An expert in international service trade policy has revised her initial outlook on Bahamian involvement in Global Value Chain (GVC) services after conducting research in The Bahamas, arguing that the country was "not going to be competitive" in low labor-cost services.
During an interview with Carlton Smith on Let's Talk Live, Senior Advisor for Services Trade at the Organization of American States (OAS) Dr. Sherry Stephenson said, "The Bahamas is a high skill, high talent, highly educated, and therefore, high cost society. So the advantage here is not going to be built on lower labor cost activities, such as call centers," she said.
"The advantage is going to be in the area of higher skills, sophisticated services activities, I think that's what we're looking at in order to strengthen. That is where the government... needs to focus, because you're not going to be competitive in the lower labor-cost end of the services scale."
Stephenson specifically argued that The Bahamas had far greater opportunities for growth in advanced services within the financial and arbitration sectors after three days of study in Nassau and Freeport, adding that additional skills training was essential to growth.
"We've been looking at the strengths in the financial services sector, how to build upon those strengths, how to develop niche markets in financial services such as advisory services, such as insurance services that can be strengthened," she said.
"We're also looking at areas in which The Bahamas might be able to develop a stronger competitive situation that they have now based on an existing skillset in the country, particularly in the area of legal advisory services... or arbitration services."
Stephenson also noted the potential for expansion at Freeport during a recent visit, stating, "The Bahamas has a great advantage in Freeport in the transshipment area, which is a service, and that clearly... could be expanded... so that the Bahamas could become more of a regional hub than it is at present."
However, Stephenson suggested earlier this week that low labor cost activities, including call centers, could prove beneficial for The Bahamas due to their low skill and education barrier. Those comments were made during a panel discussion which explored the opportunities of integrating Bahamian goods and services into GVCs.
Several persons expressed doubts over whether The Bahamas had sufficient skilled, appropriately educated laborers to meet the demands of the services industry. In response, Stephenson suggested that The Bahamas could adapt to these shortcomings through training and lower skill services.
"Your human capital can be shaped, but not all human capital has to be at the highest level to capture services tasks," said Stephenson.
Fellow panelist Edison Sumner, CEO of the Bahamas Chamber of Commerce and Employers Confederation (BCCEC), similarly felt that a lack of skilled workers represented a significant challenge to the country's services ambitions, and called for immigration reform.
"Part of the human capital... is having a look at our immigration policies to ensure that we can attract the kind of capital that we need to build certain industries in the country," said Sumner.
"Being mindful that when we bring persons in... that we also have a policy in place where we're able to have some knowledge transfer to other Bahamians in the country, so that when those persons who are workers on work permits vacate the country, we don't create a vacuum in various industries," he added.
Stephenson conducted research at the request of the Ministry of Financial Services from July 22-24 and will present her suggestions for Bahamian integration into GVCs to the government at a later date.

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