A Bold New Agenda: The Next 25 Years

Ladies and Gentlemen,

I wish to thank the organizers of this event for once again inviting me to bring these keynote remarks to open this 25th Annual Bahamas Business Outlook.  The theme of this year’s Conference “A Bold New Agenda: the next 25 years” is quite fitting within the context of the work which is currently underway in my office.

The next twenty-five years for The Bahamas will indeed see a bold agenda, a coordinated agenda and a clear agenda through comprehensive national planning to ensure a bright future for our Bahamaland.

Perhaps, it is rare at The Bahamas Business Outlook that one refers to Biblical text, however, in this case it is quite appropriate to make this important point.  The Book of Genesis relays a tale of a Pharaoh of Egypt who had a dream of 7 fat cows and 7 thin cows and 7 sturdy ears of corn and 7 thin ears of corn.  In each case, the gaunt product consumed the healthy product.  Joseph, an Israelite slave, is called in to interpret the Pharaoh’s dream.  His interpretations, tells the leader to prepare – to use the fat of today, for the thin of tomorrow.  His interpretation instills in the leader the urgency and the necessity of planning.  This parable remains relevant today as we prepare for the next 25 years.

In his speech to the World Economic Forum in Davos in 2012, Economics Professor Nouriel Roubini, often called Dr. Doom for his correct prediction of the 2008 crisis, had this to say about the Global Economy, (quoting from the Associated Press).

“We live in a world where there is still a huge amount of economic and financial fragility,” …. “There is a huge amount of uncertainty — macro, financial, fiscal, sovereign, banking, regulatory, taxation — and there is also geopolitical and political and policy uncertainty.” …“All these things lead to political and social instability,” … “So we have to reduce inequality. We have to give growth to jobs, skills, education, and increase human capital so workers can compete.”

“Once you have too much debt in the public and private sector, the painful process could last up to a decade, where economic growth remains weak and anemic and sub-par until we have cleaned up the balance sheet and invested in the things that make us more productive for the future,”

Professor Roubini urged the world to concentrate on “things that are more productive like our people, our human capital, our structure, our technology, our innovation.”

While economists argue about whether Roubini’s predictions were 100 percent correct, his warnings – both before the 2008 crisis and over the last few years are quite relevant.

On a global scale, the 7 years from 2008 to today have certainly been thin years with the “fat” and “spoils” of the pre-crisis years devoured by a global recession and a timid recovery.

While Dr. Roubini is often called Dr. Doom, I think that the world is missing an important element in his statements – he is clear that there is hope of a better future once the hard work is done. The adjustment is painful, but necessary and yields a stronger economy.

We exist in a world today where all countries — from the developed giants to the emerging economies have lost some of their shimmer.  The lustre of these economies, including our own, however, can be regained.

Like the entire world, The Bahamas has had to make its adjustments over these years.  We have had to pull our boot straps up, make painful and hard decisions to regain our shine.

We have had to make decisions on matters such as:

  • Tax reform and austerity measures to secure public finances;
  • National Health Insurance to secure our people from the financial ruin that comes from sickness or the productivity losses that come from not having access to preventative healthcare;
  • Reforms to put in place a credit bureau system to ensure that our banks can make wiser credit decisions and to provide incentives for more responsible credit behavior by customers;
  • Financial services regulatory reform which sought to ensure that our Financial Centre operated within internationally agreed standards;
  • Gaming reform, which ensured that businesses which had been continuing for decades under the radar, un-taxed and un-regulated – could be brought out to the light and regulated;
  • Education reform which seeks to put in place higher standards for graduates in our public schools;
  • Developing a National Training agency to ensure that our school leavers have basic training to prepare them for work; and
  • Social services reform – which seeks to ensure that we can better provide for our brothers and sisters in need; and
  • Public/private partnerships which relieves the burden on the public purse in pursuing essential infrastructure, economic and social projects.

These are but a few of the hard reforms which have been made over the last few years to build towards a better future; to implement structural reform; and to focus on policy actions which touch the everyday lives of our people.

The economic prognosis for The Bahamas is similar to the rest of the Caribbean with subdued growth for this calendar year and the next two years.  This is notwithstanding a return to normalcy in foreign direct investment, and tourism earnings in the face of global instability influenced by the slowing growth in China.

