Firms do not possess ‘unlimited money tree’




Tribune Business Editor


THE Chamber of Commerce’s chairman yesterday said the Government seems to feel firms have access to an “unlimited money tree” with the private sector often falling victim to “suppressive” policies.

Timothy Ingraham, speaking on a panel discussion at the Bahamas Business Outlook conference, said the business community was frequently ignored by policymakers who proceeded with pre-conceived laws and regulations despite being warned of the potential harm they may inflict on the economy.

“It is critically important that the business community is involved in what is happening in this country, and planning in this country,” he argued. “I’ve seen too many times when we get called into collaborate only to be told what is going to happen and our feedback is ignored, and the powers that be will go forward with their plans despite what we are saying.

“Most business people in this country have invested millions of dollars in this country, in their businesses. It’s in their best interests to see that investment grow to get a return on it. That’s why they invested. They can tell you what’s best for their businesses, what’s the best way to move this country forward for their businesses.

“There’s no sense me planning what we’re going to do for tourism if I’m not speaking to the stakeholders in tour- ism. There’s no sense me planning what’s going to happen with employment in this country if I’m not speaking to the small and medium-sized enterprises that drive employment in this country,” Mr Ingraham continued.

“A lot of times we see policies that seem to be regressive for business, almost serving to hold the businesses back. There seems to be a kind of feel- ing that businesses have an unlimited supply of money: Just go to the money tree out back and get it to pay for whatever needs to be paid.

“And so it’s critically important we sit down and have open dialogue with the business community when decisions are being made.” The Chamber chair said this occurred via the Economic Recovery Committee that was created by the Minnis administration to develop ideas and strategies for The Bahamas’ post-COVID revival, where the private sector was centrally involved in providing recommendations and advice.

“To leave the business community out of these discussions, to ignore the advice, I think it’s going to go nowhere because you’re going to come up with policies that are bad for business, that are going to suppress business and which don’t encourage growth,” Mr Ingraham said.

Asked to identify the two priority reforms necessary to drive increased investment by all sizes and types of business, the Chamber chief identified “fixing” The Bahamas’ education system as the country’s greatest need. He added that a recent Chamber survey of its members had again identified the private sector’s “number one” problem as finding employees with the right basic skills, attitude and work ethic.

Revealing that the survey will likely be discussed with Pia Glover-Rolle, minister of labour and the public service, in an upcoming meeting with the Chamber, Mr Ingraham added that improved educational outcomes - together with better job and income prospects - is a key element in the fight against rising crime.

“I believe it all starts with education,” he said. “Our education system has been failing us for quite a while. We don’t seem to have the formula to fix it yet but we need to fix it. We see the incidents on our streets, which is a manifestation of that.”

Referring to an earlier discussion at yesterday’s Bahamas Business Outlook, Mr Ingraham continued: “The tourism people were talking about bringing new ideas for businesses. When people are better educated they are able to come up with those ideas.

“The Chamber sent out a survey to its members last week. We’re meet- ing with the minister of labour in a couple of days and the education level of persons being employed is the number one problem that most of our members have been reporting. They cannot find good employees to do the basic things they need to get done.

“We need to get the education fixed, and we need to get that fixed as quickly as possible for so many reasons - for crime, for economic development. A better educated population tends to attract higher level business operations. All of those we need to get done.”

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told the same panel discussion that The Bahamas has reached where it is today economically more through its UX proximity, natural environment (sun, sand and sea) and luck rather than any clear strategic direction or planning.

And he warned that the Government “loses credibility”, including with outside observers, every time it reverses course on policy or taxation-related decisions when it is faced with legitimate resistance and push back from the private sector and citizens.

The Fidelity chief cited two such instances as the Davis administration’s late 2022 decision to expand price controls on foods and medicines, and the recent controversy over four-digit percentage hikes in boat registration fees, contrasting these with the ultimately more collaborative approach that the Government and private sector settled on over VAT’s 2015 implementation.

“I’ve a couple of examples that show how we become stagnant or progressive,” Mr Bowe said. “When we had the talk on VAT, it was: ‘This is going to happen’. Then there was massive resistance, both from businesses and individuals.”

Noting that businesses were “over-reacting” to the prospect of far-reaching tax reform, he recalled how they were “going in the opposite direction. The Government was going left, businesses were going right. There was a right one in the middle”. Eventually the Chamber, via its Coalition for Responsible Taxation, obtained the necessary information to conduct a study so business could make “informed decisions”.

Once the studies were completed, education of the private sector and citizens followed, and Mr Bowe said of VAT: “It was then actually embraced, and is now almost common place and persons don’t think about it except they’re still asking where the VAT money has gone.”

However, he then added: “When we come back to that and say it worked, we said we’re going to impose price controls without discussion. Then: ‘Well, we may not do it. We may not do it at all’.” Mr Bowe, in an obvious reference to the current boat registration fee controversy, also added: “We’re going to impose these fees, but then we get push back saying these fees don’t work in various areas.

“So we’ll reverse that, but maybe we don’t, and partially. The result is that every time you make a decision that’s not collaborative, and you reverse or revisit, you lose credibility as an administration and, to the outside world, the question is do you know what you are doing? And, you know, if we are seen as either incompetent or arrogant I don’t know which is worse.”


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