Director of Investment & Legal Counsel respectively (Bahamas Investment Authority)

The Caribbean is a highly attractive yet competitive destination for FDI with, for example, Cuba opening up in terms of tourism, the British Virgin Islands and Cayman Islands making strides in the area of finance and Jamaica securing large investments in renewable energy and the ICT/BPO industry. In your opinion, what does The Bahamas offer that really sets it apart from its neighboring countries and makes it the regional investment destination of choice?

Candia: Historically we have always attracted foreign investment. Obviously we are the closest Caribbean country to North America and we have good connectivity to the Americas and Europe. We also have a very attractive country and a variety of islands. We are not just one landmass so within the Bahamas, there is so much variety in terms of places you can invest. You can invest very big or you can invest very, very small so we have the whole range in terms of tourism. Of course everybody knows about the mega Baha Mar but we have a lot of properties that are very small and ultra high-end. So you have a lot of high net worth individuals who take advantage of, for example, purchasing a cay. On that cay you can, for example, have a bigger investment than say some of the islands where you could put up a whole hotel. You buy a cay for $20 million and you put a pretty big high-end resort or a home for personal use. I think too what attracts high net worth individuals to the Bahamas is that we pretty much allow you to go about your business just as you like. We are not very star struck so you have a community like Bakers Bay, which has Michael Johnson, Nicole Kidman and recently Ben Affleck. So a lot of them know that they won´t be hunted down as stars. Also we are a relatively safe jurisdiction and we are a safe investment. Our currency is one on one with the American dollar and never in our history has there been discussion of reducing our rates or moving that, and there’s no thought of that in future.

Alivia: Our people are also one of our strongest assets. Human capital has, and I would venture to guess, always will be the driving force of investment. Bahamians tend to be rather easing-going, yet resilient; and with our proximity to North America and the cadre natural resources that are available, it provides the perfect elixir for foreign direct investment. Equally, our laws and policies that govern the area of foreign direct investment provide a much needed flexibility that attracts potential investors from most jurisdictions around the world. Most notably, perhaps, is our Banking and Finance Industry which reportedly still is the second strongest pillar of the Bahamas economy. Due to our laws and compliance with international standards, most recently with the implementation of FACTA, the Bahamas upholds the highest standards in the finance industry.

As one of the Small Island Developing States, the Bahamas relies heavily on FDI to fuel economic growth. Do you think the country is reaching its full potential in terms of FDI? Why/why not?

Candia: I think that we have very large interest but a lot more potential. The challenge that we have is the balance between FDI and LDI and not necessarily in local investment but in the feel. Bahamians want to be a part of what’s going on in their country so we want to bridge the gap between bringing the foreign investor in and partnering with Bahamians so that there is a feeling of ownership as opposed to relying solely on the foreign direct investment. So even though we are welcoming, I don’t think that we can just open the floodgates due to a respect for what Bahamians would want so we’re just trying to get that balance right.

Alivia: As with anything, there is always room for improvement. I believe that a key factor for real economic growth in any country is a thriving private sector. Historically, however, the Bahamas has been a country whose economy is largely fueled by the Government. Due to, perhaps, limited access to adequate resources, the private sector has not yet experienced a full reaping of the opportunities that are available in FDI. The policies and procedures that are in place, while they certainly are beneficial and essential to the continued growth of FDI in this country, perhaps there could be some scope to revise them to an extent that would provide a better balance whereby FDI is more accessible to the private sector.

Last week Minister Rolle said that data collected for the National Development Plan suggested the Bahamas has “flat lined” in terms of foreign direct investment growth. This reflects the data in the latest publication of the Economic Commission for Latin America and the Caribbean (ECLAC), which shows that the Bahamas has shown a significant and consistent decrease of FDI especially over the last four years. Its FDI inflows are significantly lower than countries such as Barbados, Dominican Republic and Jamaica. What is the Bahamas Investment Authority (BIA) doing in order to set the Bahamas under the international spotlight and regain the interest of foreign investors?

