The Tribune

EDITOR, The Tribune.

Recently, I started to write about apathy/complacency of Bahamian citizens and residents. As the article became much longer than I anticipated, I decided to break the topic into two portions to try and ensure that the newspaper would be more likely to accept and publish the presentation.

STAND -UP AND BE COUNTED (part II)

1. Upon my return from vacation in early November, I read in the news that the Minister of Financial Affairs had agreed for the Bahamas to accept an automatic exchange of information measure with all world governments. The Minister was being complimented for taking an option that would not be implemented until 2018. Whether such an agreement comes into effect or not it is not good news and continues to show The Bahamas yielding to outside forces. In this case, the OECD but the acceptance seems to have been without any apparent resistance or fight back or even any consultation with the banking sector.
   

I find such a position unacceptable especially when it goes against a core human right – i.e. a person’s universal right to confidentiality. Not all people who seek confidentiality are criminals or undesirables. These external pressures are motivated by socialist countries who feed on more and more taxation that are needed to “buy” votes. Such countries make out that persons having accounts offshore accounts/structures, etc., are avoiding domestic taxes in the billions.

Such stories invariably use mouth-watering amounts without being called for any substantiation or justification. If one believes that automatic exchange of information will come about then The Bahamas might as well forget about maintaining its position as a financial centre, which in turn will see more unemployment of skilled Bahamians. This is not just theory as it can be witnessed first-hand – (i) UBS Bank and Royal Bank of Canada Private Wealth withdrawing from The Bahamas. Other smaller financial institutions have already departed; (ii) CIBC – First Caribbean International Bank re-organising their Bahamian presence by transferring certain sectors to other island nations in the Caribbean. Voices need to be raised and heard other than just single-handed efforts.

1. Further to the above, there is also another move, being promoted, principally, but not solely, by the United Kingdom, which is to make the ownership of companies and the beneficiaries of trusts known to the general public. Again the rationale behind such a move is to widen the tax net of all these “unknown” persons who are not paying their share of taxes. As this requirement also goes against the core value of confidentiality it is being challenged. I am pleased to report that Bermuda and the Cayman Islands have thus far refused to accept this directive. The Bahamas has not yet declared its position on this issue but it would have been nice to have seen the country as one of the leaders and say “No”.
   

2. One cannot write an article such as this and exclude the “hot” topic re Value-Added Tax (VAT). There have been several articles on this topic and as such there is little for me to add. Without doubt, however, the people on whom this will prove to be the greatest burden are the poorest amongst us. The Government has been warned of such consequences and it has said on a couple of occasions that it will consider the establishment of a “safety net”. Should this happen then it will have two consequences namely (i) that the VAT monies collected will not be used to reduce the country’s debt which was the primary reason for its introduction; and (ii) any Government “safety-net” invariably means creating a cesspit of corruption as per historical evidence. Will the public stand-up and show its dissention? Based on the above probably not.

3. Bahamas Electricity Corporation (BEC). Another government agency that has an atrocious corporate governance record and financial record. The cost of electricity is unbelievably and unrealistically high – why does the public accept this situation? There have been signs of cracks within the Government relative to differences over the corporation practices. We were told over 12 months ago that BEC was to be restructured and sold to third parties. Did it happen? “No”. With the result the cost of fuel and distribution continues to be rife for exploitation. Employee benefits without any employee contribution continue to exist as a unique situation that must only exist in the Bahamas – it is certainly neither a world standard nor is it a “best-business-practice”. Similarly, there is exploitation for employees to work at overtime rates as opposed to regular rates of pay. There is no policy or conception for hedging one of the Corporation’s highest cost ingredients – fuel. Much of the fuel if not all is supplied by a company where one of whose shareholders is a prominent Government supporter. Why does the general public accept such exploitation? Recently we have learned of bribery money being paid to a Bahamian in order for a foreign company to obtain a contract for new generators. Will this claim be independently investigated? If such an investigation is undertaken, will the public learn of the findings? The answer is invariably “no” and the public will accept it.

4. Bahamasair. This government agency has cost the country millions of dollars every year since its inception. Is there a general public outcry requesting details of the benefits of continuing with the airline? Are the employees grateful to be working for the company? – it would appear not in view of the pilot’s sick-out over the peak Christmas period. It is reported that this action resulted in a costs to the Government exceeding a million dollars – but still no public outcry.

I could continue but I am not certain that it will add any further benefit. It is now 2015 and as such one frequently makes New Year Resolutions. It is my wish that the Bahamian public will be motivated to loudly and clearly say “enough-is-enough”. One person alone cannot achieve this goal yet we seriously need to motivate all the public and become patriotic in order to save our country either from becoming bankrupt like Greece or having the Bahamian dollar devalued. Quite simply we cannot continue in a like manner without a disastrous outcome.

LET IS ALL STAND-UP AND BE COUNTED.

FAIR AND BALANCED

Nassau,

January 12, 2015.