Monday, September 25, 2017
Monday, September 25, 2017
Deputy Prime Minister and Minister of Finance Peter Turnquest speaking at this year’s Eleuthera Business Outlook said that The Bahamas must do more to improve the own investment climate and competitiveness.
“For The Bahamas perhaps it is that we had become complacent, assuming that our investment climate was the best in the region given our relative success in attracting foreign investment and maintaining a stable economy.”
“But the truth is that – and as all of you who run a business would know – we need to do better and we must do better. We have to accept that in many areas urgent improvement is needed.”
DPM Turnquest explained that according to the International Monetary Fund World Outlook, The Bahamas is forecasted to grow by 1.75 per cent in 2017 and 2.5 per cent in 2018.
He said, however, that growth will not happen and be sustained if the government does not do its part in breaking barriers and promoting success.
“In fact a country cannot progress without undertaking the reforms that lead to better business conditions. These reforms are critical to achieve better living standards, moderate inflation, low-inflation uncertainty and high-growth rate.”
The DPM explained that employing the principles of sound macroeconomic management such as small deficits, manageable government debt, increased investment both domestic and foreign, an improved business environment, stronger infrastructure, and a more educated, sophisticated workforce is necessary for the country to sustain high growth and to become strong.
“The government reaching back to the 1970s has consistently provided special incentives and encouragement to Bahamian entrepreneurs through various government agencies and by the passage of special incentive legislation.”
“The establishment of The Bahamas Development Bank, The Bahamas Industrial and Agricultural Corporation together with the enactments of the Agricultural Manufactories Act, the Spirits and Beer Manufactories Act, the Industrial Encouragement Act and the Family Island Incentive Acts, have all provided a range of incentives to local entrepreneurs.”
“However, we recognize that we need to update the facilities that exist to aid small businesses and Bahamian businesses generally. And we need to consolidate and improve access to these mechanisms so that Bahamian entrepreneurs get timely and effective support.”
He said the government also needs to consolidate and improve access to these initiatives so that Bahamian entrepreneurs get timely and effective support.
He said one of the schemes involves the introduction of Small and Medium Enterprise Development support programmes geared to provide advice and technical support to the Bahamian business community and help walk them through the sometimes confusing maze of government.
The DPM explained that the government is also creating incentives to encourage risk taking in non-traditional sustainable industries; establishing a One-Stop Shop to improve efficiency and access to government services; and improving customer facing software products to improve the ease and convenience of doing business with government across agencies.
Another initiative also involves strengthening the existing Bahamas Venture Capital Fund (BVCF) by increasing contributions into the fund and coordinating other financing and business support agencies efforts, such as The Bahamas Development Bank, to avoid overlaps and mission creep.
He went on to say that the government appreciates that the ongoing success and vitality of the Bahamian economy is tied to the nation’s ability to attract quality “strategic” foreign investment.
“In order to maintain and sustain living standards at the levels we have become accustomed [to], we need to not only attract a certain amount of foreign direct investment, we must do so on an annual basis and in competition with the rest of the Caribbean and Latin American region as well as with many states, municipalities, cities and towns within the United States.”
Over the years, the country has been relatively successful in attracting those investments by extending a range of incentives to the foreign investor in terms of tax concessions, favourable terms for land acquisition and counterpart capital developmental funding for infrastructure by the government; all of which are elements of private and public partnership (PPP) cultivated over the years though we may not have labelled it as such, he noted.
One of the country’s main challenges going forward, he said will be — how does it maintain that leadership position?
“Maintaining our leadership position would involve greater collaboration by the government and the private sector to improve and expand our infrastructure, the level of services offered and the number of opportunities created.
“This means, in my view, the expansion and formalization of the PPP concept. The basic aim of creating PPPs is to allow the public sector to employ private-sector capital and management expertise in the delivery of public services,” he said.
The government efforts to provide the necessary resources to meet public sector demand will be guided by the mandate to increase the revenue base without having to rely heavily on the introduction of new taxes or increases in existing tax rates, the DPM explained.
The government needs to re-organize, modernize and upgrade the revenue collection machinery in order to increase its yield, he said.
“In that regard, the government intends to introduce a number of measures with a view towards improving the administration of the collection process; improvements to the revenue statistical data base; and the development of programs to reduce leakages.
“In light of this challenge, we are guided by the principle that the private sector, in a competitive environment, is better able than the government to deliver goods and services to the public.
“Therefore consideration should be given to public-private partnership as a more efficient means of meeting the needs of the public sector.”
DPM Turnquest said the advantages of this type of partnership include the ability to raise additional finance in an environment of budgetary restrictions, make the best use of private sector operational efficiencies to reduce cost and increase quality to the public and the ability to speed up infrastructure development. In this way the private sector is seen as a partner in nation building.