For this year the calendar year the Ministry of Finance is forecasting real GDP growth of 1.5% and for next year a slightly elevated growth level is expected.  It is important to note that this forecast does not take into account the opening of Baha Mar and some of the new investment projects which I shall mention.

A subdued growth target limits the amount of revenue the Government can expect for the buoyancy of the economy, hence an important focus of the Ministry of Finance has been to improve tax compliance by improving interaction with the tax payer.  As result, I am pleased to say that over 30% of the Government’s revenue is now collected electronically, with 100% of Vat for business returns and business licence revenue being collected electronically or through the banking system.

It is fully expected that by the end of this fiscal year over 50% of the Government’s revenue would be collected either on-line or through the banking system.  The net impact of this initiative will yield an increase in Government revenues.

Another aspect of the reform process which is overlooked is the efforts with respect to E-Government.  No commercial importer VAT registrant or Business Licence applicant is required to go into any Government office to submit documents.  This a vast improvement over the recent past and efforts to make the Government’s operations completely electronic continue with efforts in Company registration, Motor Vehicle and Drivers Licencing and Border and Passport systems.

While these initiatives are not quantified as net revenue they do have a positive effect on the Government’s fiscal balance.

The year 2015 has been a time of putting our tourism sector in high gear as my Government embarked on an ambitious investment strategy, and agenda of energy, financial and social reform to grow our economic pillars.  A snapshot of tourism economic performance and examples of related investments reveal Grand Bahama last year led the rest of The Bahamas in increase in visitor arrivals with an increase over the previous year of some 25%.  This resulted in large measure from a Ministry of Tourism marketing campaign, added airlift by American and Delta airlines, Sunwing flights from more than a dozen Canadian and U.S. cities, and increased capacity of cruise ship and cruise ferry services.  At the end of last year the renovated Lighthouse Point at Lucaya was reopened as an all-inclusive resort. Recently approval was given for the $160 million major expansion of Deep Water Cay Fishing Resort on East Grand Bahama, into a five star boutique and residential resort to be operated by Six Senses.

Resorts World is investing some $500 million in the development and operation of its Bimini Resort.  Their new 300 room luxury five star Hilton branded hotel and multiple amenities will be fully opened before the end of the winter season, adding additional job and entrepreneurial opportunities.  The Developer and scheduled carriers have added additional airlift and the Developer is in the process of replacing the Bimini Superfast with a more efficient and even faster cruise ferry between Florida and Bimini.  Resorts World is planning a major training programme to achieve world class standards with a view to catering to more affluent clientele.

Mediterranean Shipping Company (MSC) one of the world’s largest global shipping companies, is completing the acquisition of Sandy Cay, just off Bimini for the development of a cruise port and marine park offering unique and authentic Bahamian experiences.  Construction on this $100 million project starts this year.  Additionally MSC is partnering with Hutchison Ports in $280 million expansion of the Freeport Container Port, opening a maritime training academy in Freeport and will train and recruit Bahamian employees aboard their cargo and cruise vessels.

South Cat Cay Properties is gearing up for the development of a $94 million luxury Resort at South Cat Cay, which will include a five star branded boutique hotel and amenities, condo and residential units, a marina, shops, restaurants and recreational facilities.

In the Abacos, Baker’s Bay Golf and Ocean Club is investing this year in excess of $250 million in the construction of 50 plus homes, employee housing and community center and beach park.  Some 650 plus persons are employed in construction related jobs and 375 in full time operational jobs.

At Winding Bay, Abaco the developers are projecting an investment of some $348 million over the next several years in upgrading amenities, new facilities, hotel and residential components.

Some $350 million is being invested at Mat Lowe’s Cay in the first luxury Aman Resort to be constructed in The Bahamas. To accommodate the growth in tourism related enterprises and visitor demand, Delta Airlines has commenced direct service from Atlanta to Marsh Harbour.

In New Providence, The Pointe, a $250 million dollar, multi-faceted hotel and residential development slated to open in the fourth quarter of 2017 will revolutionize the physical and social landscape of downtown Nassau, delivering non-stop entertainment and diverse social activity to the premier city centre.  Just further west at Junkanoo Beach, two rebuilt three star hotels are opening this year.  The Warwick, Paradise Island’s newest Four Star All-Inclusive property will reopen this year after extensive renovations as an “Adult’s Only” Resort.

