Opinion

The gathering storm in the Caribbean

April 09, 2014

Pretty soon, the meteorologists will designate the names and the number of the gathering storms that will inflict their damage on the paradise-like, but fragile and battered Caribbean. Coming from the continent of Africa, the wind that takes strength in its voyage across the Atlantic will become a raging storm that may land either in Mexico or in the United Sates after ravaging several of the islands of the Caribbean, depending on its trajectory.
Yet, I was not thinking about a physical storm in writing this essay; I was instead thinking about that metaphorical storm in which you find a Caribbean saddled not only with a fragile eco-system that stands directly in the path of the hurricanes but also with heavy national debt compared to national GDP - Jamaica 150% of its GDP, Saint Lucia 100% and The Bahamas 50%. Interestingly, the Republic of Haiti, whose national debt has been annulled, is in worse shape than any of the Caribbean islands.
The economic fragility of the region is so pronounced that the IMF characterizes it as standing on a "knife's edge."
Dr. Rolph Balgobin, senator of Trinidad and Tobago, in his article "The Gathering Storm," painted a canvas filled with color that depicts the true picture: the nations of the Caribbean "are living beyond their means in an escalation of crime at all levels of the society, growing drug culture, armed criminals, declining performance in the schools, both in terms of behavior and educational achievement, egos getting in the way, corruption, indiscipline, poor maintenance of infrastructure, declining value systems, weak economic growth, escalating food imports, failure to put limited agricultural land into production, need for political reform, disregard for the rule of law, indifference to the value of life, threats to democracy, failure to effectively police our laws, failure to exploit renewable energy resources, above all, poor leadership in conducting the business of the state."
I would add that the United States and Europe have deserted the Caribbean in their public policies. Enter China first and foremost, with trophy projects such as soccer stadiums. Then the PetroCaribe initiative - the lifeline of Caribbean nations (the Dominican Republic owes $3 billion for its 50,000 barrels per day allocation), rests on the fragile standing of the Maduro government in Venezuela.
A cursory review of most of the newspapers in the Caribbean will reveal each and all the above ills being prominent in the concerns of the citizens and of the national press not only in Trinidad and Tobago but in each one of the islands.
Starting with The Bahamas and the Turks and Caicos Islands, the issue has been the growing criminal behavior amongst the ordinary citizenry that threatens to rock the budding tourist industry in this archipelago. We find also the recurrent illegal migration from Haiti, where both nations as well as the United States have refused to stop the movement at its source with an interdiction on land that would root the future migrants with economic development in their own coastal rural villages.
The Bahamas government is ready to spend $250 million to buy boats and other gadgets to stop the flow of illegal migrants. A portion of the same invested with USAID in rooting the potential migrants in their communities and improving the spirit of the village and the comfort of the city will eliminate the lure of leaving.
This north-south cooperation (United States-Bahamas-Haiti) would be a win-win in every sense. Why such an international agreement between the parties is not on the agenda goes to the issue of poor leadership in the region.
Cuba, still ruled by the Castro brothers and held hostage by the Cuban diaspora in Florida, is misusing the genius of its citizens. I was pleased that I may have had some input into the recent initiative of the Cuban leadership in doubling the salary of Cuban doctors. One week earlier, in the essay "Deconstructing the rising political storm in the Latin American and the Caribbean," I questioned why Cuban doctors should earn only $300 per month merely because it is a dictum of the Castro regime.
The Cuban genie is waiting to be liberated from Florida with the connivance of the Castro brothers for the prosperity of the island and of the Caribbean. A Cuba that adopted the system of state capitalism a la China will unleash the creativity of millions of educated Cubans and will produce a boom not only for Cuba but also for the entire region.
Going further down to Haiti, an emerging democracy is being shaken by the old demons of the Duvalier and Lavalas doctrines that are plunging that country into a misery so bare that Haiti is currently characterized as the poorest in the Western Hemisphere. Haiti must reconcile with itself to experience 'le vivre en commun' that will spur the enrichment of the women and of the peasants - the two main engines of the national economy.
Its neighbor that shares the same island of Hispaniola or Ayiti - depending on whether you use the name given by Christopher Columbus or the original name given by the Indians - the Dominican Republic, is embroiled in an international dilemma of denying citizenship to thousands of born residents that have enjoyed citizenship rights and privileges for decades.
The Dominican Republic, albeit already a tourist hot spot, will usher in true development only when it assumes its responsibility of hospitality towards all its residents, whether or not they are citizens of that country.
Jamaica, in spite of its tourists oases such as Ocho Rios and Negril, is rife with criminal behavior that has its roots in the culture of smoking and selling marijuana as a given right transcended to a sector of the population by their so called ancestors.
It is also invaded by criminal returnees from the United States who feed the local criminal culture with ingredients well honed in the American prison system. The natural primacy of the leadership role of Jamaican women needs national and international incubation if it is to serve not only Jamaica but also the neighboring islands.
Puerto Rico, the American satellite, is languishing under heavy debt, political corruption and the culture of welfare from the United States. Its privileged situation has not been used to spur economic development either on the island or in the Caribbean.
The Virgin Islands of St. John and St. Thomas, the American possessions in the Caribbean, to a lesser degree represent the same lethargy observed in Puerto Rico. By transforming themselves into an incubator for education, industry and technology from the United States, the US Virgin Islands could spur growth not only for themselves but also for the non-American islands of the Caribbean.
St. Vincent and the Grenadines, the cries of your children go all the way to God. With a leader that looks more like Louis XIV than a philosopher king of modern times, the distress of the citizens at home and abroad is visible to the naked eye.
Saint Lucia, that Helena so courted in colonial times, is embroiled in a political skirmish that compromises this ideal setting so prized by the British escapees of the melancholic foggy winter of London. The tourist industry will remain sustainable there and in the rest of the Caribbean only if the nation is hospitable first to its own citizens.
Barbados, this jewel that claims to be the little British isle, is laden with debts that compromise its economic expansion. Still rich enough to face an overweight population, it is using the politics of the ostrich - if Barbados is all right, the rest of the Caribbean can go to hell!
Dominica, the Nature Isle that I am so much in love with is suffering from the spirit of negativity inherited from the French culture. A large portion of its citizens that labor in the Virgin Islands, Barbados or the French islands of Martinique and Guadeloupe, are waiting for a Dominica that knows how to marry an expanding economy with its special status as an ecological preserve to return home. Its government has not made the decision to move forcefully in that fine direction.
A perfect candidate for REED+, the program designed by the UN to compensate regions that use conservation as a means of reducing carbon emissions, Dominica should be rewarded for being a perfect steward of nature, the benefits reverting back to each one of its citizens.
Trinidad and Tobago, so rich and so diverse, you used to be for me the perfect paradise on earth. I need not quote again Dr. Balgobin to paint the presently dark canvas. Suffice to say that Trinidad is looking more and more like Guyana. A nation rich in cultural and mineral resources that could and should lead the Caribbean. Its leadership is seeking a mission that was stamped by the country's founding father. Trinidad and Tobago, go back to that spirit and you will be all right!
Guyana, oh Guyana, I cry for you, Guyana! A land rich in natural resources, in need of additional human resources, is misusing its local resources in a system that keeps the country in de facto bondage and ranks Guyana along with Haiti as the poorest in the Caribbean. Its population of Indian heritage must extend its hand to the black population to form a homogenous nation where the color of skin will make no difference.
In conclusion, the Caribbean, the Mediterranean of the Atlantic, in spite of CARICOM and the ACS, is in need of a common public policy that will keep its citizens happy at home, enjoying this chain of islands that seems to have been created with special care by God. It is almost a lost paradise, with its sand, sun and surf that attract the distressed populations of the United States, Europe and Asia who are in search of clement weather and fleeing from a recurrent frigid winter due to climate change.
A peaceful Caribbean, hospitable first to its own citizens, has only to sell its natural hospitality to the tourists of the world to create a perfect deal that no one will refuse.
o Jean H. Charles LLB, MSW, JD is a syndicated columnist with Caribbean News Now. He can be reached at: jeanhcharles@aol.com and followed at Caribbeannewsnow/Haiti.

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Cash's Phony Concern over BTC
Cash's "Phony" Concern over BTC

April 09, 2014

Nearly four years after the sale of the Bahamas Telecommunications Company (BTC) which was vehemently opposed by thousands of Bahamians, the chickens have come home to roost and the country is now forced to face the consequences of the bad decisions made by the former Free National Movement (FNM) administration...

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The departure of a legendary investor
The departure of a legendary investor

April 08, 2014

Sol Kerzner's investment changed The Bahamas and helped improve the lives of the people who live on these islands...

