Prime Minister National Report by The Most Hon. Dr. Hubert Minnis Commonwealth of the Bahamas Monday, 28 January 2019:
Fellow Citizens and Residents:
Good evening and a belated Happy New Year.
An essential element of good governance is informing you of important national developments.
Toward this end, I will offer three Reports to the Nation over the next several weeks to provide you with updates and information on a broad range of national issues.
This first Report will focus on what we are doing to boost economic growth, to help create jobs, and to provide greater opportunity for all Bahamians.
In the coming weeks, in my second Report, I will outline our social agenda in areas such as combatting crime, education, health care, housing and home ownership, and other areas of social development.
My third Report to the Nation will detail what your government is doing in the areas of the environment and climate change, energy reform, land reform and other critical areas of national development.
My Fellow Bahamians and Residents:
The leading priority of our Administration is: economic growth and expansion, jobs and opportunity.
We are making considerable progress. But there is still much work to do. We will be relentless in boosting growth, jobs and opportunity.
According to the latest estimates by the International Monetary Fund, The Bahamas is projected to score annual growth to the tune of 2.3 percent for 2018.
In 2019, the IMF estimates growth of 2.1 percent.
This is the first time in 12 years, and the first time since the Great Recession of 2008, that The Bahamas has enjoyed projected growth of more than 2.0 percent for two consecutive years.
This is a milestone. But we need even more robust growth to bring down unemployment across the board.
Expanding our economy is a key to growth. I fully understand the economic anxieties of so many Bahamians.
Tonight, I want to provide you with more details on our aggressive growth and opportunity agenda.
While the unemployment rate increased from 10 percent to 10.7 percent from May to November 2018, the country is making progress.
This is seen in the fact that the number of discouraged workers decreased by 6.7 percent.
This indicates that more Bahamians have confidence in the country’s economic recovery. More people are actively looking for work.
Overall employment has increased by 2,305 jobs.
I am pleased that the jobless rates in Grand Bahama and Abaco have improved.
The jobless rate in Grand Bahama is down from 12.4 percent to 11.9 percent.
This is the first time since 2008, the year of the Great Recession that the employment rate is below 12 percent.
The number of discouraged workers also fell in Grand Bahama to a rate of 9.8 percent.
While this is very good news, the jobless rate in Grand Bahama is still way too high. It must come down even more.
We have a comprehensive and aggressive agenda to boost growth and jobs in Grand Bahama, including transforming the island into a technology hub.
The jobless rate in Abaco has come down from 10.7 percent to 7.7 percent. This is considerable progress.
We are also focusing on boosting growth and employment throughout our Family Islands.
This includes more infrastructure on a number of islands, including aviation infrastructure improvements and new airports to be developed on North Eleuthera, Exuma and Long Island.
New Providence’s unemployment rate increased from 10 percent to 11 percent. We still have lots of work to do on New Providence as more people are entering and reentering the job market.
While youth unemployment decreased from 24.1 percent in May to 23.1 percent in November, this is still a major and persistent problem.
Fellow Bahamians and Residents:
Tourism remains by far our leading economic sector. Growth and economic expansion requires diversification generally, including more diversification within the tourism sector.
Some years ago, a leading hotelier operating in the Bahamas was at a conference in another Caribbean country, where there was concern about what the opening of Cuba would mean for the region.
His reply: Wait till the Bahamas really opens up and see what that will mean for tourism in the Bahamas. His point was that the Bahamas has considerable untapped potential.
It is important for us to understand the many strategic advantages and the tremendous bounty and resources which make up the Islands of The Bahamas.
Canadian astronaut Chris Hadfield once noted: “From space, the Bahamas is the most beautiful place on Earth.”
To offer you some geographical perspective, the Bahamas archipelago encompasses an area of over 100,000 square miles, and extends over 500 miles from north to south.
With over 700 islands, and thousands of cays and rocks, we have a land area of approximately 5,382 square miles and approximately 2,200 miles of coastline.
Our far-flung archipelago, with a number of major islands and many hundreds of cays and islands, extends from north to south, approximately the same geographic length from the northern to the southern end of Great Britain.
Our great challenge and even greater opportunity is the sustainable development of our entire archipelago, with multiple and diverse tourism enterprises and experiences across The Bahamas.
