The Tribune

By RICHARD COULSON

I see the new VAT-free Bread Basket will now include mustard. Why not ketchup? How did the Government’s expert nutritionist decide which flavouring is essential in the diet for the cash-strapped family?

Also cheese: does that include brie, camembert and roquefort? Or just wholesome American slices? More nit-picking decisions from Government and paperwork at every food store is inevitable, all with a cost. Will the careful housewife shopper really see the subsidised purchases of a dictated bunch of staples compensate for the 60 percent across-board-the-board VAT increase to her total food bill?

Minister Turnquest’s message is full of measures like this, reflecting the hidden political message of “soak the rich”. Clearly, he loathes the web shops and sees them as the prime target for cash extraction — probably our most profitable industry employing 3,000-4,000 people and already paying substantial government taxes. Their percentage tax rate will rise as gross revenues rise, the only industry so treated. In the United States, by contrast, casinos pay federal income tax at the same rates as all other businesses. Possibly more Bahamians now play these legally regulated wagering games than voted the FNM into office.

Similar questions arise about other hidden-agenda measures: why favour residential property insurance premiums over business property? On import duties, why favour clothing and shoe stores, or printing products, or tiles? Or imports of whole salmon and frozen fish fillets, however tasty they may be? In short, through its taxing power, Government is intruding into every aspect of our economy.

Instead of holding the general tax level to the minimum, Government raises it and then carves out exceptions to suit its own views about desirable objectives, a policy generally known as “socialism”, a word that is anathema here but leaves ever deeper traces. Minister Turnquest argues argues the abrupt VAT increase from 7.5 percent to 12 percent is the only way to amortize a pile of debt left by the profligate PLP and maintain our credit ratings and good standing with the IMF.

But a legitimate question can be asked whether he is going about it the right way. We see barely a nod toward true capitalist measures to grow the economy. I could see nothing about reducing or adjusting business licence fees. Not a word about privatising BahamasAir, BEC or ZNS.

Shifting to a contributory pension scheme for public employees is another can just kicked down the road, while unfunded liabilities balloon into the billions. Government’s 100 percent contribution to their pensions — a vanishing practice in modern economies — is a major drag on the Treasury, real but never publicised.

We all must obey the law and pay enacted taxes. But before the July 1 effective date, public opposition may be strong enough to cause radical modification of this slanted budget.

It’s grim up north

The decision of Barbados’ brand-new lady prime minister to abruptly call on the IMF for one of its standard visits by experts and “offers to help” really amounts to a declaration of national bankruptcy.

Since she was elected with 100 percent political support, there will be no official opposition to argue against this move. It will take time to understand what led to this crisis and whether an IMF bail-out, with the usual conditions, is the best solution.

One grim prospect is her announcement that principal payments on domestic debt will be deferred. At least The Bahamas can be grateful that our foreign exchange reserves are much stronger than Barbados’ so we have more room to manoeuvre.

Rosewood Gives New Touch to Baha Mar

The Rosewood opening ceremony recently gave a new touch to the vast Baha Mar complex. The event itself set a special standard. Unlike the jolly mob scenes that announced Hyatt and SLS, only a dignified group of local leaders were seated for addresses by the PM and dignitaries, then were offered non-stop champagne and led through the public rooms. The most popular gathering spots became the wood-panelled bar and adjacent lounge, which gave elbow-room to enjoy classic caviar, black, fine-egged — and plentiful.

With Rosewood - the last of the three hotels - already accepting guests, the resort’s grand three-in-one concept becomes clear: the giant Hyatt will appeal to solid middle-budget American family vacationers, with next-door SLS using Vegas and Miami glitz to attract younger swingers, while Rosewood will stay a bit aloof (and pricey) to draw lovers of sophisticated elegance like New York’s Carlyle and the Crillon in Paris. All will be served by a medley of exceptional restaurants, an all-games casino, spa, golf course, convention centre — and here in Nassau, don’t forget the beach! There’s even an art gallery, with working studio for anyone to try budding artistic ambitions.

The imperturbable Baha Mar President Graeme Davis and his Bahamian deputy Sandy Sands have their hands full juggling all these balls: three hotels and many other ventures, each with its own brand and profit target, needing to earn while leaving enough to pay the Hong Kong owner Chow Tai Fook Enterprises (CTFE) a return on its $4bn investment. Somewhere deep out of sight a regiment of computers must be handling the endless cash flow from over 2,000 guests and sorting it out to even more staff and innumerable suppliers, always deducting the percentages due to the house. Mr Davis moves like a decisive diplomat, resolving daily crises without ruffling a hair.

Possibly he never met the sharp-eyed reporter whom Bloomberg News sent down to cover the scene just two weeks before the Rosewood launch. While observing that the enterprise is “booming”, with $21 drinks priced at a level for “plenty of revenue to be made”, she wrote a few waspish comments that “It looks like heaven. It can sound like hell... a cacophony of hospitality”. And “the only unifying thread is Instagram!” – as guests keep themselves busy snapping selfies. “Without the background noise, they’ll look vivid and serene.”

Probably such minor snipes don’t bother Mr Davis, as Baha Mar is well on the path from a conflicted history to future success. Few indeed are the resort projects that were conceived, planned and 90 percent-built by one owner, went bankrupt and soon started operating under a new owner, with one political party backing the shift while the other opposed it. Now the opposition is in control, and Tourism Minister D’Aguilar is nimbly adjusting his allegiances, like any sensible politician.

Fortunately, those colourful past disputes can be swept under the rug. The saving grace for Baha Mar is the quality of its staff. I have met quite a few of them by now, all immaculately uniformed, efficient, friendly and helpful, cheerfully performing a wide variety of tasks. Of course, some foreign training was required, particularly for the culinary specialties, but that would have failed without the bed-rock of Bahamians’ individual charm and character.

When Henry Cheng, principal of family-owned CTFE, next visits Nassau, I hope he can tell me how content he is with his Bahamian investment.