The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Grand Bahama business community “needs to know, and know now” what Freeport’s future model will be, the island’s Chamber of Commerce president arguing that the city will “continue to die its slow, exhausting death” if the original was abandoned.

Barry Malcolm told the Grand Bahama Business Outlook that the Freeport model, set up in 1955 under the Hawksbill Creek Agreement, was “a simple but brilliant grant of concessions in return for certain commitments to be developed on the island of Grand Bahama.

“It was to be a centre for Target Investment Enterprises -- the growth enterprises of that time in bunkering and commercial harbour operations, cement manufacture, pharmaceutical and chemical production, and oil refining. This centre was positioned to provide the economic and tax incentives that were required to attract the growth enterprises of the 1960s and 70s.

“The model was simple, powerful and effective.” he added. “We know it was effective because it successfully resourced and mobilised the capital and effort that built the infrastructure and established enterprises, the successors to which we rely on in Freeport to this day.”

However, Mr Malcolm then said: “While the underlying drivers are obviously complex, one clear answer to the question is that somewhere along the way, the model was modified and we started going sideways. There is a view that, from the early 70s, core elements of the model ceased to be driven as originally intended.

“There are a host of reasons why this may have occurred. The resultant impact on sustained quality growth in Freeport is evident. A long time ago, we stopped pushing the model for growth and development of Grand Bahama and Freeport in its original form. The clear result is that we lost traction and the momentum.

“Some say the possibility of what Freeport could be has been irrevocably lost. I do not accept the last proposition that all possibility is lost. But I do believe that many specific opportunities have irretrievably slipped through our hands. Despite all, I remain strongly optimistic, not just because that is my nature, but because we are of an even stronger view that the original Freeport model, as conceived within the Hawksbill Creek Agreement, can be even more powerful and even more effective in today’s international business environment than it was back in the 1960s.

Acknowledging that current Business Licence and real property tax exemptions under the Hawksbill Creek Agreement are set to expire in 2015, Mr Malcolm added:”The expiration of the Hawksbill Creek Agreement property tax provision has to be addressed, quickly and timely. For the business community the need is to know now.

“The 2015 expiration is only a year-and-a-half away, if that. What is to be the structure of Freeport? What is to be the ongoing regime that governs and guides? What is to be the model that drives this place and enables us stakeholders to make a living in this place? There is a need to know it and know it quickly.

“There are also global trade agreements for us to deal with, the WTO and EPA, all of which the Bahamas is now in the process of negotiating for accession. These are critical trade agreements, the decisions on which have direct and long-term impact on the life of Freeport.”

Mr Malcolm concluded: “We can decide that we want to make the original model that should be Freeport work or not. If we choose the latter, we then simply agree to allow Freeport to continue to die its slow, exhausting death.”