Toward this end, our tourism numbers, including the more lucrative stopover market, are improving.
Air arrivals increased by 16.5% for the year through September 2018, as the upward trend in international arrivals since October 2017 continued through 2018 [BMOT, Research and Statistics Unit].
Preliminary stopover numbers for the year through October 2018 stood at 1.33M, a 10.4% increase over the same period in the previous year, with an average length of stay of 6.7 nights [BMOT, Research and Statistics Unit].
Expedia reported a 32% increase in room night sales for The Bahamas, and a 22% increase in gross hotel bookings, Year-On-Year for the period January through November 2018.
Arrivals from the US, which continue to be the destination’s largest source market, grew by 10.7% Year-on-Year for the period January through October [BMOT, Research and Statistics Unit].
The outlook remains favourable for continued growth in air arrivals, with bookings for the first quarter of 2019 forecast to be ahead by 10.3% for international arrivals.
International airlift capacity increased by almost 9.8% in December, with air seat capacity from the USA and Canada scheduled to increase by 21.0% and 19.9% respectively in the first quarter of this year [Forward Keys].
I also note that in order to boost tourism from China, the Ministry of Tourism conducted a very successful outreach mission to China.
The Ministry of Tourism will launch a new branding campaign this year, the first in six years.
To take advantage of our untapped potential in tourism, there are new hotel and resort projects under development throughout The Bahamas.
On New Providence these include: A 100-room condominium hotel and marina at the Pointe, by Margaritaville, and a 118-unit condo-hotel project by the Wynn Group at Gold Blossom, on West Bay Street;
Tourism developmental projects that are expected to come on stream on New Providence are the Sterling Hurricane Hole Community Resort and Marina, and the Rose Island Community Resort and Marina.
The Sterling Hurricane Hole Community Resort and Marina is a $250 million mixed use development, which will include residential, retail and professional office space, and a renovated marina.
Over the next five years, the development is projected to provide 3,000 construction jobs.
There are also a number of large-scale New Providence-based Bahamian-owned tourism projects which include Paradise Island Lighthouse and Beach Club, Athol Island Entertainment Facility, and the Heritage Tourism Project.
The owners of the Heritage Tourism Project are a group of Bahamian businessmen. Their objective is upgrading and operating several historical sites, transforming them into major attractions for the Bahamians and the international tourism market.
This represents greater Bahamian ownership in the tourism sector.
This promises to be a significant advancement in promoting Bahamian culture and heritage as a part of our enhanced visitor experience and tourism product.
Through a new Tourism Development Corporation, we will provide incentives for Bahamians in heritage tourism. Through the Corporation we will also help in the development of a broad variety of tourism products and services.
A significant development that will help to expand and to grow the economy in New Providence is the proposed public-private-partnership for the management, upgrade and expansion of the Port of Nassau, which has gone to tender.
The ambitious project aims to provide for the development of expanded berthing capacity, a new arrivals terminal and associated harbor front facilities improvements.
This major undertaking will tie-in to the long-awaited and ongoing redevelopment of Downtown Nassau.
In the redevelopment of Prince George Wharf, the Government will continue to own the wharf, but taxpayer dollars will not be used in its transformation.
The redevelopment of Downtown Nassau must go from east to west and from north to south.
The old Main Post Office Building will be demolished to make way for new Supreme Court Complex, and supporting officers, which will help in the revitalization of Downtown. The new Central Bank will be constructed on the old Victoria property.
Just as with other urban centers around the world, the long-term revitalization of Downtown Nassau will require residential properties for Bahamians and residents, which is necessary for the growth of other businesses, such as restaurants, shops, convenience stores and other commercial enterprises.
But in the short- and medium-term, I have directed the Ministry of Tourism and Aviation and the Ministry of Works and other agencies, to present a plan as soon as possible to begin to immediately beautify and clean up Bay Street.
In addition to my personal observances, many Bahamians have reported to me how appalled they are by the state of Downtown. I will have more to say on this on another occasion.
Fellow Bahamians and Residents:
The recent bilateral meeting I had in Brussels on financial services with European Commission officials was very constructive. Accompanying me were several industry members.
The meeting provided The Bahamas with a significant opportunity to ensure the Commission fully understands the scope of the efforts we are taking to adhere to global standards.
