Bahamas Offshore Company

* Bahamas’ Competitiveness Eroding







The once-dominant position The Bahamas held in tourism and financial services in the region has been eroded, according to State Minister for Finance Zhivargo Laing, and the jurisdiction must increase its competitiveness in order to maintain gains and expand them.

"Forget regional leadership for the moment; this is incidental to our real aim, which is to maximize our potential, to realize our best self as a nation," Mr. Laing said. "I say to you fearlessly, confidently, the best years of this nation are not behind it, but ahead of it."

Delivering the opening address at the annual Bahamas Business Outlook seminar on Wednesday morning, Mr. Laing said The Bahamas is both leading and competing, and can do more on both fronts.

"I do not mind telling you, as I tell the government, this is not the time for half-measures. The opportunities that exist in the world today are huge; they are enormous," he said. "They will not be seized by doing what we have been doing all along, but by doing new and different things.

"We must do big things. Big, big things."

Mr. Laing laid out the government’s action plan for improving The Bahamas’ competitiveness for regional leadership.

Along with improving customer service and skill levels in critical areas of the public service and engaging the international trading system with strategic focus by having a national trade policy, the government intends to get the kinks out of the Bahamas Telecommunications Company services, and privatize and liberalize the telecomm sector of The Bahamas.

Better use of information computer technology, making exchange control more user friendly and modernization of laws also featured prominently on the government’s action plan.

2007 Economic Report Card

Mr. Laing also gave the Business Outlook attendees a report card on the country’s economic performance in 2007.

The minister reported that the growth rate for the Bahamian economy had indeed slowed in 2007 to 3.1 percent, down from 3.4 percent in 2006.

"This slowdown was due in large measure to weakness in the US economy caused by the now infamous mortgage and credit crises of ’07, the tapering off of major investment projects like Atlantis Phase Three, a slowing of credit expansion enjoyed in the prior two years in this country, and the implementation of the Western Hemisphere Travel Initiative (WHTI), which negatively affected Bahamian tourism output," he said.

"Arrivals to The Bahamas were reduced by 3.8 percent to 3.93 million in the first 10 months of the year in contrast to the 0.5 percent expansion in the previous year, as all of the major markets – New Providence, Grand Bahama and the Family Islands – registered declines."

Mr. Laing also confirmed that the current account deficit widened over the first nine months of 2007 by 4.7 percent over the relative period in 2006.

"This notwithstanding, one of the principal factors behind our sustained economic growth has been foreign direct investment for projects such as Kerzner Phase Three and Baha Mar, which helped to support the estimated $485.5 million capital account surplus over the first nine months of 2007, which though down from the $706.0 million the same period the previous year remained an acceptable level of surplus," he said.

"The capital investment inflows enjoyed in 2007, along with sound levels of mortgage led private residential investment, helped to maintain reasonably healthy levels of construction activity and employment throughout 2007."