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The fiscal reform series: A deeper dive into VAT

April 08, 2014

The analysis of the best taxation model and the appropriate mix of taxes for The Bahamas is far from over as we await the final study commissioned by the government and the results of the work done by Oxford Economics - a global advisory firm engaged by the Coalition for Responsible Taxation (Coalition). It is encouraging to see that the government seems to have kept its promise to work with the private sector in the fiscal reform exercise.
While we await the findings of the referenced studies, it would be unrealistic to conclude that value-added tax (VAT) will not be a major component of the government's fiscal reform program. It is a known fact that the issue of tax reform, in general, and the implementation of VAT, in particular, have been considered for several years and by multiple administrations. Hence, considerable work and analysis ought to have been conducted prior to the selection of VAT as an appropriate form of taxation, even though the general public is not privy to the specific details of such prior analysis. As the clock ticks and the plot thickens on the government's fiscal adjustment agenda, we take a closer look at this form of taxation, what is being proposed and where we stand today.
The general nature and details of VAT
VAT is an indirect tax; that is, it is a form of tax that is collected by an intermediary on behalf of the government or revenue agency from persons (either individual or corporate) that bear the ultimate tax burden. In essence, the payer of the tax is often different from the ultimate bearer of an indirect tax. Indirect taxes are therefore also defined by the ability of the taxpayer to shift the tax burden.
It is noteworthy to state that the difference between direct taxes and indirect taxes was first discussed at length by Adam Smith, who is regarded as the father of modern economics. In his classic work, "An Inquiry into the Nature and Causes of the Wealth of Nations," which is abbreviated as "The Wealth of Nations," Smith articulated extensively the concept of indirect taxes and the impact on necessaries and luxuries, noting the similarities between indirect taxes and direct taxes with the former falling on the consumer, ultimately.
VAT is a consumption tax that is essentially levied on consumers and what they consume. A key objective of introducing VAT, as indicated by the government, is to broaden the tax base, and the choice of VAT is intended to achieve this as the country seeks to join the World Trade Organization (WTO), which requires the reduction of tariff rates. This goal is consistent with the general consensus among a number of economists and public finance experts that consumption tax should be planned with the widest base and positive rate possible.
The VAT rate and revenue
The white paper issued by the government in February 2013 suggested the implementation of VAT at a standard rate of 15 percent with a proposal to have a special rate of 10 percent, exempt supplies and zero-rated supplies. The draft VAT Bill and Regulations were consistent with the white paper in this regard. The export of goods and services are expected to be zero-rated which means that 0 percent VAT will be charged by the supplier and the VAT paid by the supplier can be recovered from the government.
It is proposed that basic food products, soap and laundry detergent, electricity and water supplies based on established thresholds will be exempt from VAT. Exempt services include, among others, insurance services, domestic financial services not provided for an explicit fee, medical services, education services, daycare and after-school care, domestic travel and services provided by a facility to persons in need of care.
It is important to state that companies offering exempt services or supplies will incur VAT on their inputs, but will not be able to directly charge their customers or consumers VAT; hence, their prices may be adjusted to compensate for the increase in the cost of production. It has been further proposed that a special (reduced) rate applies to a supply made in accordance with the regulations by a hotel or similar establishment registered and licensed by the Hotel Licensing Authority; this is presumably to minimize the corresponding impact on the tourism industry.
We know that the minister of finance has indicated that VAT will be introduced at a rate lower than the proposed 15 percent. However, numerous utterances from officials from the Ministry of Finance (MOF) have also made it clear that the choice of the initial rates was based on the revenue needs of the government. On the one hand, revenue from VAT on goods is intended to replace revenue lost from the reduction in tariff rates. On the other hand, VAT revenue derived from the service sector was expected to provide the government with approximately $200 million in additional revenue. In light of the foregoing, it is logical to conclude that a lower rate of VAT will reduce the expected revenue and the projections will need to be adjusted. Luckily, MOF officials have indicated that they have conducted multiple projections based on lower VAT rates.
A tale of VAT studies
By the end of the debate on VAT, there will have been at least four studies conducted by different stakeholders in The Bahamas to ascertain the impact and suitability of VAT for the country. The stakeholders in this regard include the government, the Coalition and the Nassau Institute. The conclusions of the first two studies were different and subject to much scrutiny as well as criticism.
It is a generally accepted notion that the conclusions of research and studies are sometimes skewed towards the client or financier of the study. This does not in any way diminish the credibility of the people carrying out the study, neither does it suggest their lack of professionalism. However, the nature of research is such that it depends on a range of data and variables which are analyzed based on the mandate of the individual or entity commissioning the study. In essence, it is very unlikely that the findings of Oxford Economics will totally favor the government's proposals and go against the Coalition's position. The same applies to the new study ordered by the government. In spite of this expected variance, when read in full, the details of both reports should be identical based on the reputation of the individuals conducting the studies and the fact that the same source data is being used.
Conclusion
The decision to introduce VAT at a lower rate has been welcomed by the private sector, although some remain vehemently opposed to this form of taxation. It is encouraging to see the relevant stakeholders come together to ensure that the best formula for fiscal reform success is implemented in The Bahamas with constructive debate on the proposed VAT regime being a major part of this process. It is incumbent upon all parties to be mindful of the four maxims highlighted by Adam Smith in relation to taxes in "The Wealth of Nations." The maxims cover topics including the need for subjects of every state to contribute support to the government based on their abilities; the importance of certainty in relation to the time and manner of payment as well as the amount payable; the necessity of convenience to the taxpayer in remitting payment and the adoption of a philosophy that takes out or keeps out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state.
Consumption tax is not a new phenomenon and has been implemented in several jurisdictions across the globe. While there has been considerable discourse on the experiences of other nations that have implemented VAT, Singapore and New Zealand have been touted as success stories in the introduction of VAT. Next week, we will take a look at these countries with a view to determining how we can benefit from their VAT implementation story and whether differences in our circumstances allow for a fair comparison.
o Arinthia S. Komolafe is an attorney-at-law. Comments on this article can be directed to a.s.komolafe510@gmail.com.

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The costs of smuggling in The Bahamas
The costs of smuggling in The Bahamas

April 07, 2014

The circumstances surrounding last week's discovery of four burned bodies on the Cay Sal Bank, the farthest southwestern corner of The Bahamas, are still officially categorized as a mystery...

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Has Cable Bahamas fulfilled its original mission

April 07, 2014

It is axiomatic to suggest that a modern Bahamas requires modern infrastructure. We appreciate the need for a world-class airport in the capital and second city and that many airports in our islands must be updated to be aligned with the increasing travel demands of citizens and visitors.
There is also an urgent need to maintain our docks for inter-island mail boat transportation and we have recently developed a deeper appreciation for the dramatically improved roadworks that were undertaken by the last Ingraham administration.
A similar observation can be made about the country's desperate attempts to make telecommunications keep pace with the ever-increasing demands that are placed on our monopolistic telecommunications network and of the omnipresent and overwhelming daily challenges that are faced by that service provider.
Then there are the growing demands on every island on our similarly monopolistic electricity supplier and our water and sewerage corporation, both of which are displaying noticeable strain as more and more wonder why we are experiencing power cuts in winter and water pressure problems even though we have been told, here in the capital, we no longer require Andros water to meet our needs.
Therefore, this week, we would like to consider this... what is the status of our television system, another important part of daily life in this country, and are we keeping pace or falling behind the increasing demands of the marketplace?
A historical overview
Television came to The Bahamas in the latter half of the 20th century. Before that time, Bahamians on New Providence and the Family Islands received their news and entertainment by radio.
I can clearly remember getting our very first television. We were among the first in the neighborhood to acquire one and I can vividly recall neighbors coming to our home to view this modern marvel, although in those days the picture on the tube regularly faded in and out and often required an adjustment of the set-top antenna. I also recall my father's friends assisting him in mounting an antenna on the roof of our home in order to improve the reception quality. It was always a childhood treat to go to Miami to enjoy "really good reception" and it was not until the advent of satellite dishes that many Bahamians were able to enjoy an enhanced quality and variety of program offerings.
In the late 1970s and 1980s, satellite dishes were popping out of the ground almost as fast as homes were built so their occupants could enjoy the clear reception that dishes afforded. Grand Bahamians could boast of being able to enjoy better TV than those living in the capital because cable TV came to Freeport relatively early in its development.
Then in the 1990s, Cable Bahamas was awarded a long-term monopoly to provide cable TV throughout the entire Bahamas and numerous satellite entrepreneurs who previously sold such systems experienced a rapid, albeit quiet, demise.
The current state
Today, Cable Bahamas dominates television in The Bahamas. It was, for years, the only legal service provider of cable TV and, although the service is generally consistent, its offerings are not extraordinarily vast. Cable subscribers can purchase various packages depending on their tastes and pocket-books. And while Cable's service delivery is generally above average, there are intermittent periods of programming black-outs and signal distortions as manifested by pixels that are disorganized.
Cable Bahamas is also an internet service provider and its service is as good as that offered by the telephone monopoly, BTC. BTC's cellular monopoly ends this month with the award of an additional license to an as-yet-unnamed second cellular company. Cable Bahamas hopes to win the bid to become the first BTC cellular competitor, and the cellular industry here is expected to be completely liberalized by 2017.
The positives
Some persons applaud the program offerings of Cable Bahamas, maintaining that we receive more offerings in The Bahamas than in many hotels in the United States. Program offerings are often duplicated, especially in the higher channel ranges, with one exception: the United States West Coast satellite feed is available, enabling persons in Eastern time zones to view programs that might have been missed earlier.
Complaints against Cable Bahamas
The most prevalent complaints cited against Cable Bahamas concern loss of signal and loss of signal quality. These instances include frequent freezing of the picture, usually during a moment of high drama or suspense, and the aforementioned mysterious breakup of the picture into what can only be described as "dancing pixels".
Reporting these occurrences to a Cable Bahamas customer service representative is another frustrating experience, replete with long waits. Once you have actually reached a live person, who is usually unfailingly polite, the outcome tends to be unfulfilling, as the representative is not well-informed about the duration or cause of the problem, only knowing that it is "being worked on".
Other complaints pertain to program offerings, including many program previews that are presented in either Spanish or Portuguese, which is useless to persons who do not speak those languages. A senior Cable Bahamas executive has explained that this arises because the Caribbean islands receive the Latin American feed, principally because of the small size of the English speaking Caribbean population, 7% of the Latin American market.
In addition, there are some persons, including this author, who wished that Cable Bahamas had not discontinued the broadcast by Al Jazeera, which offered a refreshingly different viewpoint from that of the often prejudiced spin that American networks place on international news.
Unquestionably the most offensive programming insert is the silly, annoyingly irritating music that is inserted along with the weather, currency rates and stock exchange data on CNN and HLN during commercial breaks. The same senior Cable Bahamas executive to whom we referred earlier indicated that the Caribbean Co-operative of Cable Companies has attempted to address some of these concerns, but again, given the "insignificant size of the Caribbean market", we have to take what we are given.
Completing the mission
In a similar way that BTC's original mission at the turn of the 20th Century included connecting The Bahamas by land lines, which for the most part it has successfully accomplished, the original mission of Cable Bahamas at the turn of the 21st Century was to provide cable TV to the entire Bahamas. The important question that must be answered is: Has Cable Bahamas achieved its original mission? Some would argue that it has; others, especially those viewers in some of our more far-flung islands, will take the opposing viewpoint. Nevertheless, the company now wishes to enter the cellular market.
Cable Bahamas' venture into telephony has, from many reports, not gone without problems. Aside from negative feedback regarding the quality of the sound transmission, its main drawback, when compared to the land line service of BTC, is its vulnerability in the event of power failures. While Cable Bahamas says its phone service comes with a backup battery that will give a few hours of service in the event of a power cut, in our hurricane-prone islands, a few hours is not enough time, given the sometimes weeks-long power interruptions the storms sometimes create. Staying connected in times of emergency like during a hurricane, clearly needs to become more of a priority for Cable Bahamas than it currently is.
Conclusion
Before any consideration is given to granting a cellular license to Cable Bahamas, we would urge an examination of whether this company has fulfilled its primary mission of bringing television to all corners of The Bahamas and maintaining that signal in the best working order. As we have seen in many companies over the years, when a primary mission is not fulfilled and diversification into other areas follows, mediocrity sets in, either with the principal product or the new offerings, or both.
Bahamians have every right to demand the best, and any company, when considering branching out, better be prepared to provide the best in all of its products and services, or deal with the consequences.
o Philip C. Galanis is the managing editor of HLB Galanis & Co., Charted Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to pgalanis@gmail.com.

