The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known attorney yesterday called for Freeport’s population to double within 20 years, questioning why it had “stagnated” as its fellow hurricane-hit island, Cayman, attracted $6 billion in investments over the past decade.

Carey Leonard, the former Grand Bahama Port Authority (GBPA) in-house counsel, told the Grand Bahama Business Outlook conference that Freeport badly needed to grow its existing 50,00- 60,000 population to create a critical economic mass.

Calling for this to be a priority focus for the Government’s six-person committee, formed to lead discussions on Freeport’s short and long-term future, Mr Leonard said the Public Treasury’s current returns from the city demonstrated what an expanded population could achieve.

“The Port area has been a cash cow for the Public Treasury since its inception. It has been said that the Port Area has provided the Public Treasury with a net, yes net, profit of not less than S60 million a year,” Mr Leonard said.

“Only a couple of years ago, the purchase of a business in the Port area resulted in a $180 million Stamp duty payment. The Treasury made a $250 million profit out of the Port area that year. None of this would have occurred without the Hawksbill Creek Agreement.”

Pointing out that a larger Freeport’s contribution to the Bahamian economy would be even greater, Mr Leonard added: “Think. If 50,000 to 60,000 people can contribute not less than a $60 million profit to the Public Treasury each year, how much could a successful Port area with 120,000 persons contribute?”

Arguing that this critical mass would create more business activity and revenue for the Treasury, Mr Leonard backed the Government’s decision to create a committee to determine the approach to the Hawksbill Creek Agreement investment incentives that expire in August 2015.

He urged that it have ‘wide powers’ to deal with all aspects of the Agreement, and related trade and tax laws, and suggested that it include persons representing small GBPA licensees and Freeport homeowners.

Mr Leonard said it should also include representatives from the GBPA, Hutchison Whampoa, Freeport’s industrial economy and a Cabinet minister.

While none of these suggestions has been taken up by the Government, it did agree with Mr Leonard on one aspect by appointing former GBPA executive, Albert Gray, as a consultant to the committee.

Questioning whether the Government “has the courage to change the overly restrictive Immigration policy” and boost business in the Port area, Mr Leonard said its industrial sector had - after financial services - the greatest ability to offer high-paying jobs to Bahamians.

“No offence to our hard working Minister of Tourism, but the job opportunities in the hotel and tourism industry are limited mostly to maids, waitresses and bartenders,” Mr Leonard said.

“These are all good jobs but, what I am saying is that we need to balance our economy, and the Port Area is the best place, for the next 20 or 30 years, for the Government to do just that.”

He added that the Government needed to attract the right type of manufacturing activities to Freeport, as this was key to providing degree-educated Bahamians with lucrative jobs that would attract many to return home.

“The idea of manufacturing might sound ridiculous considering the cost of electricity in the Port area, but it shouldn’t,” Mr Leonard said.

“ I maintain that there is nothing to prevent a company from manufacturing its own electricity for its own purposes. Any manufacturing plant could be designed with solar panels. Most business is conducted during the day, when solar power produces its energy. It may well be that certain components need not be connected to the power grid at all.”

Mr Leonard contrasted Freeport’s performance over the past decade with that of the Cayman Islands, given that both were badly hit by hurricanes in 2004.

Noting that Cayman fared much worse, he said: “Since Hurricane Ivan, Cayman has managed to attract over $6 billion of foreign direct investment.

“According to Wikipedia.org, the total land mass of the Cayman islands is about 102 square miles with a population, including expatriates, of about 55,000, almost identical to us on Grand Bahama, and with the Port area having some 230 square miles of land mass.

“So what did Cayman do that we did not? We certainly have not seen $6 billion invested here in the last 10 years. Could you imagine how much better off the whole country would be if it had such an injection of capital? We need to look at the steps that were taken in Cayman.”

Mr Leonard said the Cayman Islands had achieved this despite the world recession, and added: “We have the opportunity to do even more than Cayman. We are better located than Cayman.