|The Bahamas Investor Magazine
June 27, 2007
June 27, 2007
After ousting the Progressive Liberal Party (PLP), Hubert Ingraham and the Free National Movement (FNM) have returned to power with promises of timely legislative development to ensure the continued growth of the Bahamian financial services industry.
In addition to pledging to strengthen the Bahamian economy, promote increased Bahamian ownership and wealth and create new, high quality jobs, the FNM says it will maintain The Bahamas as a low-tax jurisdiction and examine regulatory regimes in order to eliminate any redundancies between them.
The international credit rating agency, Standard & Poor’s (S&P) is satisfied that The Bahamas will continue to be an attractive financial services jurisdiction following the change in government. “Given the previous experience of the FNM’s leader, Hubert Ingraham, who headed the government of The Bahamas between 1992 and 2002, Standard & Poor’s does not expect any major delays related to a ‘transition’ period, as all major issues on the political agenda are familiar to the FNM,” said a statement released by S&P following the election results.
The statement noted that the new government “is generally perceived as being more rapid and aggressive in decision-making” than its predecessor, the Progressive Liberal Party (PLP), “particularly in dealing with investors.”
Based on his party’s Manifesto 2007—a glossy 36-page booklet presenting the Free National Movement’s election promises—Prime Minister Ingraham remains committed to developing financial services.
As he did when he was previously in power, Prime Minister Ingraham will keep the Ministry of Finance within his portfolio and he has appointed Zhivargo Laing as his Minister of State for Finance. The Ministry of Financial Services and Investments was an invention of former Prime Minister Perry Christie and has been eliminated in the formation of Mr Ingraham’s Cabinet. The roles previously conducted by that Ministry will be absorbed by different ministries.
The Bahamas Financial Services Board (BFSB), which was created during Ingraham’s second term in office, will continue to play a key role. The FNM has promised to create a statutory Financial Services Board, giving it increased importance in the country’s development.
Another sign that the sector is seen by the government as an important facet of the economy is a promise to increase the state-sponsored marketing budget and ensure that Bahamian overseas missions—in particular those based in London and Washington DC—are manned with economic officers with backgrounds in financial services.
When it comes to development of a captive insurance industry, the FNM government is expected to pick up where its predecessor left off. Manifesto 2007 promises to pursue the re-establishment of a captive insurance industry and replace the office of Registrar of Insurance with a new organization that has a supervisory role in the insurance sector similar to the one that The Central Bank of The Bahamas has over the banking industry.
These are still early days in a five-year term, but analysts have noted that Ingraham and the FNM already have a track record in government, and based on this and the promises laid out in Manifesto 2007, there is every reason to believe they will continue to work hand in hand with the private sector to create an attractive and internationally competitive financial services sector.