The Government is doing everything it can, in cooperation with industry stakeholders, and in keeping with our national interests, to protect this important industry.
As the industry continues to evolve in light of external circumstances, we will work with the financial services sector to identify those areas of specialization for which The Bahamas can place its stamp on the world.
Fellow Bahamians and Residents:
Our growth and expansion agenda includes a dynamic mix of Bahamian and Foreign Direct Investment.
Since mid-2017, our Government has approved an estimated $3.7 billion of foreign investment projects.
Many of these projects, once approved, immediately contracted Bahamian firms for legal, accounting, project management, engineering, environmental, architectural, consulting and other professional services.
The success in Foreign Direct Investment is due in part to the increase of Information Communication Technology enterprises and boutique financial services investments as companies look to make The Bahamas their regional headquarters for the Caribbean.
New Providence received 55 percent of the inward flows of Foreign Direct Investment since 2017.
This includes: the approval of a number financial services companies, and a number of back office administrative firms approved including Baptist Health International Services, CITGO Petroleum; and the Disargo Group of Companies.
To increase Bahamian and international partnerships and Foreign Direct Investment we will restructure the Bahamas Investment Authority by establishing a promotional arm of the Authority.
This promotional arm will be critical for economic expansion and growth. It will facilitate investment promotion tours with participation of both private and public stakeholders.
Fellow Bahamians and Residents:
I travel to the Family Islands every chance I get. Our archipelago of islands is a major strategic economic advantage, which require enormous investments in terms of infrastructure, including air and marine transport networks.
We must have a broad and compelling vision for economic and national development.
Let me give you an example of the bounty and breadth of our archipelago of possibilities. In some ways, we are as much a region as we are a country.
Great Inagua, in terms of square miles, is larger than the islands of Dominica, St. Kitts and Antigua combined. Andros is one of the largest islands in the Caribbean.
If you fly in a jet from Grand Bahama to Inagua, your trip will take one hour and 35 minutes. It is a distance of approximately 500 miles.
By comparison, the distance from Nassau to Jamaica is 450 miles. That flight would be 15 minutes shorter at one hour and twenty minutes.
Eighty percent of our tourism activity and 70 percent of our population is found on the two percent of our land, that of New Providence and Paradise Island.
The other 98 percent of our far-flung archipelago have all of these same fundamental assets, but remain largely underdeveloped.
With this abundance of gifts, government alone cannot develop our archipelago in the diversity of sectors required for economic growth and expansion.
The role of government is to help provide the Bahamian people and international partners with the incentives to develop the Islands of The Bahamas.
To expand and grow our economy now and for a better future for all Bahamians, will require the sustainable development of our Family of Islands and cays.
Toward this end, I wish to note a number of developments.
We are actively exploring the opportunity to establish a transshipment port in Mayaguana in the southern Bahamas which will only make the port in Grand Bahama even stronger.
The owners of the highly successful Bahamas Stripping Group of Companies, which got its start through incentives by a previous FNM administration, will develop poultry farms and processing plants on North Andros and Eleuthera and through a distribution center on New Providence.
We will promote Family Island and rural development with the same intensity and focus that have been historically applied to New Providence and Grand Bahama.
This year we will roll out several key agriculture investment projects in this sector on several islands especially Andros, Eleuthera and Grand Bahama.
We will invest in strengthening agricultural infrastructure inclusive of farm feed roads, and facilitating access to power and water in farming areas.
We are equally committed to developing an integrated agriculture eco-system where farmers will have access to insurance, and access to cost-effective inter-island transportation inclusive of refrigeration.
As a matter of urgency, we will increase access to credit and additional funding to Bahamians in this sector while increasing the access of producers to local and international markets.
In terms of international investment, the Family Islands are attracting tens of millions of dollars and significant projects to energize their economies.
At long last, after so many years and fits and starts, Eleuthera, the island named for “freedom”, is set for growth.
Investments for Eleuthera include: The Philautia boutique resort hotel project in Governor’s Harbour; Disney Cruise Lines’ low-density cruise port destination at the Lighthouse Beach in Bannerman Town; Windermere Island North Community Resort; Jack’s Bay Community Resort and Davis Harbour Marine south of Rock Sound and the $4 million dollar Harbour Island Marina and Community Resort.
