Prime Minister of The Bahamas (Office of the Prime Minister)

As you know, the Caribbean is a highly attractive yet competitive destination for FDI with, for example, the British Virgin Islands and Cayman Islands making strides in the area of financial services, and Jamaica securing large investments in renewable energy and the ICT/BPO industry. In your opinion, what does the Bahamas offer that makes it the regional investment destination of choice?

I think the significant point to make about The Bahamas is its geo-physical relationship to the United States of America (USA). It’s the closest off-shore country to the USA so the geography causes people in Chicago, New York, Philadelphia and along the eastern seaboard to be able to come to The Bahamas in a relatively short period of time. So proximity lends itself to significant advantages to us, for example, it enables us to have a very dynamic second home industry. Whereas tourists can fly anywhere and go by cruise ships anywhere in the Caribbean, they choose in large numbers to have a second home here in The Bahamas and that is because of proximity, the common language, access to adequate medical facilities and again because we are close, medical evacuation is a simple process and they also have access to full infrastructure. One would expect that infrastructure has been completed in New Providence and the island of Grand Bahama but we spent about $68 million in my first term on sending cables throughout all of The Bahamas and giving that connectivity so investors would have the prospect of being able to have advantages. So I think our proximity has caused us to have a significant advantage over the rest of the region and we feel good about that.

It also enables us to have a relationship with the USA from the point of view of a relationship with our defence forces and national security. The Bahamas can be seen to be a stepping stone, a pathway into the USA, for those involved in nefarious activities: human smuggling and drug smuggling. The Bahamas is an attractive place because it is right next door and so the disadvantages that we have arising out of our proximity happens to be with people using The Bahamas to have access to the USA. Whether it’s people from different countries in the region wanting to get there using The Bahamas as a stepping stone, we’ve had to ensure that we have a close relationship with the USA, which enables the American forces, in addition to ours, to control our waters. The Americans have entered into a treaty with The Bahamas, the Turks and Caicos Islands and the British that enables them to get surveillance and do search and rescue, but using their own resources to help The Bahamas considerably in that regard. But not withstanding that, I should add that from the point of view of proximity, we have determined that we need ourselves to spend a lot of our resources on security, and we have recently effected a loan of some $250 million to purchase defence force vessels to remediate ports where the vessels can be berthed to create a centre on this island for the defence force. So when you look at an island nation and not withstanding the fact that we speak of having so many people coming to our country - cruise ship visitors of 4 million a year, stopover visitors 2 million a year, thousands who have second homes here - clearly a part of our offering must be to ensure that people feel safe and secure.

I will speak about the contradiction that exists here. When we look at the increasing crime and discussions on what is happening with gangs in our country, but by enlarge the government has a major plan to try to secure the economy by having a robust global defence force joining with a police force that populates our islands and provides the confidence on people who are traversing our waters by boats, whether they’re on a cruise ship or yacht, or who decide to have second homes that they are living in a place where the government prides safety and security as a priority. So we understand the relationship between confidence and security and so we have spent the money, we are receiving the ships now, we are going to create a base in Ragged Island in central Bahamas, a base in Inagua in the southern Bahamas, a base in Grand Bahama and a base in New Providence, which will give us the coverage of the Bahamas that we would need and that would enable us to be seen to be taking responsibility for our own security. When you have to think of The Bahamas spending that amount of money, I think it really gives you clear sense of what our commitment is all about.

Sir Baltron Bethel said that The Christie Administration has been faced with continuing to grow the Bahamian economy after the worst international recession in the last century. How would you summarise the country’s economy today and what are your priorities in terms of strengthening it?

