The Bahamas was becoming moribund in the financial services industry long before a package of financial legislation was enacted in 2000, according to trade negotiator Raymond Winder, a partner at Deloitte & Touche.
“The legislation served to bring the thing to the surface but the reality is before that the Bahamas was slowly dying in the financial services sector,” Mr. Winder said.
At the start of a three-day Educational Conference at the Sheraton Grand Resort on Thursday, Mr. Winder, a member of The Bahamas’ negotiating team for the Free Trade Association of the Americas, and the alternate negotiator for competition, told members of the Bahamas Chapter of the International Association of Administrative Professionals also that both tourism and financial services were feeling the effects of competition.
As for The Bahamas’ decision on whether or not to join regional or other international trading groups, he said, whatever was decided would have no impact on world events.
Stating that both Bermuda and The Cayman Islands have surpassed The Bahamas in the financial services sector, Mr. Winder said that, “Bermuda was created because of some of the things The Bahamas did that were not correct in the insurance legislation.”
As a result, it became a powerhouse in the insurance industry, he said.
The Cayman Islands, which he described as a dominant force in the financial services sector, were also learning from The Bahamas’ mistakes, according to Mr. Winder.
He said that the Cayman Islands, in addition to changing their laws in response to international initiatives also raised their fees for operating a bank within their borders. With the increase in fees, having a bank in the Caymans increased to 10 times the cost of operating a bank in The Bahamas.
But despite this, he said, banks in The Bahamas are still leaving to go to the Cayman Islands.
He also emphasized that the problem in The Bahamas stems from the low level of productivity in both the private and public sector. Stating that price does not always determine where people go for service, he called for a closer look at the level of service offered in both sectors.
Calling for a revamping of the length of time it takes to receive licences to establish certain financial services, Mr. Winder noted that it takes 24 hours to establish a mutual fund in the Cayman Islands, but two months for the same process to be completed in The Bahamas.
The tourist and financial sectors have allowed The Bahamas to retain a fairly high standard of living over the years, he said, and consequently, they should receive the utmost attention. “It is those two industries that have really kept the standard of living in The Bahamas at that level and it is those two industries today that are under threat from the stand-point of competition,” he said.
Advising the group that The Bahamas’ decision to sign or not to sign the various trade agreements will have no impact on what is currently happening in the global arena, he said, “The world is changing and it doesn’t matter whether the Bahamas decides to sign an FTAA agreement or not to sign. These things are happening without agreements.”
According to Mr. Winder, the movement of goods and services between countries is happening without agreements and countries have been putting up barriers to protect themselves. These trade agreements are simply ways of preventing countries from erecting barriers, he said.
Using the United States as an example, he said that the factors that previously denoted powerful countries have changed from reserves of natural resources to a strong knowledge base and the United States recognized this and made a point of attracting experts into its borders. “Yes it may displace someone,” he said, “but the person helps to create an atmosphere where they can bring more jobs to that country.”
Of all the agreements facing The Bahamas, he continued, the World Trade Organisation agreement might be the easiest to accede to, because it is less integrated than the larger ones.
Referring to the recent collapse of the Ministerial Meeting in Cancun, Mexico, which he attributed to the issue of subsidies, Mr. Winder said that with respect to Bahamas FTAA negotiations, “Its hard to say what’s going to happen, but we are still going to the meetings and we are still pushing forward.”
By Martella Matthews, The Nassau guardian
