The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent realtor has urged the Government to "completely rethink" the approval process for foreign real estate purchases, suggesting it had contributed to remote Family Islands becoming "economic wastelands".

John Christie, H. G. Christie Ltd's chief executive, told Tribune Business that the bureaucracy and 'red tape' involved in taking even the smallest foreign real estate purchase through the Investments Board had deterred investors from injecting badly-needed capital into Out Island economies.

"The most important thing to do is for the Government to completely rethink their Investment Board strategy," he said, "where every non-Bahamian wanting to buy land over two acres has to go to the Prime Minister's Office.

"Since about 1982, it's stagnated the whole Bahamas, especially the Out Islands. They need to get rid of it."

Mr Christie explained that he was referring to islands such as Long Island, Cat Island and others struggling with minimal economic activity, lack of jobs and depopulation, plus locations such as south Eleuthera.

He argued that removing the costs, time and uncertainty associated with the Government having to approve every deal could encourage foreign investors to purchase - and develop - real estate and other ventures in Family Islands which badly needed economic growth.

This, in turn, could generate the businesses and jobs needed to attract residents back home, and help reverse the population movement adding to the unsustainable demands on New Providence.

While there was no guarantee that foreign buyers would develop their landholdings, Mr Christie added that their purchases would at least generate Stamp Duty, VAT and real property tax for the cash-strapped Public Treasury.

"We've turned those areas into economic wastelands, where people are leaving because there's no jobs," he told this newspaper. "Letting them [foreign investors] do it will bring money to the country, and people will start moving back to those islands because there will be jobs there."

Mr Christie pointed out that the remoter Family Islands, and especially their public infrastructure, were being subsidised by New Providence taxpayers who had very little hope of seeing a return on their investment.

He suggested that the Bahamas could not allow this to continue indefinitely, especially given its fiscal crisis, hence the need to boost economic output outside Nassau and the more populated islands.

"Right now, the Government has to build miles and miles and miles of roads to get to people in these dying villages, and you can't keep on doing that," Mr Christie said.

"You need to free up the market, let people invest in real estate or otherwise allow people to pack up and move. It's all government generate. Once they free it up, and let people buy and sell without getting in the way, it will start moving."

Mr Christie is not the first to urge the Minnis administration to streamline the approvals process, and apply a 'lighter touch' when dealing with foreign investor applications.

Fred Smith QC, the Callenders & Co attorney and partner, warned earlier this month that there was no need for the Government to become involved in approving every foreign investment deal or real estate purchase.

Arguing that the Government's regulatory agencies needed to stay within the statutory limits set for them by Parliament, Mr Smith joined Mr Christie in identifying 1982 as the year when major restrictions were imposed on foreign direct investment (FDI).

This was when 'exchange control approval' was introduced as a device to push all FDI proposals before the Government, and ensure foreign purchases of Bahamian real estate could only be concluded with its backing.

"The main message is less control, more growth," Mr Smith had told Tribune Business. "The fact of the matter is that the more that central government interferes and tries to control, it stifles; it doesn't work.

"In the UK, if a foreigner wants to do business, every application is not scrutinised by the Cabinet Office in Downing Street.

"I urge the FNM to get out of the business of interfering with business, and let the regulatory agencies deal with these matters as proscribed by Parliament. Then you have a nation run by the rule of law, not by arbitrary political decisions. Then investors are not kept waiting ad infinitum at the pleasure of a political decision."

Foreign investors must currently seek approval for Bahamas-based projects through the Cabinet, and the National Economic Council (NEC) and Investments Board. The latter two entities are effectively the Cabinet, or a sub-committee of the Cabinet, with the former dealing with major multi-million investment projects and the Board handling real estate purchases.