QC’s ‘collapsed state’ fear if another Dorian

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas “will be a collapsed state” if Nassau suffers a Dorian-type hit within the next two years, a well-known QC warned yesterday, urging: “This is not the time for half measures.”

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that the potential for another category five storm to hit the Bahamian capital should be a “wake-up call” for the government to “save Freeport by opening the immigration and investment doors again”.

Demanding “big strategic thinking” from the Minnis administration, Mr Smith urged it to relax the government’s grip on the country’s second city and allow it to flourish as originally designed by the Hawksbill Creek Agreement’s founders.

The outspoken QC, suggesting that Dorian had reinforced the importance of reviving a Freeport economy that was already “catatonic” pre-storm, added that The Bahamas can no longer rely on one island to generate three-quarters of its economic activity given that hurricanes and natural disasters linked to climate change could virtually wipe it out overnight.

He also argued that the reluctance of successive FNM and PLP administrations to let go had made the Grand Bahama Port Authority (GBPA) “amateurs” when it came to fulfilling its governance and development responsibilities, and in attracting the new investment vital to Freeport’s growth and prosperity.

Mr Smith said the “red tape” and bureaucratic obstacles imposed from Nassau had also resulted in a “vicious circle” where the GBPA’s two family owners, the Haywards and St Georges, and their Hutchison Whampoa partner were constantly in “financial survival” mode and extracting any profits made via dividends - rather than reinvest in Freeport - due to the city’s inability to grow.

“Dorian should be a wake-up call for the Government,” he told Tribune Business. “It is once again the opportunity to say to the rest of The Bahamas that Freeport remains the only other viable economic area in The Bahamas, even though it was partially destroyed by Dorian. Abaco, which is the third leg, was completely destroyed.

“We have thousands of people displaced from Freeport, hundreds of homes destroyed, thousands damaged, businesses closed and collapsed, with many others struggling to get back on their feet. This is not the time for half measures; it’s time for big strategic thinking.

“By way of strategic planning, if a hurricane of the magnitude of Dorian hit Nassau in the next couple of years The Bahamas will be a collapsed state. By way of strategic planning the Government needs to take this opportunity and say the only way we’re going to resurrect Freeport is to get rid of all this red tape that never existed when Freeport was created in the first place,” Mr Smith continued.

“They need to revert to the initial plan, co-operate with the licensees, open the doors and create so many opportunities for licensees and Bahamians. We should not be afraid of open doors policies, and allowing joint ventures with Bahamians. We should let people in who want to invest, grow and make a future in Freeport.

“I urge the Government to go back to basics with the Hawksbill Creek Agreement, open the doors and let the good times roll again in Freeport. Stop being afraid of the rest of the world. Open the Immigration and investment doors again. This is the only thing that will save Freeport. Otherwise this leg of the economy will be crippled like I was on a mountainside in Italy.”

Mr Smith’s call to revive Freeport’s original model as a tax-free zone, or “free port”, with minimal government controls and interference may alarm those who believe that a sovereign nation must control everything that goes on within its borders.

Yet the outspoken QC remains firm that going back to the future with The Bahamas’ second city is the only way to build a resilient national economy capable of withstanding the extreme threats this nation now faces.

While praising the Carnival cruise port and Royal Caribbean/ITM Group plans to revive the Grand Lucayan, Mr Smith told Tribune Business that these investments were “miniscule” when set alongside Freeport’s already-constructed infrastructure and “are merely scratching the surface” of the city’s economic potential.

“Regrettably, the PLP, the FNM and bureaucrats in both administrations for 50 years have been terrified of our status, and have squabbled and quarrelled with the licensees and the Port Authority, which has resulted in the catatonic state of the Freeport economy,” he said.

“Despite the flaws facing them, they refuse to take the drastic steps necessary to resurrect this phoenix from the ashes of government interference..... Freeport licensees have just been able to survive, instead of there being co-operation with the Port Authority and the Government, which would result in a hugely expanded economy.

“This requires a big wide opening of the Immigration doors, not tentative baby steps like the Commercial Enterprises Bill, and recognising that the genesis of Freeport was an open doors Immigration and investment policy, the building of trust with investors, and letting the Port Authority do its job.”

Mr Smith called for the Government to return to that position while holding the Port Authority accountable for its governance and development responsibilities. He also urged it to relax controls such as exchange control, Investment and Immigration approvals, and to stop trying to replicate Freeport and its ‘free zone’ characteristics in other parts of Grand Bahama and The Bahamas.

The Minnis administration, upon taking office in May 2017, indicated it was placing a high priority on reviving Freeport and Grand Bahama’s economy by announcing initiatives such as the “technology hub” plans for the city.

However, Mr Smith said: “This is the reality. They can talk as much as they want about resurrecting Freeport’s economy, but until they accept this is a unique business environment which has dramatic potential for becoming a Singapore in the Caribbean, this won’t work.

