Tuesday, June 23, 2015
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
A former Financial Services Minister yesterday urged the Government to establish an operational Chinese currency trading platform within 12 months, and not let “a great opportunity pass us by.”
Ryan Pinder, now Deltec Bank & Trust’s wealth management head and chief legal officer, told Tribune Business that the highly competitive financial services market meant the Bahamas had to act on growth possibilities “sooner rather than later” if it was to keep pace.
“It’s a competitive global environment in this industry of financial services,” the Elizabeth MP said. “I think that we have to act on opportunities in a swift fashion otherwise they may pass us by.”
The Bahamas was given designated status as a platform for trading and settlement using China’s national currency, the renminbi, during Prime Minister Perry Christie’s trip to Beijing earlier this year.
However, much remains to be done to make this a reality and, in the meantime, China has granted the same status to another Latin American nation in the shape of Chile.
“I think it was a tremendous opportunity that was negotiated by the Prime Minister and the Government, and it should be pursued,” Mr Pinder said, adding that he had already “reached out” to the administration on the issue since leaving office.
“I would like to see the platform put in place and attracting business within 12 months,” he told Tribune Business yesterday.
Mr Pinder also used his 2015-2016 Budget address to advance this cause, suggesting that a Chinese currency trading platform would provide “a key area of growth and diversification” for Bahamian financial services.
By moving on this opportunity now, Mr Pinder said the Bahamas’ efforts would coincide with China’s development of a Western Hemisphere version of DragonMart in Panama.
DragonMart is a buyers’ emporium, which attracts thousands of businesses to one location, where they assess and purchase products from hundreds of Chinese traders and manufacturers.
Developing the renminbi trading and settlement hub, Mr Pinder added, would enable the Bahamas to offer financial services to some 3,000 Chinese companies doing $10 billion worth of business annually - trade financing, currency conversion, short-term debt paper issuance and commercial loans.
And, ultimately, the renminbi trading platform would also give Bahamian private wealth management practitioners access to Chinese entrepreneurs.
“It’s a multi-faceted opportunity for the Bahamas, but is based on putting in place a renminbi trading and settlement platform,” Mr Pinder told Tribune Business.
“It’s not something you turn the key on overnight, but it should be put in place sooner rather than later.”
He added that a private sector committee had been established to help the Government understand the commercial opportunities flowing from such a clearing and settlement platform.
Mr Pinder expressed confidence that the Christie administration would move on the opportunity, adding that it was “moving in that direction for sure”.
However, in his Budget debate contribution, Mr Pinder called on the Government to launch the renminbi trading and settlement platform “without unnecessary delay”, especially given other Chinese initiatives.
“These opportunities will not sit idly by,” he warned than. “New opportunities will develop for, and in other, jurisdictions. As an example, since the award, Chile has been granted status to trade and settle renminbi.
“It is also anticipated that China will launch by the end of this year a pilot program that is called the China International Payments System (CIPS).”
Mr Pinder said this initiative was designed as an alternative payments system to SWIFT, and would diminish the advantages of being a renminbi trading hub once expanded internationally.
“It is very important that we launch and develop this platform as a currency trading hub in the shortest amount of time to gain a first mover advantage in this hemisphere,” he warned.
Much remains to be done. Mr Pinder said it required the Central Bank of the Bahamas to show an interest at the ‘working group’ level, and engage with the People’s Bank of China.
A Chinese bank would have to establish itself in the Bahamas, while a Memorandum of Understanding between the Bahamas and China would have to be signed and all necessary regulatory approvals obtained.
Mr Pinder, meanwhile, added that there were “measurable opportunities” for the Bahamas in Latin America beyond Brazil and Mexico.
With traditional source markets under pressure, Mr Pinder said the Bahamian financial services sector had to “position ourselves to be a factor in these new markets”, identifying two possibilities as Colombia and Chile.
Yet “to do effective business” in Colombia, the Bahamas needed to agree a Tax Information Exchange Agreement (TIEA) with that nation, otherwise wealthy Colombians would be subject to ‘withholding’ penalties and unable to use this nation to diversify their assets and income.
Comments
TalRussell says...
Comrade Ryan needs quickly decide, if he wants be a lobbyist for the Chinese and Bankers, or a siting House of Assembly representative "for and by da people."
Posted 23 June 2015, 2:49 p.m. Suggest removal
VDSheep says...
We must not be daft about trading with the Chinese or anyone for that matter! The future is in the East. the Chinese has their agenda as with everyone else. We are an independent nation that ought to trade with the world. No longer do we need to be tied to the West alone. A new international banking system (BRICS) is on stream and will grow by leaps and bounds - countries like Germany and others in Europe are joining. We need options from the hegemonic World Bank, IMF, US banks and so on. But most of all we need our own agenda; and if we are smart about it - we can accomplish tremendous advantages for our economy! However it cannot happen if we stay in this centralized colonial mentality. So, lets all be comrades and move the Bahamas onwards!
