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News : Bahamas Information Services Updates Last Updated: Dec 5, 2017 - 1:36:54 PM

DPM Tells Tourism Forum, Government committed to reducing ‘structural impediments’ to economic growth
By Betty Vedrine
Dec 5, 2017 - 1:27:23 PM

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NASSAU, Bahamas – Cognizant of the current state of the country’s economic affairs, the Government is moving to ‘crystalize’ measures to restore its financial status. Speaking at the Bahamas Hotel and Tourism Association’s (BHTA) 65th Annual General Meeting, Deputy Prime Minister and Minister of Finance, the Hon. K. Peter Turnquest said that topping the agenda is the reduction of debt and overall deficit. The AGM was held on Friday, December 1, at the Imperial Ballroom, Atlantis Paradise Island Resort and Casino.

“High fiscal deficit and debt levels create pressure on the Government, divert considerable future resources to service the debt that could be used for other socio-economic priorities; limit the Government’s ability to respond to economic shocks and diminish our credibility in international credit markets,” said Minister Turnquest.

He said that the path to recovery would entail reforms. These reforms, he said, will not be easy or painless and will require a multi-year approach and a well-designed framework in order to take account of all of the considerations and the tension between the pursuit of the necessary reform and the economic growth agenda.

“At this stage, what is important is that the Government has identified and is moving, with a sense of urgency, to execute on a concrete strategy that will bring stability to the public finances, by reducing the deficit and the debt to sustainable levels; grow the economy and provide jobs; and remove obstacles to growth and competitiveness,” he said.

The Minister said that apart from stabilizing the fiscal finances, the government is also committed to addressing the various obstacles to economic growth and the competitiveness of the Bahamian economy.  High on the agenda are energy reform and ease of doing business.

He said as it pertains to tourism, the government has recognized the need to expand the tourism base to include the Family Islands as currently 80 percent of tourism concentrated on only 2 percent of the country. “As the Minister of Tourism knows and has already expressed, it might be a daunting task but we have an obligation to stimulate the economies in all of our island constituencies.” He said that the Ministry of Tourism is trying to find ways to make it much easier for people to travel within the Islands by land, sea and air. “We must get the relatively neglected 98 percent of the Bahamas much more visible and much more accessible.”

He also said that the government is also looking at the sources of tax revenues from tourism to see what adjustments can be made to optimize tax revenue, optimize employment, increase hotel occupancies and enhance stakeholders’ return on investment and reduce the government’s subventions to the industry.

“Looking at the inverse relationship of growing arrival numbers verses expansion in debt, we need to make some adjustments,” he said. “One such adjustment may be in the cruise industry, which has been an important sector for us.”

He said that a ‘glaring’ observation is while the occupancy of cruise ships coming to The Bahamas exceeds 90 percent, occupancy of hotels have been lingering around 60 percent for some time.

“If we were to move hotel occupancies to the 90 percent level, like the cruise ships, and with a solid average room rate, we will have increased tourism GDP (Gross Domestic Product) by 50 percent without another major resort investment,” he explained. “Today, our biggest local and foreign investors in tourism are those already in The Bahamas with empty inventory. On average, every night in The Bahamas, we have 7,000 rooms vacant. We have to ensure that we get conditions right to begin filling those rooms even while we look for new investors on the horizon.”

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