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Fears for 'reform catalyst' if WTO deadline missed

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Darron Pickstock

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Private sector executives yesterday expressed fears that The Bahamas will lose "a desperately-needed reform catalyst" if the government decides the 2020 WTO target is unattainable.

Darron Pickstock, who heads the Chamber of Commerce's trade and investment division, and Carey Leonard, the ex-Grand Bahama Port Authority (GPBA) in-house counsel, both agreed that the "momentum" to implement changes - required regardless of whether The Bahamas joins the World Trade Organisation (WTO) or not - could now slow or be lost completely.

The duo, speaking to Tribune Business in separate interviews, were responding after Zhivargo Laing, The Bahamas' chief WTO negotiator, suggested on his Guardian Radio program that The Bahamas was unlikely to meet the June 2020 accession deadline set by the Minnis administration.

He suggested that the process might take several more years to complete, and hinted that the government was sensitive to the political (election vote) implications given the level of opposition to joining the WTO from some elements in Bahamian society.

Mr Leonard, expressing disappointment at Mr Laing's comments, said: "I was hoping the government would stand firm and move the country forward. I think the forward momentum will dry up completely, and the rest of the world will speed far ahead of The Bahamas and we will continue to fall further behind.

"We look at poor countries like Haiti, but are doing nothing to keep up with the rest of the world and will fall back into that position. The reforms desperately needed the WTO as a catalyst, and the fact we're talking about missing the deadlines means we will fall further behind the rest of the world. Unemployment in this country is still high and may get even higher."

The recent Chamber of Commerce-commissioned study by Oxford Economics argued that The Bahamas needed to undertake internal reforms for its own good, regardless of whether it becomes a full WTO member or not, and that such changes were critical to maximising the benefits from joining.

Besides improving the "ease of doing business", and eliminating bureaucracy and red tape, such reforms include lowering the cost of electricity and improving its reliability; cheaper and easier access to credit; equipping Bahamian workers with the necessary 21st century skills to compete; and digitising government services for smoother interaction with the public.

Mr Leonard, now a Callenders & Co attorney, added: "These are reforms the country has to do to get ahead in the world and stay up with the rest of the world. The rest of the world is steadily increasing its lead on The Bahamas because they are moving on ahead and we are not, and are continuing to do so.

"This was one area where we could have caught up. We led in some of these areas in the past, but are now behind in the ease of doing business, attracting foreign direct investment (FDI) and international financial services."

Mr Pickstock backed Mr Leonard's sentiments, telling Tribune Business: "One thing we don't want to do is we don't want to lose that reform momentum. These things should have been implemented long ago.

"We don't want them [the Government] to lose that momentum, and WTO was certainly a driver pushing the Government to review and implement new and existing legislation. It will be interesting to see - if we don't meet the deadline and the pressure is off all of a sudden - whether the momentum of the Government slows down with the reforms. The reforms are certainly more important than anything else."

The International Monetary Fund's (IMF) full report Article IV report on The Bahamas, released this week, reiterated that "decisive structural reforms are needed to enhance competitiveness" in the Bahamian economy.

"Long-standing structural impediments continue to weaken competitiveness and constrain private investment and growth," the Fund said. "The World Bank's ease of doing business index (DBI) points to onerous administrative processes, high costs of trading across borders, poor access to credit, and lack of reliable and affordable electricity.

"These factors are aggravated by the strength of the currency in real effective terms. Tackling these structural bottlenecks is urgent to prepare the economy for the planned accession to the WTO in 2020."

The IMF's recommendations will come as no surprise to the private sector or most persons in government. It urged rapid progress on energy reform, calling for "strengthening regulatory oversight of both BPL and private sector operators, and encouraging energy efficiency and conservation measures, including in the hotel industry."

A regulatory framework to incentivise renewable energy investment, and its uptake by consumers and businesses, was another priority identified by the IMF. Besides the $30m digitisation initiative designed to lower the cost of conducting business with the Government, the Fund also urged passage of the Integrity Commission Bill to combat public sector corruption.

The Government, according to the IMF's report, agreed with "the need to advance structural reforms to strengthen competitiveness. The authorities concurred that the external position in 2018 was weaker than suggested by fundamentals, and shared staff's view that structural reforms hold the key to shift the economy to a higher and more inclusive growth path," it added.

