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Last Updated: Feb 13, 2017 - 1:45:37 AM |
Nassau, Bahamas - Remarks By The Rt. Hon. Perry G. Christie, M.P. Prime Minister &
Minister Of Finance at The 26th Annual Bahamas Business Outlook Theme:
“Breaking Barriers – Promoting Success” Melia Resort Monday, 23rd
January, 2017.
It is once again an honour to have been invited to speak at this 26th Annual Bahamas Business Outlook and to give a report on the nation’s social and economic well-being. The Bahamian economy is steadily improving and poised to benefit from the completion and opening of the mega Baha Mar Resort project on Cable Beach. The property has gone through provisional liquidation receivership, with additional financing by the Export Import Bank of China at my Government’s request, and has now been sold to new owners in proceedings and arrangements which have been sanctioned by the Bahamas Supreme Court.
The Government was also able to ensure payment of unsecured Bahamian creditors and certain debts owed to former employees and the Government, which were the obligations of the previous developer. The Export Import Bank of China, without obligation to do so, provided just over $100 million to meet these debts, most of which have now been paid. Remobilization is well underway and the project will open in phases with the golf course, convention centre, casino and hotel in a soft opening by April.
It is my understanding that since the announcement, Baha Mar’s website has received over 20,000 views and 5,000 job applications have already been received for the 1500 positions now available, with several thousand more positions coming on stream by year end when the project is fully completed.
The new owners, CTF Enterprises, a Hong Kong based conglomerate and operators of top branded hotels worldwide, are also making plans to add additional features to what is already the largest single resort complex under development within the region.
On Paradise Island, the Atlantis Resort, with 7,763 employees continues to be the largest private sector employer in the country. Its owner, Brookfield Asset Management, which was restructured just before we took office, and successfully refinanced during this Administration, is carrying out $38 million in upgrades and renovations to the property. In 2016 Atlantis contributed $290 million in salaries, fees and taxes, for which the Government has extended appropriate concessions, and will maintain a vibrant capex programme over the next three years.
A signal achievement of my Government has been the initiatives taken with respect to the expiring provisions of the Hawksbill Creek Agreement which is expected to result in the strengthening and expansion of the Grand Bahama economy. The consultative process undertaken by this Administration for review of the expiring provisions of the Agreement has led to the implementation of a new policy framework and conclusion of a Memorandum of Understanding with key stakeholders for commitments to further development. This will deliver a wide range of economic and social gains for Grand Bahama’s residents.
Some of the outcomes from this new framework include changes to the regulatory framework governing Freeport, creating improved transparency and regulatory oversight. Future concessions to developers will be administered by Government and conditional upon compliance with real estate and business development milestones. A collaborative strategy is being developed with key stakeholders for attracting, retaining and expanding investment in Grand Bahama, including the injection of new equity capital into the Grand Bahama Port Authority group of Companies.
Our cruise sector continues to expand with the recent negotiation by the Government of a Waiver of Exclusivity from Freeport Harbour Company to enable development by Carnival Cruise Lines of a cruise port in Eastern Grand Bahama. More than $350 million has been committed by Royal Caribbean Cruise Lines (RCCA), Disney and Mediterranean Cruise Lines (MSC) for refurbishment and creation of cruise ports in The Bahamas.
The construction of a large pier and enhanced amenities at Coco Cay in the Berry Islands will enable RCCA, which is a minority investor in the Grand Bahama Shipyard, to transport over 2 million passengers per annum to The Bahamas.
The development by Mediterranean Cruise Lines (MSC) at Ocean Cay of a $200 million, exclusive private cruise destination, the Ocean Cay MSC Marine Reserve, will enable MSC’s new, smart mega ships sailing in November 2018, to bring an additional 390,000 passengers to The Bahamas. MSC is committed to hiring more than eleven hundred twenty (1120) Bahamians for the construction and operation of the Cay and, in partnership with the National Training Agency, will train and employ an additional 240 Bahamian crew who will join the 20 Bahamians already working on its cruise ships.
The efforts of my Administration on job creation from foreign direct investment have been fruitful, with approvals given for over eight billion dollars in touristic projects and, inclusive of 300 estate homes which, along with Baha Mar, will create an additional 15,000 permanent jobs throughout key islands of our archipelago. As a matter of record, the Department of Statistics has recorded the creation of 31, 735 jobs during the current Administration.
