“I’ve always been a big believer in diversification for anybody. It’s never good to put all of your efforts and all of your time and all of your financial resources into just one project. Diversification is key for any individual and any business.” — Paul Heyman
In the last three weeks, we addressed important issues that intimately and irrevocably impact us, but which we seem irreversibly intent to ignore. Too many of these are things that daily stare us in our faces and bombard us, but invariably fall on deaf ears.
In part 1, we addressed lessons that we should have learned from our over-reliance upon our primary industry: tourism.
In part 2, we detailed how the threat to our environment presents a sober reality and pervasive danger, which, if we continue to ignore and fail to seriously address, would not end well for us or future generations of Bahamians.
Last week, in part 3, we considered the enormous price we would pay if we continue to ignore the warnings regarding economic empowerment to which we have regularly paid lip service, another issue that has also fallen on deaf ears.
In this final instalment, we will consider this — what are some of the remaining daily lessons that continue to fall on deaf ears? We will examine our vulnerability regarding food security and our failure to diversify our economy for long-term sustainability.
According to the latest data available, The Bahamas’ food imports were valued at $1.1 billion, more than 80 percent of our annual food bill.
That significant statistic represents approximately nine percent of last year’s gross domestic product of $12 billion.
Of the total food import bill, approximately 60 percent to 70 percent is channeled toward the retail sector, while the remaining 30 percent to 40 percent is directed toward the hotel, restaurant, and institutional food service sector.
Our food import bill also represents a significant drain on our foreign reserves because all imported food is paid for in United States dollars, the source of which is profoundly reliant on a buoyant tourism sector.
Food insecurity represents a national security risk for several reasons. First, if our tourism sector becomes anemic due to external shocks, as we have seen in recent months, our ability to access U.S. dollars to pay this bill becomes tenuous.
Secondly, external shocks can significantly impact our ability to feed ourselves, as we recently feared when our borders were closed to foreign trade, or as we witnessed following the interruption of the trade from the Americas in the months following the 9/11 terrorist attack on the World Trade Center and other critical terrorist targets. Both events resulted in the reduction in the international movement of food stocks.
In both cases, we feared the possibility of not having enough food to feed ourselves. However, the government and primary food suppliers assured us that we were not at risk of running out of food for local consumption.
There is a third negative effect that diminished international, and, therefore, import trade has on our local economy: the reduction in import taxes and the resulting potential shortfall in government revenue. Nature abhors vacuums, and lost public revenue is often replaced by local taxes, imposing increased hardship on household and corporate discretionary income.
Considering the preceding, we should seriously ask ourselves: what, if anything, can we do to reduce our national food insecurity and increase local food production?
In a globalized world, we recognize that the competitive advantages that other nations enjoy often diminish our ability to feed ourselves.
Given the modern technological advantages and advancements, as well as the lower cost of labor in food-producing countries, it is challenging to compete against multinational food-producing conglomerates. We should, nevertheless, determine whether we can produce essential food products locally, thereby reducing our reliance on imports.
There was a time, not long ago, when we enjoyed a healthy poultry industry, with several successful producers of chickens and eggs.
We also locally produced milk, pork, and beef, albeit on a limited basis.
Likewise, we enjoyed a limited production of fruits, including pineapples and tomatoes, and vegetables, including onions and corn, as well as citrus products.
Additionally, we developed a vibrant food canning industry. Some of these endeavors employed archaic production processes, and others were driven by more progressively developed technologies, including hydroponics. Very few of these endeavors have survived the onslaught of globalization.
Bahamian history is fraught with limited, albeit noble, attempts to address domestic food production.
Notwithstanding our failed experience of domestic food production, we should consider the feasibility of revisiting our prospects of local food production, particularly in light of emerging technological advances.
We should undertake a comprehensive review, possibly with the assistance of the University of The Bahamas, regarding our national food needs and determine whether there are opportunities for rapidly developing this sector to reduce our food insecurity risk.
Agriculture and fisheries
The most apparent area for enhancing food security is determining how we can expand domestic food production through agriculture and fisheries, which currently account for approximately 1.6 percent of GDP. This sector also accounts for three percent of all jobs and represents significant potential for diversifying and expanding our economy.
