Nassau, The Bahamas – Economic diversification is the Government’s latest fiscal strategy to rebound from the cash flow stagnation of tourism dollars, due to the global recession. The privatisation of certain public utilities will stimulate internal economic activity to respond to urbanisation through direct investment that expands national infrastructure.
“The Bahamian economy over the past 12 months continued to labour under the residual effects of the global economic and financial downturn, though to a lesser degree of the previous year 2009,” said Prime Minister the Rt. Hon. Hubert Ingraham.
“I now turn to the subject of your Outlook, which is ‘Diversification of the Economy’. It’s a mantra in The Bahamas to say that tourism is fickle. We have a single industry economy and we must diversify.”
On January 13, Prime Minister Hubert Ingraham delivered the keynote address at the Bahamas Business Outlook convention, at the Wyndham Ballroom, Cable Beach. The Government has responded to the demands of the external global environment on the local economy, by centralising foreign and local investment. The strategy is to spread scarce resources to expand the public utilities infrastructure, starting with the privatisation of BTC.
“The privatisation of BTC has been a policy of Bahamian governments for 30 years. The difference between my government and the previous government, the Progressive Liberal Party, is that we told the public publicly that was our policy. They didn’t,” said Mr. Ingraham.
“When we won the election in 1992, the PLP had been having talks and discussions with Cable and Wireless to sell them a position in Bahamas Telecommunications Company. We told the public of The Bahamas that we would undertake the liberalisation of the telecommunications sector and we set out in our Manifesto in 1992 precisely what we would do. And, we delivered. We said in 1997, we would set out to privatise BTC and we undertook to find a strategic partner to do so. When we ran in the election of 2007, that saw we were returned to office, we put in our Manifesto a simple one line, ‘On telecommunications, the Free National Movement will complete the privatisation of Bahamas Telecoms Company.”
The privatisation of BTC and other traditional Government monopolies will inject a cash flow into the Bahamian economy to offset the current trend of receding consumer spending.
“That is our agenda. That is one of the principle purposes we put forward as to what we would do for the economy of The Bahamas. We are absolutely satisfied that we are on the right track and we are absolutely satisfied for the benefit of The Bahamas and the Bahamian people. We are absolutely satisfied that we would reduce costs for people, and that we would provide opportunities for more Bahamians to own shares in BTC”.
The expansion of public infrastructure does not translate into the end of tourism economics in The Bahamas. It simply means that an investment is being made into the utilities sector, as an alternative economic source The Bahamas can draw from within its range of scarce resources.
“We want broad based ownership by the Bahamian public and the Government of The Bahamas with a strategic partner with international muscle and capability and that’s what we seek to do,” said Mr. Ingraham.
The recent slow-moving economy has been identified by a scarcity of tourism dollars and the retreat of foreign direct investment in the construction sector. The privatisation of former Government monopolies will reduce the intensity of economic pressure on central Government to provide opportunities and return the responsibility to Bahamian investors and entrepreneurs.
“Bear in mind too that the major investment economies have been benefitting from a huge tourism sector long before the island economies recognised the enormous potential the economic growth of travel represented. In the investment world, they call it ‘invisibles’,” said Mr. Ingraham.
“I noted these opportunities to make this point, it should be the desire of any government to see as many types of economic enterprises and sectors develop its economy as its resources can promote.”
Bahamian entrepreneurs have been calling for government to open more opportunities in farming, fisheries, local manufacturing, and developing cottage industries to offset the current economic trend.
“It seems to me that the discussion around diversification arises from a desire to see this economy achieve higher levels of growth and perhaps more importantly, to become less vulnerable to shocks in the global economy,” said Mr. Ingraham.
“Diversification then seems to be defined as less dependent on tourism and financial services, both services, and more involvement in manufacturing, industry, and agriculture. The reality is the remarkable growth and development we have achieved through services presents huge opportunities for further integration of the $7.5 billion economy The Bahamas has in value and exploiting the natural resources we do have.”
By Gena Gibbs
Bahamas Information Services