Ladies and gentlemen, investor confidence in The Bahamas is continuously demonstrated, given the number new projects tabled over the course of my Administration. The successful launch and operation of new hotels such as the Resorts World Bimini Hilton, Island House, the Pointe, Ocean West, Warwick and Memories; the expansion of Sandals, Albany, One & Only Ocean Club, Bimini Bay, Baker’s Bay and February Point, and new projects to soon come on stream in Lyford Cay, the Four Seasons & Cotton Bay in Eleuthera; the JMMC Exuma Great Adventure Resort and Stocking Island Club as well as touristic developments at Children’s Bay & Williams Cay, Exuma, among others, will provide avenues for new business development and employment in hotel, second home, cruise, maritime and sports sectors for years to come.
I now turn to matters of financial management within this Administration. Notwithstanding our efforts at modernization and economic growth, coupled with unplanned expenditures in the face of external pressures, particularly, natural disasters, I am proud to say that this Administration has indeed established a remarkable record of fiscal consolidation and restraint. From the outset we prioritized responsible management of our financial resources and I’m happy to say that GFS and unemployment figures are on a downward trend, in spite of the impacts of recent category three and four Hurricanes, Joaquin and Matthew, which resulted in severe damages to residential and commercial infrastructure. The recent uptick in construction activity and the completion of the Baha Mar resort by year end, however, should result in further economic stabilization.
When we assumed office, the state of infrastructure in the natural and built environment, in technology and in our service sectors, necessitated an investment of millions to modernize and strengthen our financial, educational and legal and law enforcement institutions, enhance economic opportunity and improve quality of life. These improvements could not be managed from the current revenue levels left by the previous Administration.
As for the Standard and Poor’s Report, while they have a job to do in providing their best analysis on the credit risk of countries, the yardstick should not be universally applied. And I say that because in most developed countries that wrestle with high debt levels the knee-jerk response is to raise taxes or seek recourse for debt relief through the assistance of international financial institutions or bailouts through affiliated trade blocs – and none of these options are options that are available to The Bahamas. I continue say that until there is full transparency surrounding their analysis and the metrics used to arrive at findings it is difficult to assess whether The Bahamas and other countries in the region are given fair assessment in their evaluation of economic activity. It is always a precarious balancing act to simultaneously improve national infrastructure and capital projects while implementing fiscal consolidation to manage debt. I contend, however, that there are sufficient levels of capital investment in the pipeline to improve economic conditions and employment over the short and medium term.
While seeking to maintain fiscal planning and consolidation commitments, my Government sought to finance reforms from revenues generated through the introduction of Value Added Tax (VAT). The introduction of a moderate level of VAT, at 7%, and the ongoing reduction of customs duties, especially on essential household items, have had the effect of enhancing Government revenues and reducing the cost of certain imports.
As a result of VAT and other reforms we have brought order to our public finances and efficiency to our public financial management system. We are presently engaged in improvements to the government’s IT and public infrastructure and have implemented a new Chart of Accounts to track expenditure at the level of project and programmes and by geographic location. We have established the Department of Inland Revenue and are concluding modernization of systems for management of Real Property Tax and Business Licence collections. The Ministry of Finance is now implementing electronic processing and online payment for the Customs and Road Traffic departments.
There is a mind-set in the country today that believes the introduction of Value Added Tax (VAT) has further exacerbated business decline and, arguably, VAT has hampered the ability of some ordinary Bahamians to sustain previous business levels, but on a much larger scale it has provided the fiscal stimulus needed for more robust social safety nets for poorer Bahamians and those whose circumstances changed dramatically after 2008. VAT has also brought increased accountability and discipline to the business environment, and most importantly, will over time, ensure the sustainability of public finances and external buffers to mitigate future crises. Most critically, however, during this long period of upheaval, VAT has enabled the funding of critical social programmes for the most vulnerable in our society, facilitated the re-tooling of a large and primarily unskilled workforce and provided the means to address new-found problems of crime, terrorism, illegal immigration and human trafficking which have arisen from this new global reality.
It has allowed the Government to explore both conventional and unconventional methods of jumpstarting the economy and introduced, especially, programmes for our youth who are both the beneficiaries of the technological revolution and heirs of its ensuing economic fallout.
VAT has enabled us to face down austerity measures after the Baha Mar bankruptcy and to maintain the incomes of government workers and thousands of Bahamian families in the midst of this perfect storm.
Ladies and gentlemen, to put it succinctly, we most certainly would have been downgraded if we had not introduced VAT. As with any new venture, however, there are still growing pains but I am confident that history will attest that as a government we have exercised very responsible stewardship of the public purse in the midst of an ongoing global economic crisis and in what can aptly described as the fight of our life time.