I want to begin by telling you that I am the son of a taxi driver. Whatever ones economy is, how ones describe it, if you grow up in a family where your father didn’t have the opportunity to have any kind of education but was able to earn an income that enabled his five children and family to live a comfortable life and for them to have the opportunity to go to university, then you can have a sense of why we describe tourism as the lifeline to The Bahamas. In that regard the tourism industry has allowed the establishment of a middle class that is comprised of people who you least expect to be in that category. People who maybe waiters, waitresses and taxi drivers, people who are in those positions and whose monies they earn from tourism and tips, the volume of tourists I think is being challenged more and more now because of the size of our population but I begin by saying that my father’s generation was the generation that participated in deepening the tourism industry and making it a year round activity by being able to work full time in it. So tourism is an impact of some 70-75 per cent of GDP and if you take 15-20 per cent by financial services then you can see that the dependency of the country on tourism and the financial services.

Again because of our proximity I feel that we can even do significantly more. We need more hotel rooms and we recognise that we are a more expensive jurisdiction than the Dominican Republic and Cuba, but people will come to The Bahamas because I believe we offer a distinct product and by that I mean that our waters are second to none in this region and you can go to islands. I think the experience of being able to sail on and swim in waters that are so clear and so pure, that it gives you this distinct feeling that you are in a special place in the world. One will never grow tired of saying the astronauts themselves, as they orbit the earth, they observe on our waters and the difference between what they see in other countries’ oceans and ours, and so therefore I use that to say that we must not be insecure about making and dedicating more resources to the tourism industry.

What we have to do is to recognise that all over the world, in Europe, China and all over the world, tourism has become a major industry and the Bahamas has certain advantages that we are not exploiting properly. Like this is the first encounter between the new and the old world in 1492 and when you go on a tour at the Vatican and you hear them talking about Christopher Columbus discovering America really the first landfall was in San Salvador. I think I once have made a speech at Club Med where I indicated we have to do more to solidify that reality as the first encounter and position ourselves in that way, but we have so many islands offering different experiences that tourism in tough times, in recessionary times, can still work in The Bahamas because of proximity and because people have identified The Bahamas as their home. In fact I can tell you that after 9/11, one of the interesting tests for The Bahamas was when the ordinary travel dried up, people continued to come to their homes in The Bahamas so the second home owners had identified this as their homes. So when there was a threat for travel, they didn’t take that threat because they were coming home and so the strength of the industry in The Bahamas, in the Abacos, Bimini and New Providence has been a wonderful boost to our country. With the opening of Albany and Bakers Bay and to a lesser extent Winding Bay in the Abacos, we have seen the high net worth individuals who have decided they want to live here, people who are great sporting starts, movie stars and the world’s real movers and shakers are living here. Yesterday, for example, I had a meeting in my office with an extraordinary man in terms of net worth, a billionaire who spoke about his love for Harbour Island and as I sat there I told him that The Bahamas has an extraordinary amount of the world’s wealthiest people who decided to make their homes here in Lyford Cay, Albany, Bakers Bay, Eleuthera and Exuma, and that the challenge for the governments of The Bahamas, beginning with mine is to understand that we have access to talent and power connections that, if properly used, can give us an immense benefit. I put that proposition to the gentleman I was talking to yesterday and I said I was thinking of a council of economic advisors and I want one or two of you, and he said he would be delighted. So here we are with a population of just under 400,000 people with the potential might of a mega category of world traveler who lives here and they are in the Exuma Cays, the Abacos, in New Providence and in Grand Bahama and what we ought to do, without compromising their love for privacy, invariably I find that they would be prepared to assist us in every which way. So what I see as important to our economic future is finding the right formula to connect these persons to governance in our country and decision-making in our country and to being able to provide advice in the country. I think it all goes well for the future of our country because we will have people who are making boardroom decisions around the world who are living here who will help us reposition the Bahamas, recalibrate certain areas and I think it is going to be wonderful. I think our second home industry is an extraordinary advantage to our country and that we should do more to take advantage of the fact that people are willing to give advice so our economy though has the challenge of monies leaking out.

