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Last Updated: Feb 13, 2017 - 1:45:37 AM |
 Commonwealth Business Forum Adding Global Value - Creating a More Prosperous Commonwealth Remarks by The Rt. Hon. Perry G. Christie, M.P. Prime Minister and Minister of Finance of the Commonwealth of The Bahamas.
Financial and Professional Services: Delivering Jobs and Growth, Highlighting the benefits that the development and growth of the financial and professional services sector can have on emerging and developed Commonwealth economies:
Ladies and Gentlemen,
I want to thank the Organizers of the Commonwealth Business Forum for extending this invitation to me to address this Forum.
The Bahamas, as many of you would know is a small developing country lying just fifty miles off the southeast coast of Florida with a population of just over three hundred fifty thousand persons. Its proximity to the United States and to the major capitals of Western Europe gives The Bahamas a distinct geographical advantage which enhances its competitiveness.
The country became independent in 1973 and this year we are celebrating our 42nd anniversary of our independence.
As its country’s Prime Minister, I have fully embraced the challenge to build a strong, safe and prosperous Bahamas, and have undertaken measures to ensure that our economy continues to expand and is able to absorb the thousands of young people graduating from high schools and colleges every year.
We ignore the issues of joblessness and hopelessness amongst our young people at our peril.
Our economy has for many years been reliant on Tourism and Financial Services. Along with the rest of the world, The Bahamas is recovering from a deep recession but continues to see improvement in its overall fiscal position as a result of the successful implementation of VAT in January of this year. Additionally, the country has been able to attract over five billion dollars in foreign direct investments over the past several years and continues to experience positive economic growth from investment-led projects supporting sustained activity in the construction sector as well as Visitor Stopovers generating higher levels of hotel occupancy and hotel rooms revenue.
Although temporary setbacks are being experienced with Baha Mar, a $3.5 billion resort development and the largest single-phase development project ever undertaken in the Caribbean with the capacity to generate 5,000 jobs, the realization of touristic developments on the drawing board and in the ground, as well as investments in agriculture, energy, gaming sports and culture, augur well for continued improvement in all of our economic indicators and sustained economic growth over the medium term.
Before I begin to speak on the subject at hand, I wish to publicly thank our friends within the Commonwealth for their support for the plight of Bahamians affected by the impacts of Hurricane Joaquin which devastated the economies of several Islands within The Bahamas’ archipelago and decimated the livelihoods of thousands of people living in these islands.
This damage shows that climate change is real. It strengthens our resolve as we head toward Paris in a few days’ time. It shows why wealth creation is so important, if we are to have the funding to mitigate the effects of climate change and to adapt to the impacts of climate change.
The Bahamas has cultivated one of the most robust and politically stable economies in the region whose tax climate, skilled workforce and attractive lifestyles continue to attract high net worth investors in commercial and real estate ventures.
Our success in building such a stable economy can be attributed to the emphasis successive Bahamian governments have placed on the twin economic pillars of tourism and financial services which in our context have matured as export industries and an enabling environment over the 42 years of our existence as an independent country.
The Bahamas Financial Services Sector: A history of excellence
Ladies and Gentlemen,
In the 1960s, The Bahamas developed an economic model to leverage our natural assets: sun, sand and sea. This strategy translated into a year round Tourism industry which now accounts for over 60% of GDP. The Bahamas has been very successful in attracting billions of dollars in tourism investment to position the country as one of the best known tourism destinations in the Western Hemisphere.
Notwithstanding the impacts of the Global economic crisis, and of Climate Change, tourism has provided a strong platform for dynamic economic growth in The Bahamas. In addition to tourism, financial services helped The Bahamas transform itself into a modern economy over the last 80 years.
Financial Services directly accounts for 7000 direct and indirect jobs or 15% of GDP and indirectly for just over 30% of the economy.
It is directly responsible for the development of a major share of the middle and upper class of the country, with an average salary of nearly double the average GDP capita. However, more importantly, the financial services sector provides an avenue for Bahamians to translate their hard-earned educational accomplishments into meaningful careers and opportunities for entrepreneurial activity.
In The Bahamas we were one of the first countries to regulate trust company business – a niche area of wealth management that we carved out as uniquely ours in the financial services world.
Many countries in the Commonwealth, particularly those in the Caribbean have engaged in the export of services – both financial and general business services, as a means to grow their economies and to provide modern opportunities to their citizens and I will offer to you that the business of financial services has the potential to lift countries out of poverty, to make advances in terms of education and infrastructure and to create vibrant middle classes.
Success in the financial and business services sector is driven by key factors such as business environment, political stability and collective trust in the legal system. Ladies and gentlemen, as we all know these are the same tenets that support better governance. And so this industry is not only of economic benefit, but will encourage its participants to improve their systems of governance.
The financial services sector also encourages investment in high quality legal, finance and accounting education. In the case of The Bahamas, through private-public partnerships, an institution such as the Bahamas Institute of Financial Services – a regional Centre of Excellence in Financial Services Education and Training, was created over 40 years ago to ensure that a large pool of qualified persons are available to staff the sector.
As the financial services sector requires high quality infrastructure, countries which successfully pursue a service based economy must invest in quality telecommunications, computer technology and physical infrastructure such as roads, airports and basic utilities.
The success of these centres also requires political stability and therefore to be a thriving financial services jurisdiction, a country must invest in modern legislation and procedures which result in sound business practices and efficient legal systems. Successful centres also require low levels of corruption. These are all core elements necessary for meaningful economic development.
Indeed, then the pursuit of the financial services and professional sector can dramatically change the course of history for many countries and should be embraced by the Commonwealth in support of the development agenda rather than reacted to with the high degree of unfortunate suspicion.
Ladies and Gentlemen,
We are all aware that the global financial architecture is under review. Rules, norms and standards are changing quickly. The Bahamas, as a responsible financial centre, understands that we must meet the challenges of regulating in a globalized environment. The world has never felt so big and yet so small at the same time. The problems that we face in 2015 are more complex. The battlefields of global wars are as much on the front lines as in the boardrooms of financial services businesses. We must all be vigilant and jealously guard our jurisdictions from those that wish to engage in financial crimes or other imprudent activities. We must all adopt responsible policy.
Conclusion
Forty two years ago, on 10 July 1973, The Bahamas took its first steps as an independent nation. There were of course, many uncertainties about what was to come. Today, however, our democracy remains stronger than ever and our economy has come through global depressions and recessions intact supported by our two major pillars: tourism and financial services.
The road has not been easy for The Bahamas. We are not a natural resource rich country. We are not a very large country. However, through vision, the spirit of hard work and the ingenuity of our people working with strong governance, we have made a strong Bahamas. It is with this same determination that The Bahamas commits itself to maintaining its position as a global leader in the financial services industry.
And so, Ladies and Gentlemen,
We have a vision of the future of our country predicated on strong economic growth, opportunity for our citizens and meaningful national development. We have a vision in which the financial services sector of The Bahamas continues to grow and thrive by remaining agile, adaptable to market conditions and forward looking. We see a future where financial and professional services play an even larger role in our economy supported by a well-educated, innovative and entrepreneurial population. Most importantly, we see a nation characterized by hope and opportunity.
Ladies and Gentlemen, I thank you for your attention.
© Copyright 2015 by thebahamasweekly.com
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