The Tribune

By JOHN ISSA

HAVING given up on the possibility of the removal of exchange controls, we need to find a way for The Bahamas to benefit from the fortune in assets held overseas by Bahamians.

I am yet to meet a Bahamian who has savings and who does not have some of these saving hidden overseas. The main reason for having foreign holdings is the existence of the exchange control regime. I have lobbied from time to time during the past 20 years for the removal of these controls. However, I have failed to convince the authorities of the great benefit that this removal would bring. There are just too many who fear that the removal of controls would result in the devaluation of the Bahamian dollar.

Fortunately, there are other ways in which the Bahamian owners of foreign assets – as well as The Bahamas as a whole – can benefit from what I propose. But first let me say that I have little doubt that most of the owners of these overseas funds and assets could earn better returns if they had invested some, if not all, of these savings at home.

For one, interest rates are generally higher in Nassau than in North America or Europe. Secondly, the Bahamian dollar is stable. Thirdly, Bahamians know their own property and stock markets better than they know the overseas markets. Many also may have missed out on good business opportunities because their funds were not here.

That said, there is a way to have the best of both worlds: treat investments by Bahamians, using their foreign assets, the same way we treat foreign investments by non-Bahamians.

We should allow Bahamians to bring foreign funds back without risk of prosecution and be able to invest them with the same right of repatriation of capital and income whenever they so wish. Believe me, these funds will likely never leave. The main reason why these funds left in the first place was because they were exchange controls. We don’t have to reinvent the wheel. There now exists a procedure whereby naturalised Bahamians can register their foreign investments and cash and then they are allowed to legally hold them. A similar registration could be implemented for native Bahamians who register their overseas resources and, consequently, would be allowed to hold and invest these and future income from these, overseas or in The Bahamas, where these registered funds would have the same rights as those of a foreign investor.

Just imagine the rush of buyers should The Bahamas issue a US dollar bond that Bahamians could legally buy with their offshore funds, thus getting a better return than they could get overseas and the Government of The Bahamas paying lower rates than they currently have to pay.

If this is not a win-win situation, I don’t know what is.

I can’t think of a single case, in the last 20 years at least, where a Bahamian has been prosecuted for illegally sending or holding funds offshore.

What have we got to lose from implementing this suggestion and watching The Bahamas get the massive benefit that would result from liberating this treasure trove?