The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas “must do everything it can” to encourage new entrepreneurs and get existing businesses to expand, the Chamber’s chief executive arguing this is “the only way” to slash unemployment.

Edison Sumner told Tribune Business that “everybody wins” if the Government creates the right environment for business to thrive, thereby boosting private sector confidence sufficiently to generate increased economic activity.

While welcoming the reduction in the national unemployment rate to 12.7 per cent at May 2016, Mr Sumner expressed concern that the figures were “artificial”.

He based this on the temporary boost provided by the Bahamas Junkanoo Carnival, which occured at the same time as the Department of Statistics conducted its bi-annual Labour Force Survey.

Calling on the Carnival’s temporary impact to be stripped out, so a “truer picture” of the Bahamas’ unemployment situation could be obtained, Mr Sumner acknowledged that job creation was not keeping pace with demand and workforce expansion.

“We’re always glad to see unemployment decreasing,” Mr Sumner said of the 2.1 percentage drop in the official rate during the six months to May 2016. “My only concern is whether they are real numbers, or are they artificial numbers?”

The Chamber chief executive explained that the ‘artificial’ comment referred to whether the jobless rate had declined largely as a result of Junkanoo Carnival’s timing, and the associated creation of temporary jobs.

The Department of Statistics, in its official release on the May Labour Force Survey, acknowledged that the 26 per cent increase in manufacturing sector employment since November 2015 had been “influenced by Carnival-related activities”.

Still, manufacturing only accounted for 4 per cent of the Bahamian labour force, with the civil service, police and domestic service still the country’s largest employer at 36 per cent of the workforce.

Mr Sumner said that with more than 27,500 Bahamians still unemployed (looking for work and unable to find it), the only feasible solution was to grow the economy by sparking the private sector.

“What it shows again is that we need to put our focus and attention on, and see more effort put into, creating entrepreneurs and small businesses,” he told Tribune Business.

Praising Junkanoo Carnival for attempting to do just that, Mr Sumner added: “If we can turn those efforts into a more sustained basis, we will see an increase in entrepreneurship and a reduction in unemployment.

“We did seen, when going through the hurricane relief effort, the entrepreneurial spirit that exists throughout the country.

“One of the things we need to do in supporting SMEs is to ensure the environment enables them to thrive, and gives them access to capital and makes the cost of capital more affordable, so they can create more opportunities for themselves.”

Mr Sumner said that the creation of numerous small businesses, each hiring just three to five staff, would have a major impact on an unemployment situation where more than one in 10 Bahamians is unable to find work.

The Department of Statistics’ release last week said there had been a 7 per cent increase in the number of self-employed Bahamians in the six months since November 2015, although it did not attribute this to Junkanoo Carnival.

Mr Sumner, though, added: “The more people encouraged to go into business, the greater the increase in economic activity. And once that happens, everyone wins.

“This is something the Government needs to pay particular attention to. The Government does well when the private sector does well. It raises revenues from businesses and private individuals, and it needs to do everything it can to promote entrepreneurship and SMEs because once it does that, we all win.”

The Chamber chief renewed calls for the Government to implement an ‘enabling environment’ for businesses to thrive, and urged it to “minimise bureaucracy and red tape”.

He acknowledged that the unemployment rate had “not moved much” since the Christie administration took office in May 2012, but said this was explained by lay-offs at the likes of Baha Mar and the Bahamas Telecommunications Company (BTC), plus the difficulties high school and college graduates face in securing permanent jobs.

Labour Force data comparisons between 2016, and the years 2012 and 2013, are somewhat meaningless because Abaco was only included in the survey from May 2014 onwards.

But, just assessing the last two years, the data shows that while the total labour force and number of employed Bahamians have increased by almost exactly the same amount - 17,000 - the jobless numbers have remained stubbornly above 27,000.

“While we’re moving in the right direction in some instances, we’re not moving at a pace to keep up with the world and engage all the people in the country in the workforce,” Mr Sumner told Tribune Business. “That’s always been our concern.

“This goes to the fact that business and entrepreneurs create jobs. How are we going to create businesses, incentivise new individuals and attract people to take risks and go into business?

“That’s the only way to reduce the level of unemployment in this country. That can only be done through the entrepreneurial class and small businesses, and creating incentives for large businesses to hire more people.”

Mr Sumner said the private sector needed to have “confidence and comfort” that the economic environment will support job-creating investments and expansion.

He added that “the spin-off benefits will be a reduction in the level of unemployment in this country”.

The Department of Statistics, in unveiling the latest labour force data, said the Bahamian workforce had expanded by 1.7 per cent since November 2015, and by 3.3 per cent in the 12 months to May 2016.

With some 215,880 persons in the labour force, the Department said the number of employed Bahamians had increased by 7,540 since November 2015, with the jobless numbers also falling by 3,855 or 12.3 per cent over the same six-month period.

Some 21 per cent of unemployed persons were aged between 20-24 years-old, with the 25-34 year-old age segment accounting for 24 per cent of the workforce.

The Department of Statistics found that 12 per cent of the workforce was expatriate, while 62 per cent were engaged by the private sector.