The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas will soon set a record for the longest-running World Trade Organisation (WTO) accession, an ex-Cabinet minister yesterday suggesting that “nationalistic resistance” was thwarting one avenue for addressing this nation’s economic imbalance.

Ryan Pinder, the former financial services minister, told RoyalFidelity’s Bahamas Economic Outlook conference that this nation’s reluctance to engage in international cross-border trade was costing it opportunities to diversify its economy.

Addressing the themes of ‘inequality’ and ‘global imbalances’, Mr Pinder said greater diversification of the Bahamian economy was necessary to reduce its reliance on tourism and financial services - both industries that are extremely vulnerable to events outside this nation’s control.

“The challenge is, with limited natural resources, with a limited exposure professionally, and a social and political culture where we are resistant to open borders and free market economies, the opportunities for true economic diversification are limited,” Mr Pinder said.

“The creation of new industry in a limited environment of natural resources, and an accepted political and social policy of resistance to trade liberalisation, is severely challenged.”

The Elizabeth MP added that “nationalistic concerns resisted, and effectively barred”, the Bahamas joining the regional Caribbean Single Market and Economy (CSME).

It was ultimately dragged and “forced” into the Economic Partnership Agreement (EPA) with the European Union (EU), which was essential to protecting key export markets for the crawfish industry.

And the Bahamas is now entering its 15th year of seeking full membership in the WTO, the body that establishes global trading rules, having initiated the process in 2001 when the first Ingraham administration was in its second term.

“We are a country that will soon set the record for the longest accession to the World Trade Organisation, the membership club of accepted trading partners,” Mr Pinder said.

“This natural resistance to participation in the global trade environment clearly creates global economic imbalance for the Bahamas.”

Now a partner at the Graham, Thompson & Company law firm, Mr Pinder said the Bahamas’ relatively small size, absence of significant commodity-type natural resources and lack of international exposure meant it was constantly having to fight unequal treatment.

Acknowledging that these characteristics made it harder for the Bahamas to ‘find its place’ in a “volatile and sometimes vicious global environment, Mr Pinder said the Bahamas had to look within - as well as to Government policy - to maintain its economic competitiveness and sustainability.

He suggested that rather than “abandon” the expertise it has developed in tourism and financial services, the Bahamas needed to leverage this into broadening these industries and attracting new business.

Mr Pinder urged the Government to follow through on an opportunity he had been developing before leaving ministerial office, namely establishing the Bahamas as the regional and Western Hemisphere hub for trading in the Chinese currency, the renminbi.

Should this ambition be realised, Mr Pinder said it would help to diversify the Bahamian financial services industry beyond its wealth management base into institutional business.

He added that a renminbi trading hub would also have a large, immediate customer base via the 5,000 Chinese businesses setting up in Panama, via a development similar to Dubai’s Dragon Mart, to distribute products to the Western Hemisphere.

Suggesting that $10 billion in annual revenues would be generated by the Chinese venture, Mr Pinder said existing Bahamas-based wealth management businesses would also gain fresh work from managing the profits and wealth generated by these entrepreneurs.

The former minister said a Chinese currency trading hub could potentially “double”, and even triple, the financial services industry’s impact for the Bahamian economy.

He argued that similar “out-of-the-box thinking” was needed in tourism, with the Bahamas needing to use its expertise to strike out into niches such as sports, medical, eco and cultural tourism.

Mr Pinder suggested that the Bahamas partner with Cuba to take its medical research and technology to the world via a licensing arrangement, as this nation had the market access and connections that its western neighbour lacked.

He said such a move would “open up the entire North American market to technology and medicines that they could only dream about for countless decades”.

Describing the opportunities before the Bahamas to tackle its economic imbalances as “diamonds in our back yard”, Mr Pinder said the most glaring examples of the inequality this nation faces internationally include the ongoing WTO and other trade negotiations; its treatment by the G-20 and OECD on financial services regulatory issues; and the Bahamas’ efforts to seek grant and development funding assistance.

He also warned that many Bahamian professionals’ relative lack of global exposure was also a potential handicap, particularly in a en economy whose model was that of an international business centre/services exporter.

“In the Bahamas, merely by a function of our small size and history as an insular domestic economy, our professionals and businesspersons have very limited experience in the global and international economy,” Mr Pinder said.

“This creates a natural global imbalance in experience and competitiveness of our professionals in the global economy, making it difficult at times for us to attract the business, keep the business and be heard economically in the global marketplace.

“Having a professional and business class with limited international economic and business exposure certainly puts our economy at a disadvantage, creates a clear imbalance, makes us less competitive.”

This lack of exposure permeated throughout the Bahamian economy and society, Mr Pinder added, suggesting that it be tackled through “mandated exchange programmes” where international companies operating here send local employees to work in their overseas offices.