off a lot of risk for businesses because you have to pay import duties upfront while VAT is paid when the item is sold - resulting in a much higher liquidity and also enables business to import and offer more products. The import duties make products more expensive, so when you don't sell the product in the Bahamas and you want to export it again you have to recollect already paid duties (good luck with that, anyone). In reality you don't import anything you might not sell. This is will also refresh the car market, as dealers now can be competitive again to the US/Japanese market. Import duties are killing your economy to a great extend as it raises the risk vs. reward a lot.

  • If you run a business here and you employ people you get a work-permit and residency permit (fast). Allow foreigners to open up local businesses. Currently there is no way as a foreigner to open up the business here as getting the permits is a "pain in the arse". I'm was sitting on a huge amount of investment money that now has flown into other countries where i employ people for the simple reason that i cannot wait a year to get a permit - and honestly, you are delusional if you think i would wait for anything when i bring money and jobs into the country.

  • Import "teachers" and rework your education system. D- on average means that the majority is unemployable.

  • Modernize your government, i cannot believe the amount of paper that is used here. There are computers that can store data for quick and efficient access.



These suggestions are really no-brainers.

BaronInvest 7 years, 11 months ago

In europe the average VAT is at 21%. In the US federal plus state tax on items match 25%. To be honest i don't feel that it is too much - you have to consider that the restaurants also can offer their food for 30% less because of the missing import duty on the goods. Maybe start out with 10% or 12.5% raise it if necessary a year or two later. As far as i know there is a property tax already, didn't know they don't enforce/collect it properly. I was more thinking for the masses, even if i pay 30% more in a restaurant it's fine as long as the prices in the groceries, electricity and water drop a bit. No import duty will attact a lot of global players, e.g i wouldn't wonder if WalMarts would open here or even large european groceries like Lidl.

newcitizen 7 years, 11 months ago

VAT at 15% and customs duty at 0% would reduce the costs overall. Current duties cost consumers and businesses far more than a 15% VAT ever would.

newcitizen 7 years, 11 months ago

VAT is not paid only when a business has sold the imported item. The importer pays the VAT on the cost of the item and on the customs duty. When the item is purchased by the consumer, the customer pays the VAT on the final price. The business then remits the difference to the government (Customer VAT - Import VAT = Payment to the government).

The tax itself is pass through, but the actual mechanics o it mean that the importer pays it and then gets it back from the customer. So he importer is still out that money until the product is sold.

newcitizen 7 years, 11 months ago

By the way, I very much agree with everything you said Baron, just wanted to clarify the VAT point.

SP 7 years, 11 months ago

Obviously getting rid of the PLP and FNM that led the country to this disaster is priority 1!

The greatest impediment to growth is the PLP and FNM corrupt group of pirate obstructionist.

Ridding ourselves of these greedy parasites would immediately encourage FDI who should be made to partner with qualified Bahamians which would slow profit repatriation and stimulate more growth.

Step 1 is the most important of all!

newcitizen 7 years, 11 months ago

Proper business tax reform. Currently businesses are taxed on turn-over (revenue), which is a terribly regressive form of tax. Businesses should be taxed on profits. Currently, if a business losses money, they still have to pay the government tax money.

By taxing profits, you encourage businesses to reinvest in capital and employees. Having high volume with low margins is penalized due to tax on turnover. By taxing profits at say a 10% flat tax, then companies are able to lower prices to increase volume and in turn lower acquisition costs due to more buying power.

Taxes should incentivise investment, which leads to higher employment and more money moving through the economy.

On the topic of taxes. All land should be taxed, including vacant, developing, and low value properties. Currently vacant land owned by Bahamians are free to hold onto the land without any incentive to develop, improve, or sell the land. There is no incentive to remove derelict buildings, or to provide capital improvement to low value and low quality properties. If people have to pay taxes on properties that are not bringing in any income, then they will rethink what why they are simply sitting on it. This should also cause a rise in the offer for sale of vacant and derelict properties and at more accessible prices and therefore allowing more Bahamians to participate in property ownership and encourages investment

Finally, taxes must be collected. There is no excuse for having over $600MM in real property tax in arrears.

On a separate improvement, the government needs to bring itself into the 21st century of technology. No more hand written licences or passports. Our country needs to be digitized. Updating government working to be totally computer based will dramatically lower costs and accessibility of services on out islands. It will encourage investment in training and put a great importance on education as people can see a direct result of learning modern skills. Customs, Policing, Tourism, Road Traffic, Medical, NIB, and Social Services will all see far greater efficiency and provide huge improvement to services.

SP 7 years, 11 months ago

This question is totally rudimentary, PLP & FNM deliberate exclusion created this mess

Dominican Republic has a clearly well published road map that led to their unmitigated prosperity which is the exact opposite to PLP and FNM disastrous policies of exclusion.

Bahamas simply need to follow the Dominicans "common sense" well proven, established practices and Bahamas will see an immediate 180 degree turn back to prosperity in record time.

http://www.odi.org/sites/odi.org.uk/fil…

Sad thing is, none of this is rocket science. Just plain, sound, "level one" business practices that empowered as many Dominicans as possible to benefit from the little tourism they had to begin with.

PLP and FNM ham strung Bahamians for 43 years, strangled economic growth benefiting friends, family and lovers and delivered the country to the present unsustainable position.

FIRSTLY, we must rid ourselves of PLP and FNM massive corruption, stupidity and greed!

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