Last week I started giving my thoughts about how we can rev up our economy, something all of us agree we need desperately. The first three ideas toward doing this I mentioned were providing wowing customer service across the board; the second was liberalizing our immigration policy to allow larger numbers of international persons with money to spend to take up residence in our nation; and the third was to have a more strategic approach to direct investment by both Bahamians and non-Bahamians.
This week we finish our non-exhaustive list of thoughts toward revving up our economy or making it robust in the shortest possible time.
However, just before I get to the remainder of the list let me stress here that the single most practical and important issue facing this country is to generate economic growth - rapid and sustained growth. We desperately need thousands of jobs, higher wages and more opportunities for business creation and profitability. When we consider some of the outrageous issues that face us in the political arena, the most recent being the affair involving billionaires, the only reason to explain why they have not caused outright pandemonium in this country is that too many Bahamians are pre-occupied with mere economic survival to pay sufficient attention to such issues.
Even crime is yielding to the desperate economic hustle taking up the attention of Bahamians. People want and need to pay their bills, and that is too difficult to do these days. So higher order issues take second, third and fourth place. So what else can we do to speed up this economy and bring prosperity to our citizens so that they might pay attention to other pressing issues? Let's continue the list.
Four, expand access to capital by liberalizing exchange control on the capital account. Access to capital for local businesses is horrendous. Rightly or wrongly, the traditional sources of funding, like commercial banks, are sour on lending to local businesses operating in this economy. That market now is brutal. They see us as too risky for their level of risk tolerance.
Non-traditional funding options are equally difficult with interest rates that are simply unaffordable in many instances. The answer to this capital access dilemma? Open the international capital access gate a little bit.
Give Bahamian businesses, especially those that are foreign currency earning, the ability to source capital from abroad. Let them do so through joint ventures, angel investors, venture capital or outright loans from lending institutions willing to advance the funds. Why? Because there is a greater abundance of money out there in the world, it's more affordable in many instances and its sources are more diversified and risk tolerant. If nothing else, it would introduce a level of competition to local funders that might make them more reasonable.
Five, reform our tax environment to make it more business friendly. Former U.S. President Ronald Regan once said, "The government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
We should not be nickel and diming businesses for a few more dollars in fees and taxes. Business growth will lead to greater economic activity which will expand the base for government revenue. It is simply not business friendly when a small business person brings in $300 of supplies at an air or sea port only to be told that she has to get a customs broker to prepare an entry in order to complete her import. For the business, this means an additional $60.00 paid to the broker in addition to customs duty. And why has the government done this? So it can collect an additional $10 processing fee. It would be easier and better for the government to simply tax that business customs duty and the additional $10 as opposed to putting it through so much hassle, delay and cost.
In a robust economy, higher government taxes and fees discourage business. What do we think happens in a bad economy? Reducing the time, cost and headache of doing business in this nation can only bode well for encouraging the growth of our economy.
Six, go all out to rev up the entertainment feature of our economy. People across the globe, rich and poor want to entertain themselves. They and their families want to enjoy their wealth or get away for a time from their pain. They often seek to do this by travelling abroad and The Bahamas remains one of their dream destinations. However, truth be told, our entertainment value these days is sub-par. Oh, we have some bright spots like Atlantis and some of the Family Island spots that remain popular with some international visitors. But, we are not what we need to be for many more millions. We are high priced with limited offerings and low value customer service. Even we Bahamians are not excited about ourselves because we find our own home not a wow kind of place to enjoy. I tell you, if I were investing an additional $14 million a year in our culture, I would not do it in a one annual event carnival. I would do it in ongoing professionally produced shows that millions of tourists, and thousands of Bahamians, would be compelled to watch.
I would use it to populate our islands with great attractions like magnificent aquariums, gardens and artistically designed water and recreation spots. The point is that we should do things that make people who live here and visit here say that The Bahamas is the happiest little place on the planet.
Seven, we must speed up Crown land grant applications. Bahamians want to invest in their country. They want to generate new businesses. Some need land to do this but know that access to land through private means is unaffordable. They seek Crown land grants to bridge this gap. However, the Crown land grant application takes longer, in most instances, than making a diamond out of coal. And the process is too often tainted by political considerations.
We need to have proper assessments made of business proposals from people applying for Crown land and once deemed acceptable, let the approval loose. Give that striving Bahamian the land and set him loose to pursue his dreams. If they fail, then a lesson is learned; the land is still in the country. If they defraud, as some have done in getting the land for farming and doing something else with it, then let the law take its course. There is economic growth in the proper use of Crown grants in this country and we need to pay more attention to this.
This simple framework for growing our economy is not exhaustive. Others may have better suggestions. Don't get caught up arguing about what is wrong with mine. Give your suggestions. We need a robust economy and we need it now. We need to have a sharp focus on this. Thousands and thousands of frustrated and discouraged Bahamians desperately need it. We must do all in our power to get it, sooner rather than later. If we do not do so, the line at Club Luna will be a joke. What will not be a joke is the level of poverty and anger that follows.
o Zhivargo Laing is a Bahamian economic consultant and former Cabinet minister who represented the Marco City constituency in the House of Assembly.
Click here to read more at The Nassau Guardian