There are two really significant problems in our archipelagic nation: one is the urban pull. If you do not develop your islands, people will travel to the urban areas looking for jobs. The areas become depopulated, you’re putting infrastructures in there and all the sudden you have these challenges but few people living are there because they all have to come to New Providence or Grand Bahama looking for work. So from that point of view, I articulated in my first term a policy of creating anchor developments for each island. That policy was intended to create a local economy in each island and you do that by tourism and looking at the islands and seeing what the offers are. The best example is the largest island in the Commonwealth, Andros. About 103 miles long and 43 miles wide, only 10,000 people live on it but it has such an extraordinary bounty of nature. It has 138,000 arable acres of land, it has extraordinary fishing, and it can be the fly fishing capital of the world. I flew to New York to meet with about 25 very wealthy people who the University of Miami had identified as people who come to and frequent the Bahamas for fly fishing. When they flew to Andros I went to meet them to see it for myself because what we are trying to do is to take the economy of The Bahamas and be stronger in our involvement in creating these economies in different islands. This is because it has a sociological result of keeping people in the islands and even if they come for an education to New Providence, they are able to have cause to go back because we are giving them an opportunity to go back there. Two things we decided were tourism and financial services. We do not have any production and spend a billion dollars on food imports, so how do we therefore incrementally have an agricultural policy and a fisheries policy that could help us create linkages with the tourism economy? How do we provide the hotels and the cruise ships with the opportunity of getting produce that we can grow.

In The Bahamas, a chain of islands, we have identified three islands with major agricultural potential: Grand Bahama 30,000 acres, Abaco 50,000 acres and Andros 138,000 acres. So those three islands have tremendous agricultural potential and we have watched farming and people not succeed at it and so my government has decided that we are going to make a real effort at establishing a niche to begin with in the agricultural industry and growing and providing products that can be used by the people, hotels and tourists. We formed the Bahamas Agricultural and Marine Science Institute (BAMSI) and decided that we will be growing things. The idea was to be able to establish this teaching institute but what is noble about it is that it has a commercial arm on each end and that commercial arm is supposed to be able to demonstrate to farmers in The Bahamas best agricultural practices, best ways to use fertiliser, best ways to grow, how to package and post harvest activities and then how to market and so we feel we are on a path where we are able to cut into that $1 billion worth of imported food. Even more recently there was an American who was farming in The Bahamas. He had permanent residence and was growing sod that hotels and people used for landscaping, and many years ago he was a tremendous farmer in The Bahamas but he went bankrupt. A big American farmer went bankrupt and I watched him for the last two years since I’ve been in. I called him in two weeks ago and I said I want BAMSI to joint venture with you and I’m going to give you an opportunity to use your talent. Let me use this by way of example: He said you know what we can do? In January and February we can export melons to the US. I said that’s what I want you to do and in the process I want you to bring people into this company and I want to inspire a new generation of young Bahamians who have been trained in this agricultural institute to recognise they can have a life in farming. Since BAMSI has started, we have farmers who could only sell $9,000 worth of produce a year and now are up to $40,000 in terms of produce so we know that it can work and therefore we have evidence that we are able to connect by way of linkage to the tourism industry.

For fisheries we are earning $70-80 million a year by exporting crawfish. We know that the world is becoming more complex in that countries are requiring sustainable practices. They want to know and have details of the methods of fishing and even if the Far East they are talking about importing fish fly and so therefore the modernisation and integration of best health practices in this whole thing poses another change for our country but nevertheless one in which we have decided that in addition to having 100,000 square miles of water, that we have not properly exploited our waters and there is a tremendous amount of marine life that exists in our waters that we can use for the benefit of employment of our people. So training whether it is in agriculture or the marine life of our country, we are doing that and are also mindful of the fact that in about 10-15 years, 60-70 per cent of the fish consumed in the world will be farmed. We have the best oceans in the world for fish farming and so, from a point of view of the economy of The Bahamas, I am putting a lot of effort into trying to demonstrate to young Bahamians, who must be the lead participants in committing to agriculture and fisheries, that there is a way of life to be earned from that and that they should in fact be able to study it in schools and go on to have a professional career in it. That in itself is going to deepen the economy and save us foreign exchange to those abroad. We have an extraordinary market in that we have cruise passengers passing through here, and all of the cruise ships who have been given an opportunity to have a Robinson Crusoe island existence, all of the cruise ships have indicated that they would be prepared if we can give them a clock calendar knowing what is going to be produced, they will be prepared to do it. So in so far as targets are concerned and excitement about the possibility of a new paradigm in the economy with respect of the agriculture and fisheries, I think we have the right model, I think we have the right approach, and I think it all goes well for the future.