"They recognised the need to continue building external and fiscal buffers, and to take reforms to lower costs and raise productivity. They stressed that the WTO accession process will allow analysing the implications for the Bahamian economy and putting in place necessary safeguards to mitigate disruptions, enabling a transition towards a more open and competitive economy."

Comments

BahamaPundit 5 years, 5 months ago

You used Haiti as an example of a failed nation but Haiti is a WTO member. If you need to join WTO as a catalyst for change that means you are lazy and unproductive and joining the WTO will destroy your economy with outside competition. You should be fit and ready when deciding to join an international organization. Your argument is saying you should enter the Olympics because it will make your terrible team better. Not going to happen! You'll just get rolled out!

BahamaPundit 5 years, 5 months ago

"We look at poor countries like Haiti, but are doing nothing to keep up with the rest of the world and will fall back into that position."

Haiti is a member of the WTO!!!

Hoda 5 years, 5 months ago

I believe his point was that Bahamians compare the nation as better off than say a Haiti, when we should be trying to keep up with the rest of the world, given that we say we are a financial services centre. However, I may be wrong.

Economist 5 years, 5 months ago

This country will lag further behind if we don't join. How bad does it have to get before we start to do the right thing?

I guess some people must love high unemployment as it will only get worse the longer we wait to join the WTO.

Once we were the leaders with very low, if not full, employment. Today so many others have passed us down and taken our business away. In many respects, we have given, and continue to give, it away to what was once our competition.

In case no one noticed, we are no longer competition for Bermuda. We have helped make Cayman, the BVI and Turks & Caicos and they have passed us down. Indeed, those four are so far ahead we can barely see them.

None of them worry about us anymore.

Well_mudda_take_sic 5 years, 5 months ago

There will be no Bahamas for any of us Bahamians if we join the WTO and most Bahamians are thankfully acutely aware of that simple fact. Scare as you may, we are not falling for it!

BahamaPundit 5 years, 5 months ago

Economist Your reasoning is not very valid. The main reason Cayman, BVI and Turks & Caicos are thrashing The Bahamas is because they remain British Colonies. Their success has very little to do with WTO. If your argument was correct, The Bahamas would be left behind by Barbados, Jamaica, Haiti, Trinidad, and this is not the case.

ThisIsOurs 5 years, 5 months ago

I agree. It's the environment. WTO will not magically fix anything. In fact it has tge possibility to disenfranchise an even wider group of bahamains. Those fighting for it will be fine, that's why they're fighting.

Nothing in our system will work until the corruption is removed from high places or those in high places by nothing more than a "popular vote" recognize that solutions aren't packaged in skin colour, age or affiliation . Until then same old same old

Porcupine 5 years, 5 months ago

The wrench in the financial cheer leading agenda has been the recent reports concerning rising temperatures and the consequent sea level rise. Do Bahamians not read these reports? Do we not understand the implications for the entire nation? Why would we be discussing generational changes, such as; "Besides improving the "ease of doing business", and eliminating bureaucracy and red tape, such reforms include lowering the cost of electricity and improving its reliability; cheaper and easier access to credit; equipping Bahamian workers with the necessary 21st century skills to compete; and digitising government services for smoother interaction with the public." None of these are even likely prior to The Bahamas facing nearly insurmountable costs associated with adaptation to rising sea levels and mitigation. I do not believe that children graduating from high school now have any future in this country. The economic, social and environmental impacts that are a near certainty are being totally ignored by those who are supposedly the most educated. While this may not be a popular message, it is becoming increasingly more likely by the day. Those quoted in the paper have the means to move their families when they need to. The vast majority of Bahamians will need to take to rafts, or stay and fight for the dwindling resources left to fight over. This will include land, fresh water and food. Lawlessness? We ain't seen nothing yet.

ThisIsOurs 5 years, 5 months ago

I believe you are right about the last part. What will be the cause, Dont know. A hurricane could do it or a complete collapse of BEC...so many possibilities, IF those winning a popular vote continue to disenfranchise 90% of Bahamians

DWW 5 years, 5 months ago

If i can get US Netflix and purchase music instead of being forced to pirate it, i fully support WTO assension. But seriously, the single most important and far reaching issue in this country is not WTO or ease of doing business it is IMHO land registry and ownership security. Why does a simple cash transaction of a little peice of land take 6-9 months of paperwork, loophole closing and thousands adn thousands of dollars in attorney fees? Anyone anyone crickets?

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