The grand deception - part 1

Wed, Feb 4th 2015, 10:11 AM

The failure of the economy of Grand Bahama remains a mystery to most people and the question is often asked as to how one of the largest islands in The Bahamas, situated only 85 miles and 45 minutes away from the largest economy in the world, with an extensive modern infrastructure, a deep water harbor, thousands of acres of land, abundant fresh water and miles upon miles of the most beautiful, untouched beaches in The Bahamas could fail to succeed. No doubt, many politicians and their acolytes have made fortunes in Grand Bahama and so have the constant procession of foreign front-men who have come to this country with little or nothing in terms of personal wealth but who, after having established alliances with Bahamian politicians, have been the beneficiaries of lucrative licenses and government contracts and have become rich.

This three part series of articles on the economy of Grand Bahama are offered by me to the Bahamian public as a means of starting a mature and meaningful discussion on the systemic developmental obstacles which we face throughout our Commonwealth, the effect of partisan political gang warfare in enabling and sustaining those developmental obstacles and the psychological and democratic choices which we must make if we are to address those developmental obstacles and mature our democracy. If we want to change our country we must change how we think and what we do. If we do not change how we think and what we do, we will not only fail to change our country but the dire social and economic issues which now confront our country will no doubt increase.

This three part series in relation to the economy of Grand Bahama will address the following issues:

o That all material decisions of the Grand Bahama Port Authority Limited ("the GBPA") in respect of the business development of the City of Freeport are, and since 1968 have been, subject to the control and oversight of the government of the Commonwealth of The Bahamas with the result that repeated statements by successive governments of The Bahamas that they are and have been powerless to direct the development of the City of Freeport and, by extension, the wider Grand Bahama community, have been untrue. The repeated failures by successive governments of The Bahamas to redirect development of the City of Freeport for the benefit of the citizenry of The Bahamas have been a gross dereliction of duty.

o That the real property tax exemption under the Hawksbill Creek Agreement which will expire on August 4, 2015 will only expire in respect of non-Bahamians (such as the shareholders of the GBPA) who own land in the City of Freeport and will, even after its expiration, continue to exist in respect of Bahamians who own land in the City of Freeport with the result that any extension of that real property tax exemption under the Hawksbill Creek Agreement would be wrong and indefensible as amounting to a tax break for rich non-Bahamians in the City of Freeport in the face of recent significant tax increases upon poor, working class and middle-class Bahamians in the City of Freeport and throughout The Bahamas.

o That the provisions of the Hawksbill Creek Agreement should be brought to an end and a democratically elected municipal government for the island of Grand Bahama should be established (as the first of other such municipal governments to be elected in other developed islands and regions of The Bahamas) with all attendant powers to administer and control the island of Grand Bahama, inclusive of the powers under the provisions of the Hawksbill Creek Agreement, with power to raise, hold and disburse municipal government funds.

This article, therefore, is the first part of those three instalments and relates to the rights and powers of the government of the Commonwealth of The Bahamas to administer and control the City of Freeport under the provisions of the Hawksbill Creek Agreement.

The Hawksbill Creek Agreement
When we speak of the Hawksbill Creek Agreement we are in fact speaking about the initial agreement which was signed on August 4, 1955 by the then Governor of The Bahamas (by virtue of the authority which was vested in him under the provisions of the Hawksbill Creek, Grand Bahama [Deep Water Harbour And Industrial Area] Act, 1955) and of the subsequent amendments to that agreement on July 11, 1960 and  March 1, 1966 by virtue of the provisions of similar statutes which were enacted in 1960 and 1966.

All three of those statutes, and the agreements which were executed pursuant to them, may be found at http://laws.bahamas.gov.bs/cms3/legislation/consolidated-laws/alphabetically.html or by googling "online Bahamas statute law".
The starting point is that the Hawksbill Creek Agreement, in effect, vested administration and control of the Port Area in the GBPA to the exclusion of The government of The Bahamas except pursuant to the provisions of the Hawksbill Creek Agreement itself.

At the time of their execution the Bahamas was a colony and although there may have been some debate at the time as to whether the colonial government had power to do what it purported to do, that debate has been put to rest (see Bancoult, R [On The Application of] v Secretary of State For Foreign and Commonwealth Affairs [2008] UKHL 61, [2008] 4 All ER 1055 paras 49 - 51). The colonial government clearly had the power to enact legislation as it did in 1955, 1960 and 1966 to authorize the signing of the Hawksbill Creek Agreement.

The effect of the Cuban Revolution on the Hawksbill Creek Agreement
History is more than an account of old facts. Many times an understanding of history can provide great clarity to subsequent and current events.

The original intent behind the Hawksbill Creek Agreement in 1955 was for the government of The Bahamas to receive the benefit of the construction of a basic city infrastructure in exchange for allowing the GBPA to construct and operate a deep water harbor, to license ancillary businesses around that deep water harbor and to sell land to persons who thereby became attracted to the City of Freeport. Regrettably, that business model was not a success for the GBPA.

Meanwhile, on November 25, 1956 Fidel Castro, accompanied by approximately 80 other insurgents including Che Guevara, set sail from Mexico for Cuba to overthrow the corrupt Batista government. Much of that corruption was centered around foreign investment in casinos in Cuba. After more than two years of fighting by the insurgents, and popular up-risings among students and the general population in Cuba in support of the revolution, the Batista regime was overthrown on January 1, 1959 and a revolutionary socialist state was established in Cuba under the leadership of Fidel Castro.

Foreign investments in Cuba were confiscated. The effect, therefore, was not only to end the Batista regime in Cuba but also the creation a demand for another casino destination in the Caribbean within close proximity to the American coast. It is, therefore not surprising that the GBPA thereafter commenced negotiations with the colonial government of The Bahamas which culminated in the signing of an amendment to the Hawksbill Creek Agreement on July 11, 1960 providing for the bonded import of goods without the payment of customs duty under the Hawksbill Creek Agreement to be extended to "places of... amusement, entertainment and sports" and for the GBPA to be allowed to license not only the types of businesses that were initially envisioned around the operation of the deep water harbor but, thereafter, to also to be able to license "all lawful businesses, utilities, professions, undertakings and enterprises of every nature".

The results were startling. On January 11, 1964 the Monte Carlo Casino was opened in Grand Bahama and by 1966 construction of the International Bazaar was completed. The Kings Inn Hotel was expanded by 350 rooms and the 614 room Holiday Inn and 12 storey Oceanus Hotel were constructed in Lucaya. Between 1964 and 1966 the population of Grand Bahama almost doubled from approximately 4,700 to 8,500. Total air and sea arrivals to Grand Bahama increased from 26,000 in 1963 to 204,000 in 1966 and 332,000 in 1968. (see "An informal History of the Grand Bahama Port Authority Limited, 1955 - 1985" by Jim W. Baker: http://www.jabezcorner.com/Grand_Bahama/Informal4.html and "Pindling, The Life and Times of the First Prime Minister of The Bahamas" by Michael Craton).

The City of Freeport was booming and the impetus for that success for the majority of Bahamians was not based upon the success of the industrial sector but upon the success of a new vibrant, fun, gaming-oriented tourism sector.

o Gregory Moss serves as the member of Parliament for the Marco City constituency. Part two of this column will be published next Wednesday, February 11.

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