There’s another area that I’m really excited about. If you think of Junkanoo and costumes, we have this extraordinary talent in our country of people who have grown up making costumes for nothing. We have not have a carnival like Trinidad, New Orleans, New York, Atlanta or Canada where the people who produce the costumes get paid to do so. So we have had artistic geniuses in terms of design but we have not been able to connect them to income and revenue. Our research indicates that some $300+ million spent by tourists on souvenirs and we have an industry that is dominated by artistic genius but we have to be able to show our people and to connect our people to this. I’ll give you an example, if you go to Meliá or a store at any of hotels and you see they are selling shells and you ask where they are from, if they tell you the truth they’ll tell you the Philippines, or Vietnam. But we have beautiful shells here, there are some black and white polished shell. There is a town called Torino, El Greco in Italy where they send their artisans to buy shells and they pay $300 for one. They make cameo broaches from the shell so I’m sitting here in The Bahamas and watch the Greeks come in and take the raw sponge. If you go anywhere in Latin America or Japan you can see a sponge that came from The Bahamas but produced somewhere else. So the question is how do we challenge ourselves to add on to this and get our sponge fishermen to know that they should not only just dry the sponge but that they can do something else with it.

The government therefore has to be very proactive in creating opportunities for joint ventures that may lead to it and training in these areas. In the areas of handicrafts and souvenirs, we have made major progress by showing how you can take the conch shell and make jewellery out of it, and all the sudden you see the Chinese importing our conch shells because people here are just throwing them away and you see the pink Bahamian conch shell showing up in Chinese jewellery. So for us the challenge is being able to, from an economic point of view, have our people come to understand in larger numbers that they are able to cut into $300 million a year that is spent by tourists by having shells collected and polished, and being able to integrate them there. I think we have to work hard at that and so when you therefore look at tourism and you look at the people who come and what they purchase, and  at our straw market, I tell people that at the turn of the century or so in 1888 to 1915 or so they had two British Prime Ministers: a father and son, Joe and Neville Chamberlain who lived in The Bahamas and had a 15 acre farm growing sisal. In those days, because our tourism industry grew, everybody just dropped what they were doing everything for tourism. As we now have the challenge of employment, the challenge for the government is to recognise how the relationship between unemployment and how it is serving as as an incubator for crime, and that we must be therefore very driven to creating sources of employment particularly for our young people. One of the great challenges in the region is the unemployment of young people and we are very mindful of that and so we have committed ourselves to training. We incorporate training into all of our agreements with the hotel chains or developers who want to build a resort, and it becomes very critical buying Bahamian products, giving Bahamians an opportunity to be able to know that if they are trained in shaping objects and polishing shells that they’ll have a market, not just straw market. So we are really putting heavy emphasis on training because we believe that we will be able to cause more jobs to develop for our young people and in that context, attack the levels of crime and misbehaviour that may exist in our country.

So in a broad sense we know that we have tourism and financial services, and that the construction industry was a major employer, but now we have these other segments that I call linkage segments that we are trying to develop. We are examining what is natural to The Bahamas. We have Morton Salt, for example, that produces salt in the Bahamas. As a result of this hurricane, we travel and go to islands and see the potential for salt production and you ask yourself, can we not call there to be more salt produced in The Bahamas? I went to John Hopkins once and I had a major sinus problem and they were investigating that and said that the best way to deal with it is to spray seawater in your nostrils. They asked me if I had access to seawater so I thought, if John Hopkins can recommend that, that’s all we have in the country, so how do we go about projecting this medicinal value to our country? Come to the pure waters of The Bahamas, put your head under the water and your sinus is gone for God sake. It’s that kind of thought about pure salt without iodine etc that we have all over this country and these small islands.