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Haiti: a national dialogue that pleases many but disturbs some

April 05, 2014

On Friday March 14, 2014, an historic step that will lead to peace and harmony among the Haitian people took place in Petionville, Haiti. An instrument that was labored over for weeks by the executive, the legislative and the political parties, under the observation of the judiciary and civil society, was signed.
The Catholic Church, under the leadership of his newly appointed Chybly Cardinal Langlois, served as the mediator, cajoling the parties to sit down, discuss amongst themselves without foreign intervention their concerns, and arrive at a consensus on critical issues such as governance, elections and the constitution.
These were only the beginning steps in a larger dialogue that will later delve into the structural underpinning that impedes the development of Haiti from a failed state to an emerging one. While the dialogue was applauded by the majority of the population and by the international community, a group of senators, as well as members of the opposition bloc bent on derailing the present government, has threatened to rock the boat and plunge the country into total chaos.
The Catholic Church, deriving from a call from God to Abraham to quit Mesopotamia (Iraq) and to go to Palestine, where 2,000 years later, the Son of God would freely give himself in immolation to replace the blood of the animals offered in sacrifice in expiation for original sin, is pursuing its role of making this earth better for each man and for each woman.
The new world order of charity, love, fraternity and hospitality offered by Jesus the Christ was spread to the world on the back of the Roman Empire. The history of the Catholic Church, an institution created by God but led by men, is filled with false starts and with major failures. I have in the past not minced words, making the observation that the Catholic Church is an excellent incubator of a mafia culture that infects the social, economic and political spirit of the countries where the Catholic faith is the strongest.
Yet the Catholic Church is also one of the best vehicles for civilization and for progress throughout the world. The republic of Haiti, ostracized by the entire planet after its independence from France, received recognition only from the Vatican in its universal quest to find teachers and preachers to render the former slaves fully equipped to lead a life of self-actualization.
From a clergy hailing from Brittany in France, Francois Duvalier, the dictator, transformed Haiti's clergy into a national one. At the departure of his son into exile, following a transitory period, a defrocked priest Jean Bertrand Aristide took the reins of power. It was neither for the good of the church nor for the country. Haiti knew a difficult time of dissension and disorder that pierced its ethos to the bone and almost brought the nation to the level of RDC (the Republic Democratic of Congo).
The hierarchy of the Catholic Church wanted to make amends and help the nation of Haiti reconcile with itself. Its role as mediator between the parties is subscribed to that effect.
The ink placed on the document by all the participants was not yet dry when the group of six senators and the opposition bloc which refused to take part in the dialogue started the process of dismantling the result and placing stumbling blocks before its implementation.
Their prime target was paragraph 12 of the agreement that calls for setting aside the articles of electoral law that have not been amended on time through dilettantism or obstruction by the opposing bloc in parliament. Considering that elections must take place by the end of the month of October to fulfill the requirements of amending the constitution, the framers of the conciliation process have agreed to take steps to prevent delaying tactics that could derail the election.
Amending the Haitian constitution to align all the elections in a five year period is a crucial step in avoiding repeated balloting and saving time and money for the country.
The opposing parties that refused to sit down and take part in the negotiation process are combing the fine lines of the agreement to find errant commas and other punctuation that would annul the terms of the conciliation.
Haiti fits squarely the parody suggested in the recent observation of Roger Cohen about Argentina. It is a poster child among nations that never grew up, blaming everybody and their father for ills that are internal in the first place.
It refuses to accept that a former dictator called Duvalier and a former president called Aristide have shaped an ethos of delusional power that refuses to face the realities of nation-building, which call for the rich and for the poor to hold hands together and continue the renovation of the legacy bequeathed by the founding father, Jean Jacques Dessalines.
The mediator through its principal, Cardinal Langlois, is offering the practice of full disclosure in response to the method of marooning practiced by the opposition forces. The Catholic Church in Haiti is pursuing, maybe for the first time since Constantine, the Roman Emperor in 313, a politics of state married with the faith in an effort to make a nation hospitable to its people.
Will the gang of six and the opposition succeed in putting enough stumbling blocks on the way to hospitality for all? This is the difficult question that the nation of Haiti will face. I am observing a country filled with young ladies and men eager to educate themselves but with no prospect of employment and no job creation in the pipeline. I am observing also a critical mass of the population living in abject poverty but preserving their dignity while praying for an end to their misery.
Would they stand in line to immigrate to Brazil, cross the border and face humiliation in the Dominican Republic or accept the lure of Canada for the best and the brightest, perpetuating the brain drain that hemorrhages from the country?
Cardinal Langlois has told all parties that frank negotiation is the only way to salvation for Haiti. Will the country remain in the barbarity of the age before Abraham or will it come into the age after Christ where solidarity, charity and love must be the lot of each and for each? Stay tuned!
o Jean H Charles LLB, MSW, JD is a syndicated columnist with Caribbean News Now. He can be reached at: jeanhcharles@aol.com and followed at Caribbeannewsnow/Haiti

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The Christie/PLP lottery: Selling out the poor and middle class

