The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An outspoken QC has branded ‘Bahamianisation’ as “an evil form of discrimination” that is long past its sell-by date, suggesting that governments abused it to serve their own interests.

Fred Smith, the Callenders & Co partner, said that while a ‘Bahamianisation’ policy may have been appropriate in the 1960s and 1970s, those days were long gone and Bahamians no longer needed “protection from ourselves”.

Speaking to Tribune Business after an address to the Rotary Club of East Nassau, Mr Smith said the concept could be used when it was “convenient and expedient” to the detriment of both foreign and Bahamian investors.

The well-known QC said that in the case of foreign investors, governments could use ‘Bahamianisation’ - and the desire to increase local ownership of the economy - to “torpedo” potential developments or “take over the transaction”.

As for Bahamian investors, Mr Smith said it could be employed to deny business and investment opportunities to those who were not of the right political persuasion.

“The Government, when it is expedient, they will use the mantra of ‘Bahamianisation’ to take over transactions or to torpedo private business opportunities, and set them up for themselves,” Mr Smith told Tribune Business, “or prevent certain Bahamians who are not of the right political class from getting the opportunity.

“Bahamianisation is an evil form of discrimination. There may have been a time when that kind of reverse discrimination had a place; when it was necessary to break the economic and political stranglehold of 40 years ago that prevented black Bahamians from having a piece of the economic pie.

“But in this day and age, we don’t need to be protected from ourselves. We don’t need nationalistic protection. I want to be able to reach out and joint venture with foreigners. There is no law against ‘fronting’. They make it a dirty word.”

In his address to the Rotary Club of East Nassau, Mr Smith hit out at some of his favourite targets, including ‘secretive’ Heads of Agreement and the fact that key agencies, such as the National Economic Council (NEC), Bahamas Investment Authority and Bahamas Environment, Science and Technology Commission (BEST) “don’t exist” because they are not founded through statute law.

Noting that Cabinets in successive governments were mostly attorneys by profession, Mr Smith said: “We all know how notoriously bad business people lawyers are.

“That is the crisis we have. Lawyers running the business of this country, rather then leaving the business to business people.......

“Politicians should stay out of the business of business. You need to keep your fingers out of the business honey pot. Leave it to the free market system, and businessmen and businesswomen, to conclude.”

Suggesting that Heads of Agreement deals had “taken on a life of their own”, Mr Smith reiterated the view that they were intended as a device to avoid Parliamentary debate and scrutiny of agreements with foreign investors.

Taking the Baker’s Bay project on Abaco’s Great Guana Cay as an example, the QC said that Crown Land on the beach, which had been sold to the developers for $1 an acre by the Government, was now selling to international buyers for $5 million per lot.

Mr Smith added that some 1,100 licence applications by foreigners in Freeport, “some going back decades”, had yet to be considered by the Government.

“Whoever’s in power takes advantage of us,” Mr Smith said, adding that while the courts “periodically deliver a little slap to keep [the Government] in check”, it was impossible for the judiciary to examine every Heads of Agreement or investor approval that was issued.

Asked by Tribune Business to sum up the consequences of this, and the direction the Bahamas is headed in, Mr Smith responded: “It will be business by favour rather than regulatory oversight or right.

“Business will not grow because legitimate business needs certainty to project its future opportunities. It will attract unnecessary business for the most part, as opposed to business that could provide mature, healthy growth and economic diversification.”