Finding prosperity for our nation continued

Wed, Sep 7th 2016, 09:51 AM

Last week, we looked at five of 12 things we can do to reverse our nation's plummeting prosperity. We discussed: (1) increasing international visitors; (2) increasing our permanent resident population; (3) mobilizing investments in the pipeline; (4) improving customer service nationwide; and (5) increasing levels of export. Today, we will look at the remaining seven ideas for making ourselves more prosperous.

Increasing investment in creativity and innovation
New and expanded business opportunities need more creativity and innovation. Small countries, like ours, are at a disadvantage when it comes to this. This is largely because we lack the vast reservoir of human capital that larger more developed countries have. We also have fewer opportunities for those critical factors (collaboration, money, marketing, technology, etc.) to come together to improve the probability of success in ingenuity. This notwithstanding, we can generate more creative and innovative ideas than we do by investing in research and development (R&D).

Both the government and the private sector in The Bahamas must take an interest in exploring cutting-edge ideas through investing in R&D, or at the very least investing more aggressively in the results of it abroad. We can produce new and better products, services, processes, systems and personnel by doing so. We can leverage our efforts by connecting with global partners. What do we have to do to make this investment? We have to have the intent to do so, budget some resources to do so and establish focussed teams to pursue the effort. In the 21st century economy, you innovate or die. It's as simple as that. In that economy, living is prosperity and dying is poverty. We want prosperity so we need to innovate.

Increasing strategic investment in education
If we are to be more creative and innovative, we must drastically improve the output of our education system. Bahamian students must achieve much higher competencies in communication (language), computation (math), problem-solving (critical thinking) and socializing (emotional intelligence). They must also acquire the skills in demand globally, which are mostly in the computers, marketing, business, data, leadership and strategy areas.

For this to happen, we have to invest in education big time. That investment must include research in best practices, training for educators, leaders and classroom teachers, collaboration with global experts and substantial improvement in facilities. We must quit tinkering with the notion of The University of The Bahamas and dive into this project wholeheartedly.

Investing in education in a big way will require lots of money, perhaps in the hundreds of millions. We can find it, and nothing stands to do more for our future prosperity in the long term than this effort. We can identify $300 million of this money in the existing budget proposals of The Bahamas. Where?

Earmark $200 million of the more than $600 million VAT proceeds and divert five years of carnival money ($60 million - $12 million per year) and OPM national training money ($50 million - $10 million per year) and there you have it. Whatever you think of this suggestion, having been in the belly of the financial beast of the government, I know that if the desire exists the means can and will be found to fund something. If we are going to continue to run huge deficits, making some, even much of that, an investment in education makes the debt worth the while.

Genuine focus on sustainable development
Going green presents huge opportunities for small countries like The Bahamas. The investment in creativity and innovation we should be making includes investing in sustainable development. Truly, we can be the greenest little country on the planet, using solar or wind to produce more of our energy; driving non-fossil fuel vehicles on our streets; recycling as a matter of course; building homes that employ the world's newest sustainable technologies; using agricultural methods that use less chemicals and more green practices; and ensuring that not less than one-third of our developed land is covered with vegetation.

The government should incentivize investment in sustainable development more, but more importantly, lead the way in it. For example, if the government determines that it will only purchase green vehicles going forward, it will lead the way. If it builds all of its future buildings using best practices in green technology, it will lead the way. Sustainable development offers new opportunities for training and retraining of Bahamians; new and expanded opportunities for workers; new and expanded opportunities for entrepreneurs; new and expanded opportunities for cost savings for consumers; and new and better opportunities for the long-term health of our nation. In other words, it produces increased prosperity for our Bahamas and that is our aim.

More strategic approach to national infrastructure investment
In New Providence the infrastructure is old and decaying. In the Family Islands, the infrastructure is underdeveloped. Rectifying this situation in both areas is necessary; doing so in a strategic way could boost the present and future prosperity of the country. A strategic approach to this infrastructural development means ensuring that we build with a view to promoting commerce and maximizing new technology.

We should lay infrastructure in some of our Family Islands that ready them to service the offshore back office needs of the computer industries of the developed world. We should lay infrastructure to support the strategic geo-economic needs of the emerging economies of Asia and Latin America in terms of air and sea links. In partnership with private investors, we can make The Bahamas more valuable to global commerce. This will lead to inward direct investment, job and business increases in the infrastructure development process and prosperity now and into the future.

Liberalized exchange control on capital account and the national investment policy
It is time for us to free up Bahamians, particularly entrepreneurs, to access capital on the global market, especially for ventures that are export focussed. Capital at home is too expensive, to slow in coming and too cumbersome to access. This is truer now than in years prior to the recession of 2008. The international financial marketplace has more and a greater variety of capital suited to the varying needs of local businesses. We harm our future prosperity by limiting these entrepreneurs' access to that capital.

We must also liberalize our national investment policy to allow, without pretense, for greater foreign participation in more areas of our economy. We pretend to have the area of wholesale and retail trade reserved for Bahamians, but the truth is far different.

Some of the largest wholesalers in our country are owned by foreigners. Sysco, a U.S. giant, owns Bahamas Food Services, perhaps the largest wholesaler in the country. On Bay Street, many stores are owed in whole or part by foreigners. Those who do not have upfront ownership have backdoor ownership. Even some whose ownership is now in the open are only so because they were brought out of the shadows by government action.

I don't begrudge this because most of them have been profitable, sustainable, job-providing businesses. Strategic foreign participation in our economy can improve pricing, efficiency and productivity because it allows for scales and gains not now present in our economy. Yes, there will be some creative destruction in the beginning, but in the end we will become a more sophisticated economy.

Application of modern tech in public & private business systems
If we have greater strategic partnership with international players, we might actually advance our effort to apply modern technology more in our public and private sectors. Use of cutting-edge technology is key to overcoming the disadvantage of smallness for countries our size. Technology can enable us to be more efficient in the production, distribution and delivery of our goods and services. Singapore is a great example of this, using technology to ensure that it sits atop of the global "Ease of Doing Business" list for years now. We can be the most technology driven small country in the world. If we become this, we will prosper greatly.

We can debate these ideas. I welcome that debate. Frankly, this is the debate that we need in this nation; a debate about ideas to move us forward. Surely, the shallow pre-occupation we are now having about some of the things now under discussion is troubling. One thing is certain, we will not produce these kinds of ideas, debate these kinds of ideas or advance these kinds of ideas without leadership - good solid leadership.

Let's imagine a debate between Prime Minister Perry Christie and Dr. Hubert Minnis on ideas for advancing our nation's prosperity. Imagine if that debate took place between the two candidates for leadership of the Free National Movement in its recent convention. Wouldn't that have been refreshing? Our nation's prosperity is in decline and there is a great need for solutions to rescue us. I pray that those who seem so determined to lead us have the same determination to rescue us and have the competence to do so.

o Zhivargo Laing is a Bahamian economic consultant and former Cabinet minister who represented the Marco City constituency in the House of Assembly.

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