The Bahamian economy is holding its own and all it needs to tip the scales is another big touristic development like the Atlantis Resort on Paradise Island, according to the Governor of the Central Bank of the Bahamas Julian Francis.
Mr. Francis disclosed in a recent interview on Radio Love 97 that the key to economic recovery is bringing to fruition a number of new projects.
“If we could convince a number of key projects to come in, and I believe the government is working hard at this, that will keep The Bahamas economy doing well for the next five, maybe ten years,” he said.
The economy has been on a roller coaster ride for the last several years, adversely impacted by the Financial Action Task Force blacklisting, the terrorist attacks on September 11, 2001 and Hurricanes Floyd and Michelle.
Management at Atlantis is making preparations for phase III of the project, which top executives say would mean 6,000 new jobs over a period of ten years.
“I have always thought that one of the biggest challenges The Bahamas would face during the next ten years would be repeating Atlantis. That is the big key,” Mr. Francis said. “The truth is… The Bahamas is used to living a North American lifestyle and the only way we could pay for that is to have major bucks come in and invest in this economy.”
Although challenged, the economy has proven to be resilient enough for the government to consider relaxing exchange controls, making it easier for Bahamians to convert Bahamian money to foreign currency.
The country’s foreign reserves stand at $450 million.
But economist Dr. Gilbert Morris is sounding a plain and simple warning: “The Bahamian economy is in crisis.”
He pointed to the decline in consumer spending in the United States economy, which is closely linked to that of The Bahamas.
Dr. Morris had predicted earlier this year that the American economy would not show signs of recovery until the middle of 2003.
He pointed to the decline in the refinancing of homes as a telling sign.
The Bahamas’ difficulty is that consumer spending impacts areas like tourism, foreign reserves and imports, the economist said.
“That does not bode very well for the Bahamas, when you add the sudden and immediate capitulation to these external regulations to the contraction in the financial services area and if we see a continuous decline in tourists because of the decline in consumer spending in America,” Dr. Morris said. “Then you are going to have rising unemployment in the Bahamas, more crime and brain drain.”
But even with the problems that the economy is facing, the Central Bank Governor still does not believe that diversification in other areas is feasible.
We should not reinvent the wheel, he said.
“We would be fooling ourselves,” Mr. Francis said. “Diversification within the tourism industry makes perfect sense.”
The country thrives on the twin pillars of tourism and financial services.
