Wednesday, August 12, 2020
By NEIL HARTNELL
Tribune Business Editor
COVID-19 has created “a Sir Stafford Sands moment” for The Bahamas to transform its economy and “leap” into the 21st century, an ex-Cabinet minister argued yesterday.
Alfred Sears QC, a former attorney general, told Tribune Business that the country needed to seize a once-in-50-years opportunity to overhaul its economic “architecture” for the new global realities it will face in a post-pandemic world.
Suggesting that The Bahamas has “a fantastic opportunity to develop a number of niche industries” using its proximity to the US, including the creation of an aviation hub, farming, seafood harvesting and light manufacturing.
Mr Sears, who represents a number of web shop operators, also argued that the government could “with a stroke of a pen” boost the country’s export earnings and its own tax revenues by allowing local gaming providers to accept foreign providers while licensing their games to third parties overseas.
While advocating a full embrace of the digital economy, the former attorney general acknowledged that the economic transformation he envisages will be impossible without reliable, lower cost energy and the greater penetration of renewable sources.
He also called for a “unity government” to lead The Bahamas’ recovery from COVID-19, adding that neither of the two main political parties has a monopoly on the experience, expertise and ideas required for the task of rebuilding an economy and jobs where unemployment is presently at least 40 percent.
“It is imperative that we use this pandemic as an opportunity to realign our economy and our governance, and to build greater resilience and sustainability,” Mr Sears told Tribune Business. “In a nutshell, this is a fantastic moment for the Commonwealth of The Bahamas; an opportunity to do what Sir Stafford Sands did in the 1950s.
“That kind of transformed the architecture from seasonal tourism, fishing and subsistence farming to year-round tourism and financial services. We have that opportunity to affect the same kind of leap, and also to reform our political process to be more inclusive, transparent and fair.”
Despite widely being viewed as a chief architect of The Bahamas’ present economic system, Sir Stafford has always been a controversial figure for many because of his politics and perceived beliefs.
However, Mr Sears said the construction of the current economy involved significant “collaboration” between Sir Stafford and Henry Milton Taylor, the then-Progressive Liberal Party (PLP) leader and chairman. He added that the duo “travelled together on at least four occasions promoting the new paradigm” due to political consensus on the way forward - something lacking today.
“We have a precedent where there was bi-partisan co-operation during a period of massive transformational change,” the ex-attorney general said. “I think the Bahamian people are looking for that kind of collaboration on a vision and a new architecture for this new global economy we have to find our way in.”
Mr Sears argued that The Bahamas has little choice but to transform its economy given that its traditional tourism market, which has relied heavily on upper-end and middle class Americans to provide 82 percent of its visitors, will be “depressed for at least another two years” due to COVID-19’s “profoundly disruptive” effects on jobs and incomes in that key source market.
“I think the uniqueness of our country offers us the opportunity to pivot in some way where we do not have to completely invent architecture. The foundation is already here; we just need to have the strategic vision,” he added.
The former attorney general pointed to the creation of a Bahamian aviation hub as one such example, noting that the country was already blessed with multiple airports and international gateways plus its proximity to the US.
Advocating that it will help create jobs for aviation mechanics, engineers and administrators, Mr Sears said the development of such skills and competencies must be directly “tied” to The Bahamas’ ambitions to manage and control its own airspace. He added that such a hub would not only be based on logistics, but “training and capacity building”.
Mr Sears also urged the Government to allow web shop operators to export their services to other jurisdictions rather than just restrict them to The Bahamas, arguing that this would boost the foreign reserves by generating vital foreign currency earnings while also increasing tax revenues.
Arguing that the industry be allowed to benefit from its intellectual property, and coding and development of games, he told Tribune Business: “The Government, simply with a stroke of the pen, can multiply the revenue streams from gaming house operators by authorising them to license their games and offer their platforms to parties outside The Bahamas where gaming is legal.
“An example of a territory that did that is Malta. The gross gaming revenue (GGR) of gaming house operators in Malta increased exponentially. Here there is no free enterprise. Operators can only game or offer their services to Bahamians and legal Bahamian residents.
“We have a well-regulated domestic gaming industry with entrepreneurs who are... hand cuffed. I’ve not seen anything like it. Most jurisdictions want their entrepreneurs to be engaged globally as revenue comes back to their country or home base.”
Mr Sears then acknowledged that any Bahamian economic transformation would be impossible without lower-cost, more reliable and environmentally-friendly energy as he described the electricity industry’s current state as “literally a disgrace”.
“We’re one of the few countries in this region without any major investment in renewable energy,” he blasted. “Whereas in the past we said we can’t do this, now we must do this. To be competitive and enable people in the digital world to move to The Bahamas, and transfer knowledge to Bahamians, we need to have affordable and reliable power because the digital economy is 24 hours.
“We cannot be load shedding, load shedding. We’ve become accustomed to that inefficiency, but to be competitive in the future we need to address this issue of power. It’s a matter of the building code. In Barbados, every heater in every home is powered by solar.”