Other tourism related projects opened in 2015, including The Island House in New Providence, a boutique Bahamian owned property.  Extensive capital expenditures have been committed for product expansion and improvements at resorts on New Providence, such as the upscale Albany, Atlantis, Sandals Royal Bahamian, Lyford Cay and One and Only Ocean Club.  Renewed interest is being shown in touristic development in South-western New Providence.

Albany is a development at the very high end of residential, sports and recreational resorts with new business, educational and health facilities now under construction, representing an investment of over $1 billion.  It has employed in construction and operation over 1000 persons (90% Bahamian) over each of the last eight years, with additional employment being offered this year, next year and beyond.

While Court appointed provisional liquidators and Receiver/Managers for the lender continue their roles with respect to the stalled Baha Mar project, the Government continues to engage the remaining stakeholders, potential investors, and resort and casino operators, in pursuing arrangements for early remobilization, completion and opening of the resort.  We are vigorously pursuing all avenues with the commercial parties and the Government of the People’s Republic of China to accomplish this goal, which also includes settling outstanding payments to Bahamian sub-contractors and suppliers, and getting laid off workers back to work as soon as possible.  There are many moving parts to this complex mega project.  No stone is being left unturned in pursuing solutions, being deeply conscious of the vast economic implications of this project for The Bahamas.  There has been positive movement on the part of the remaining stakeholders and I am hopeful that with the cooperation of the stakeholders, the impasse of the past year will be behind us soon.

I am advised that planning by the Developers and the operators is continuing for the start of construction on the Four Seasons and Eleuthera Properties/Noble House projects in South Eleuthera.  Hotel occupancy and the construction of second homes by both Bahamians and non-Bahamians in Eleuthera are on the rise.  Further investor interest includes the recent approval of The Potlach Group to redevelop The Potlach Club at Governor’s Harbour.  To meet increased travel demand, Delta Airlines has recently inaugurated services between Atlanta and North Eleuthera.

Both resort and upscale residential development continues at encouraging levels in the Exumas.  The luxury Sandals Resort at Emerald Bay is an anchor project which has proven to be a catalyst for attracting other investors and airline service.  We are in discussions with Sandals about major expansion, and the infrastructure and support services to support the expansion and other new developments.  Plans for the “one of a kind” upscale Children’s Bay and Williams Cay Resort and Marina, also incorporating staff and support services being constructed at Barratarre with considerable economic impact on that community.  This project represents a single investment of $182 million, and taken together with planned projects at Stocking Island and February Point, represent over $400 million in new investment over the next several years.

Unfortunately Hurricane Joaquin wrought serious damage on the fragile economy of South Eastern Bahamas last October and will take vast resources with allocations from the public purse and time to effect a full recovery.  This has placed a particular hardship and set back on the small hotels and fishing lodges in the area.  Club Med the largest resort to be severely damaged on San Salvador, has carried out extensive renovations with reopening set for 31st January.  The Government is setting up temporary facilities at the damaged airport terminal to facilitate the resumption of international flights, while we move ahead to construct a new, more spacious terminal building and related facilities.

All of the foregoing projects, taken together with the Government’s capital development programme, including upgraded airports in Exuma, Eleuthera and San Salvador, represent significant new jobs and entrepreneurial opportunities this year and subsequently.

Our focus this morning is on the bold agenda of the future, some 25 years from now.

The major difference going forward is that we as a country will have a National Development Plan – a strategic action plan to guide public and private decision making.  As we all know, having a plan of action reduces uncertainty.  We, as a people, will understand the roadmap – where we are going.  We will see, collectively, the path towards regaining our strength as a country in this uncertain world in terms of our economy, our governance arrangements, our social policy and our environment and infrastructure.

This National Development Plan that will guide this process is undergirded in non-partisanship and inclusiveness.  My friend, the Leader of the Opposition, must be as much an owner of this Plan as I am. A Bahamian mother living on one of the islands farthest away from New Providence must feel that she is an owner of this Plan.  The child being born today, must in the years to come recognize that this Plan was designed for him to have a better life.  The private sector, civil society and academia must feel that they have positively contributed to this work.  This, Ladies and Gentlemen, is how we will produce a durable National Development Plan.

Let us, then, envision our future through this lens of a bold agenda.

  • Building an Economy which is resilient, modern, vibrant and diverse

Through the work of our National Development Plan, an instrument which will be agreed with the Bahamian people and laid before Parliament, we will set specific targets to ensure that we have an economy that is resilient, vibrant and diverse.  Some of our people will unleash their entrepreneurial spirit, while others will engage in meaningful employment.