“Tentative baby steps, approving projects here and there, is the same old, same old. People get frustrated, they can’t get anything done, and they throw up their hands and leave.”

Mr Smith also argued that increasing central government involvement in the city’s affairs had “resulted in the Port Authority families and Hutchison taking advantage of the Government, residents, licensees and homeowners of Freeport.

“Because the Government has been so constipated in its approach to investment, the Port Authority has not been able to do anything, and therefore has lapsed into financial survival and extraction mode,” he argued.

“There are hundreds of miles of paved roads, lots of subdivisions, canal systems and water and electrical infrastructure. All of it is collapsing from lack of investment and lack of use to maintain it.

“It’s a vicious circle being created. DevCo, LusCo have been unable to maintain the infrastructure because of a lack of service charges and land sales from people building homes,” Mr Smith continued. “As a result, they have been unable to invest enough money in infrastructure that has been dilapidated and collapsing.

“While we blame the Port Authority for the collapse of infrastructure, the real blame is on the Government for failing to allow the Port Authority to do their jobs. Over the years they’ve become amateurs at doing their job because they’ve not been allowed to do it, so they take in whatever money is made for themselves and Hutchison.

“This is a vicious circle, which the Government has created, which is self-perpetuating. The people suffering are the Bahamians and licensees who reside in Freeport. We are doing a disservice to Freeport.”

Mr Smith suggested incentivising “the rest of The Bahamas to go and develop Freeport”, using as an example the removal of exchange control restrictions on local investors buying shares in international companies doing business in this nation if they moved to or invested in the city.

“Nassau is quite Freeport phobic. The business community and politicians seem quite afraid of Freeport. They don’t understand it’s the future of The Bahamas. If only they get let it grow,” he added.

Comments

Well_mudda_take_sic says...

LMAO. QC Smith remains a big part of the reason why Freeport is in the predicament that it's in today.

Posted 24 December 2019, 3:34 p.m. Suggest removal

BigSlick says...

why?

Posted 25 December 2019, 1:19 p.m. Suggest removal

Well_mudda_take_sic says...

Get someone else to teach you how to suck eggs. LMAO

Posted 28 December 2019, 3:05 p.m. Suggest removal

Bobsyeruncle says...

I've been saying this for years. With successive FNM & PLP governments constantly putting all their eggs (money) in a single basket (Nassau), a single direct hit by a major hurricane will destroy The Bahamas economy.

Supply management 101 teaches you never to be sole sourced, as any kind of major disruption in ones supply chain can have a catastrophic on your business. The same is true for the economy of The Bahamas. It doesn't have to be Freeport as suggested by Mr Smith, but the government should invest in the other islands, rather than 90% in Nassau, so that risk is spread around. Surely Dorian has proven that to them ?.

Posted 24 December 2019, 5:30 p.m. Suggest removal

geostorm says...

@ Fred Smith, I can finally agree with you on something! You are correct, the government should allow things to work as it was intended in the Hawskbill Agreement.

It would really be good to see Freeport as a thriving metropolis. It would certainly benefit all of us.

Posted 24 December 2019, 6:36 p.m. Suggest removal

Well_mudda_take_sic says...

Those "thriving" days and the opportunity for there return are long gone and the cupboard will forever be bare now that successive corrupt PLP and FNM governments alike have turned our country into a satellite state of Haiti.

Posted 25 December 2019, 9:32 a.m. Suggest removal

Well_mudda_take_sic says...

'their'

Posted 26 December 2019, 9:15 a.m. Suggest removal

TalRussell says...

Yeah, no. How **more worsen** can it be expected get for the thousands upon thousands FREE porters and the Abacoians - **when even their central government has announced that they will not even bother with sending labour counting workers to collect data to record the number of thousands FREE porters and Abacoians with no realistic hope on labour's arisen be collecting paycheques.** Any **King's Counsel** should know that you cant make this laboriousness plot up, **you just, can't.**

Posted 24 December 2019, 8:17 p.m. Suggest removal

concerned799 says...

His fear is correct, but the solutions are misplaced. We do have a huge climate disaster problem from larger huricaines. But you can't have a viable Bahamas if you don't stop climate change.

the real solutions:

#1 we need to get all solar ASAP. This means cancelling LNG. As otherwise you just have more climate change and stronger storms.
#2 we need to get tourism more sustainable and higher yielding to the Bahamas. This means kick out the cruise ships and have more hotel based stays.
#3 we need a standing disaster relief fund adminstered by its own board where the money can only be spent on disaster relief. Yes, it will cost more money.
#4 the debt must get under control so the capacity is there to borrow more, but only for huge disasters.

Alas, these are the only real long term solutions.

