Middle East instability highlights importance of offshore sector
Recent uprisings in the Middle East have highlighted the importance of offshore jurisdictions, two financial experts assert, as the country struggles to shed the image of’tax haven’.
According to Jerome Gomez, CEO of Global Corporation Management, the recent situations in Tunisia, Egypt and Libya have brought focus back to why offshore jurisdictions are necessary and useful to people all over the world.
“There are other reasons why people come to The Bahamas,”he said on 106.5 FM radio show’Jeffrey’, hosted by Jeffrey Lloyd.”If you take Tunisia, Egypt and Libya now, in those countries there are people with money, millionaires and billionaires, who now are confronted with a difficult situation,[and]it’s best for them to move their funds offshore to protect their wealth.
“They have to put their money in a stable environment so it will be there when they need it. You never know what government may come into power and suddenly they are nationalizing industries and taking people’s money out of the bank.”
Executive Director of the Bahamas Financial Services Board Wendy Warren agreed with Gomez, asserting there are other reasons why people seek to put their money offshore.
“Political stability ranks as the most important attribute for an international financial center, with fiscal stability following closely behind,”she toldGuardian Businessyesterday.”During peaceful times, surveys seem to speak to the obvious, however, the need for a stable environment, irrespective of domestic or international events, is fully appreciated in times of instability.
“For those who know The Bahamas, they place great confidence in our country. This confidence in our political and fiscal stability is critical to our success as a place for investment, international business and finance.”
Her comments came as The Bahamas dropped five places in an annual competitiveness ranking of the world’s leading financial centers–now listing the country as 64 of 75 countries assessed in the report.
The placement came in the latest Global Financial Centres Index(GFCI), which pointed to the possibility of The Bahamas now being perceived negatively following pressures by the Organization for Economic Cooperation and Development(OECD).
“The Caymans and The Bahamas are just not places to be seen doing business right now–they still have(probably unfairly)a dirty reputation,”the report quotes a trust fund manager based in New York as having said.
Nevertheless, The Bahamas still ranks in the top 10 offshore centers, behind the Cayman Islands and the British Virgin Islands, among other countries. The bi-annual GFCI report ranks 75 financial centers.