April 03, 2014

The Bahamian middle class is under enormous pressure and threat. The fallout from the Great Recession continues with a new normal of largely stagnant wages and significantly less disposable income.
While the fortunes of many of the wealthy in the west and here at home are rebounding, many in the middle class have lost or are losing hopes and dreams along with homes, small businesses and life savings.
The expanding gulf between the wealthy and middle class is growing with income inequality rising. For many poorer Bahamians, incomes and prospects continue to worsen.
Poor and middle class families have typically had to juggle bills. But the new normal after the Great Recession makes the juggling more difficult, more anxiety-ridden.
The result is an increasingly complex sort of lottery for many Bahamians who now have an even more difficult time deciding what portion of what bills they can afford to pay down at a given time.
The juggling involves electricity and other utility bills, school fees, small business expenses, mortgages, groceries, health care and other expenses.
With jobs being lost, by one or more income providers in a household, many more families are at the financial brink with little funds in checking accounts and near maxed-out credit cards with ballooning interest payments.
During the 2012 general election the FNM, led by Hubert Ingraham, offered a variety of proposals in response to what promised to be a slog toward more vibrant economic growth amidst a dramatically changed economic environment post 2008.
Ingraham promised what he thought the country could afford given fiscal constraints and revenue prospects.
Expansive
Conversely, many of the economic and social proposals offered by Perry Christie and the PLP were significantly more expensive than those of the FNM, which did not seek to outbid the PLP's more expansive promises.
Thousands of hurting poorer, lower middle income and higher middle income individuals voted for the PLP based on four specific proposals the party repeatedly and solemnly promised.
Many families bargained that the PLP's compendium of promises represented a middle-class rescue package. Instead, more of the middle class have plunged deeper into debt with seeming little relief on the horizon.
Employment, housing and home ownership, education and health care are critical in terms of economic security and survival for the middle class.
The PLP promised a quick 10,000 jobs. The unemployment rate went up higher than during the Great Recession.
The PLP promised to double the national investment in education. The education budget was cut.
The PLP promised quick action in implementing National Health Insurance. Instead, yet another study is on the way, with many families a health care crisis away from bankruptcy, and the PLP offering additional excuses.
Famously, the PLP promised an expansive mortgage relief plan. That plan died a quick death, despite the budgeting of $10 million for relief and repeated assurances of help.
As famously, Christie intervened to assist his upper middle income and chronically tax delinquent VAT coordinator with mortgage relief, despite having abandoned the vast majority of those he promised to help who were on the verge of losing their homes.
Christie beat his chest in self-praise of what he did for his VAT coordinator, cheered on by a Greek chorus of ministers including the minister of works and the minister of agriculture.
When the chest-thumping and cheering dies down, scores of homeowners will still be without the aid and comfort the PLP promised and certainly nowhere as near a priority as are select friends of the prime minister.
Correspondingly, in two and a half years, the Christie administration's record on building homes has been abysmal.
Callousness
Christie campaigned as a leader of compassion and empathy. He has largely governed with callousness and indifference. With Bahamians losing homes, Christie has waxed about an official residence for the prime minister, and of the need for a prime ministerial coat of arms.
He seems to be living in a parallel universe. Meanwhile, the question of government revenue tells a tale.
With the middle class and many businesses struggling, the PLP initially proposed a 15 percent VAT rate on various goods and services, though that rate now seems negotiable.
The Christie administration's handling of VAT is a monumental disaster. Uncertainty on the tax proposal is damaging business confidence and investment prospects, with the disastrous roll-out or non-roll-out likely affecting the broader economy.
Recall Christie's all things to all people pandering on VAT with the bizarre statement on the division within his government on the tax between the prime minister and the minister of finance.
With the middle class struggling the Christie administration's likely improbable timeline for a VAT roll-out, unclear regulations, unready tax collection system, and the initial rate of taxation seemed a perfect storm likely to damage various businesses with the prospect for job losses in certain sectors.
Christie has been a thoroughly incompetent prime minister. But it is his and the PLP's sell-out of the poor and middle class that is chilling and revealing.
Life involves a natural and social lottery. The lotteries of life involve chance, luck and happenstance.
In the natural lottery our genetic make-up is critical. Some are born with a greater predisposition of developing breast or ovarian cancer. Mychal 'Sweet Bells' Thompson was certainly a hardworking athlete. But his genes made a difference.
The genetic lottery can mean all the difference as to whether one typically enjoys a sunny disposition or suffers from chronic depression. From general health to the distribution of talents, the natural lottery is highly influential though not necessarily fully determinative.
Circumstances
The social lottery involves the circumstances of birth from income levels to the cultural and religious heritage into which one is born.
Being born into a higher income family does not make one naturally more intellectually gifted than being born into a lower income family. Yet circumstance quite often determines economic prospects and educational attainment.
Political and economic debates have raged for centuries over the state's role in balancing or negating the effects of the natural and social lotteries of life.
For progressives, government plays a critical role in addressing the inequality involved in life's lotteries, especially on matters such as ensuring access to education, health care and a variety of social goods.
Public action can go a long way in terms of equality of access if not equality of outcome. Which raises the question of gaming lotteries. A lottery is unlike other businesses. It is based exclusively on chance and luck.
Walk into a grocery store, spend $20 and you come out with that amount of groceries. Walk into a web shop or play $20 online and you come away with a "hope" which is more often than not dashed.
You usually come away with nothing or next to nothing, rarely winning that pot of gold at the end of an ever-elusive payout at the end of an imaginary rainbow.
In playing numbers most people lose substantially more than they gain. Lotteries often prey on fear and hope, superstition and randomness. It involves the ultimate irrational exuberance. Still, lotteries can transform certain human traits into certain common goods and gain.
A public or national lottery is typically designed to expand opportunity and equality for citizens. They ensure a greater common good than do private lotteries which overwhelmingly concern the narrow interests and greed of a few, with little by way of return to the mass of citizens.
Because of the nature of lotteries, in most civilized societies they are largely government-owned and for a reason. These societies utilize lotteries to help rebalance the lotteries of life which leave fellow-citizens in need of help from the state.
Accordingly throughout the U.S., the U.K. and many other countries lottery profits are used overwhelmingly to fund public goods such as education rather than to primarily enrich already bulging private coffers.
National lotteries are decidedly more consistent with the demands of social justice than are privately owned lotteries.
The Christie administration now seems on the verge of regulating or legalizing a system that will transfer millions upon millions more into the hands of a few at the expense of thousands of poor and middle-class Bahamians.
If it does so it will be one of the worst betrayals of the Bahamian people in an independent Bahamas, a moral disgrace, an affront to social justice, another sell-out to moneyed interests and a grave insult to the poor by a party that no longer deserves the names progressive or liberal.
o frontporchguardian@gmail.com, www.bahamapundit.com.

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Why crime is a political issue
Why crime is a political issue

April 02, 2014

Political parties are elected to government to solve problems. For example, if there are no roads and people have difficulty getting from place to place, members of the electorate want men and women in power who are able to fix the problem and build roads...

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My daughter's lesson on domestic violence

April 02, 2014

Every morning, on the way to school, my eldest daughter's job is to read the newspaper's headlines or top stories to me as I drive...

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The fiscal reform series: About that VAT

April 01, 2014

The views and commentaries on the proposed value-added tax (VAT) system have been as diverse as they have been inconsistent. What makes the discussion even more interesting is that the divergent opinions have come from economists, experts in this form of taxation and industry leaders.
There is often the tendency for facts to either be lost or manipulated in a prolonged debate, with the loudest or most frequent message being perceived as the ultimate truth. It is therefore important that we filter out the proverbial noise in the market and unravel the actual facts that will enable us to develop our own opinions on the proposed VAT framework. In this article we briefly consider the various utterances made by both local and foreign individuals as they chimed in on the ongoing debate on VAT in The Bahamas. We will subsequently embark on the tasking journey of understanding VAT and what it means for the average Bahamian.
The Barbados experience
It was reported a number of weeks ago that the Governor of the Central Bank of Barbados, Dr. Delisle Worrell, had indicated that VAT is an anti-tourism tax and had hurt that country's local industry. Worrell was also reported as stating that the tax is very complicated and suggested his preference for a simple sales tax. We will examine sales tax as an alternative later.
A few days after the aforesaid report on the comments of Worrell, The Nassau Guardian quoted Lalu Vaswani, president of the Barbados Chamber of Commerce and Industry (BCCI), as saying that VAT has been good for the economy of and businesses in Barbados. Vaswani noted the level of concern and anxiety within Barbados prior to the implementation of VAT; an experience that seems similar to the current pre-VAT environment in The Bahamas. Of particular note was his reference to an adage that a rope in a dark room feels like a snake. More recently, Mark Shorey - a VAT expert out of Barbados with about 20 years experience in VAT consultancy and a member of the VAT implementation unit - weighed in on the VAT debate in The Bahamas. Shorey remarked that anti-VAT hoteliers will not be satisfied and indicated that training closer to implementation may be more effective. In the end, Shorey suggested, the implementation of VAT in Barbados was successful and is a model that could help The Bahamas.
Chronicles of the local commentaries
Comments attributed to past and present government officials with responsibility within the Ministry of Finance have been consistent insofar as they relate to the urgent need to address our fiscal imbalance. These individuals have also been backed by some locally respected professionals who have cautioned that we are between a rock and a hard place with the window for remediation closing with each passing day. A common concern has been the rate at which VAT is introduced, with recommendations for a rate lower than the proposed 15 percent.
The main opponents of VAT from the business community have been fervent in their campaign against this form of taxation, arguing that it is not appropriate for The Bahamas and would increase the cost of living while further shrinking the middle class. A study of jurisdictions that have implemented VAT will show that the fear and anxiety being expressed is not unique to The Bahamas, nor is it unusual for various interest groups to voice their concerns. The emergence of groups that purportedly represent the populace and average citizens has also inserted a unique dimension to the ongoing debate on VAT.
WTO accession and a replacement tax
We know that the government requires among other measures on the expenditure side, additional revenue to correct our structural recurrent deficit. However, the recent revelation by the co-chair of the Coalition for Responsible Taxation that the group was not aware that the reduction in tariff rates has to be immediate and cannot be phased in as The Bahamas seeks to join the WTO is indeed food for thought. This raises the question of how effective the government has been in explaining the link between our efforts to join the WTO and the introduction of VAT.
It appears that the case for our urgent accession to the WTO has not been adequately presented to the average Bahamian. It can also be argued that not enough has been said to sensitize the public to the fact that VAT is intended to replace the significant amount of revenue the government will be forfeiting as tariff rates are reduced to facilitate our accession to the WTO. Perhaps this is an indication of the oft manifested culture of addressing matters in vacuums or isolation without due attention to the bigger picture. It follows therefore that if VAT on goods is expected to replace existing tariffs on goods, the introduction of VAT should be neutral in relation to government revenue. This will not however be the case as the government expects to raise some $200 million in additional revenue from VAT on services which have been untaxed for quite some time even though our economy is for the most part service based.
The progressive aspect of a regressive tax
There is no doubt that VAT cannot be classified as a progressive form of taxation and is generally regarded as a regressive tax. In this regard, there have been numerous criticisms of this proposed tax system and suggestions for alternatives which are deemed to be more progressive in nature, including income tax.
Warren Buffett - the man often referred to as the Oracle of Omaha and regarded as one of the greatest investors of all time - has been a proponent of the rich paying more taxes in support of the philosophy of U.S. President Barack Obama. Locally, businessman Tennyson Wells has been quoted as stating a similar view, albeit from the perspective of a different school of thought on welfare, allocation of the tax burden and the trickle down paradigm. Nevertheless, as research has shown that individuals who are more well off spend a higher percentage of their income on services than goods when compared to the less well off, one can conclude that the introduction of VAT will increase the amount of taxes paid by the upper class in our country over that paid by the lower class. It should be noted that this does not eliminate the expected increase in the cost of doing business for companies, though this will ultimately be borne by the consumer.
VAT versus sales tax
The complicated nature of a VAT system has been a major component of the concerns raised by the private sector with preference for a sales tax being expressed. The government had documented its rationale for proposing VAT as opposed to other forms of taxation in the white paper released in February 2013. While the paper did not provide ample details on the analysis conducted on each type of tax prior to the selection of VAT, the superiority of VAT over sales tax in terms of enforcement mechanisms is apparent.
It is therefore understandable why the government would prefer VAT over a simple sales tax. It is a known fact and Shorey confirmed that VAT has inbuilt self-policing and compliance features which reduce the level of resources that the government will have to allocate to its compliance efforts. In effect, VAT creates a level of accountability, responsibility and transparency that makes registrants and in some cases consumers, agents of the Central Revenue Agency with significant incentives and penalties ensuring that the government receives VAT payments. On the other side, it is expected that businesses will prefer a sales tax system which is easy to administer because it requires the collection of taxes at the point of sale instead of throughout the production/value chain as required in a VAT regime.
Conclusion
The German-born American artist Hans Hofmann famously stated that "the ability to simplify means to eliminate the unnecessary so that the necessary may speak". It is time to rid ourselves of the unnecessary commentary in the VAT debate and focus on the facts necessary to move the discussion on fiscal and tax reform forward. Only then can a constructive discussion about the VAT that has become associated with fear and uncertainty, as well as proposals for viable alternatives, begin. Next week we will take a deeper dive into the features of VAT and the contents of the draft VAT Bill and regulations. In the interim, the various stakeholders need to disclose all the relevant details and simplify the information necessary for all to comprehend.

o Arinthia S. Komolafe is an attorney-at-law. Comments on this article can be directed to a.s.komolafe510@gmail.com.