Posted 24 December 2019, 11:57 p.m. Suggest removal

SP says...

The Bahamas is already a ‘Collapsed State’ for many Bahamians who find themselves standing in soup kitchen lines every day because Fred's Haitians and other blue-collar ex-pats have taken their jobs!

Why the hell do we allow Bahamians to suffer the indignities of joblessness and begging for handouts while ex-pats are enjoying the fat of the land?

Posted 25 December 2019, 12:06 a.m. Suggest removal

jackbnimble says...

Hurricane Dorian is also a real wake up call to Fred Smith and Rights Haiti to stop encouraging illegals to live in The Bahamas in substandard conditions.

Posted 25 December 2019, 9:27 a.m. Suggest removal

Well_mudda_take_sic says...

You're absolutely right on that score!

Posted 25 December 2019, 9:34 a.m. Suggest removal

ted4bz says...

Our politics is all wrong. And, why is advising the government what to do and what not to do the only approach we think there is?

Look, advisors outside the circle of these party governments must realise that there will be no respond by the government to their advise (maybe a sneaky one but), no direct response, otherwise may as well give up this approach.

In the main time we are head towards the uncertainty of a possible catastrophic catastrophe, yes, and it’s only a matter of time. In the main time we fight each other until then, getting nowhere. Begging awkward party governments to do what they don’t know how to do or not allowed to do is one way but a waste of precious time.

Community Organisation is another way , an option in waiting, waiting to be explored on a national scale. Community organisation with or without the support of party governments, directed by leaders within all local communities is another angle laying dormant in waiting yet to be explored on a national level.

We are wasting precious time dashing dismally towards the abyss... pushing something that does not want to be pushed, trying to move something not made to be moved (at least) by no other means but political and monetary gains and it alone.

Posted 25 December 2019, 10:13 a.m. Suggest removal

BigSlick says...

ummmm..... huh???

Posted 25 December 2019, 1:24 p.m. Suggest removal

realitycheck242 says...

"Without vision the people will perish" That's is the exact scenario playing out in freeport today since the death of Sir Jack and Sir Edward. Their decendants are taking taking taking and not reinvesting and bringing in new investors. Freeport has the infrastructure and location on the SE coast of the USA to be the Singapore or Dubai of the Caribbean with deep water port areas.
Fred Smith is absultly correct. Many of us have been saying this shortly after Hannes Babak suckered Sir Jack and the St Georges into making him chairman. This was the beginning of the destruction of Freeport which continues today after the reoeated destruction caused by the many hurricane strikes.. The licensees must act on the strenght of the Hawskbill Creek Agreement and move forward for the benefit of ALL here on Grand Bahama. Fred, like many others, knows for a fact that the Central Government has allways had a hands off approach to Freeport placing the blame for freeports demise on the government is debatable. because the present leadership in the GBPA hasn't a clue as to what to do or how to do it.

Posted 25 December 2019, 11:33 a.m. Suggest removal

DiverBelow says...

It is time that Freeport be run as many towns/cities of the world are, with an elected leadership representing the licensees. i.e.: the governed drive the government, the economy steers the direction... The days of Freeport as a Company Town (directed by a minority group/family) is long gone, as a teenager must learn to manage their own feet & hormones, so must a community learn how to grow without Mother Nassau impeding as many a helicopter (over protective) parent must release their children.

Posted 25 December 2019, 12:37 p.m. Suggest removal

BONEFISH says...

Hurricane Matthew which side swipe New Providence in 2016 should have been a wake up call.It took BPL eleven days to restore electricity to my house People living on this island have short memories and choose to be blissfully ignorant.The Bahamas needs to evolve to a federal country on the basis of like Canada.Allow each island group to be self-governing with a high level of autonomy.But there will be strong opposition to this by political class,business community and average bahamian on the island of New Providence.

Posted 26 December 2019, 9:36 a.m. Suggest removal

concerned799 says...

New Zealand works just fine with two islands and one level of government for all. Canada has 30 odd million to spread the costs of three levels of government among. The Bahamas does not.

Posted 26 December 2019, 2:59 p.m. Suggest removal

Well_mudda_take_sic says...

My God man, just how big a non-productive public sector do you want? Layer upon layer of even bigger government than we have today is definitely not the answer!

Posted 27 December 2019, 7:16 a.m. Suggest removal

sheeprunner12 says...

I support you Bonefish .................. those who do not want the islands to have more autonomy are dirty faced dictators (like our previous PMs)

This PM should do the right thing and give each island a greater measure of fiscal independence and decision-making beyond what is in the 1996 LG Act.

Posted 27 December 2019, 9:35 a.m. Suggest removal

Well_mudda_take_sic says...

And each island should have its own flag, national anthem and parliament. LMAO

Posted 28 December 2019, 3:07 p.m. Suggest removal

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