**Rt. Hon. Hubert A. Ingraham
Prime Minister of The Bahamas**
Addressing the **7th Annual Caribbean MBA Conference** in The Bahamas today, Prime Minister Ingraham acknowledged the collaborative effort between two of the most prestigious educational establishments in the United States and, further, the encouraging endeavour to focus on entrepreneurship in the Caribbean region. He used the opportunity to speak to the natural advantages of the Caribbean region and The Bahamas in particular. *”The Caribbean has become host to a number of international financial services centres of which The Bahamas is the oldest. The Bahamas is also one of the oldest Parliamentary democracies in the region; it boasts an independent judiciary and a vigorously independent press. The Bahamian judicial system, based on British Common Law, recognises and respects private property and guarantees the rights of the individual.”*
The Prime Minister noted that the local tourism industry grew from a small, seasonal business in the middle of the last century to a lucrative year-round industry with themed resorts based in New Providence and in Grand Bahama and upscale, boutique resorts and smaller fly- fishing lodges and bed and breakfast inns around our Family of Islands. More recently, he said, time share, fractional ownership and second homes have become an important growth segment in the sector.
Turing to the number two industry in the nation, Mr. Ingraham said the financial services industry evolved during a period of just over 60 years beginning in the aftermath of the Second World War and the advent of large scale international financing of global trade. *”Today we are a premier, soundly established, well-regulated jurisdiction for the provision of international financial services. We are conveniently located at the cross roads of the Americas. Grand Bahama, the site of our second largest city, Freeport, is home to a state of the art container transshipment port, ship care and mega-yacht repair facilities and a number of related maritime services.”*
Also referenced in welcoming remarks was the widespread global economic turmoil, described as having resulted in particularly perilous times for business and investment. The global financial events of the past 12 months, unlikely to have had a precedent in modern times, bring great challenges but, if the appropriate international and domestic responses are made, they can also present opportunities. *”Amidst this turmoil, we believe that The Bahamas offers excellent prospects for business and investment; and we have no doubt that present circumstances, although difficult, are a temporary phenomenon,”* the Bahamian Prime Minister affirmed.
The well-established tourism sector creates excellent business opportunities in the domestic economy for the provision of goods and services; lucrative investment opportunities for major international hotel and resort developers and operators as well as for owners and operators of small resorts catering to specialists niche markets. *”Indeed”*, Prime Minister Ingraham confirmed, *”tourism has produced well-paying, stable employment for large numbers of individuals at all levels of the business, allowing Bahamians to enjoy the highest per capita income of independent countries in this hemisphere, after the United States and Canada.”*
With an economy heavily dependent on the twin pillars of tourism and financial services, the Bahamas has an especially open economy – good in strong economic times but at risk during global economic crisis.
Prime Minister Ingraham maintained that the domestic banking sector which benefits from prudent regulation has been isolated from much of the turmoil created by the international toxic debt trade. *”Still, the present crisis in the international financial sector has consequences for our financial sector. Most notably, a number of sources have inaccurately sought to assess some of the blame for the current crisis on the operation of international financial centres.”*
He felt that as the crisis evolves and weaknesses in regulation of financial centres in the developed world are revealed, these allegations will be discredited, although it remains to be seen whether this will silence them altogether. Students were reminded that in response to criticism from international financial agencies during the late 1990s, this jurisdiction substantially improved the supervision and regulation of its financial services and banking sector, making it tighter and more efficient and more accepting of a shared responsibility for the stability of the international financial system.
International finance is, however, a very dynamic industry – – ever-changing, always refining, fine tuning or pioneering new products and services, and in some ways, always re-inventing itself. *”In this regard, my Government proposes further amendments to our financial services legislation to address some identified weakness. Already, five Bills that affect refinement of existing financial legislation were passed in Parliament during the current legislative session. These were developed in full consultation with the sector.”*
Prime Minister Ingraham reported that The Bahamas has a long history and tradition of overcoming adversity and of finding special reserves of strength and courage when facing misfortune. *”We are a warm and friendly people. We are a prudently governed country. We are a low-tax jurisdiction with no taxes on incomes, wealth or inheritance. Our financial services regulatory regime adheres to best international practices and is risk-based in its approach to supervision.”*
He said plans in progress should ensure that The Bahamas will continue to be a jurisdiction of choice for premier financial institutions and for international investment whether in hotel and resort developments, second homes, shipping and related business or in light manufacturing and industry. Some such steps brought to the attention of the MBA conference included:
**Implementation of policies and measures to reposition the economy for early, resilient, sustainable and strong growth**
*As we move into 2009 we are alert to the need to continue to safeguard our financial services sector. The Government will continue its practice of consultation and collaboration with licensed providers in the sector to ensure that our products and services remain competitive but also compliant with established international best practices and standards.
Similarly, on the tourism front my Government is working closely with owners and operators of resorts to keep our product fresh and innovative. This is evident in new collaborative tourism marketing and promotional initiatives being undertaken by the public and private sector; and for example by the recent amendments to the Hotels Encouragement Act extending concessions available under the Act to tourism related businesses located outside of a traditional hotel property.
And, the adoption of legislation to encourage and promote the revitalization of properties, both residential and commercial, in the City of Nassau, is meant to restore the historic charm and beauty of the old City to enable it to trade on that charm and beauty in an increasingly competitive international marketplace.
On the investment front, we will continue to encourage and promote investment in both traditional and non-traditional sectors of our economy to provide rewarding job opportunities and careers for our young and ambitious graduates. We are especially interested to tap the nascent entrepreneurial ability of our people, encouraging enterprise development capable of competing in the ever harsher international environment which confronts us today.*
**Ongoing modernisation, upgrading and maintenance of infrastructure**
*Acceleration of a number of planned major infrastructural projects around the country will create jobs, prevent untenable levels of unemployment and related social dislocation, and will at the same time improve the fixed investment stock, leading to improvement in economic efficiency. Infrastructure development will include the upgrade and expansion of air and sea ports (including our principal airport here in New Providence), the reconstruction and repaving of road networks (including a $120 million road corridor enhancement on this island), the construction of a number of new government administrative complexes, the accelerated completion of several other Government infrastructure projects and the construction of additional government operated schools.
All of these projects will be required to provide value for dollars spent and will enhance the attractiveness of our islands for new and increased investment when the international economy rebounds.*
**Continued high investment in education, health and in communications**
*These job creating activities are being combined with new and expanded training and retraining initiatives in our tertiary level and technical and vocational institutions. The goal is to ensure that The Bahamas has a trained labour force capable of responding to changes in the demand of the market place in the years ahead.*
The Prime Minister concluded that The Bahamas is not oblivious to the problem of growing public debt. *”Fortunately, with a history of prudent fiscal management and administration, The Bahamas is not burdened by significant pubic debt and is able to undertake these necessary initiatives on an accelerated basis without exceeding prudent debt to national income targets.”*
THE Caribbean Business Clubs of Harvard Business School and the Wharton School of the University of Pennsylvania are hosts of the Annual Caribbean MBA Conference, being held January 4 to 7, 2009. The programme revolves around the concept of experienced business professionals meeting with “future business leaders” for dialogue and professional development, under the central theme: **”Linking the Caribbean through Entrepreneurship.”** Lead Sponsor is FirstCaribbean International Bank.