The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Chamber of Commerce’s chief executive has denied claims that it is “capitulating” to the Government, and that it is too close - and ‘in bed’ with - the Christie administration.

Edison Sumner told Tribune Business that the Chamber’s role as private sector advocate was being misunderstood, and just because it was “not bashing” the Government did not mean it was not holding it accountable.

Acknowledging that he was responding to criticisms that had surfaced on social media and other forums, Mr Sumner said it was necessary for the Chamber to have “a very intimate” relationship with the Government if it was to influence policy to the private sector’s benefit.

“I would like to say this very clearly,” he told Tribune Business. “In order for the Chamber of Commerce to affect the changes were looking for; to have the impact on policy and influence how business ought to be done in this country, to raise issues and concerns that we have as private sector organisations and business people, it is necessary for the Chamber to have a very intimate and extensive dialogue with the Government.

“That does not mean that the Chamber is ever capitulating to the Government. What it does mean is that we have the opportunity that many people in the country do not have, and that is to provide advocacy for them at the very highest levels.”

Mr Sumner added: “Because we are not out bashing the Government does not mean the Chamber is not holding the Government to account for what it is doing.

“Those in government will tell you the Chamber is not taking it easy on the Government because we have a strong relationship with them.

“Where we find impediments, vulnerabilities and unintended consequences in the fiscal set up of the country, the Chamber has as part of our mandate to address these issues. The business community will feel the impact and affect of the work of the Chamber.”

Disquiet over the Chamber’s apparent ‘closeness’ to the Christie administration has come to the fore in the last several weeks, with most of the concerns centred around the private sector’s failure to obtain any meaningful concessions or benefits from the Government in return for accepting Value-Added Tax’s (VAT) implementation.

Several members of the business community have become increasingly disillusioned by the still-growing $6.695 billion national debt and persistent - although reduced - deficits despite the $852 million VAT ‘windfall’ during the new tax’s first 18 months.

They believe the private sector should have ‘leveraged’ the Government’s need for co-operation on VAT to at least gain a firm commitment, and timeline, on introducing a Fiscal Responsibility Act, which many wanted before the new tax’s implementation.

These sentiments were echoed by Nassau Institute executive, Rick Lowe, in a letter to the editor last week, in which he said: “It is cause for concern when the Bahamas Chamber of Commerce gives up on sound fiscal principles in order to go along to get along with the party in power.”

He was referring to comments in a newspaper article that interviewed Gowon Bowe, the Chamber’s chairman, in which he apparently praised the Government’s recently-announced tax crackdown for “assisting in increasing annual revenue, decreasing annual deficits and generating annual surpluses”.

Although this was not a direct quote attributed to Mr Bowe, Mr Lowe described his comments as “specious based on the Government’s fiscal track record.

“The trend line of the debt and deficits over 40 years - which includes many tax increases along the way - casts a long shadow of doubt on this reasoning,” he added.

“There is also no guarantee that increasing taxes will increase revenue in a declining economy. Higher taxes might slow economic growth even more. Yes, we’ve seen this movie before, and the outcome is not very pleasant so far.”

Pointing out that similar arguments were made when the private sector agreed to VAT, Mr Lowe said: “A year-and-a-half in, VAT has hampered economic growth and many believe it has exacerbated the wasteful spending by a government that now appears even more cash strapped than before VAT was introduced.

“This points to the core issue with the country’s fiscal problems: Spending, waste, ‘leakage’ (read theft of tax dollars) and an ever growing monolith of power and regulations.

“No obvious steps have been taken by the government to hold the line on spending since VAT was introduced. Instead they argue that controlling their inflated budgets (note this is not even suggesting a 5 per cent decrease in spending) to compensate for slower economic growth would be detrimental. Presumably they think the burgeoning deficits and debt are not harmful.”

Similar sentiments were also expressed in a letter sent to the Nassau Guardian, in which the Chamber was described as “the Chamber of government”.

The anonymous writer claimed the Chamber was “working for the Government”, rather than working with it on the private sector’s behalf.

Mr Sumner, though, told Tribune Business that the Chamber’s role was being misunderstood, and that the Bahamas would be weaker today were it not for its advocacy.

“It’s important for those in the country to understand the role the Chamber plays,” he said. “It’s not a political or social organisation, it’s a business organisation representing the private sector and private sector employers.”

Calling on critics to suggest how the Chamber could be improved, Mr Sumner added: “The Chamber of Commerce is an extremely necessary organisation in this country.

“If the Chamber did not engage in dialogue and discussion, not only with the Government but international bodies like the rating agencies, the Bahamas would not be as strong as it appears to be.

“It’s because of the involvement of the Chamber and the private sector that we’re able to effect changes to policy and practice, and to hold the Government to account on fiscal matters, transparency and the health of the economy of the country.

“The Chamber has a role to play, I believe we’re doing that, and affecting changes in policy in the way we need to.”