Finding prosperity for our nation

Wed, Aug 31st 2016, 12:20 PM

Last week this column discussed the decline of our national prosperity and the pride we once had in it. We noted our bleak economic conditions and the limited hope for improvement. In the end, we asked: What can we do to make things better? In this edition, we will look at some of the possible answers to this question.

Increasing prosperity in The Bahamas is a matter of finding and getting new and abundantly more money into the hands of the masses of Bahamian consumers. Money is the bottom line. In a system where we must pay for almost everything, including hopes and dreams, we need money. And we need the money on a sustained basis because bills and debt obligations come continuously.

One of the tragedies of governance in our nation is that the government is obsessed with its need for money to satisfy its insatiable appetite to spend, but takes a laisser-faire attitude toward the desperate need of citizens to have money to meet their needs. Think about it, in a time when far too many Bahamians have less money, the government moved to take more of their money with the introduction of new taxes and fees. We need to find plenty of new money for citizens and companies that are strapped in this country.

How is this going to happen? We need jobs; lots of jobs; thousands of jobs. There are more than 20,000 people in The Bahamas looking for work who cannot find work. They need jobs that can pay a living wage.

What is a living wage in The Bahamas? If we use the national minimum wage ($5.25/hr) as a measure, the living wage is at least $210 per week, or $840 per month or about $10,000 per year. If half of the unemployed people in The Bahamas got a job earning this living wage over the next five years, the economy of The Bahamas would increase by $150 million, an increase in GDP of almost two percentage points, pushing our growth rate some three percent or more.

How are we going to get thousands of jobs in The Bahamas? We need scores of new businesses to come on stream and hundreds of existing businesses to expand their operations. New businesses need new workers and new workers mean new wages and income. Expanding businesses need more workers. More workers mean more wages and income.

New and more workers with new and more income means more spending. That spending goes to rent/mortgages, utility services, groceries, clothing, healthcare, travel and entertainment. It means even more taxes. That means, all else being equal, the economy expands, and if the expansion takes hold it means a robust economy over time.

How are scores of new businesses going to come on stream and hundreds of existing businesses to expand their operations? They will come about through new market possibilities, some at home but lots abroad. Businesses have been selling to customers. When businesspersons see new opportunities to provide goods and services to new customers, they create businesses to provide those goods and services. When existing businesses see increased opportunity to service their existing markets or new markets, they expand their operations to do so.

How are new market possibilities going to open to our businesses? We will do so by:

(i) increased international visitors;

(ii) increased permanent resident population;

(iii) mobilization of existing investment intent;

(iv) improved national customer service;

(v) increased export orientation;

(vi) increased investment in creativity and innovation;

(vii) increased strategic investment in education;

(viii) a genuine focus on sustainable development;

(ix) a more strategic approach to national infrastructure investment;

(x) liberalization of exchange control on the capital account and the national investment policy; and,

(xi) a no-holds-barred application of modern technology in our public and private business systems. Let's look at each in turn.

Increased international visitors
The short-term lowest hanging fruit in our quest to get new money in the hands of our people is increasing our tourism count. We need more tourists coming to The Bahamas annually spending good money. We need them to come by boat, but especially by plane.

The argument is that we need more hotel rooms. That may be true but we have existing hotel rooms that are not maximized, even in peak season. It may be true that we need more hotel rooms but it is also absolutely true that we simply need to be more competitive.

In 2013, according to the Resonance Consultancy Report, The Bahamas was atop a list of 10 countries most visited by American travellers, but the last on that list that they want to visit most in the future. We need to be these people's first choice, next choice and always choice. To do that we need to improve the quality of our services to a wowing level.

Mobilization of existing international investment intent
The government claims to have hundreds of millions of dollars in inward direct investment in The Bahamas. We certainly know of the multi-billion dollar Baha Mar project. New money and increasing prosperity for The Bahamas could begin with the actualization of these projects.

The government should move with haste and determination to have these projects come on stream, even doing the extraordinary where necessary to unleash them. Extraordinary times call for extraordinary measures. Get behind those bureaucrats and cause them to give undivided attention to the realization of these international projects. While they are at it, they can do the same for local projects.

There are many Bahamian business projects, some construction projects, that are stuck in the mud waiting on approvals. These projects too can create new jobs and new prosperity. If an application is in, get it out and on the road to establishment. That should be the government's immediate mandate.

We need to make price a lesser issue in visitors' travel. We need to ensure that the experience of visitors is so outstanding they regard the cost as a discount and cannot wait to repeat it again and again. A pipe dream? Well, it takes a dream to make the world better than it is.

We need to rev up the entertainment feature of our tourism. People need to experience our nation as the happiest place on the planet. They need to be oohed and aahed with sights, sounds, food, drinks, dance, art, culture and hospitality. When they leave, the memories of our hosting them must be so intense that they will have no choice but to tell everyone they meet about it. More tourists spending more time and more money means more prosperity for us.

Increased permanent resident population
I have said it before and will say it again. We need to liberalize our immigration policy and make it easier for international persons with disposable income to come to live in The Bahamas. This is less about changing the content of our policy as it is about changing the administration of it.

Let's drastically reduce the time it takes to approve permanent residence applications to under 30 days. Let's reduce the impediments to those applications like long waits on police records by employing the concept of "eligible introducer". Let's broaden the things that can lead to accelerated consideration, such as long-term leases as opposed only to the construction of a home valued at $500,000 or more.

Let's add some contribution items to the qualifying criteria like charitable donations, volunteering to teach or hospitality ambassador work. Let's make special considerations for families locating to The Bahamas, Bahamian and foreign, such as one-time customs duty exemptions on imported items. When we decide to do this, let's go out and invite the world to become a part of our country.

Improved customer service

Forget the foreigners who come to our shores for the moment; truth be told, our service to our own in this country sucks. We are marginally friendly, woefully inefficient and mediocre in our productivity. We deliver services to each other as if it is some flavor rendered to the unfortunate.

How often do you go to the food store, a restaurant, a gas station, a hotel or a government office and feel that you were punished for spending your money with them? How often do you go to buy a product or a service and get shoddy treatment? Worse still, when you complain, you are met with debate, blame and little relief. Try this in the U.S.A. and see how often they ask no question and eagerly refund or replace the product.

Here we get mistreatment. It is not a good feeling and it happens too often. If we can substantially improve the level of service at all points in our economy, the rewards to our prosperity will be enormous. People spend more where they are treated best and they spend more often. If we do this to ourselves, the strangers among us will both observe and experience the same and herald our goodness across the globe. The result will be more money all around and more prosperity.

Increased export orientation

Our economy is small because our population is small. We are 355,000 people boosted annually by five million temporary visitors. Local and international population considered, we are a small economy.

For new and expanded market opportunities, we need to branch out. We need to look at the world. We need, by ourselves or in partnership with others, to go global, offering our goods and services to the world. The world's population is much larger and its spending power abundantly greater than ours.

Bahamians have to stop being so parochial. We must look to play in the world just as we keep looking to have the world come to us to play and pay. To do this we must be smarter, more efficient and more strategic in our relationship with others outside this country. What we cannot do is be what we have been, inward-looking and frightened at the thought of foreigners doing business on our shores or us doing business on their shores. Think small be small. Think big, be big and do big things.

Next week we will look at the other things we need to do to find prosperity in this country. What I offer here is a general look at this issue. It needs much more fleshing out, but we have to have these serious conversations. If we do not resolve this economic issue that is plaguing us we will continue our spiral down the path of poverty.

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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