Posted 23 June 2015, 3:53 p.m. Suggest removal
banker says...
Either Pinder is a naive idiot or he is being paid by someone. Everyone in the business knows that the Chinese manipulate their currency for the export business, and the US has tried to call them on it at every opportunity, all to no avail. If we become a currency hub for the Chinese, we will be nothing but their front-man puppets for Forex manipulation worldwide by the Chinese government. I guess Pinder has the "everything in the country, including the country" attitude from his father. The apple doesn't fall far from the tree, and especially when the tree flourished at the height of corruption in the Swindling government.
Posted 23 June 2015, 4:21 p.m. Suggest removal
killemwitdakno says...
They are having a bust, but much of the world has considered their dollar safe and done the same as recession protection already.
Posted 23 June 2015, 10:19 p.m. Suggest removal
banker says...
Either Pinder is a naive idiot or he is being paid by someone. Everyone in the business knows that the Chinese manipulate their currency for the export business, and the US has tried to call them on it at every opportunity, all to no avail. If we become a currency hub for the Chinese, we will be nothing but their front-man puppets for Forex manipulation worldwide by the Chinese government. I guess Pinder has the "everything for sale in the country, including the country" attitude from his father. The apple doesn't fall far from the tree, and especially when the tree flourished at the height of corruption in the Swindling government.
Posted 23 June 2015, 4:21 p.m. Suggest removal
Economist says...
Banker is correct they do manipulate their currency. It just happens that, at the moment, the IMF says that it is not undervalued. But don't hold your breath.
You have to wonder what the Chinese angle on all of this is? They want something, maybe not now, but you know that they want something.
Look at what they have done to Freeport and now look at what they are doing to Baha Mar. Lower the value and then take it for themselves perhaps?
Posted 23 June 2015, 4:55 p.m. Suggest removal
banker says...
What you say is true as well. At the moment it is not devalued intentionally, because the Chinese economy has tanked, and they are struggling to maintain its value against a basket of currencies, loosely pegged to the American dollar. However it has even fallen against the American dollar.
Some economic pundits are saying that China is now doing the opposite -- artificially boosting their currency as a prop against the optics of having to admit the huge slowdown in their economy.
Whatever the true situation is, the stark truth is that the Chinese are manipulating it one way or the other, and we would become unwitting partners in their machinations.
Economist makes a good point as to how everything that China touches in the West turns to crap. The CEO of Walmart made a commitment to buy and sell less Chinese junk, and their glory days are over.
In their boom years, they accumulated over $4 trillion dollars in foreign currency, and now their Central Bank is spending some of that to prop up their currency (The Economist Magazine -- February 2015).
Whatever the real picture, the Chinese are hanky panky players and Pinder wants us to jump into bed with them, almost like Moron Miller wanted us to sell our energy sovereignty to that Venezuelan nutbar, Hugo Chavez with the Petro Caribe deal. Our government is dangerous, because they are naive amateurs and rubes.
Posted 23 June 2015, 5:17 p.m. Suggest removal
GrassRoot says...
China wants proliferation of its own currency. Ryan has a point, albeit he may be the wrong messenger. There are only a few chips the Bahamas Financial Centre has left to play with, but again the Government choses to chase the PAC through the streets and legislate on drones rather than executing this option to become one of the first movers on a Renminbi hub.
Posted 23 June 2015, 7:26 p.m. Suggest removal
killemwitdakno says...
Trump said they manipulate their currency, now Trump is cool with them , keep up.
Posted 23 June 2015, 10:18 p.m. Suggest removal
TalRussell says...
Comrades why would the Chinese have to wait to depress the value of all residential and commercial properties in Nassau Town, including Paradise Island, when the total combine land values would only require they write a cheque in the total amount of less than 3 billion dollars. Equates to mere pocket change for the Chinese. In fact for the same 3 billion or just a few more hundreds millions, you could throw in Freeport with the lands purchase package - buildings and all.
Posted 23 June 2015, 6:02 p.m. Suggest removal
banker says...
This will explain it: https://www.youtube.com/watch?v=iIijBLn…
Posted 23 June 2015, 6:48 p.m. Suggest removal
killemwitdakno says...
If trust owners aren't going to escape through Pinder, then yes, step on it.
Posted 23 June 2015, 10:18 p.m. Suggest removal
Regardless says...
Seems Ryan "Sarah Palin" Pinder missed his name in the papers. One would think the bank notes he is now stuffing in his mattress would be enough.
Posted 24 June 2015, 12:08 p.m. Suggest removal
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