We have also looked and are looking now at exporting sand. Sand regenerates and by policy we have very loathe to take our sand and populate other beaches because if you get Bahamian sand in Miami, they don’t have to come here for it. But in the sand there’s something called aragonite, which is a component for all of things including the trays that McDonalds make and cleansing coal mines. We have had studies done by the University of Miami and the University of Havana about the potential to mine aragonite in The Bahamas because for industrial use, that is making glass  etc, apparently it is a sought after product, and there are five or six places in The Bahamas that produces this. Apparently our concern would be if it’s sustainable, does it come back when you remove it, and the answer to that they say is yes. Why I am saying this to you? If we have a product that the US and European markets would like, then it is to our advantage to use it to employ people, and I’m told that we could employ significant numbers. So we are in the process of looking at a product that has been exported from our country but only the exporters knew what they were getting from it and not the government of the country. It is like the cascarilla tree that we have in the southern Bahamas, which our people have been exporting to Europe. It makes medicine and perfume, and again we have not tried to grow it, take advantage of it or maximise it. I’m saying this because the challenge to every country is to see how you can deepen your economy because your future is threatened if you are not stable. Your future happens to be in young people and given the fact that we have an island nation that is able to produce some areas that are attractive to people, our job is to do the research to enable us to make this big jump forward. Sometimes it becomes amusing because as I begun to focus on BAMSI and enter into protocols with the University of Miami, University of Florida, Ocean University in China and University of the West Indies, I begun to find products that exist here, for example, the sea whip, which is now exported from a particular island and is an organism where there are currents coming up against each other, it lives. These are matters that we want to look at. Years ago at 3,000 or 4,000 feet they were bringing up red snappers with big shrimps and so forth. We don’t do deep sea fishing, ours is artisanal fishing, so we don’t deal with all the tuna and swordfish going through yet you eat them in The Bahamas. The point is that we serve these fish in our restaurants but we don’t serve them so the challenge is catching the fish in The Bahamas. So I’m giving you a glimpse of the exciting potential for a country that has 100,000 square miles of water and the waters have yet to be properly exploited.

You were the architect of the 2012 Stronger Bahamas Initiative, which PLP Chairman Bradley Roberts asserted is a “program for people to reinforce their beliefs in themselves, and to build hope and encourage and remind our people that they have come a long way and that there is still a long way to go.” What was your inspiration for this national conversation, which aims to make a safer and more modern and prosperous future?

For political leaders to know and identity the future of the country. The key to development is getting people to believe it. I happen to have been pulled out of school at the age of 14 and at the time, the teachers deemed that I was incapable of an education. The principal of one of the schools I had been at called my parents and said they are wrong about your son, send him back. I went on to become successful by going to night school and to university three years older than the average student. I used my dismissal from school to drive me to become special in some areas. I became an international athlete and the second Bahamian to win a medal at an international competition because I was driven to prove myself. In other words, something happened to me that made me dig deep but also I had this connection to my parents who didn’t give up on me and to another teacher who said that you can make something of yourself. So I became a believer in the redemptive power of second chance and that in a country like The Bahamas, there are people whose misfortune would’ve been - like me - some form of an attention deficit disorder, like others got a young girl pregnant and had to leave school, made a mistake and the system couldn’t pick it up.

Sidney Poitier is the most famous Bahamian actor. He won two academy awards but tells a story to us that when he was a youngster, he became a dish washer in New York. One day a Jewish waiter saw him trying to read a newspaper and said “What are you doing? You can’t read it. I’ll stay behind once we have finished our work and will teach you how to read.” This is the most famous black man in the world. He said that thanks to the intervention of that Jewish waiter, I have become a two time academy award winner, been in hundreds of movies, became a film director and producer and became an author even though I couldn’t read. What he said was “Prime Minister, you must always remember your own story and you’ll remember my story and know that out there in the mass of people that you represent, there are gifted people. Your job is to recognise that if you find them, those kids could have a wonderful impact. There are more Usain Bolts and they may be living in Long Island where there is no track or field or open space to run on, so go give them an open space to run on.”

