The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government is focused on “telling the story about The Bahamas” and its post-COVID recovery to ensure international investors and markets retain confidence in the country’s debt, a Cabinet minister said yesterday.

Michael Halkitis, minister of economic affairs, in leading the Budget debate in the Senate said the Davis administration was concentrating on ensuring that lenders, creditors and other investors have faith in the Government’s economic recovery and debt management strategy to the extent The Bahamas can still access the credit markets at competitive interest rates when it needs.

“I believe we have a good story to tell here in The Bahamas,” he argued, pointing to the recently oversubscribed $385m international bond issue that was placed with help from a $200m Inter-American Development Bank (IDB) guarantee. “We have a strong recovery underway, driven by tourism, the prospects are good and we are bullish on The Bahamas.”

Mr Halkitis said this was the message that the Government is continuing to drive home in its conversations with Bahamas-based and international financial institutions, as well as other money market players, emphasising that this has to be continually reinforced in an environment where so-called emerging market countries such as this nation are under pressure from global inflation and rising US interest rates post-pandemic.

He added that The Bahamas had been “very well-received” to-date, and described this as an “ongoing process” to educate investors about what is happening in The Bahamas to ensure this nation both gains and retains their confidence.

Again explaining why the Davis administration has elected not to impose any new and/increased taxes on Bahamians, Mr Halkitis added: “We believe we should be growing the economy. A rising tide lifts all boats. This is the path we have taken..... We officially launched the Revenue Enhancement Unit, which has already identified hundreds of millions of dollars in uncollected revenues that will now be pursued via enhanced collection and enforcement measures.”

Acknowledging that the Budget’s combination of duty rate cuts, planned public sector wage increases, continued social services support and food security investments will not be a cure-all for soaring inflation that has plunged many Bahamians into a cost of living crisis, Mr Halkitis added: “The current wave of global hyperinflation has made a bad situation worse in The Bahamas, where we already had high costs of living even before the pandemic.

“We cannot stop global inflation, but we can take steps to lessen the impact and support our people. It may not be enough to completely reverse the impact of inflation, but we believe that during these times every dollar counts.”

Elsewhere, the minister said the Government has asked the Securities Commission to “develop and advise on carbon credit secondary markets trading legislation, which will be debated alongside the Government’s legislation very soon.

“Carbon markets with high-quality carbon credits and offsets could play a vital role in helping countries with the decarbonisation of the global economy, while also providing substantial economic benefits,” Mr Halkitis added. “The Securities Commission reviewed and benchmarked seven jurisdictions to determine how The Bahamas can develop and implement an international voluntary carbon credit trading market.

“The intention is to create a carbon credit regulatory framework that would allow for the cross-border trading of carbon units, which ultimately can assist in reducing The Bahamas’ greenhouse gases footprint, fulfilling its obligations under the Paris Agreement and increasing direct and indirect economic and financial opportunities.”

Mr Halkitis also pledged that The Bahamas was finally making progress on establishing itself as an international arbitration centre - something it has been talking about for more than two decades. “We have been talking about ADR (alternative dispute resolution) in The Bahamas for well over 20 years now with little substantive progress,” he acknowledged. 

“It’s not been due to a lack of passion or enthusiasm on the part of local ADR experts and enthusiasts within the public and private sector. They have been clamouring for this. After all this time, progress is now being made. The ADR Unit is in the process of appointing Bahamian members to the Court of the Permanent Court of Arbitration.

“The Alternative Dispute Resolution (ADR) Council has been reformed. It is hoped that through the ADR Council, The Bahamas can effectively promote itself as a leading jurisdiction for international arbitration and other ADR processes.... After two decades, we are seeing real movement in ADR and are hopeful that businesses and people involved in disputes will soon have an International Arbitration Centre in The Bahamas to address those disputes.”