Alivia: I think that the flat lining is as a result of us reaching our full potential with regard to the tourism industry. That industry, for the longest time, has been the foremost industry in the Bahamas and, it has probably been sufficiently exploited, at least for a while. With so many other more advanced and forward-looking industries available today, particularly in the IT field, we find at the BIA that we must begin to entertain a wider cross-section of industries for FDI. In recent years, the BIA has participated in the annual Bahamas Diplomatic Week. It is a week-long conference that gathers together a cross-section of Non-resident Ambassadors accredited to the Bahamas, the Resident Diplomatic Corps, Bahamas Heads of Mission overseas, Bahamas Honorary Consuls abroad and Public Service Officials to discuss the advances in FDI in the Bahamas. The aim is to explore new strategies and approaches to attract FDI both locally and from abroad. It also gives agencies such as the BIA the opportunity to have a first-hand view of the developing trends in FDI directly from those representatives of the Bahamas.

The economy of The Bahamas today rests on two strong pillars: tourism and financial services. Besides IT, where do you see the biggest opportunities at present for FDI?

Candia: Agrobusiness is another area. As I said earlier, we have so many islands and if you look at a map of the Bahamas, Nassau – the island that we are most familiar with – is a smidgen of the size of Andros. Andros has some incredible soil and acreage so there’s so much agribusiness that we would do. Mariculture is another area and those two can tie into the hospitality industry because we import most of our food, even seafood even though we have all of these lovely waters. We can up the ante in those areas.

There’s also a lot of technology that we can take advantage of like hydroponics. There are one or two farms that do that but we don’t really do it. If we could produce for 25% of our consumption, that’s a huge investment for this country. That’s one of the areas that we are actively seeking and it is a mandate of the government. BAMSI is there but I think we need to work closer with them in order to bring in the technical expertise and the FDI to make BAMSI grow and develop.

Also we tend to be very Nassau- and New Providence-centric. We have a great port and the whole Freeport area. Freeport is a sleeping giant, anything can happen in Freeport and it really is untapped potential.

The cost of electricity in the Bahamas is relatively high, which could deter investors. Do you see any opportunities for FDI in renewable energy?

Candia: I think it’s wide open. The government has signed an agreement with an American company and I think that their mandate is to reduce the cost of electricity. We have been promised a 25% reduction in our electricity rates. But yes the BIA has had a number of applications for renewable energy but we are still trying to figure out how we make this work, especially with having a monopoly. We have cays that are run solely on solar but I think that we have been reticent to buying into renewable energy because the government monopoly is almost seen as a source of revenue. We are a young country so we still haven’t bought into it. We are getting there but we’re not yet convinced even though the electricity bill should convince us.

Alivia: There has certainly been a developing trend in recent times for FDI in renewable energy. We have seen a few investors wishing to develop resorts, some of which are to be almost entirely generated by solar energy, which we think is brilliant and rather benefitting, considering our climate. In large part, of the few applications that we have received recently, investors are proposing to undergo developments in the Family Islands. Therefore, that means that most of the problem with the high cost of electricity in the Bahamas is still left un-tapped because most of the energy that is used and billed, for that matter, is on the island of New Providence. Consumers would, of course, appreciate the opportunity for any project that would seek to reduce the high cost of electricity.

The BIA is a “one-stop shop” designed to simplify investing in The Bahamas. It has the overall responsibility to promote and facilitate investment in the country, an increasingly important role as competition in the global market investment market gets ever fiercer. What are your current priorities at present?

Candia: It’s two-fold. In terms of the facilitation aspect, we are really trying to make sure that the procedures are more clearly defined. We are trying to improve our responsiveness and sticking with investments from the beginning to end and aftercare. I noticed that a lot of time investments will be approved but the investors were left on their own so we are trying to have a stronger guiding hand. If, for example, you’re doing a hotel development, there are so many components so rather than leaving the investors to navigate them on their own, we are trying to have a stronger hand in terms of walking them through the various departments and identifying persons within this organisation who are not only just going to be there to approve the project but to carry it through to fruition and from horizontal to vertical. Aftercare is very important because a lot of times you come into a country, set up your investment and have issues and you don’t know who to go to. So aftercare is very important as it enables us to see whether the investment is working and whether you are doing what you said you were going to do. Often investors start doing a completely different project than they planned to do so one thing that we are really trying to do is provide aftercare and guidance, and make sure that our investor is happy.