By the year 2040, The Bahamas would have achieved the targeted objectives set in 2016 for economic growth and sustained development.  We anticipate that the maturing economies of the islands of New Providence, Grand Bahama, Bimini, Eleuthera, Exuma and Abaco, North Andros and San Salvador will continue to be key drivers of the national economic growth and that there would be substantial economic gains in the emerging destinations of South Andros, Cat Island, Long Island, Inagua and Mayaguana.

We expect that the development of all of our islands will be right-sized and sustainable, reflecting the needs and desires of the people who occupy these islands.  We envision island communities where our citizens are confident that there are good opportunities for them to make a sound living.

Tourism
In the country’s primary economic sector, tourism, we envision that the committed capital investments made during my administration and following, are now fully operational and generating significant government revenues and that institutional strengthening through public reform has laid the ground work to enable the Government to execute a new, bold and aggressive reform agenda.

Tourism continues to provide a key engine of economic growth, but through sound policy there is greater ownership of the sector by Bahamians by the year 2040.

We also see that the value chains within tourism are fully functional within the country providing thousands of high quality employment and entrepreneurial activities.  These newly created elements of the tourism value chain also provide needed activities to better capture higher revenues from tourism.

We shall see that apprenticeship and exchange programmes within the tourism sector have been designed to ensure that Bahamian talent is exposed to a range of opportunities at home and abroad to ready them for senior positions within the sector.

Employment Opportunities Abound
Within the next 25 years, we can envision a country that has not only achieved full employment, having absorbed 95% of those seeking employment, but also a country where private sector recruiters are now actively targeting newly minted, talented college graduates in every field of endeavour for careers in high growth sectors such as tourism, carpentry, financial services, healthcare, engineering, technology, business and technical services to support an expanded economy.

There are well developed value chains across our key sectors, ensuring that businesses are able to integrate in the best possible way within The Bahamas and to also integrate into the global value chain to increase exports.

We can imagine that the University of The Bahamas has already felt the pressure to increase its recruitment of students and to ensure that they are trained for employment from “day one”.  There is no time to waste in growing a student to a valuable team member of a firm.

Agriculture is Flourishing
In 2040 North Andros, BAMSI is in full swing, with exports of local fresh fruits and vegetables to every corner of the archipelago and private-labelled canned products across the region. Demand, both local and international for BAMSI’s products, particularly in aquaculture and organic farming, has spurred unprecedented economic development in the communities of North Andros.  We see the construction of homes and businesses and expanded farms of local Androsians to assist BAMSI in meeting production targets.  Energy and infrastructure reforms begun in 2016 have improved access, spurred new entrepreneurial activity and increased business and leisure travel to Andros.

By 2040, the extension services and research services offered by BAMSI have been fully operationalized providing new farming methods to the people of The Bahamas and increasing the commercial strength of agriculture in The Bahamas.

FDI Policy which is Proactive
By 2040, some 25 years from now, I envision a well-oiled investment machinery.  The Bahamas, which has traditionally attracted high percentages of FDI will now be proactively seeking the investment opportunities that it wants.  There will be an aggressive investment policy, girded by the country’s business environment, talent pool and capacity to innovate as well as facilitate innovation.

Ladies and Gentlemen, that is our world in 2040.

Social Policy

In today’s Bahamas, we continue to face complex and immediate threats from poverty and crime, sustained unemployment, affordable housing, sanitation and waste management practices, under performing educational and training mechanisms, institutional weakness and a high debt burden.

But when we look deeply at these issues, we note that our most challenging deficiencies are social constructs with the most ominous consequences emanating from past decades of under-investment in innovative, social and educational programmes and public policies that are inadequate in countering negative attitudinal and behavioral tendencies among our young people.

Therefore nothing that I have stated earlier can be realized in 2040 if the social decay is not addressed now; therefore, God-willing, in this administration and the next, my Government will arrest this decline and sow the seeds that will bear the fruit that will give rise to the prosperity which has been elusive and which Bahamians have come to expect, but will experience and enjoy in the years to come.

Much of the progress will depend on social policy, on education and the imposition of greater order and discipline in every facet of our lives.

By the year 2040, The Bahamas will have ensured that there is tremendous social and economic progress for all of its citizens.

