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Transition of power

Transition of power

New government pledges to promote financial services, improve ease of doing business

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The Bahamas Investor Magazine
August 21, 2017
August 21, 2017
Erica Wells Cox

The Free National Movement (FNM), led by Dr Hubert Minnis, took office in May after securing a sweeping victory over the ruling Progressive Liberal Party (PLP) in the 2017 General Election, promising to restore growth in the Bahamian financial services industry.

The convincing win, in which the FNM captured 35 of the 39 seats in the House of Assembly, was followed by a smooth transition of the new administration.

In addition to pledging to create a more open, protective and competitive society and economy, and sustained economic growth driven by Bahamian investment and strategic foreign direct investment, the FNM said it will aggressively promote the financial services industry.

Dr Minnis, a physician by profession, was sworn in as the country’s fourth prime minister on May 11. He promised to honour the people’s mandate for change and thanked the Bahamian people for putting their trust in the FNM.

“We will honour this trust with an unwavering commitment to good governance, the rule of law, transparency and accountability,” the prime minister said at the swearing-in ceremony held at Government House, May 11. “We will respect the constitution and we will abide by the long-standing and tested conventions of our parliamentary democracy.”

Addressing the crowd at a victory rally in Nassau, Minnis said: “This was a long fought battle but the victory is not mine, the victory is yours. This is the people’s time and I am your servant.

“I am fully aware of the awesome mandate that has been handed to me. There are serious challenges ahead, but we are confident we shall overcome.”

In one of the biggest upsets of the night, former Prime Minister and PLP leader Perry Christie lost the Centreville constituency–a seat he has held since 1977–to FNM newcomer Reece Dean Chipman. Christie, who is The Bahamas’ longest serving parliamentarian, later announced his retirement from political life. Out of the four PLP candidates to win their constituencies, two had served in the Christie Cabinet–Philip Brave Davis, as Deputy Prime Minister and Minister of Works and Urban Development, and Glenys Hanna Martin, as Minister of Transport and Aviation.

Financial matters
Peter Turnquest, the FNM’s deputy leader, was installed as the new Deputy Prime Minister and Minister of Finance. Turnquest is a certified public accountant (CPA) and has spent most of his career between New Providence and Grand Bahama.

In the annual Budget Communication on May 31, Minister Turnquest announced that the government will strengthen transparency of the government’s fiscal operations in the Ministry of Finance and vigorously implement the Inter-American Development Bank (IDB)-funded Public Financial Management Project.

Minister Turnquest said the near-term outlook for domestic economic activity appears modestly positive in 2017, with the phased opening of Baha Mar and the ongoing support provided by other foreign investment-led projects. Projected developments in the US, such as boosted financial markets and business confidence, are also expected to provide modest stimulus to economic activity.

In its latest World Outlook report, the International Monetary Fund (IMF) projects that the Bahamian economy will expand by 1.4 per cent in 2017, followed by 2.2 per cent in 2018; however, Minister Turnquest has suggested that The Bahamas can do better than the growth rates predicted by the IMF.

“We must do better and we will do better,” he said.

Economic revitalization
The new administration has also pledged to jump-start and revitalize economic development in Freeport and Grand Bahama, where the economy has been in a years-long slump. Minister Turnquest, who represents the constituency of East Grand Bahama, said in the Budget Communication that the government will repeal and replace legislation to ensure all Grand Bahama Port Authority licensees receive equal treatment under the law; promote the air, sea and land business park; focus on the development of Freeport as an offshore technology hub; revitalize the tourism sector; and promote Grand Bahama as a primary location for the local and international film and television production industries.

Bahamian businessman and lawyer Brent Symonette serves as Minister of Financial Services, Trade and Industry, and Immigration in the new administration. Symonette has served in previous FNM administrations as Deputy Prime Minister, Minister of Foreign Affairs, Attorney General and Minister of Tourism.

Financial services industry stakeholders have already discussed potential opportunities for the sector with Minister Symonette, including ease of doing business, tax reviews, immigration, jurisdiction branding and repositioning of The Bahamas’ brand after the implementation of the Common Reporting Standard (CRS).

Weeks after taking office, the Ministry of Finance announced that The Bahamas government had formally advised the Organisation for Economic Co-operation and Development (OECD), of its interest in acceding to the Multilateral Convention for Mutual Assistance in Tax Matters. Previously, The Bahamas was taking a bilateral approach to implementing CRS for automatic exchange of information. This move is a progressive step by the new administration to firmly place The Bahamas in the global arena as a tax compliant international financial centre.

“This important development serves to emphasize, once again, the enduring commitment of the government of The Bahamas and the banking sector to adhering to all international best practices, thereby assuring the continued participation of The Bahamas as a world-class financial services centre,” the Ministry said in a press statement.

Both the Bahamas Financial Services Board and the Association of International Banks and Trust support the government’s move to “take the necessary steps to avoid adverse impact to The Bahamas as an international financial centre and to position the jurisdiction for sustainable growth and development over the long term.”

As it relates to tourism, the new administration has pledged its commitment to strengthen and rejuvenate the country’s bread and butter industry, which is expected to receive a boost in the near term from the phased opening of the Baha Mar megaresort. The new Minister of Tourism and Aviation is Dioniso D’Aguilar, a Bahamian businessman and certified public accountant. D’Aguilar is also a former president of the Bahamas Chamber of Commerce. His portfolio includes the national flag carrier, Bahamasair.

With the new FNM Cabinet in place, The Bahamas is set to move forward, focusing on key issues such as ease of doing business and local and foreign investment strategies. Looking to future growth, The Bahamas financial services sector will continue to promote its innovative wealth solutions to new markets and reinforce ties with traditional client-bases around the world.

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