The Tribune

By NATARIO McKENZIE

Tribune Business 
Reporter

nmckenzie@tribunemedia.net

Reducing the $200 million-plus incentives granted annually could limit the Bahamas’s ability to attract foreign direct investment(FDI) in the current climate, a key Cabinet Minister said yesterday, adding: “If we don’t offer those incentives, someone else will”.

Minister of state for investments, Khaalis Rolle, speaking at the annual general meeting (AGM) of the Bahamas Chamber of Commerce & Employers Confederation (BCCEC), said: “Over the long-term, what those businesses add to your economy in terms of taxes paid and employment generated, accounts for a larger portion of activity than if you were to not offer those incentives.

“If we don’t offer those incentives, someone else will.”

In a February interview with this newspaper, Mr Rolle said the level of incentives and subsidies being offered by the Bahamas to lure potential investors was “not out of line” with regional norms.

He added that unlike its Caribbean counterparts, the Bahamas has been more capable in attracting “upper crust” investors.

Mr Rolle yesterday said the creation of a National Development Plan to be codified in law was underway.

“A national development plan will modernise our development plan beyond the existing model. The plan will serve as the guide for sustainable planning and future growth that outlives an election cycle,” said Mr Rolle.

He added that several firms have sought to lead the consultation process on that initiative.

“It is the intent for the procurement process to conclude by June of this year. In the interim we wish to mobilise an independent steering committee to work with the firm to ensure national ownership of this process and build capacity,” said Mr Rolle.

He added that despite tremendous strides being made towards the diversification and development of the Bahamian economy, it still remains a “one trick pony” due to its reliance on tourism as the major driver.

“Although financial services is a strong contributor to the economy, it is tenuous at best due to large industrialised countries, like the US and Europe, taking firm positions to shut down offshore, tax competitive jurisdictions. This is evident by the number of offshore banks closing or downsizing in recent times. It’s a regular trend which we don’t expect to get any better,” said Mr Rolle.