We are also trying to streamline the process and make it very clear. Even though we are facilitators we are also advocates because you come into the BIA and present your proposal to us but before it is approved we have what is called the National Economic Council (NEC). We present your proposal to the NEC, which by statute is a subcommittee of Cabinet or could be all Cabinet, it’s at the discretion of the Prime Minister as to how the NEC works. But once we have all of the information and due diligence on the project, then we go there and present it. The investor doesn’t present it so we have to make sure that we have done our due diligence so we can explain what exactly the project is, what are the economic benefits to the country, what are the work permit requirements and whether the design is going to have any environmental implications. So we are holding your hand and then we go and argue for your investment. It’s a balancing act because we have to think about not only the benefits to the investor but also to the wellbeing of the country.

In terms of promotion, we are planning our strategy for the next 12 months in terms of our outreach. We are planning to put more emphasis on our missions abroad, which have the ability to draw investors. We want to have investment-type summits so we can go there and explain what we because a lot of times people want to see a face and interact with you. The Bahamas has always been fortunate. People come knocking on our doors. We have something that’s unique and people love coming to the Bahamas and so we have not had to do so much promotion. But now the world is a smaller and more competitive place so we have to up the ante and get out there and let people know that the Bahamas is here.

Alivia: I would agree that streamlining our policies and procedures is perhaps one of the key priorities of the BIA at present. We are the agency that is considered the “one-stop-shop” for FDI in the Bahamas because not only are foreign investors required to enter our doors to obtain approval to establish and operate a business or to undertake a development in the Bahamas, we also act chief liaison between every other relevant Government agency for FDI applications. In that regard, we are finding that it is extremely important not only to stay on top of the current trends in the global investment market but that it is equally as important to adhere to our laws, policies and procedures in tandem. It certainly is a balancing act on daily basis to weigh the costs and benefits attributed to investors when negotiating deals in FDI, while also weighing the costs and benefits attributed to the country itself.

BIA’s primary responsibility is to promote investment in the Bahamas. Given all countries in the region are looking to secure the same scarce FDI dollars, it´s crucial for even countries with the strongest of brands to aggressively market their jurisdiction internationally. Are there any messages in particular that you are trying to communicate at present or ones that you feel are not as widely or properly understood by the international investment and diplomatic communities about investing in the Bahamas?

Alivia: We perhaps wish to communicate that the Bahamas is still the premier destination for FDI in the region and, indeed, the world. One message that may not be as widely understood about investing in the Bahamas is that the Bahamas remains open to joint-venture partnerships in FDI. In most cases, we find that investors come to the Bahamas with the preconception that they have to conduct every part of the development themselves. Many of them seem to be under the impression that, in many cases, Bahamians are unable to undertake certain projects due to a lack of specialization or limited resources. On the contrary, the Bahamas, though it is a relatively small nation, it is in fact filled with a cross-section of rather talented, skilled and experienced professionals, many of whom have been scouted by some of the best companies abroad. Therefore, the message that we wish to convey is that although we at the BIA are charged with the primary responsibility of attracting foreign direct investment to the Bahamas, we remain ready, willing and able to facilitate joint-venture partnerships with locals.

Candia: Another part of the message we want to get out is that our investment process is transparent and that we will facilitate you. Once you get to these doors, we are going to show you what you need to do. I think we were created in 1993 and only now are some countries coming up with similar agencies but we have been here all along. We know how to do it, it’s just that we need people to know that we are here. So we are here, we are transparent and we are responsive.

BIA′s responsibility is to develop investment policies. Are there any policy initiatives that you have implemented that you are particularly proud or that have proven particularly successful in attracting investors or positioning the country as the premier business/investment destination?

Alivia: I believe that the National Investment Policy, which is effectively the governing policy of the BIA, has proven rather successful in attracting foreign investors. It has identified target areas of business for foreign investors such as hotel and resort development, luxury second home and condominium development, and of course, international business companies in the finance industry. It also provides certain incentives for investors to the Bahamas that I believe have proven to be a key factor in successfully attracting investors.

Candia: We want to be open and attractive to foreign investors but not to the detriment to our own Bahamians and we don’t want them to feel that each and every sector is open to FDI. We also have financial limits to certain benefits that you will get.

To conclude the interview, as you know, Harvard Business Review’s readers include many of the world’s most influential business and political figures. What final message would you like to send to send them about The Bahamas and the BIA?

Candia: Welcome. We are responsive, we are here and we are ready to turn investment dreams into reality. We have the infrastructure, the people and the education.

Alivia: We look forward to doing business with you.