The Tribune

By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

A former trade minister last night warned it will be a “total disaster” if The Bahamas joins the WTO, as he challenged the government to identify “the benefits for Bahamians”.

Leslie Miller, who held ministerial responsibility for the World Trade Organisation (WTO) accession between 2002-2006 when he was a member of the Christie Cabinet, told Tribune Business that the Minnis administration had totally failed to make the case for this nation to become a full member.

Expressing fears that foreign competitors will be able to enter The Bahamas and “wipe out” smaller local businesses, the outspoken ex-MP called on the government to “cease and desist” from joining the WTO by its 2020 target date as this was “not in the interest of the Bahamian people”.

And he dismissed arguments that full WTO membership will help The Bahamas attract more foreign direct investment (FDI) by clarifying the rules for accessing this market, adding that this nation had attracted the likes of Atlantis and Baha Mar while outside the overseer of the world’s rules-based trading regime.

“I think that if the government proceeds to take us into full membership it will be a total disaster,” Mr Miller told this newspaper. “The economy is already stagnant; we only achieved GDP growth of 1.8 percent last year when were supposed to get 2.3 percent, and we’re not seeing where the new jobs are being created.

“It doesn’t do anything for the fellas on the ground, where the unemployment rate for people aged between 15 to 24 years-old is around 26 percent. We don’t have any policies to incentivise local manufacturers to create jobs in light industries, banking and the retail sector.”

Pro-WTO membership advocates would argue that the “stagnation” referred to by the former trade and industry minister is precisely why The Bahamas should seek full membership in combination with enacting wholesale reforms to address the ease and cost of doing business, as it shows the economic status quo is not working.

And Mr Miller’s suggestions that WTO will have no effect on the unemployment rate is contradicted by the Oxford Economics study commissioned by the Bahamas Chamber of Commerce and Employers Confederation (BCCEC), which forecast that joining would help slash The Bahamas’ national unemployment rate from its current 10 percent to 6.5 percent over the next decade, driving it to its lowest level this century.

The consultancy also estimated full WTO membership could lift the economy’s long-run average annual GDP growth rate to around 2 percent - higher than the 1.5 percent currently forecast by the International Monetary Fund (IMF).

But Mr Miller, unconvinced by such findings, told Tribune Business: “You tell me what incentive is there for the local economy to join WTO? How are we going benefit? I haven’t heard anyone give any benefit. Tell me what benefits are going to accrue to the Bahamian people.

“I was insulted when the lead man, Zhivargo Laing, came back from the WTO in Geneva and gave no benefits. Tell me: What are we going to benefit from? There are none. They say we will get more investment, but how come we got Atlantis and Baha Mar and all these other investments in the country without WTO. 

“No prospective investor mentioned to anyone in government when I was there that we needed to join the WTO. Not one of them over the last 50 years. No one pushed us. No one. It’s coming from the Government itself and makes no sense.”

Mr Miller backed Super Value owner, Rupert Roberts, who he argued was correct to reject WTO accession despite the heavy criticism he had received for saying so publicly. “The big boys will come here and wipe us all out in the retail sector,” the former Tall Pines MP warned, although the Oxford Economics study said the sector can be “reserved” for Bahamians only under the WTO.

“It’s very dangerous what the Government is trying to do,” Mr Miller added, “and I would ask them on behalf of the Bahamian people to cease and desist going forward with the WTO. It’s not in the interests of the Bahamian people.

“Show me the benefits. There aren’t any benefits except maybe for the financial services sector. How many Bahamians have control of that sector? Probably less than 1 percent. Why do this thing to the detriment of other Bahamians. It cannot be right, cannot be fair. 

“They’re the Government and can do what the hell they please. Nothing you or I can do about it. Let’s hope they keep the Bahamian people’s best interests in mind. Let’s hope. Let’s hope.”

Mr Miller, who headed the Light Industries Development Council when in the private sector, said successive governments had done too little to support and incentivise domestic industries and manufacturing, describing their attitude towards the sector as “lukewarm”.

Arguing that the least the Government could do was ensure its ministries and corporations “buy Bahamian”, he added that while K P Turnquest, deputy prime minister, was complaining this nation imports too much there had been no policies “to get manufacturers to produce more and get new entrants into the market” to reduce this.

“The Government has to be more friendly to local manufacturers to produce products and produce jobs for our people,” the ex-minister argued. “Something’s got to give to give Bahamians the breaks they need while foreigners are getting everything they want.”

Pointing to the $250,000 investment threshold and work permit access provided by the Commercial Enterprises Act as one example of this, Mr Miller said Florida manufacturers were already sending persons into The Bahamas to obtain orders without the necessary approvals.

Warning that this was “to the detriment of the local manufacturing base”, he added that “those of us in it for 30 years will walk away and forget about it” unless the Government created a level playing field for Bahamian entrepreneurs.

Mr Miller also urged the Government to implement a tax on Airbnb and other vacation rentals in today’s Budget, arguing that foreign second homeowners renting their properties out to visitors was “decimating the small hotels, guest houses and timeshares” in the Family Islands owned by Bahamians.

“They don’t stand a chance,” he argued, pointing out that foreign homeowners enjoyed a competitive advantage by being able to import construction materials duty-free.