While the Hawksbill Creek Agreement (HCA) may have failed to live up to its full potential, the government should strongly consider expanding Freeport's free trade zone model to other Family Islands to stimulate economic growth outside of Freeport and New Providence, according to Giora Israel, senior vice president for port and destination development for Carnival Corporation and a board member of the Grand Bahama Shipyard Limited (GBSL).
Israel told Guardian Business that it was critical that the government not scrap the free trade zone blueprint established in Freeport ahead of looming expirations of several critical tax exemptions under the HCA. While Israel, a key player in the conception of the GBSL, acknowledged that the HCA faced criticism given its pre-independence origins, he stressed that it had a great degree of untapped potential.
"A lot of governments are building duty free or special taxation areas. Most countries have things like that. The Hawksbill Creek Agreement, although it goes back before independence for The Bahamas and a lot of people question it, it's not unusual to have a structure like this in The Bahamas.
"Why don't we have another one in Andros? There should be more of these areas. I know The Bahamas, and in giving those economic benefits will spawn more and more activities. We're for keeping Grand Bahama very competitive and the Hawksbill Creek Agreement, though it ultimately maybe didn't deliver everything it was expected to, [resulted] in one of the biggest port operators in the world with the container terminal and the Grand Bahama Shipyard, the world's number one cruise ship repair facility," he said.
Prime Minister Perry Christie questioned the success of the HCA given the state of Grand Bahama's economy earlier this month at the Grand Bahama Business Outlook (GBBO), confirming that the government would allow some of the tax exemptions under the HCA, most notably for business license fees and real property tax, to expire in August 2015.
However, Israel countered that the HCA concessions played as much of a role as Freeport's geographic proximity to the U.S. in developing the GBSL, if not more. Other Freeport stakeholders, including the Grand Bahama Chamber of Commerce, have repeatedly appealed to the government to renew the concessions, especially given Grand Bahama's current economic malaise.
"Every government has a system of taxation and fees and obviously Grand Bahama through the Hawksbill Creek Agreement is a very unique set of circumstances.
"Having said that, many countries have special economic zones where certain tax breaks are designed to allow economical development. Everybody says that Freeport was important to build the shipyard because of proximity [to the U.S.], but the benefits under the Hawksbill Creek Agreement were a key reason to build the Grand Bahama Shipyard. Business needs to be encouraged because they create employment, economic activity, and that's a top priority for any government," Israel said.
Despite the uncertainty and private sector unrest surrounding Freeport's future, particularly once the tax incentives under the HCA expire, Israel was convinced that the city's "best years" had yet to come if only Bahamians capitalized on the opportunities before them.
"The promise is there. There was a setback on tourism, unfortunately, and we all know the story of the Princess and Our Lucaya, but I think the best years of Freeport are ahead but the people of Grand Bahama and the people of The Bahamas generally need to grab the opportunity and run with it," he said.

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