The latter two projects were recently approved for expansion of developments that were approved previously and are currently underway.
I note again that the land that Disney is developing on Eleuthera was privately-owned. Disney was not sold Crown Land for this development.
Some of the core elements of the Disney Cruise Lines Island Development include: the integration of Bahamian cultural and artistic expression into the design of the site and experiences offered, and the restoration of various historical and cultural sites.
The development will create approximately 150 new jobs and an array of entrepreneurial opportunities for residents of Eleuthera and Bahamians in general.
Disney will convey approximately 190 acres of the land purchased from the private seller to the Government of The Bahamas for conservation and a national park.
Abaco Island and the Abaco Cays will receive significant new investments.
These include: the proposed Tyrsoz Family $580 million investment in South Abaco for the development of a 5-star residential resort and marina, which will involve the upgrade and expansion of the Sandy Point airstrip, the development of Sandy Point ferry dock as a cargo transshipment port and construction area, and the extension of Queen's Highway in South Abaco.
On Andros, we have approved a Bahamian joint venture partnership arrangement for the development of the Blue Hole Marina and Lodge in Fresh Creek consisting of a 12-room lodge and an 80-slip marina including a bulk fuel facility.
Long Island will experience growth to its economy with the development of the Pinder’s Bay $5 million dollar 28 bungalow community development project at Lower Harbour.
This project will hire about 30 Bahamians during construction, and nine Bahamians to operate and maintain the residential community.
Also in the works for Long Island is a new five-star eco-resort by Star Resort with 515 luxury residences.
The Berry Islands, Bimini and the Exumas experienced their share of investments with the expansion of existing properties and green field tourism projects.
Fellow Bahamians and Residents:
Grand Bahama is vital for the overall growth and economic expansion of The Bahamas.
While unemployment has gone down in Grand Bahama, there is still a long way to go.
We are making progress on the Bahama Bay resort and residential development, the former Ginn Sur Mer. This development will include: 173 condo-hotel units, a marina, and the development of a smart city.
We are on track to sell the Grand Lucayan, the temporary purchase of which was absolutely necessary for the economy of Grand Bahama.
Thankfully, the economy of Grand Bahama is recovering through new tourism projects and our ambitious program to establish the island as a technology hub.
The island has attracted several high-tech and back office firms employing Grand Bahamians, chiefly as a result of the Commercial Enterprises Act, 2017.
Among the new and diverse businesses on Grand Bahama is the Carnival Cruise Lines’ Ocean Medallion project.
Ocean Medallion is a wearable device that enables a personal digital concierge for passengers, eliminating long check in lines, cabin keys and credit cards.
A team of eight Bahamians currently on the project underwent training to learn to install the Ocean Medallion hardware and software on cruise ships, and they continue to monitor those systems.
Another tech firm is GIBC Digital “a digital-transformation facilitator [which] helps organizations automate their manual processes to reduce cost and errors, use their data to make better decisions faster, and prevent cyber security threats.”
Other companies approved under the Commercial Enterprise Act on Grand Bahama include: Globe United – a European-based medical call center and administrative office; G.B. Biopharma a company engaged in biomedical services; DevDigital Bahamas Limited – a Bahamian joint venture web development company; Agriculture Enterprises Development Limited - a Bahamian joint venture farming company that will engage in a pilot fruit and nut farm producing coconut, castor and palm oil for the local market and for export; and another Bahamian joint venture company, Bahamas Golden Harvest Limited, was approved to establish a chicken hatchery, produce eggs, chicken feed, cash crops and citrus on East End Grand Bahama.
Fellow Bahamians and Residents:
Despite our small population of under 400,000, The Bahamas is a big ocean nation.
In terms of the number of islands, islets, reefs, coral reefs and cays, The Bahamas is one of the larger archipelagos in the world.
How can we take better sustainable advantage of our waters?
Our Blue Economy Initiative is on our priority list of growth measures.
The Blue Economy Initiative is a part of our vision for growth, diversification and economic expansion and opportunity for current and future generations.
The Initiative is an evolving concept that highlights the need to capitalize on the extensive economic potential that can be found in the ocean, including economic activity that uses the sea as an input either directly or indirectly.
