The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamas remains challenged on providing downstream benefits from foreign direct investment (FDI) inflows, despite leading all of Latin American and the Caribbean with a gross investment ratio of 27 per cent in 2012, Investments Minister Khaalis Rolle said yesterday.

Speaking at a press conference to announce The Bahamas Chapter of the Caribbean Growth Forum Mr Rolle said that FDI inflows were expected to continue at the same pace the country has seen over the past few years.

“Last year was pretty good. We received, I believe, 27 per cent of foreign direct investment that occurred in this hemisphere. For a country like The Bahamas, per capita, when you start to measure that performance it’s not bad. The challenge is how do you provide more downstream benefits to individual businesses and the people of The Bahamas from all of this economic activity,” said Mr Rolle.

The Wall Street credit ratings agency Moody’s, in a report on all Latin American and Caribbean sovereign credit ratings, found that The Bahamas’ gross investment ratio of 27 per cent of GDP led all-comers in 2012. Moody’s said: “From 2009 to 2011, the median investment ratio in Latin America and the Caribbean was 21 per cent of GDP compared to 25 per cent in Asia.

“Just two countries in the region - Panama and Ecuador - exceeded Asia’s median, and just barely, with average investment ratios of 26 per cent of GDP from 2009 to 2011. Panama is the only country in the region reporting Asia-like growth rates over the past decade.” Moody’s said the Bahamas and Paraguay were the only two nations in the region set to “grow significantly above trend” in 2013.

Mr Rolle said the government was working to establish an economic development unit in the Office of the Prime Minister.

“When you look at all of the activities we have participated in during the economic crisis and post crises it does not reflect a clear economy recovery strategy, it does not reflect clear policies that will be designed to create more entrepreneurial opportunities and create more jobs. What we have done over the years is come up with a couple of initiatives but left it there. What we are doing now is understanding all of the key components so that those initiatives will turn into sound activities that will turn into results. When a country like The Bahamas imports half a billion worth of food annually there is a clear case to be made for import substitution and we have not studied the science at a detailed level that will provide us with the information that will help us to solve that import problem we have. Alternative energy is one of those areas where there is tremendous opportunity but we have to understand it and having this economic development unit in place will allow us to make the right decision that will translate into reducing the cost of energy which will help to reduce the cost of doing business and allow business to absorb more people and expand a little easier,” said Mr Rolle.