August 3, 2010
August 3, 2010
With global tourism facing a challenging year, a leading banker in The Bahamas believes the jurisdiction should target emerging economies, such as China, to boost visitor arrivals.
“America is in trouble. Europe has its issues. So what’s next?” asked Gregory Bethel, president of Fidelity Bank (Bahamas) Ltd, during a recent address to an economic summit hosted by the Bahamas Christian Council. ”The Chinese have all the money.”
According to information coming out of a Global Travel and Tourism Summit held in Beijing earlier this year, Brazil, Russia, India and China, the world’s top four emerging markets, which represent 40 per cent of the global population, are the focus of travel professionals looking for new clientele with money to spend.
Bethel also noted that 10 years ago, 11 of the top 20 largest banks were American. None were Chinese.
Today, only two American banks–JPMorgan Chase Bank National Association (#8) and Bank of America NA (#11)–are among the world’s top 20, according to the online Bankers’ Almanac.
Meanwhile, the Industrial & Commercial Bank of China Ltd and the Bank of China Ltd now rank 15 and 16 respectively. A little further down the list sit China Construction Bank Corp (#22) and the Agricultural Bank of China Ltd (#24).
According to Bethel, what local officials have done with tourism–ie target Americans–is no longer where the focus should be.
“This is the reality: Americans are earning less and rather than come to our expensive hotels they are opting for cruises,”?said Bethel, in his no-holds-barred address. “You are not going to get foreign investors in The Bahamas unless you get tourists. No tourists. No foreign investors. One follows the other.”
Last year, the Bahamian economy shrunk by five per cent, while a decline of anywhere between 0.5 to 2 per cent is predicted for 2010. Post recession recovery isn’t anticipated until late 2011.
Bethel challenged church leaders who organized the economic summit to get moving with plans to stimulate the economy.
“The two options are to downsize government and reduce government spending, because the government is spending all its money on salaries and pensions, subsidies, grants, housing and interest on debt,” Bethel advised. “So, you either have to cut that or you are going to see a goods and services tax, where anytime something is sold there will be tax added.”
Other taxes he suggested as possibilities in the future were inheritance tax, payroll tax, higher fees for government services, as well as the government moving to sell off companies, businesses and land.
“That’s what’s in your future, if you can’t grow the gross domestic product,” Bethel said. “Get ready for it…Doing nothing is not an option.”