Minister of Financial Services Hope Strachan yesterday affirmed that the government is committed to the establishment of The Bahamas as a trading hub for Chinese currency, which would lead among other things to the establishment of the first Chinese bank in The Bahamas, and would -- the minister contended -- eliminate reliance on the U.S. dollar and the transacting of business through the United States.

Strachan was delivering her contribution to debate on the government's 2016/2017 budget. She has Cabinet responsibility for promotion of the financial services sector, international trade, the Industries Encouragement Act, the Bahamas Bureau of Standards and Quality and the establishment of an international commercial arbitration center in The Bahamas. In order to achieve this mandate during the 2016/2017 fiscal year, the Ministry received an allocation of $2,597,300.

The minister noted that the government has taken advantage of several opportunities for project financing from the Chinese government and from Chinese corporations.

"As a result, the establishment of a hub for trade in Chinese currency is an attractive prospect that the government of The Bahamas has approved and my ministry is diligently pursuing this initiative as a viable project," she said.

According to Strachan, the success of this project would translate into an entirely new frontier of financial services and trade business for The Bahamas, making The Bahamas the RMB (renmimbi -- Chinese currency) trading hub for the entire region. Success would mean that the government, Bahamian businesses and financial institutions would have the ability to engage in less costly and less time consuming processes related to transactions involving the direct clearing and payment of the Yuan currency in The Bahamas.

"It would eliminate reliance on the U.S. Dollar and the transacting of business through the United States. The creation of a platform for the Yuan to trade freely with the Bahamian dollar will allow for international trade finance, and trade and investment to increase significantly," she said.

The minister cited the potential to increase business activity in the global business segment, as foreign corporates set up shop in The Bahamas or those already in existence further leverage to tap into a comprehensive pool of RMB denominated solutions; an efficient business framework, underpinned by factors ranging from The Bahamas' position as a well-respected international financial centre to its strategic geographic location to North American and Latin American markets, and trading without the hurdle of an additional layer of foreign exchange cost and currency risk and to have transactions settled within a favorable time zone (EST) is indeed an attractive prospect.

She said the economic slowdown in the United States magnifies the importance of the need to diversify cross-border trading with other markets around the world.

"Further, new financial institutions would be established in The Bahamas, including the introduction of the first Chinese bank to the country. The establishment of the RMB trading hub in The Bahamas would help to further diversify our financial services sector and position The Bahamas favorably from a global perspective as an even more appealing place to invest and do business," Strachan said.

Service Culture
Strachan also spoke bluntly about the need to improve service, which she referred to as the need to "strengthen the services culture in The Bahamas in both governmental and private sector departments that are closely connected with financial services." For example, she said the new online companies registry at the Registrar General's Department and with the online registration for business license applications, these initiatives still need to be coordinated with other departments.

"We must realize we are One Bahamas, the experience is holistic. More improvement is needed in immigration matters and with our regulatory agencies. Improving efficiencies and service attitudes is the responsibility of both the government and the private sector. We must work together. Our competitors are surpassing us in the "ease of doing business". We must improve in technology and innovation," she said.

She spoke about complaints from certain sectors, and talked about "low hanging fruit" in the area of service that could be solved relatively easily.

"So I'm hoping that the relevant stakeholders are all listening and they would understand that we have to create that environment of professionalism, and that we are here to deliver the services that we boast of and that we go out into the world to sell.

"It's one thing to get the people here, that is the responsibility of my ministry, to go out into the world and bring the financial services business here. But once we get the people here, we have to treat them right in order for them to remain," she said.

She asserted that there is much room for improvement when it comes to the ease of doing business in The Bahamas.

"The Bahamas is falling behind while our counterparts across the Caribbean are positioning themselves to be the best. We must work toward stimulating and improving our international competitiveness by reviewing and improving our policies and practices, offering speed and quality to the market as well as taking a good look at how we can improve existing legislation and regulatory practices that hinder our ability to grow and provide new services. This does not translate into a lower standard, it is the necessity for the government and regulators to understand that the way we do business has changed and that we must equip our industry with the ability to choose alternative approaches to capture new business alternatives in a clean and compliant environment," Strachan said.

Meanwhile, the minister also reported that financial services second only to tourism and accounts for more than 15 percent of the GDP of The Bahamas and more than 20,000 jobs directly and indirectly, representing more than 13 percent of total employment. She added that the industry generates substantial government revenues of approximately $200 million and 19 percent of the tax base according to latest publicly available figures.

K. Quincy Parker, Guardian Business Editor

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