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Bahamas needs to ‘sustain’ doubled GDP growth rate

By YOURI KEMP

Tribune Business

Reporter

ykemp@tribunemedia.net

THE Bahamas must double its average economic growth rate over “a sustained period” through an “aggressive” pursuit of the right foreign direct investment (FDI) opportunities.

Michael Halkitis, minister for economic affairs, speaking on an Organisation for Responsible Governance (ORG) panel, said it was critical that the Government make progressive reforms in the “attraction of foreign direct investment” so that The Bahamas can break out of historical gross domestic product (GDP) growth rates that have averaged between 1-2 percent for decades.

“We have made some reform as to the way we deal with risk, with studying, with analysing and approving foreign direct investment, something as simple as more regular meetings so that they can be dealt with, you know,” he said in reference to the Cabinet’s National Economic Council (NEC).

“We’re having meetings on just about a weekly basis to deal with investments, and really streamlining the process of approval so that we can get to the point where you can get the shovel in the ground as soon as possible.” The Government is also working to transform the Bahamas Investment Authority (BIA) into Invest Bahamas, a more proactive investment promotions agency along the lines of Jamaica’s Jampro, which focused on attracting targeted industries and investors.

“The second thing that’s working, and you’ll see some more activity even before we get to the Budget, is that we have these investment projects on the various islands like Abaco and Eleuthera and Long Island,” Mr Halkitis said. “The second element of this is we have to have an enhanced investment in our infrastructure, physically your Family Island infrastructure, because that will help drive and help attract investment, and it’ll help drive the return on investment.”

There will be “shovels in the ground” on several Family Island airport projects as part of “bold” infrastructure upgrades. “I think what we’re trying to do is get away from that average, where we’ve been averaging like one-and-a-half to 2 percent economic growth,” Mr Halkitis said. “We have to get into the three-plus or 4 percent area over a sustained period. We believe that if we have the investment come in, if we are successful in establishing the linkages........”

He added that the pursuit of foreign direct investment must be “aggressive” because it will enable the Family Islands to enjoy a “boost in GDP” in terms of increased employment along with growth in the housing and tourism markets. Mr Halkitis said: “We have to look at ways to get the capital, and to mobilise the capital, because the Government can’t continue to borrow to build the airports.”

Developing the public-private partnership (PPP) model as the best mechanism for attracting private investors to infrastructure-type projects, he added: “In a very short time, you will begin to see shovels in the ground because we have certain areas in this country that are very vibrant, like North Eluethera and Exuma. If you have the investment in the infrastructure, the economy will take off.”

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