Backgrounder: An Agenda for a Modern Bahamas

May 25, 2016 – Nassau, The Bahamas – Today, during his Budget 2016 address to the House of Assembly, Prime Minister Perry G. Christie presented his ‘Agenda for a Modern Bahamas’.

The Prime Minister highlighted major reform measures that have been implemented since taking office. Notably, The Government announced it has entered into a framework agreement to complete the Baha Mar resort, and a series of tax relief measures. Other key announcements included a plan to reduce the deficit, as well as major investments in health, education, job creation, and national security.

Positive economic growth was registered by a number of industries, including in the wholesale and retail trade, banking, real estate, business services, public administration, health, education and community, social and personal services. By the end of the 2016/17 fiscal year, the Government will have reduced the deficit by $439 million, or by over 80 per cent. The Prime Minister noted that through his Government’s fiscal plan, the Government will have reversed the rise in that burden in many years.

Key Facts:

Economy and Job Creation

  • Exclusive of Baha Mar, infrastructure projects around the islands will create over 8,000 construction jobs during the development phase and a minimum of 5,000 new permanent jobs as new projects come on stream.
  • The Bahamas’ share of the cruise market will increase by 3% or by 96,000 additional passengers annually with the establishment of the new cruise port at Sandy Cay.
  • The Economic Development and Planning Unit is entering its second year of operation and is tasked with overseeing implementation of the country’s first locally developed and executed National Development Plan as well as a number of technical cooperation projects in concert with the Inter-American Development Bank (IDB). These projects include a $1.1 million dollar grant for the IDB to create a Sustainable Nassau Masterplan and a $900,000 grant for a Sustainable Masterplan for Andros.
    • The Andros Masterplan takes an ecosystems services approach valuing the existing mechanisms through which people benefit from the land and sea resources of the island.
    • The Nassau Sustainable Masterplan is also a dynamic initiative which brings Nassau into a network of over 50 cities in the Americas participating in the IDB’s Emerging and Sustainable Cities Programme and seeks to deliver a model of development that can support the City and ensure its sustainability for many years to come.

 Baha Mar

  • Following 2 days of meetings between the Government and relevant parties, China EXIM Bank and China State Construction Engineering Corporation (CSCEC) have entered into a framework agreement which provides a pathway forward for the completion of Baha Mar.
  • Negotiations between China Construction America (CCA) Bahamas and the Receivers are underway. There will be a scheduled timeline for completion of the project. It is expected that the contractors involved will be re-engaged in the project.
  • EXIM, CCA and CSCEC will work closely with a view to seeing the project through to completion, so that Baha Mar can achieve its goal of providing jobs to thousands of Bahamians.

 National Security

  • In 2014, the ASTRO Digital Trunking System was further upgraded at a cost of $6.1 million.
  • $4.5 million has been invested to install 243 cameras, mainly in the downtown area and hot crime spots of New Providence.
  • The Government has sought to modernize the prison system with legislation to address recidivism and improve rehabilitation.
  • A Police and Fire Station is being completed in Freeport, Grand Bahama.
  • Expanded and newly refurbished facilities are being made available for a Police Station in Lower Deadman’s Cay, Long Island.
  • The number of Police Reservist Officers has increased by 200.
  • The Government has sought to modernize the immigration system with investments of over $20 million
  • In 2013, The Government earmarked some $232 million under the Sandy Bottom Project towards equipping and decentralizing the Defence Force to increase its overall efficacy. Major changes include the decentralization of the RBDF; the augmentation and modernization of the Force’s fleet and bases under the Sandy Bottom Project; and the accelerated rate of recruitment of personnel.
  • The Office of the Attorney-General had a most productive year in 2015. It’s Swift Justice initiative is making progress as conviction rates have more than doubled from 31% in 2012 to 63% in 2015; 110 more cases were tried in 2015 compared to 2012; 7 murder cases were tried within one year of charge ; and the backlog continues to steadily decrease.

 Education and Training

  • Modernised and enhanced the agricultural sector through the establishment of the Bahamas Agriculture and Marine Institute (BAMSI) in 2013. BAMSI also served to create a tertiary level academic curriculum which would offer Associates degrees, Diplomas, Certificates and a Skills Training programme.
  • Introduced new standards for high school graduation and established the National Training Agency, as well as the STAR Academy for the most vulnerable in our society.
  • In the last Budget, provided $20 million for training and apprenticeship programmes aimed towards the at-risk unemployed youth in the country.
  • Introduced a new apprenticeship and training programme targeted to the unemployed that will be managed jointly by the Office of the Prime Minister and the National Training Agency. Under this new programme, for which $22 million has been allocated, persons will be paid to work and train in a very formal manner, with certification on completion of the apprenticeship period.
  • Completed legislation for the establishment of the University of The Bahamas.
  • Under a jointly funded agreement between the Government and Grand Bahama Shipyard Ltd. (GBSL), the latter will increase the intake of its apprentice programme for skilled trades to 40 per year. These will be high school graduates in the 17-19 year age group. Over the next 10 years, GBSL plans to recruit and train 400 skilled Bahamian workers into permanent full-time positions.

 Tax Relief and Rationalization Measures

  • 16 Tax relief and rationalization measures being proposed which include:
    • Customs duty exemptions and Real Property Tax concessions to owners of derelict buildings in New Providence who intend to demolish and/or renovate these buildings for commercial, educational or social purposes
    • Allow Real Property Tax concessions granted to residential properties last year to be extended to commercial properties with the exception of properties which are now subject to collection
    • Allow for the waiver of Real Property Tax arrears for owner-occupied properties with values less than $250,000, which could potentially benefit over 41,000 homeowners
    • Exempt from VAT ancillary fees paid along with tuition fees;
    • Eliminate the duty on baby clothes and reduce the duty on used clothing

 Mortgage Relief

  • Designed a comprehensive Mortgage Relief Programme in collaboration with the Clearing Banks Association to assist borrowers negatively impacted by the financial crisis. The programme will provide financial incentives that will allow banks to offer borrowers who have some ability to pay, but have fallen behind, the chance to get back on track. For their part, borrowers will be required to attend a financial counselling programme that will be established and run by the Government.
  • Upwards of 1,000 delinquent borrowers are anticipated to qualify for the Mortgage Relief Programme. The total cost of the programme is estimated to be in the range of $20 million over 4 years.

Governance

  • Plan to launch a wide-ranging reform of the Public Financial Management System that will have a positive impact on the performance of the public sector, including a more transparent and efficient public procurement system.
  • Plan to implement the new Chart of Accounts by the end of the next fiscal year to track of expenditure at the level of projects and programs.

Health Reform

  • Cabinet has approved a single governance model that will accelerate the implementation of Universal Health Coverage while providing effective oversight of NHI Bahamas.
  • The budget allocation for the Ministry of Health reflects an investment in primary care coverage and health systems strengthening. This will result in shorter wait times, improved facilities, more doctors and Bahamians living longer and healthier lives.

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