In Opposition to the BTC Deal

The Bahama Journal Editorial


That we live in perilous times is no longer a matter that incurs debate; it is simply taken as a given that, these are surely times when practically everything that was once stable seems hell-bent on being ripped from its moorings.

In this we would surely include certain givens as they related to how the Bahamas could and should orient itself to the region and to the world market.

In this regard, we would place all of what we once took for granted as it pertains to the supremacy and desirability of relying on foreign direct investment; and here sometimes to the exclusion of Bahamian investment.

For a fairly long season, this idea worked its magic; and here it had the salutary result of creating a fairly self-confident middle class [albeit one that lived heavily off borrowed money]. But as some of our people would attest and confirm, for a fairly long while, it sure did seem as if this kind of scenario would persist for a while longer.

And then, there was that other emerging trend where and when there arose such a high respect for the magic that was said to be inherent in market forces. As a consequence, very many governments around the world soon came to find themselves dragooned into becoming true believers in the new mantra.

This slew of new and true believers in the so-called magic of the market place included some of our leaders and their myriad of followers.

Indeed, such was the magnetic force of the new idea that some who should have known better were soon enough found to be dancing and sometimes even prancing to the same tune.

As we recall, this was the context wherein there emerged that consensus behind ideas to privatize this or that public owned entity.

Early on the Bahamas Telecommunications Corporation was identified for the privatization experience and treatment.

While the times have obviously changed and while practically no-one with an iota of sense continues that blather about the so-called magic inherent in so-called market-forces, BTC is set to be divested of majority control on the Bahamian side; with that control going to Cable and Wireless.

And yet again, we are learning that, there is currently a Memorandum of Understanding [MOU] that the government signed with the regional communications giant (which is known as LIME throughout the Caribbean) provides for the sale of a 51 percent stake in BTC for $210 million.

We are also told that an additional $21 million will be collected by the government from the 10 percent stamp tax associated with the sale.

Note also that the said MOU also provides that the government will leave $15 million of BTC's cash in the bank to provide operating capital for LIME.

As reported, BTC had just under $66 million in cash at the end of September, according to financial records obtained by our Journal.

Evidently, this implies that if the sale is concluded in the next several months and BTC's cash reserves are significantly impacted, at least $51 million of that cash would go to the public treasury.

At this juncture, then, the word we get is to the effect that, if BTC maintains the cash it now has until the targeted sale date of February 15, 2011, the money generated by the sale of BTC would amount to more than $282 million.

While this is good as far as it goes, we are loath to support this move.

In this regard, [and as everyone would know], the potential buyer is Cable and Wireless.

In addition, we are now being told that, the proposed sale of the Bahamas Telecommunications Company (BTC) to Cable and Wireless Communications (CWC) could net the government nearly $300 million by the time the deal is done.

While this is apparently a done deal, we are adamant in our conclusion that, more effort should have been put into seeing to it that this entity stayed in Bahamian hands.

This is our view not only because of our enduring concern for the well-being of our country and its people; but because we are absolutely convinced [as in the case of Cable Bahamas] BTC could and should be owned by Bahamians.

And clearly, we continue to be impressed by arguments that tell us that, there are some utilities such as those relating to water, electricity and communications that should – in the interests of national security- remain in the hands of Bahamian nationals.

Furthermore, we are absolutely convinced that, there remains a crying need for the Bahamian economy to stand –as it were - on two feet; with one firmly planted in the Bahamas by Bahamians and with the other just as firmly planted by foreigners.

Such a move would put this country of ours on a much firmer footing.
And for sure, this is precisely why –in principle- still opposed to this proposed link-up by BTC with Cable and Wireless.

December 8th, 2010

The Bahama Journal Editorial

Bahamas Blog International