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The fumbled, failed fiasco of BTC

March 31, 2014

"The single biggest problem in communication is the illusion that it has taken place."
- George Bernard Shaw
There is nothing more important when living in an archipelagic nation like ours than good communication. That's why mail boats came into being early in the 1800s in order to connect the men and women living in our islands. That's why telephones came to the country in the early 20th century so families could remain connected even though they might decide to live on different islands. That's why we invested in a radio system a little later in the 20th century so that information could be transmitted from end to end of our island chain. As we matured as a nation and entered the 21st century, we had the very reasonable expectation that our ability to communicate would not only improve and expand but would become even more reliable. Apparently, we were misinformed.
Therefore, this week we would like to Consider This... what is the state of telecommunications in The Bahamas since BaTelCo was privatized?
Telecommunications in The Bahamas
International telecommunications began in The Bahamas in 1892 with the connection of the first submarine telegraph cable from Florida to the western part of New Providence in an area that was and still is known as Cable Beach. Then the first manual telephone exchange was installed and on October 5, 1906, the first telephone system opened in Nassau with 150 subscribers; thus, international telegraph communication preceded domestic telephone service by 14 years.
Regulation and control of telephonic services was established under the Colonial-run Telegraph and Telephone Department (later the Telecommunications Department), until the passage of the Telecommunications Act of 1966. This act created a state-owned corporation, Bahamas Telecommunications Corporation or BaTelCo, which, until its privatization in 2012 to Cable & Wireless, operated as a monopoly of telephony and related services.
The Telecommunications Act, which became effective on March 25, 2000, repealed the earlier act, paving the way for the privatization of the company.
As of 2012, BTC had approximately 137,000 fixed lines, 141st in the world and approximately 254,000 mobile cellular lines, 176th in the world.
The privatization nightmare
During his second term in office, Prime Minister Hubert Ingraham announced that his government would privatize BaTelCo, ostensibly to move that public corporation to a first-world telecommunications company that would introduce state-of-the-art technology, enhance service quality and hopefully lower prices as a result of the operational efficiencies that a privatized company would provide. In addition, there was a promise of eliminating political interference from the management of BaTelCo, a practice that some suggested had evolved into a "fine art" under the PLP government over its 25 years in office.
It took nearly the next two decades to convert the privatization dream into reality. There were countless missteps and mistakes made by successive administrations en route to privatization. But one thing is irrefutable. Ingraham pointedly and emphatically asserted that he would not even discuss the matter of privatization with Cable & Wireless, a company which had not even submitted a bid to purchase BaTelCo. He probably correctly arrived at that "intransigent" and "irrevocably voiced" position because of the dismal reputation that that company had earned throughout the Caribbean.
It was therefore stunningly surprising when Bahamians learned that Cable & Wireless had been "invited" to propose on the privatization of this national asset. Not only was it invited to submit a bid for our greatest national treasure, it actually won the bid! This move left many Bahamians stunned as to what could possibly have transpired between the government's initial pronouncements and its final position to sell this asset to a foreign company it had initially categorically rejected - and at a price that seemed significantly lower than its intrinsic value suggested.
The vast number of Bahamians believed at the time, and even more so now, that the entire privatization process was misguided, mismanaged and mired in a quagmire of confusion that was not in our best national interest. It is reported that Ingraham made an 11th hour futile attempt to reverse the decision taken by his government to sell a majority interest to foreigners.
The fumbled, failed fiasco of privatizing BTC was birthed out of the vortex of the perennial love affair that we have historically developed for foreign ownership of our important national assets.
The current situation
Today, a privatized BTC has demonstrated that the decision to sell to Cable & Wireless was a national nightmare of epic proportions. Since BTC was sold, we have experienced what can only be described as the worst telephone service in the country's modern history. Land line and cellular calls are frequently dropped, cellular telephone calls customarily fade in and out like a tenuous apparition, depending on where you are on the islands, and the customer is often faced with a complete black-out of services for no apparent reason. Ten days ago, the entire island of New Providence and consumers on the Family Islands had no cellular service whatsoever for most of the day. That failure prompted BTC to print a full-page ad in the dailies, apologizing for "any inconvenience caused". And what have we heard from the regulator, URCA, in all of this? Absolutely zippo! No one is protecting the public interest because of the power of corporate might.
BTC was developed, managed, and financed by Bahamians and, for many years, provided impressive dividends in the millions of dollars to the central government. When we reflect on the tumultuous events caused by foreign managers at BaTelCo back in the 60s and 70s, we are reminded of how hard Bahamians worked to rid the corporation of those managers, making it 100 percent Bahamian. For some unknown reason, it really appears that the Ingraham government, in its decision on privatization, was determined to go backward, with no regard for the competence, ingenuity and business acumen of Bahamians who could have continued to manage BTC under its privatized reincarnation.
Conclusion
It is sad but true that what Bahamians spent decades developing into a modern, state-of-the-art telecommunications company has taken foreigners only a few short years to depreciate, devalue and degrade.
In 2014, our telephone services leave so much to be desired. We should demand more from the regulator and actively petition the government to move with alacrity to introduce more competition into the marketplace, so that the consumer will have a choice and the ability to fire the provider who does not deliver quality, efficient, reliable and reasonably priced service.
We are also concerned, and will closely monitor, the proposed relationship that BTC is slated to develop with the Broadcasting Corporation of The Bahamas (BCB) with specific application to television. If BTC's past experience is any indication of things to come, this does not augur well for BCB or Bahamian consumers. Only time will tell.
In the meantime, until we are provided with real and reasonable telephony choices, we must daily endure yet another bungled blunder of the political directorate that has saddled the Bahamian people with the fumbled, failed fiasco of BTC.
o Philip C. Galanis is the managing partner of HLB Galanis & Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to pgalanis@gmail.com.

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Teachable moments

March 31, 2014

What is it that distinguishes "great leadership" from "leadership"? It is the ability to stimulate and encourage, making people want to act. Taking advantage of teachable moments, great leaders show us not just who we are but who we can be.
At the times when we are at our lowest and doubt ourselves, he (or she) encourages us to rise above our situation. A great leader appeals to our better angels and encourages us to see that many of our limitations are self-imposed, to be our better selves.
The Bahamas suffers from a failure of great leadership at a time it needs it sorely.
What do I mean by teachable moments?
Our government is desperately in need of money. The consequences of failure are dire. We impose taxes to collect revenue but people are not paying their taxes. More money must be raised and therefore people must be encouraged to pay. The task is made all the more difficult because, unlike other countries, the obligation to pay taxes is not considered to be a part of the Bahamian culture.
Despite all the protests in the market, Bahamians can afford to pay more taxes than they are now paying. The enormous profitability of web shops is illustrative of this. "Numbers" do not produce anything. People spend huge amounts of their income on numbers and yet continue to lead their lives and meet their obligations. I look in amazement when I see our leaders point to taxing web shops as an integral plan for the raising of money and think themselves brilliant for devising it.
The truth is that all money spent on web shop gaming is available for the payment of taxes. In allowing the web shops and taxing them, what we are doing is letting other individuals collect it for us and, as a reward for doing so, we allow them to keep the bulk of the money collected. Taxing some of it and letting web shop owners, and maybe an occasional individual, keep the rest, in a time of national need, can be counterproductive. You can have a moral position on numbers one way or the other, but to support it to the detriment of our ability to provide basic needs and services is self-defeating and contrary to our self-interest as a community.
We can legislate more taxes but, when people don't pay existing taxes, how can we rely on payment by them of even newer taxes? Leaders have the power to make laws exercising the coercive power of the government to oblige persons to act. However, unless those laws are accompanied by strict draconian penalties enforced constantly, laws alone cannot ensure compliance. This can be imposed in a dictatorship but not in a society where leaders are subject to elections.
The people must be taught the importance of the obligations we owe each other in living together as a society; that we must each contribute to the general costs without persons who can afford to contribute wanting a free ride. We must also feel confident that the money we provide the government is spent wisely and in our best interests and not for the benefit of the few.
Characteristics of great leaders
The great leader is a teacher who is aware that he must, at times, "carry" his people where they need to go. For this he needs credibility and the trust of the people. Leadership is a sacred obligation and privilege. It is not an entitlement nor is it a favor to the people. He needs the wisdom to teach and like a teacher must know how far to push and when to call a break.
First the leader must by his own life show that what he is saying is possible.
"Example is not the main thing in influencing others. It is the only thing," said Albert Schweitzer.
The recent hurling of allegations by members of Parliament, each that the others do not pay their taxes, is disappointing. The subsequent admission by the prime minister that many parliamentarians live in "the shadows" is even more so. His cry that this must be condoned because these are hard times and that we all are suffering does not give encouragement. Leadership is about sacrifice and if you wish to be a leader then there are obligations you must bear without excuse.
Second, the leader must be able to educate, charm or even cajole people into doing the right thing. This is where oratory becomes important. However, not just empty rhetoric but words to serve a purpose. President Barack Obama has had at least two teachable moments where as a leader he rose above the fray and attempted to communicate a necessary message.
The first dealt with religious intolerance. Whilst a candidate, the accusation was hurled that he was a Muslim. His response was to deny that he was a Muslim but then to postulate that even if he was, it was no reason to condemn him or disqualify him from being president. He then educated people on the importance of tolerance.
The second dealt with race when Henry Louis Gates, a black university professor, was hauled out of his home in a white neighborhood and arrested without cause. Obama then addressed the question of racial prejudice.
Sir Lynden Pindling had teachable moments.
When, as some cry, he "forced" disclosure (then called "the sunshine law") down the throats of our parliamentarians, this was necessary but unappreciated. His opponents (inside his party and out) failed to see that this was necessary if parliamentarians were to have the moral authority to convince people to modify their behavior in their own best interests. It is perhaps unfortunate that this has become lost on our present parliamentarians who see this merely as a breach of their right to privacy or, as ironically phrased by the prime minister, to live in the shadows. In consequence, they have largely ignored the sunshine law.
Again, Sir Lynden saw early the need to introduce national service to decelerate the then creeping decline in the discipline and moral awareness of our youth. Unfortunately, the credibility and trust reposed in him had been so diminished that his detractors were able to stymie his efforts by raising doubts as to his motives. As these youth themselves are now parents of youths, we are paying a steep price today resulting from the unchecked rise in crime caused, in part, by the failure to institute national service in the mid-1980s.
Our leaders now are so concerned with winning the next election that they are reluctant to challenge any destructive behavior in the people for fear of unpopularity.

o Luther H. McDonald is an attorney and partner at Alexiou, Knowles & Co.