There is no question that we live in challenging times and that global events now play a significant role in shaping national security policies. In response to societal pressures associated with crime, unemployment, illegal immigration and terrorism, significant new investments have been made to strengthen our nation’s security and improve law enforcement and judicial processes.
This necessitated an expenditure an of $20 million for modernization of our Immigration system and an investment of $250 million to establish three new Royal Bahamas Defence Force bases, acquire 9 new patrol vessels and accelerate recruitment of officers.
Additional and significant investments have been made in cutting edge technologies in the fight against crime and provisioned the Royal Bahamas Police Force with more officers and equipment to improve interdiction of drug traffickers, poachers, smugglers and illegal migrants.
In the current term we have modernized and expanded our Judicial System with 10 new courts and additional legal officers to reduce backlogs and facilitate the Swift Justice initiative. We have introduced video-streaming of witnesses in court cases which is especially beneficial for Family Island and international witness participation. We have also established the Office of the Public Defender, overhauled prison infrastructure and systems for adult rehabilitation.
We recently progressed negotiations with the United States Federal Aviation Administration for exemption by Bahamian registered aircraft of overflight fees for traversing its own airspace which will represent significant savings for Bahamian carriers.
We also spent $100 million to re-fleet the national carrier, Bahamasair, and have earmarked $150 million for improvements to airports in San Salvador, Exuma, Eleuthera, Berry Islands, Inagua and Cat Island, with regulatory oversight provided by the recently established Civil Aviation Authority. An additional $200 million has been allocated for completion, through public private partnership, of public infrastructure projects designed to improve roads and bridges in our islands. Additionally, many other capital projects have been unilaterally undertaken to build seawalls, schools fire stations, sporting facilities and health clinics throughout our archipelago.
We have also sought through privatization to bring a level of efficiency to the cost and management of our public utilities and achieved liberalization of the cellular mobile market.
Ladies and gentlemen, this Administration remains absolutely committed to health care reform and through the implementation of health system-strengthening plans to improve accessibility and affordability of basic medical services has laid the groundwork for universal health coverage.
My Administration has also revitalized the agricultural sector with investments in human capital, education, infrastructure and crop and livestock production through Bahamas Agricultural and Marine Science Institute (BAMSI) with the objective of increased food security, reduced poverty and improved agricultural and marine research. And we have increased the number of Marine Protected Areas for environmental protection and continued environmental sustainability.
We have invested heavily in the National Training Academy and Star Academy to equip young Bahamians with the soft skills necessary to succeed in today’s workplace and has provided $20 million for the development of programmes for at-risk youth.
In tandem with these efforts, initiatives have been taken ensure that there is sufficient and appropriate human capital to power a modern Bahamas through the establishment of the University of The Bahamas - now a full-fledged tertiary institution.
Most importantly, we have kept our promise to redistribute the shareholding of BTC, facilitate pay-outs to CLICO insurance holders and provide relief to mortgagees who qualify.
These are but some of the accomplishments of my Administration during its current term and as we approach the end of this term I want to again thank those hard working public servants who have placed my Government’s priorities at the forefront of their efforts to advance our economy.
Although we have not yet tackled in a meaningful way all of the issues that continue to constrain domestic growth, we have begun the process with the comprehensive change agenda of the Charter for Governance which will grapple with issues such as land ownership that require lengthy deliberation and debate within the context of national strategic planning and policy development.
Through establishment of the National Economic Planning Unit in the Office of the Prime Minister, we anticipate further reform and results-based management within the centre of government. We also prioritized the publication of a non-partisan National Development Plan for The Bahamas which is expected to provide the rationale and overall strategic objective for decision-making.
Ladies and gentlemen, each administration faces the daunting challenge of national development and in most instances the nature of the work and its outcomes are readily visible for all to see. But there comes a time when efforts must be aimed at those critical but often intangible aspects of development which are slow to take root but work to steadily improve those foundational elements underpinning the nation’s economic drivers to improve function and competitiveness which then enables all economic sectors to bear fruit.
It is therefore my hope that the barriers we continue confront will enable a deeper analysis of the pervasive threats to our development and lead to more constructive engagement and more thoughtful approaches to problem-solving. It is my belief that we must move to harness the creativity that we know exists in this country, to funnel new ideas and explore new opportunities designed to sustain economic growth for future generations.
And so, ladies and gentlemen, I believe that with sound reasoning, realistic expectations, and an abundance of optimism, we can continue to break the barriers that constrain us from movement forward, onward and upward and that by working individually and together to achieve these goals, each of us can realize the dreams and aspirations articulated by those who came before us and build on that momentum for those who will come after.
Thank you.
© Copyright 2017 by thebahamasweekly.com
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