Bahamians have historically demonstrated a cultural aversion to working closely with the land, possibly because we have focused most of our energies in tourism, retail trade, and corporate activities.
We need to develop a comprehensive understanding of what food we can produce domestically on a sustained basis, and then commit to doing so. Our commitment will ensure the allocation of national resources in the form of concessions, capital, and training to achieve this objective.
We recently attempted to accomplish this through The Bahamas Agricultural and Marine Science Institute (BAMSI) in Andros.
While this is a noble and well-intended endeavor, it has represented little more than a pet project of successive governments that have not made the monumental impact that can be achieved if we place sufficient resources to expand its current mandate.
In short, we need a comprehensive approach to make agriculture and fisheries a more significant third pillar of our domestic economy, with established targets, including specified time frames, of supplanting our food imports.
We can, for example, set a national commitment to growing this sector from its current 1.6 percent to 10 percent of GDP by 2030 and establish a realistic approach for achieving this critical milestone.
If we are serious about developing this sector, we should establish even more ambitious objectives, both in terms of contribution to GDP, ownership and employment milestones, by the middle of the 21st Century.
Also, we should allocate resources to identify which food products are best produced on each of our Family Islands and deliberately allocate adequate funds, human capital, and training to develop our food stocks on those islands.
Light manufacturing also has enormous growth potential.
Over the years, we have experienced false starts and have paid persistent lip service to this sector.
Many possibilities could be earnestly explored such as conch shell jewelry manufacturing, enhancement of production, and marketing of our artistic community into a world-class export industry, the manufacture of Bahamian woodwork, and well thought out approaches to environmentally sustainable aragonite mining.
In addition to the relatively high cost of labor, one of the most challenging barriers to manufacturing in The Bahamas is the cost of electricity.
This has prevented many businesses from moving from the planning phase to effective execution.
We live in an environment that is perennially showered by uninterrupted sunshine. Yet, we have not taken advantage of the benefits that can inure from the employment of sustainable, constantly available solar energy and other forms of alternative energy to meet our voracious appetite for power consumption.
Successive governments have demonstrated neither a sincere nor sustained commitment to developing alternative energy systems.
The time has come for a radical paradigm shift in this area. Not only will this significantly reduce our carbon footprint, but it will also provide greater empowerment and employment opportunities for many.
All these areas present practical, workable, viable opportunities for sustained economic empowerment of Bahamians. To develop these areas, we need a national commitment to creating an environment that fosters their development and growth.
As we approach the end of this series, we realize that other areas could have been included in this body of work. We have attempted to highlight those areas that we consider to be low hanging fruits, things that we can realistically address in a relatively short period.
Several external events have adversely impacted us locally: notably, the great recession of 2008, Hurricane Dorian last year, and, this year, the coronavirus pandemic. Significant external shocks are being experienced with greater frequency and within shorter timeframes.
If we are going to cushion ourselves against these external shocks successfully, we must seriously examine our entire cultural realities and our daily lives. We must revisit what we do individually, in community, and as a nation and how we address the essential components of everyday life.
Our ability to create a sustainable environment and a prosperous nation will largely depend not only on how we respond to external shocks but how we prepare for them. Some phenomena can be anticipated, and their impacts could be proactively addressed. For example, we live in a hurricane belt and, at least three to four months of every year, we can be devastated by torrential storms.
Our ability to sustain and recover from such catastrophes is, to a degree, within our control and can be anticipated through advanced planning and preparation. Although we did not and could not predict the COVID-19 pandemic and its devastating impacts, we must craft a recovery plan as effective as one for weather-related disasters.
In the final analysis, we must be aware of the realities that we can influence and do whatever is in our power to shape and fashion them.
We cannot afford to bury our heads in the sand. We must continuously resist the propensity to refrain from making the changes that we can.
Above all, for the sake of a more rational and reasonable response to whatever external shocks may – and will — come in the future, we can no longer allow these daily lessons to fall on deaf ears.
• Philip C. Galanis is the managing partner of HLB Galanis and Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to email@example.com.