The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government has been urged to create a land registration system and enable Bahamians to borrow in foreign currency, a private sector grouping suggesting these would be key upgrades to the business environment.

The Bahamas’ chapter of the Caribbean Growth Forum, via its Investment Climate Working Group, detailed seven key areas that should be targeted to improve the country’s competitiveness.

While all seven have long been identified as areas in need of improvement, and there is nothing especially revolutionary about the Working Group’s suggestions, the key is whether they can create enough impetus for the relevant government ministries and agencies to make the change.

The open, transparent nature of the CGF processes is designed to ensure their recommendations cannot simply be buried after they are presented to the Government.

Focusing on land reform, the Working Group said: “Investors prefer to invest in countries where they feel their assets are protected.

“At times, investors are faced with litigation issues as it relates to clear land entitlement. It should be noted that currently the Government will not consider any project that does not have clear title, or if there are any liens or encumbrances on the subject land.”

The report added: “In the Bahamas, land administration is based on the old common law deeds recording system. In a deeds system a title is not guaranteed, and this has generated a tremendous degree of uncertainty in the Bahamian property market.

“Proof of title and ownership in the Bahamas continues to be highly problematic. For example, the unauthorised home demolitions experienced of late and the unclear titles in generational land, which sometimes involves foreigners.”

As a result, the Working Group called for the Government to develop a land registration system, which would give landowners - and purchasers - security of ownership.

“Under a title system there is a guarantee of indemnity (security) regarding who owns each registered parcel of land,” the report said.

“This guarantee enhances a property’s marketability. For instance, title properties are generally not vulnerable to claims of adverse possession – a risk that still exists under a Deeds Register.

“Ensuring formal property rights and effective land management is fundamental to economic growth, national wealth and sustainable development.”

The Working Group also called for Bahamian entrepreneurs and investors to be placed on a ‘level playing field’ with their foreign counterparts through being given access to foreign currency borrowings, something that could ultimately lead to ‘dollarisation’ of the economy.

“Exchange control effectively limits the Bahamian’s ability to borrow on the same footing as the foreign investor, as there are additional approvals and premiums the Bahamian must meet in order to borrow in foreign dollars,” the report said.

“There should be no restriction/control on Bahamians’ ability to borrow in a foreign currency. This will create a level playing field whereby they have access to the same capital markets as the foreign investor (subject to qualification of the project).

“The Government may also wish to consider replacing the Bahamian dollar with the US dollar (‘dollarisation’ of the economy).”

The Working Group also called for the Government to tackle “excessive” utilities costs, especially for electricity.

It was urged to explore alternative energy sources and “promote privatisation of utilities to encourage more competition and drive down costs.”