Prime Minister Philip Davis returns home today following a 10-day trip to Sharm el-Sheik, Egypt, where he led the Bahamas delegation to COP 27.
In his absence, two significant developments, touted by his government as successes that would bolster the country’s economy struggling to recover from the pandemic, imported inflation and historic unemployment, collapsed.
First, negotiations for the much-heralded sale of the Grand Lucayan resort to Electra America Hospitality folded, dashing hopes for a reinvigorated tourism sector on Grand Bahama.
Then, the world’s third largest cryptocurrency exchanges, FTX, with headquarters in The Bahamas, imploded.
FTX’s assets were placed in provisional liquidation by regulators in The Bahamas, the company’s CEO Sam Bankman-Fried resigned and the company sought bankruptcy protection in the United States for its company there.
FTX’s collapse is a special blow to the prime minister who has linked the recovery and expansion of The Bahamas’ financial services sector to predicted expansion of trade on crypto currency exchanges.
In April, he attended groundbreaking ceremonies for FTX’s new two-tower campus on a multi-acre site adjacent to the Bayside Executive Park and the Caves Commercial Centre on West Bay Street.
At that time, he foreshadowed the creation of thousands of new jobs in the sector.
Bankman-Fried’s downfall not only gutted anticipated job growth in The Bahamas but left scores of high-salaried employees of the company jobless.
It halted what has been lucrative investments in the Bahamian real estate market, whether at the Veridian Corporate Centre or at Albany, Old Fort, One Cable Beach, Goldwyn or elsewhere – purchases that attracted VAT payments, legal fees, real estate commissions and real property taxes. And it canceled next year’s hotel rooms and conference center bookings at Baha Mar for the promised annual FTX conference.
The company’s collapse also eviscerated hopes for its continued financial sponsorship of national events like the visit to The Bahamas of the Duke and Duchess of Cambridge or the concert to commemorate losses from Hurricane Dorian and to raise funds in support of hurricane recovery.
Added to these disappointments, the prime minister returns home to face his government’s still unresolved conflict with wholesalers and retailers over his announced expansion of the price control basket of food items.
In a “misery loves company” scenario, Tropical Storm/Hurricane Nicole last week created havoc along the western coastal roads of New Providence before making landfall first in Abaco and then in Grand Bahama.
Mercifully, notwithstanding flooding in low-lying areas, particularly in North Abaco and a number of its cays, reported damage from Nicole has not been extensive.
Preparations for the tropical storm, including unwarranted calls for evacuations of Abaco cays, like Grand Cay, and the closure of all government offices and schools in the northern and central Bahamas including New Providence, proved to be over-reaction.
This decision added a burden to schools still struggling to overcome pandemic related education interruptions. And the closure of government offices no doubt resulted in significant revenue losses at a time when the country can least afford them.
At COP 27, Davis unveiled The Bahamas’ Blue Carbon Credit Management Initiative. He told attendees that the initiative would permit the country to use its valuable carbon sink in trade arrangements in carbon credits presumably with companies or other governments.
Early criticisms of such plans center on the fact that they could permit the world’s highest emitters of greenhouse gases to continue “business as usual”, not reducing dangerous emissions that fuel climate change and simply buying carbon credits from the vulnerable.
A year ago, at COP 26, developed nations reaffirmed pledges to provide $100 billion to developing countries to assist with climate change mitigation initiatives and to work together to reduce the gap between existing greenhouse emission reduction plans and what is required to effectively reduce emissions.
Apart from Australia, few countries are on or near target.
Bahamians will, therefore, be anxious to hear of advances made at COP 27 on the development of a financial mechanism that will make post-disaster assistance more accessible to vulnerable countries like The Bahamas and its people following hurricanes and floods that destroy infrastructure and displace populations.