P.J. Patterson, the former Prime Minister of Jamaica, wrote a paper for Caribbean prime ministers and that told us that we are not doing enough to exploit cultural industries and sports. He said that globally it is a mega industry and gave us the names of three Jamaican artists. He says that together their impact on the GDP of Jamaica is stronger than the banana industry. He said those people exist in The Bahamas and once you believe it, go and create the mechanisms and instruments by which they are able to do that. We have had our own good fortunate as per capita we have always been the best country in the Olympics. Any gold medal we win with our small population places us per capita at a very high level. So economies in the region recognise that we are all labouring competitively with tourism, are trying our best with the financial services industry as we watch what happens with FATCA and in Europe and develop new products, recognise the power of the second home industry, have stronger legislation than the countries who criticise us and are aware about what would happen to the financial services sector if it is further undermined and to thousands of persons in the region who had a good way of life because of this and we are talking about tax competition not matters that lack integrity. We are committed to being a jurisdiction of integrity but we are saying that what we are doing must be seen to be no different to what they are doing in Delaware in the US. Having said that, the economy of our country depends to a great extent on the innovations that governments are prepared to use, research that governments are prepared to commit themselves to position their country and training.

So I am very encouraged that when I look to the future of our country, not withstanding the emergence of Cuba, I think in The Bahamas we have the opportunity to have a one-of-a-kind destination. We are going to be an island with an Atlantis and a Baha Mar. When we agreed to Baha Mar, you should know that we have already spent $400 million in borrowing money for the new Linden Pindling Airport on the basis that there would be a Baha Mara joining the Atlantis and there would be thousands of additional travellers going through that airport who would be guests of Baha Mar. So the critical nature of Baha Mar has not been lost on the government because it is my government that engineered the new airport, committed to it and selected Vantage to manage it. So we know the importance of Baha Mar and are working diligently with respect to a final outcome. I was invited by the developer to intervene and help him to negotiate with the bank in China. I did that and he elected to file for Chapter 11 and we elected to resist the jurisdiction of Delaware. We succeeded in that regard, have been committed to a negotiated settlement and have worked with all of the parties and continue to do so. In recent times, I have indicated that both the governments of the Commonwealth of the Bahamas and the People’s Republic of China must be aware of the implications of this development to the reputation of both governments because this has been the single largest resort effort in the history of the Caribbean. I am very confident that the final outcome will result in Baha Mar opening at some point early next year.

Your Excellency, as you well know, the readers of Harvard Business Review 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 Christie administration?

The Commonwealth of The Bahamas, although a young country, is participating in the global arena well beyond our size. We have a big vision for our country as it is positioned in the world. We know that our policies are calculated to attract people of the world here and in business. I didn’t touch on the maritime industry but it has the fifth largest flag and is a very dynamic one. Because our policies are intended to reach people of the world and bring focus on our country and the opportunities we offer people of the world, we have a big reach and a big impact. Because we have some of the world’s very significant personalities deciding to make The Bahamas their home, we also have a big reach and a big impact and it is those things that will cause us always to work to ensure that we have the best little country in the entire world and a country that will be a model of being able to have people of different races and colours live together cohesively and to have fun in doing so. That is the Commonwealth of The Bahamas and it is an exciting stage of our development not withstanding the major challenges. Our history is a history of a people with an indomitable spirit and all of the problems that we have had in the past, for example, the hurricanes, we have demonstrated that even when we get knocked down we get back up. So when we think of climate change, we think of global warming, sea levels rising and hurricanes. We would want to be able to know that we are going to be speaking very strongly for small island developing states and the need for the developed countries of the world to ensure that the $100 million they have agreed to put together in Denmark, Copenhagen should be mindful of the fact that countries such as The Bahamas ought not to be prevented because of per capita income from having access to concessionary funding. The good news is that I think the Americans have taken that point of view and that countries such as The Bahamas and Barbados are not precluded from matters of disaster, preparedness and energy reform and being able to attract the kind of assistance that we need.