The Blue Economy Initiative will include: fisheries, maritime transport and coastal tourism activity.
It will also enable us to diversify into many new and emerging ocean-based activities such as marine aquaculture, seabed mining, maritime safety and surveillance, marine biotechnology, marine security and other areas.
The government has already secured a non-reimbursable grant from the IDB of $500,000 to finance a three-year technical co-operation project that focuses on the Blue Economy and the Digital Economy.
We are planning for short- medium- and long-term growth and diversification.
Fellow Bahamians and Residents:
Economic growth must be inclusive. Economic growth and activity must be felt all across the country for all Bahamians.
One key element of this is to do more – much more – to support Bahamian entrepreneurs and small businesses.
Last January, I foreshadowed the launch of the Small Business Development Centre, the SBDC.
I committed our administration to an investment of $25 million toward small business support over five years.
The SBDC is up and running. So far, approximately 500 Bahamian entrepreneurs have had consultations or participated in seminars through the Centre.
For this fiscal year, the government has pledged support in the amount of $5.5 million for loans, grants and equity injections into Bahamian small businesses.
Together with private sector partners, the total level of support will come to just under $7 million in funding directly to Bahamian entrepreneurs and small businesses.
Of this amount, I am most pleased that some $450,000 will be spent to provide grants to young underprivileged Bahamians from throughout the country – from poor neighborhoods and poor families – to support their business aspirations.
So far, through the SBDC, seven companies have been approved for funding to either begin or to expand their businesses for a collective total of $1.5 million, with more credit to be extended.
Once these small businesses are provided with capital, they can contribute to the fabric of the economy by providing new businesses by Bahamian entrepreneurs and jobs for Bahamians.
Moreover, my government has committed to enhanced training for aspiring entrepreneurs through BTVI and the University of The Bahamas.
The ‘Be Your Own Boss (BYOB)’ Scholarship offers $1,000 in tuition support to students between the ages of 18 and 25, who will enroll full time in preparatory, certificate, diploma, and associate degree programs, which will train them with the requisite technical and vocational skills needed to start a business or to secure employment.
Equipping our students with these types of opportunities will create both jobs and products to help grow the economy. We anticipate expanding this initiative in the upcoming budget.
Fellow Bahamians and Residents:
To help new business startups, the Ministry of Finance recently announced the roll out of a provisional business license, which is expected to be implemented by the Department of Inland Revenue in the first quarter of this year.
This provisional business license will allow individuals wishing to start a new low-risk business to do so in five days or less.
Once granted the provisional license—which will be valid for 90 days—businesses will be allowed to be up and running, while they work to complete the full business license process, by obtaining all of the necessary documents for completion.
In addition, the fee for starting a new business has also been waived, and instead of business persons having to go to more than one agency to submit different applications, they now are able to apply for the various approvals through one consolidated application form on the Department of Inland Revenue’s website.
This has made the process much easier for those wishing to launch a new business. We will ensure that we continue to refine this process even more.
I have pressed my ministers to address the unacceptable amount of time it takes for Bahamians and foreigners alike to open a bank account.
Yes, the Know Your Customer rules are important. But just as important is that Bahamians should be able to go to a bank and open up a bank account with little hassle once they have proper identification to prove who they are.
Instead of finding excuses as to why it cannot happen, I want the Central Bank, the Ministry of Finance, the commercial banks and the private sector to tell me how it will happen.
Fellow Bahamians and Residents:
Our country is making economic progress. Our economy is growing. We are out of recession. There is more opportunity.
But there is still much work to do to boost jobs, especially among young Bahamians.
We must expand even more, and do all we can to secure our middle class and to move more Bahamians out of poverty.
We have a plan to tackle electricity and energy costs, which I will outline in a subsequent report to the Bahamian people.
Along with combatting crime, we will be relentless in attacking joblessness and in expanding our economy.
I ask for your continued support as we transform our country, by building a more prosperous, fairer and just society, which promotes the common good of all Bahamians.
I am sustained by the prayers and good wishes of so many of you. Please continue to pray for all of your leaders, including those of the Official Opposition.
May God bless each and every one of you and your family and loved ones. And may the God of new beginnings bless our Commonwealth at the beginning of 2019.