Editorials

Living in interesting times

“May you live in interesting times” — an English language expression wrongly attributed to Chinese sources appears to be a blessing but is used ironically as a curse.

Living in calm and peace during “uninteresting times” is clearly preferable to living in “interesting times”.

We are living in interesting times.

The Bahamian economy, overwhelmingly dependent on tourism and financial services, has never fully recovered from the fallout of the Great Recession with anemic economic growth before Dorian.

Tourism, the backbone of our economy, developed with little competition from other regional destinations where tourism was not considered a real industry. Nowadays however, competition from such destinations is intense, as it is from elsewhere in the world.

To respond to growing trends in the luxury, warm weather tourism market we must be innovative and develop varied and alternative experiences to complement our mega and smaller resorts while safeguarding employment in the sector and being mindful of our fragile environment.

Our financial services sector was developed in the years following World War II responding to demands for financing of growing international trade outside the encumbrances of complex national tax systems. Our banking mantra became ‘strict bank secrecy’. Apart from Switzerland, few others engaged in the business.

Today, the sector is highly competitive in both developed countries and in a myriad of offshore international financial centers.

The Organisation for Economic Co-operation and Development (OECD), the organization of the world’s most powerful economies, sets the political, economic and social international policy agenda.

Its ‘financial arm’, the Financial Action Task Force (FATF), sets standards and monitors the implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other threats to the international financial system.

Our financial services sector has been in the crosshairs of the OECD/FATF for more than four decades; markedly since 1999. Notwithstanding significant and continuing efforts by The Bahamas to strengthen its financial services related legislation and to improve regulation and oversight of the sector, the goal posts for ‘international best practices” change constantly, to the disadvantage of small states like ourselves.

Strict bank secrecy has given way to enhanced bank regulation and supervision. To maintain and grow the sector, we need to distinguish ourselves by our product offerings and service standards while complying with the litmus test of international compliance. The recent appointment of our attorney general as the next chairman of the Caribbean Financial Action Task Force (CFATF), the organization of Caribbean states committed to implementing common anti-money laundering and financing of terrorism standards based on FATF recommendations, is timely.

Foreign policy decisions by our nearest and most important trading partner, the United States of America, have been especially difficult to forecast and respond to in recent years, whether regarding relations with Cuba, the several political and military “hot spots” in the Middle East or indeed, trade with China.

Also difficult is developing appropriate responses to British government indecision on its future relationship with the European Union (EU). The reality is that the loss of our advocate in the EU – the UK — could impact our relations with that community.

EU funding permitted important development projects including road and airport enhancement in some Family Islands and culinary and hospitality education at the University of The Bahamas.

The 2008 Bahamas-EU Economic Partnership Agreement (EPA) provided for duty-free access to EU markets for certain Bahamian goods with reported positive impact on EU-Bahamas trade.

In these interesting times, it is increasingly difficult for a small country like The Bahamas to predict necessary modifications to development policies and strategies even excluding the implications of global climate change. The recent experience with Hurricane Dorian however dictates the urgency for such modifications so that we might not only survive but thrive.

 

 

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