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The eternal PLP leader
The eternal PLP leader

March 28, 2014

By the general election of 2017, Perry Christie will have been the leader of the Progressive Liberal Party (PLP) for two decades. And for 10 of those years he will have served as prime minister of the Commonwealth of The Bahamas...

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Want real change in The Bahamas It's time for active citizenship

March 28, 2014

On July 10, 2013, the Commonwealth of The Bahamas celebrated 40 years of independence.
The annual recognition of self-determination inherently gave way to a national reflection on self-evaluation and an assessment of how far we have come as a nation and what is the way forward for the next 40 years.
An objective, fair and realistic evaluation would render a judgment incredibly favorable to the Commonwealth of The Bahamas. As the adage goes, "To whom much is given, much is expected."
We, the Bahamian people, have been given a great country by our God, our forefathers and Bahamians of generations past. The expectation now even more than ever is for every Bahamian citizen, every one of us, to make individual contributions to the continuous advancement and further greatness of our beloved commonwealth.
As we embark upon the next 40 years, all of us must embrace an active citizenship, one that asks: "How does my attitude, my lifestyle and my behavior either contribute to the increasing development or gradual weakening of the Commonwealth of The Bahamas?"
An active citizenship that says to be born Bahamian is not a right, but a privilege, a privilege that must be honored by an equal and unshakeable resolve to "do my part" to make The Bahamas better.
Occasionally lost sometimes in the usual rhetorical scuffle and paralysis of analysis that at times handicaps the national dialogue on pertinent issues is a fundamental and undeniable fact that history has been a witness to time and time again. When real change and transformation altered the Bahamian national landscape in the Commonwealth of The Bahamas, it was an active citizenship that served as a catalyst.
From the Burma Road Riot in 1942, to the taxi cab blockade in 1958, to the historic vote of Bahamian women in 1962, to Bahamian independence in 1973, to the formation of both the Free National Movement and the Progressive Liberal Party, these historic events have been shaped by ordinary Bahamian men and women with extraordinary passion, resolve and selfless love of country.
Admirably, we have become a very vocal and critically thinking citizenry, but the ongoing sense of entitlement, over-reliance and excessive dependency on government have in many ways reduced the incentive for some Bahamians to be involved in their own development.
There must be a collective commitment to change the status quo and create a country for active citizenship to flourish. We must foster a culture that rejects the idea that political access to the Public Treasury is either the only way or the primary way for economic empowerment to occur. Governments ought to not simply act on behalf of the Bahamian people. They should act with them and create an environment ripe for economic independence and empowerment.
So while I do concede that social services agencies and programs are necessary to act as a collective safety net for our brothers and sisters who are ill-equipped and less fortunate, they cannot be embraced as a sustainable method through which we empower. We the citizens must be engaged sufficiently that we ensure that political, business, civic and religious leaders are accountable for their actions as we have to be accountable for ours. We must work with other community stakeholders to forward development, provide serious long-term solutions for our social, economic and educational ills.
Each of us should champion the concerns for those who have no voice and those whose influence is limited by virtue of education or economics. An active citizenship and social agitation is the bedrock of any mature democracy and it must be dynamic, visible and vibrant. Let me submit this, that our desires for our country are directly connected to what we are willing to give it individually. Now let me register this admission for the record. There are thousands of great Bahamians who helped to build this country and there are countless others who make their contribution to their community and this nation everyday. Yet, there still remains a sizeable portion of the population who sit on the sidelines; people who spectate not participate. Simply put "the work is plentiful in our country and the laborers are few".

Self-advancement
We must embrace the notion that each of our roles is significantly important to the transformation of our country. Whether you are the right honorable prime minister or a painter, an engineer or an evangelist, a taxi driver or a janitor. We must all lead from where we stand and alter our surroundings for the good of The Bahamas. It is my belief that we must weave into our social fabric a sense of a "through the corner", "in the yard", "everyday" patriotism. An ever-present patriotism that will stir the soul of the Bahamian people daily and incite a level of pro-activeness and a relentless focus on nation building. I'm reminded daily of the impact of this when I talk to and observe a remarkable lady on the corner of Meadows and West Streets affectionately known as "Mother Blessed" as she cares for and transforms the lives of young children in the Bain Town community. I'm reminded of this when I drive on Baillou Hill Road and see Troy Clarke of the L.E.A.D institute as he inspires the young men in his program. I am reminded of this when I think of Tyrone 'Goose' Curry of the Foundation Junkanoo group, who works tirelessly to uplift the spirits of the young men and women in the Chippingham area.
There is, however, a stark and festering reality that has been with us for decades that seems to evade our consciousness and that is there is no amount of legislated public policy that can stem the instances of chronic lawlessness, social deterioration and corruption that we are now facing. To begin to usher in the change needed it will involve an active citizenship and an engaged, aggressive, demanding Bahamian citizenry whose members work tirelessly within their circles of influence to begin to eliminate and battle those elements of our society that weaken us as a country.
We have much to be proud of as a country and are truly blessed for having been given the Commonwealth of The Bahamas by our creator. We are therefore both citizens and caretakers. Let us remind ourselves daily that citizenship is not simply a status of national residence. It is an unwritten, sacred, solemn and binding pact between us and our country. We are exposed to unlimited privileges of being Bahamian; the absolute advantages of our climate; our geography, our seas. We benefit from a sometimes, yes, challenged but underestimated thriving democracy and a stable economy. We are in the elite and enviable position of being one of six countries in the world that have United States pre-clearance. We enjoy the relatively peaceful and tranquil experience that is the Bahamian way of life. All that is asked of us is to do our part and make individual and collective contributions to our Bahamaland that has given us so much. We reap the harvest from our land but in my humble view too many are unwilling to till the soil for the next generation just as the land was prepared for them.
There is no more room for idle hands or the absentee citizen. For the very same community and society we neglect today are the same ones we will become victims of tomorrow. We must awaken those patriotic passions and cultural ideals that were so prevalent during the pre-independence years and those immediately after. There must be a huge shift in how we view our citizenship. Let us harness that unique Bahamian spirit of excellence that has given us world-class leaders, scholars, actors, painters, song writers, musicians and athletes and become consumed by what will make us individually better neighbors, ideally better Bahamian citizens, because the future of the Commonwealth of The Bahamas depends on it.
o Shanendon E. Cartwright is the founder and facilitator of Vision 21 - an educational, motivational and interactive lecture series on leadership.

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The FNM, the equality of women and the progressive cause