A Country of Higher Education
Within the next 25 years, The University of The Bahamas will be in expansion mode with satellite campuses in our most populous Family Islands. The University will be touting the success of its New Providence and Grand Bahama campuses and the long list of local, regional and international enrollees in programmes such as sustainable development, climate change adaptation, maritime industries, marine science, engineering, economics, finance, human resource management as well as science and technology.

Universal Access to High Quality Health Care
With the introduction of universal primary health care for Bahamians in 2015, and further advances in specialized medicine, stem cell therapy and medical tourism, Bahamians in 2040 will now experience fully funded and affordable quality health care and travel abroad only for critical care not typical in The Bahamas because of our small size.

Our streets and homes are safe, with well-functioning systems to detect, detain and reform offenders

We all know that over the last few decades, the level of violent crime in our country is unacceptable.  The callousness with which lives are extinguished is unacceptable.  The crime trends in this country fly in the face of who we are as Bahamians.  We are a trusting people, a calm people and a kind people.  We are instinctively our brother’s keepers and we are accustomed to acting as a village, to raise our children.  This is why the crime that we face is such an antithesis to our way of life and who we are as a people.
I wish to assure you that today the fight against crime remains this administration’s highest priority.  The issue of criminality must be brought under control to maintain The Bahamian way of life.  My Government is tackling this issue on a variety of fronts.  From a social perspective, our efforts are seeking to reduce the onset of criminal behavior.  Our social programmes must continue to identify youth at-risk and provide them with an opportunity to choose a different path, a correct path, a path which leads them to become productive citizens.

We also know that we have to continue to support our policing efforts to detect and deter criminal activity.  My Government’s attention to the matter of reducing on crime is something that is ever-present and is of the level highest attention.  We must continue to improve our justice systems and our correctional facilities to rehabilitate offenders.

We know that crime is a complex matter, stemming from inappropriate socialization, economic hardship and community and moral decay.  Throwing money at the problem is not the answer.  This is a war of collective effort and re-socialization, which takes time. But as a society we must be prepared to embrace zero-tolerance policies.  We must couple these policies with the necessary resources and social investments in crime mitigation and rehabilitation and we must all demonstrate a collective responsibility for the monitoring of criminal behaviour in our communities to significantly reduce levels of criminal activity.

  • Environment and Infrastructure

The Bahamas of 2040 will have a physical plant and an environment which can sustainably support a modern economy and society. Under the 2015 United Nations Framework Convention for Climate Control (UNFCC) and Conference of the Parties (COP), whose objectives aim to keep global warming below 2%, The Bahamas is on course to exceed the goals of the Caribbean Challenge of establishing 20% of coastal and marine habits as Protected Areas by 2030.  This will include further expansion of the National Marine Protected Areas network particularly in areas of globally significant marine biodiversity and increase the management effectiveness of the National Marine Parks.

I firmly believe that twenty-five years from today, our graduates of marine sciences, maritime studies and related areas will become highly sought after as marine research and development advances at the University of The Bahamas through collaborative efforts with international institutions and as more international scientists and researchers seek to study The Bahamas’ model of sustainability.

Modern Utilities
Energy reform will be a particular focus of my Government in 2016.  Through the creation of the necessary legal framework, namely the National Energy Policy and the Amendment of the Electricity Act 2014, The Bahamas has placed itself in a position to attain its prescribed goal of a minimum of 30% Renewable Energy in the energy mix by 2030.  By 2040 it is expected that as many as 40% of households would be powered by solar energy.

Through the provision of secure and reliable energy at lowered cost, and modernized water, sanitation and waste disposal systems, residents across the archipelago can in 2040 experience significant improvements in the quality of life as well as greater disposable incomes.

An Achievable 2040
The Path to 2040 must be carefully guided.  It will require an experienced and committed government and a collective spirit of faith, hope, unity and optimism on the part of the citizenry for any administration to transform the challenges we face as a small nation.

I ask each and every one of you here today, and in our communities throughout the length and breadth of this nation to work with us to meet the challenge, and also, to individually do our part.  I ask that each and every one of us, make this commitment, as we must now, more than ever, demonstrate that we are indeed our brother’s keeper if we are to achieve the levels of sustainable growth and individual self-determination that we desire for ourselves, and that is our destiny over the next 25 years.  Let us together, be jointly committed to this vision for the development of our great country.

Thank you.

The Right Honourable Perry G. Christie

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