The news on the Bahamian economy since the attacks of September 11, 2001 has been bad.
But it has also been good.
This was the word from Central Bank Governor Julian Francis who said today that he does not expect that the Bahamian economy would experience any growth by the end of this year, but no shrinking is forecasted either.
“It would be optimistic in my opinion to think we are going to see any upswing in the economic activity,” Mr. Francis said. “If I were to put a number on our average economic activity for the year 2002, it would be zero. It would not be negative. But it certainly would not be positive.”
The Bahamian economy ran out of fuel as a result of September 11, government officials and economic analysts have said.
The net result is that construction starts have been slow. Tourism statistics, both from visitor arrivals and expenditure are down.
In some Family Islands, visitor arrivals have been reduced to a trickle, although Tourism Minister Obie Wilchcombe said recently that things were picking up.
The country’s largest employer, the Government of The Bahamas, had to put in place emergency measures, securing an overdraft facility of $125 million.
Following the tragedies of that fateful day when two planes crashed into the World Trade Center in New York, another into the Pentagon just outside of Washington, D.C. and a fourth in a lonely field in Pennsylvania, world economies have been dealt a blow that created grave concerns.
Here in The Bahamas, the new government of Prime Minister Perry Christie was elected to take over the job of finding ways to stimulate the economy.
Government ministers now report that there are glimmers of hope and are banking on major investments in tourism like the Emerald Bay Resort in Exuma, which is expected to provide several hundred jobs.
Hotel mogul Sol Kerzner is also expected to help in the continued relief efforts to improve economic conditions here with the Phase III expansion of his Atlantis Paradise Island Resort, which would eventually create about 6,000 new jobs for Bahamians, according to company officials.
But at the Atlantis Paradise Island Resort, sales and marketing executives are “slightly pessimistic” regarding 2003.
However, the resort’s Senior Vice President of Administration J. Barrie Farrington said Tuesday that there is always a late booking pattern the seems to be prevalent in the industry.
“We think that on balance, we’ll be able to hold our own come 2003,” Mr. Farrington said.
After the attacks, Atlantis officials took a route taken by few other resorts. It kept room rates at the level they were at pre-September 11, while other resorts discounted their rates to create volume.
“We suffered a very considerable downturn in our occupancy,” Mr. Farrington said. “September is going to be very soft and October and November seem not to be developing a very strong trend in reservations.
“So overall, the impact on the industry has been fairly significant. As far as our property is concerned, we’ve been able to recover pretty well for the first two quarters, but are a little uncertain as to what we expect the final quarter of this year.”
At the Nassau Marriott Resort where occupancy was today 25 percent, officials are focusing on trying to generate airlift into The Bahamas. Other than that, the hotel’s General Manager Robert Sands wishes this day would “just die quietly.”
Mr. Sands said, “The hotel’s year to date has been somewhat resilient in withstanding the dilemma of September 11 in terms of our occupancy levels. However, our yield and revenue generation has suffered somewhat to a higher degree, having an impact on levels of profitability within the hotel.”
Occupancy is almost equal to this time last year at the Nassau Marriott, he said, but there are average room rates variances from $10 to $25 per night. (September and October are traditionally the slowest months of the year in the tourism industry.)
“Certainly, this trend is overflowing into incremental spending in terms of shopping and restaurants on the island, taxi cab drivers etc.,” Mr. Roberts said.
The resiliency of September 11, 2001 can be seen in some areas of the economy where entrepreneurs have become innovative and imaginative using every skill they can find to sustain their various businesses.
But there have been layoffs in several areas of the economy, especially in merchandising.
Indeed, the year since September 11 has been a difficult one for North America and for The Bahamas.
The attacks came six months into the American recession, which has continued to run its course, “almost independently of September 11,” Mr. Francis said.
“So, in a way, we have had the double impact of one, the recession, which had already been in progress and then the tremendous disruption to industry and commerce, the loss of consumer confidence, the problems which have been felt by a number of major industries and which have resulted in reduced investment activity in the U.S. economy and outside since September 11,” he said.
All of these have converged and it is almost surprising that the North American economic situation isn’t actually worse than it is, Mr. Francis said.
“Since then, that is, during this last 12 month period, we’ve seen the American economy operate at quite a weak pace,” he said. “On average, I believe the U.S. economy has been more or less not growing. The Bahamian economy has been pretty much mirroring that.”
The economy is “marking time,” Mr. Francis said.
Ian Fair, chairman of the Bahamas Financial Services Board, added that the economy continues to “hold its own.”
“I think what was good for The Bahamas was the fact that on September 11, we weren’t on any of the blacklists,” Mr. Fair said. “We had demonstrated our maturity and sort of shown the world that we were as responsible a financial centre as any other.”
Shortly after the September 11 attacks, the U.S. Government issued a list of names of individuals and organizations it believed were involved in terrorist activities.
“And The Bahamas was very quick in its response to address whether any of those persons did business in The Bahamas,” Mr. Fair said. “And this was obviously appreciated by the U.S.”
He said it is very difficult to differentiate between the impact that September 11 has had on financial services, the impact of the blacklisting of The Bahamas by the Financial Action Task Force and the Organization for Economic Cooperation and Development and a recession that was taking place when the attacks took place.
“It’s very hard to point a finger at where the decline in business has occurred, ” he said. “I think The Bahamas is in pretty good shape to re-grow. I don’t think we’ve lost a lot of business as a result of the various initiatives.”