March 27, 2014

By royal mandate the House of Assembly was established in the Bahama Islands in 1729 during the governorship of Woodes Rogers.
The institution was intended for white men of means. Slaves, their descendants and women did not legally qualify to sit in the House. White men of lesser means were unable to sit by virtue of their lower economic standing.
The institution evolved over the centuries, becoming the centerpiece of Bahamian democracy representing the relative advancement and equality of various segments of society.
During the second and third decades of the last century, R.M. Bailey and the politicians C.C. Sweeting and S.C. McPherson formed a political group, the Ballot Party. McPherson, like Stephen Dillette, Walton Young and others before him, were among the first blacks elected to the House.
In the 1940s Dr. C.R. Walker, Bert Cambridge and Milo Butler engaged the struggle for racial equality, championing the cause as members of the House.
Still, the largely undemocratic nature of the assembly involved not only those eligible for election. It also concerned those "qualified" to vote. As noted by Governor General Sir Arthur Foulkes in an independence address last year: "One had to be male to register to vote. One had to own or rent property of a certain value. One male could vote in every constituency in which he owned or rented property... A lawyer could cast a vote for each of the companies registered at his office."
The gross inequality of the system was overwhelmingly directed against blacks and women.
Intransigence
In her famous January 19, 1959 philippic and plea for female enfranchisement Dame Dr. Doris Johnson understood how difficult the road ahead was in the face of male intransigence.
She might not have fathomed then the resistance ahead by the men of the PLP in regard to gender equality well beyond voting rights.
She drummed in 1959: "This mobilization of our energies was called forth by the challenging statement issued by the Right Honorable Secretary of State Mr. Lennox-Boyd on 13th April 1958 that there was not sufficient interest on the part of Bahamian women for him to recommend the enfranchisement of women at that time.
"This statement by the secretary was issued despite the fact that a petition signed by more than 3,000 women had been presented to Mr. Lennox-Boyd by a delegation of women from the Suffrage Movement.
"To add insult to injury, Mr. Lennox-Boyd at the same time recommended the extension of the franchise to all males who have reached the age of 21. May we remind you that there has never been any demand from our husbands and sons to secure their rights, but these are freely recommended..."
Women secured the vote in time to participate in the 1962 general election. They would not secure a seat in the House for another two decades. It was not the Old Guard alone which stymied the election of women to the House.
Sadly, ironically, it was some in the New Guard in the PLP who failed in helping secure a woman a seat in the people's assembly.
It is unfathomable, unconscionable, that a PLP which raised eternal hell in dismantling the Old Guard's resistance to blacks attaining political power, failed to move heaven and earth to quickly get a woman elected to the centerpiece of Bahamian democracy.
From the inception of the PLP in 1953, and most certainly from the 1956 general election until 1987 - over 31 years - a Bahamian woman was never afforded nomination for a safe or winnable seat in the House by the party.
Shattered
It was not until 1982, two and a half centuries after the establishment of the House, that a woman was elected to the chamber. It was the Free National Movement which shattered the glass ceiling, successfully running Janet Bostwick.
What makes the narrative more compelling is that the accomplishment came while the FNM was still in opposition and enjoyed a limited number of winnable seats. The party made a calculated gamble in the advancement of Bahamian women.
For decades prior, the PLP, which enjoyed a surplus of safe seats, refused to run a woman in any of those constituencies, though they nominated any number of men with limited intellectual capacity, poor character and a talent for corruption.
It seemed that the PLP preferred a dumb man over a smart woman. Even the brilliant Dame Doris was given a nomination for a seat in Eleuthera, which she stood no chance of winning.
Likewise the highly accomplished Mizpah Tertullien, who was nominated for the unwinnable Shirlea seat. The sexist pattern was to nominate women as tokens for seats the PLP could not win.
Bahamian women were integral to the success of the PLP in terms of votes, grassroots organizing, fundraising, branch development and other support. But apparently women were not good enough to sit among the men in the House.
Except for the brief period Dame Doris served in an early Cabinet of Sir Lynden Pindling, not a single other woman sat in the Cabinet of The Bahamas during the PLP's initial quarter of a century rule. Apparently, women were also not good enough to serve in Cabinet.
The election of Janet Bostwick was part of a broader progressive vision which became resident in the FNM after the departure of the Dissident Eight from the PLP.
That split came about for a number of reasons, including the abandonment of various progressive principles and ideas by Pindling's PLP. Among the eight were Warren Levarity and Arthur Foulkes, two of the leading architects of the PLP progressive advocacy group the National Committee for Positive Action.
Unmatched
Over the decades they were joined by other progressives including Edmund Moxey and Hubert Ingraham, whose record on gender equality is unmatched by any Bahamian prime minister.
With the FNM's 1992 victory three women were appointed to Cabinet posts with portfolio assignments in health, social services, national insurance, transport and the public service.
After a Cabinet shuffle during that term, women were appointed to portfolios dealing with education, foreign affairs and that of the attorney general.
The FNM irrevocably shattered many glass ceilings for women, including in the judiciary and Mount Fitzwilliam.
Following the 1997 election both the speaker of the House, Italia Johnson, and the president of the Senate, Lynn Holowesko, were female. A mid-term change of senators resulted in 50 percent of the Senate being female.
One of the few progressives remaining in what quickly became a reactionary cult of power around Sir Lynden Pindling was A.D. Hanna, who reportedly noted in recent years that it is the FNM which now appears as the more progressive of the two major parties.
With majority rule secured, the PLP largely abandoned women. At the 1972 Constitutional Conference the party opposed the right of automatic citizenship to children born outside The Bahamas of a non-Bahamian husband.
The issue was a significant matter of contention, with the FNM delegation arguing for full equality for women.
The FNM made another calculated gamble toward the advancement of women with the 2002 referendum, but the PLP, in a gross act of political expediency, campaigned against the equality amendment.
In office, the FNM dismantled institutionalized sexist policies and laws the PLP maintained for a quarter century.
The FNM required that male and female officers engaged in the public service be treated equally regardless of marital status.
It ended the practice whereby male public officers were routinely promoted over women and winning higher salaries because they were invariably seen as the principal "breadwinner".
Abolished
The FNM abolished the dower and made surviving spouses, regardless of gender, heir to the matrimonial home. It abolished primogeniture.
Who sits at the table, whether in the House or in Cabinet, makes an enormous difference in terms of policies and attitudes generally and on matters relating to equality.
The next wave of equality is on the horizon. It will include not only more pro-family and gender equality policies. It will include also significantly more women at the heart of political decision-making.
Of historic moment this may include Loretta Butler-Turner, the granddaughter of Sir Milo Butler, a progressive with unimpeachable credentials.
Majority rule helped liberate some from their fears and prejudices. The greater involvement of women in elected office may do likewise. But perhaps more significantly she is Milo Butler's kin and an FNM, rooted in the progressive traditions of her grandfather and the party she now calls home.
Like the offspring of prominent PLP families, including those of the late Charles Maynard and Dr. Duane Sands, she decided to leave the PLP and join the more progressive FNM.
Butler-Turner is revealing herself as a champion of all Bahamians, whether black or white; gay or straight; rich, middle class or poor; PLP, FNM or DNA. And no matter whether male or female.
Gender remains a significant factor in political life. Still, today, the bulk of the electorate appears decidedly more motivated by a leader's vision and values. Decidedly less concerned as to whether a leader is addressed as Mr. or Madam.
The FNM may be on track to shatter the biggest glass ceiling yet.
o frontporchguardian@gmail.com, www.bahamapundit.com.

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Changing the conversation: Assessing VAT and the nation's fiscal crisis

March 26, 2014

Anyone watching the news or reading the newspapers in the past few months would have heard some elements of the government's planned implementation of value-added tax (VAT). The private sector has mounted opposition to the introduction of VAT and some have raised concerns whether VAT is the best taxation regime to wrestle the gloomy state of the national finances. It should be stated at the outset that VAT is widely employed and recognized in many developed countries as an appropriate model for modern tax collection.
With the publication of the white paper and the value-added tax bill, there is no doubt that the introduction of VAT is a major and radical policy shift in our post-independence fiscal management. If introduced, it will amount to the alteration of an archaic taxation regime that has been in place from the colonial days. It too will have the distinction of modernizing our approach to taxation matters and hopefully will signal a new paradigm in the collection and allocation of the state's finances. The planned introduction of VAT has major consequences for The Bahamas and therefore it is vitally critical for members of the public to be informed and engaged in the consultative process. Given these realities, it is imperative for the public dialogue to be analytical, informative and frank.
VAT is generally considered a complex and robust tax. Although VAT is not the most progressive of taxation methods, it is viewed as having vast benefits in a multi-tax regime principally because it is a consumption tax. VAT is similar to retail (or sales) tax but is collected in smaller increments throughout the production or service delivery process. Its method of collection does not allow the "full" tax to be paid by the final consumer.

