With fallout from blacklisting and other external shocks looming over the financial-services sector, Bahamas Agricultural Industrial Corp. is looking to domestic investment for economic diversification.
New general manager Troi Ferguson said BAIC's new mission is "to create a domestic business class that is able to compete in the global economy in matters of product innovation and development that will lead to expanded opportunities for trade and business development for existing and aspiring Bahamian entrepreneurs."
He agreed with financial analysts that there is this false perception about the standard of living in The Bahamas, due to the benefits derived from the offshore business sector, whether in oil storage and distribution, banking and trust services or tourist-resort development.
Agreeing with Mr. Ferguson's view of domestic investment as the next primary mover of the Bahamian economy, Colina Financial Advisors principal Larry Gibson said that country is too dependent on foreign investment, tourism and finance, and to some extent, construction.
"Our level of domestic investments is really low, across all industries," Mr. Gibson said.
"We believe that there is fairly significant amount of Bahamian capital that can be put to work but for some reason, we don't seem to elect to put it to work."
Arguing that this is not an issue for the masses, whose bank accounts show less than $1,000 in savings, Mr. Gibson said it only takes a small number of people who can make a difference.
As to getting them to take a greater risk with the economy, he said, "we need to start somewhere, we need to know that investing locally is viable."
At a dinner of the Kiwanis Club of Over-the-Hill at the British Colonial Hilton, BAIC's Mr. Ferguson said the corporation's mission is to become a centre that facilitates domestic investment by providing research and feasibility studies, industrial land, state-of-the-art industrial parks, access to development funding, access to buyer markets and business monitoring and evaluation.
Mr. Ferguson, who formerly headed BAIC's project development department, borrowed the concept of domestic investment as defined by the Republic of Vietnam, which holds this idea of economic development is "to mobilise and make effective use of all capital, natural labour resources and other potentials of a country."
"In the case of Vietnam, domestic investment is defined as a means to put capital in production and business operations."
The domestic investment concept can apply to a broader base such as:
* The establishment of productive and business units of all economic sectors;
* Expanding the scale and capabilities of production;
* Conducting research and development;
* Renewing technologies of existing productive and business units;
* Buying holdings of business enterprises.
Commenting on The Bahamas' banking experience during the period of international blacklisting, Mr. Ferguson said the financial-services sector has become riddled with uncertainty as scores of institution have scaled back plans to establish or expand operations.
He said BAIC must respond to changes in the international community in keeping with Government's overall goals and objectives in rescuing the economy.
Hence, the new mission of and vision of BAIC, said Mr. Ferguson, reflects a response that impacts internal positioning. He said those changes are necessary because there are a number of significant events that will impact business in The Bahamas.
These included the Free Trade Area of the Americas, set to come on stream in 2005, the International Year of Micro Credit in the same year, and Economic Partnership Agreements between the European Union and Africa, Caribbean and Pacific countries, including The Bahamas.
According to Mr. Ferguson, the FTAA introduced considerable pressure on countries such as the Bahamas when it included services as part of its negotiation process.
"This forces us to consider what will happen to Bahamian professionals
in providing services to the international as well as domestic clients," he said. "ACP countries like The Bahamas would require considerable assistance to prepare its business sector to meet the challenges of trade liberalisation."
These programmes would involve:
* Assistance to create favourable framework conditions for business;
* Need to contribute to the establishment of new enterprises by (a) rewarding and supporting those who risk, (b) promoting ways to improve their access to finance;
* Implementing widespread availability of business-support mechanisms, networks and services;
* Creating and developing clusters of innovative new businesses;
* Reforming educating and training systems in the domestic market;
* Eliminating barriers to market access in the domestic market.
* Introducing new ways of coordinating national policies and initiatives in support of enterprises and measures the impact.
* Taking advantage of the e-economy.
By Lindsay Thompson, The Nassau Guardian