The tax is collected by all entities providing taxable goods and services and is imposed on sales to all purchasers. It allows for a set-off of a business' VAT liability from that of the amount paid for the purchase of the goods and services delivered to the consumer. It has a net-like-effect in the calculation of the total VAT liability owed to the government.
There is need for further explanation and discussion as to whether the "Bahamian" design of VAT will be based on a broad consumption base by an inclusion of all forms of government services. There must also be further consideration to whether there will be neutrality between public and private sector provision of goods and services. Additionally, deliberation must also be given to whether VAT will employ a credit-invoice method and if there is value in the imposition of the intended multi-rate as opposed to a single uniform rate. There has not been sufficient discussion about the increased administrative burden it will place on businesses and the government and whether the rate(s) will be high enough to raise sufficient revenue to accomplish the tax reform measures. These are weighty matters that require broad consultation and public education so that the implementation is progressive and seamless.
Further, special consideration must be given to small businesses and those entities which carry out non-commercial services in light of the added costs associated with VAT compliance. At present, the definitions of "business" and "taxable activity" in the bill are broad enough to include some charitable and religious services and possibly certain non-commercial government services. Although the bill exempts services relating to religious and charitable functions, all ancillary services may not be exempt. This was the experience in the United Kingdom (for example) where children's clothing had a zero rate VAT but some items in that category were still not exempt (i.e., a basic T-shirt versus one with embellishments).
It is interesting that the bill seeks to create a distinction in the taxes collected from goods and services for local and international consumption. This approach questions whether our present economic model justifies such a division given the limited taxpayer base. We also must examine whether there is any merit in retaining the payment of license fees in the port area in Grand Bahama under the Hawksbill Creek Agreement if VAT is to create a broad base tax regime. Emphasis must also be directed at ensuring that poor Bahamians are not unduly saddled with a greater taxation burden. In this regard, the bill provides exempt status for certain basic food items and services. The question is whether the identified exempted goods are adequate to provide the required protection for the poor and marginalized. It must be noted that some critical services are not subject to zero exemption, albeit they are heavily utilized by the poor.
There are clear advantages if VAT's application is broad based and levied as a single rate. It should stimulate economic efficiency and can also increase consumers' choice. It can also have the effect of allowing consumers to properly and wisely allocate resources in a democratic fashion.
The rationale for the exemption of financial services and international transactions requires further public explanation. The intent may have been to blindly continue the decades' old "protectionism" of foreign banks and financial service providers. For local banks and financial services providers that are majority owned by Bahamians who cater to a predominant foreign clientele, no exemption should apply. Similarly, foreign banks and financial institutions, whose shareholders are predominantly non-Bahamians and whose control is outside the geographical waters of The Bahamas, should not enjoy exempt status. These matters should be further reviewed within the context of whether VAT will be a barrier to the further expansion of the Bahamian financial services sector and the overall economic growth across all sectors.
It must also be recognized that unlike other nations that have employed VAT, the national conversation is not centered on the introduction of VAT in conjunction with the harmonization of income or capital gains taxes. This means that our approach should be fundamentally different to that of the United Kingdom and New Zealand (and other OECD countries). The primary focus should be to attain the greatest potential for overall revenue generation by taxing goods and services enjoyed by all consumers, particularly those who may repatriate savings and profits to onshore or other offshore jurisdictions without the payment of taxes under the present structure.
Our present taxation regime is unitary and based on fixed rates for business licenses and customs duties. Even within this simple system of taxation, noncompliance is remarkably high. It is also true that no matter the taxation method or model, tax evasion is inevitable. In the U.S.A., income tax evasion is projected at between 18-20 percent. It is possible that in The Bahamas the rate of tax evasion is at the higher threshold of 40 percent for customs duties, real property tax and business licenses. The government hopefully has built into its revenue projections and analysis a reasonable percentage for tax evasion, as VAT will not likely put an end to the culture of tax noncompliance. In fact, it may be arguable that tax evasion may be simplified and enlarged with the introduction of VAT, as it may lend to counterfeit inputs and "ghost" transactions. The United Kingdom pegs its tax evasion for VAT to around 13 percent and in OECD countries it is around 18 percent on average. The experience of the developed economies is that VAT is more prone to evasion when more categories of goods and services are excluded and multiple rates are utilized. There are other valuable experiences and lessons that we must take stock of and seek to find creative ways to eliminate in the Bahamian roll-out of VAT.
Government spending and tax collection
Thus far the debate on the new tax has placed too little emphasis on the relationship between VAT and the growth of government spending. Assuming that the government is able to raise more revenue with VAT it must not be a panacea for an exponential increase in government spending and the expansion of government noncommercial services. The fact that there is a need for a more modern approach to taxation demands that the government similarly create a legislative frame that ties government spending to the total amount of taxes actually collected in any fiscal period. There must be dual responsibility and accountability on the taxpayer and the government in the collection, allocation and spending of the tax dollars.
Bahamians fully understand that the government requires a broader tax regime to meet the growing demands of the society. Bahamians are also in tune with the culture of non-tax compliance, which is across all economic classes. Thus far the debate is glaringly and intellectually hypocritical by the failure or refusal to discuss all of the other available options for tax-credit expansion. There is a need therefore for the policymakers to engage in a larger purposeful discussion about taxation (period) and the best measures to increase taxes, albeit in a grueling recession. The debate must also focus on the "new" measures and methods that must be introduced to improve tax collection. There is no denying that presently the government is doing a lousy job in collecting real property tax and in the assessment and collection of customs duties and business license fees. Just as the present system allows for tax evasion, one hopes that the culture of a few paying the tax bill will not remain a staple of our fiscal discipline and management.
Governments are elected to lead. But they are also elected to govern responsibly, sensibly and fairly. There is no fairness in a taxation model that will drive people into poverty and create a further burden on those who are not able to meet the basic needs of human existence. The Bahamian people are duty bound to reject any taxation regime that favors over-taxing the poor or that creates a windfall for those who can afford to pay more.
The honorable prime minister was correct when he suggested that the government should slow down the process. At present there remains too many unanswered questions, and too many other viable options that require public explanation as to why they cannot be employed to fix the nation's fiscal crisis. It is therefore incumbent on the government to change the conversation and to review all options, inclusive of a payroll tax, to assess and determine if there are other robust models which can be implemented to assist in the expansion of the tax base. The government must also lead by example and must demonstrate to the public that it recognizes that it must reduce waste, foolish and extravagant expenditure and poor fiscal planning. It can lead by recognizing the constitutional provisions on the size of Cabinet and by creating a more lean, responsive and progressive public sector.
There is much merit in a simple and easy to understand taxation regime that better aids in tax compliance.
The government should revisit its overall taxation strategy and devise a plan that fits well within the nation's future needs and achieves our international competitiveness. The fact is that there can be no new taxation regime without an engaging public dialogue. Leadership on these matters demands a pragmatic approach to the nation's daunting fiscal challenges and the full engagement of the Bahamian people. The process must be transparent, intellectual in its analyses and focused on improving the quality of the tax product (VAT or a viable alternative).
o Raynard Rigby is an attorney and former chairman of the Progressive Liberal Party.

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The South Bahamas Conference of Seventh-day Adventists present "Then Came the Morning"

March 25, 2014

Easter themed dramatic musical premiers April 16th at the Dundas Centre for the Performing Arts...

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Union demand must be resisted

March 25, 2014

The union representing workers at the Customs and Immigration Departments has been upset in recent weeks. The Bahamas Customs, Immigration and Allied Workers Union (BCIAWU) recently won a strike vote over its outstanding labor issues with the government...

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The fiscal reform series: Political music chairs

March 25, 2014

The game of musical chairs has been around for quite some time and is often played at functions to the delight of both participants and spectators. The game begins with a number of players and a number of chairs which is one less than the number of players. Music is played and while the music is on the participants walk or dance around the chairs. However, when the music is stopped, the players must race to find a chair to sit on and the individual without a chair is eliminated. The game continues until the chairs are reduced to one and last man or woman sitting when the number of chairs is reduced to one wins the game.
The vital topic of fiscal reform over the years can be likened to the game of musical chairs. The metaphoric reference to this game is an interesting one albeit the only difference is that the last man or woman standing in this instance has been left to address this matter and must face the music. In essence, fiscal reform had become a game of political music chairs but now the music has stopped and chickens have come home to roost.
The participants over the years
The public discourse on the issue of fiscal and tax reform has rightly highlighted the fact that successive administrations have contributed to the current state of our financial affairs. The main players of the fiscal reform political music chairs have been the administrations of both the Progressive Liberal Party and Free National Movement. However, it would be disingenuous not to state that the levels of prudence and/or extravagance exerted by each administration have differed.
The fact that the percentage of our revenue obtained from taxes is one of the lowest in the world suggests that we have not sought to keep up to date with global trends and the changing landscape of our country. Additionally, the reality that we have depended heavily on custom duties and import taxes for so long shows our level of planning in a world of globalization and free trade.
The Band-Aid approach
The lack of courage to make the difficult decisions on fiscal reform over the years led successive administrations to use quick fixes to plug holes in our finances. Hence, the government adjusted tariff rates year after year in attempts to raise sufficient revenue to cover its expenditures. Additionally, some fees were increased sometimes to the detriment of businesses and private individuals in order to minimize recurrent deficits.
It is apparent that the plan of the current administration to curb spending, improve revenue administration, implement a more progressive form of taxation and spur economic growth should have been implemented several years ago. Had such a plan been developed when it ought to have been done, we would have had the luxury of phasing in our fiscal reform plan without our backs up against the wall. We chose to cover fractures with Band-Aids knowing full well that casts were required to fix the structural fiscal problems of The Bahamas.
The delight of the spectators
It is important that the private sector and we the Bahamian people take responsibility for our role as spectators in this game of political music chairs. The danger of political tribalism could not be better shown than in this instance as we failed to adequately hold successive administrations accountable for the management of our financial affairs. While the music played, we were entertained as we demanded more from the government on the expenditure side without considering the consequences of spending more than we earned.
On the part of the private sector, it is encouraging to see the current level of engagement on the proposed implementation of value-added tax (VAT) in The Bahamas. However, this also begs the question as to where the leaders of industry have been hitherto. Unfortunately, the discussion is being held at a time when the country is at a crossroad; at a period of desperation for our commonwealth. While the tax concessions were being given, tariff rates were being reduced and we amassed considerable debt, it seems that we were comfortable as long as there was no direct threat to our profitability or survival.
The hypocrisy of opposition parties over the years is even more profound due to the contradictions of positions taken. These positions were accompanied by complaints against and criticisms of the government of the day for not doing enough (which requires spending more or giving up more revenue in concessions or tax breaks), overspending and not having a comprehensive national economic plan. Sadly, upon assumption or regaining political power, the former opposition parties chose to maintain the status quo. It is therefore mind-boggling to see that we are only just considering fiscal reform in 2014.
The stoppage of the music
There is no doubt that the music has now been stopped and the current administration has been left holding the proverbial bag. Unlike the traditional game of music chairs, the government of the day in winning the competition and being elected is constrained to confront the important issue of fiscal reform under the watchful and prying eyes of international rating agencies and multilateral organizations.
This is indeed quite a time to be the government and a convenient period to be the opposition party. Long overdue discussions are being held and recommendations are now being made while the clock is ticking. We must face the fact that the downgrade of our sovereign rating and potential devaluation of our currency in future is imminent if we do not act now. We must remain cognizant that we do not have the luxury of time and the urgency of now demands calculated action in the short term.
Conclusion
There must be full acknowledgment by our political leaders across the various political parties that they have all failed over the years to put country first on the issue of fiscal reform by the reluctance to make the tough but right decisions on this issue of national importance. The rationale for their inactions may not be fully known but it is clear that political self-preservation was a major contributor. The fear of repercussions at the polls appears to have crippled successive administrations in this regard.
Once they admit this failure, it is incumbent upon them to now work together to address this matter.

It is unhelpful and counterproductive to simply disagree without offering realistic alternatives. In the midst of this debate, we must also not forget that tax reform is not unconnected to the globalization effort and the move toward trade liberalization with our accession to the World Trade Organization (WTO). Hence, commentators must consider the bigger picture and resist a myopic view to simply avoid VAT.
In the final analysis, it would seem that the game of political music chairs is a permanent fixture of our politics, and Bahamian politicians have mastered the art of finger-pointing. Regrettably, this game is played out on every issue of national importance in our nation. However, as is often said, when you point a finger at someone, the majority of the other fingers are pointing at you. The only saving grace for the individual pointing the finger is that when the music stopped, he/she was only watching as a spectator even though he/she had his/her day at the reins of power.
o Arinthia S. Komolafe is an attorney-at-law. Comments on this article can be directed to a.s.komolafe510@gmail.com.

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