So now the People's Government has decided that foreigners can invest in and own any restaurant or entertainment business in our beloved Commonwealth. How can The Bahamas Government justify such a decision?

What’s left for us?

By Philip C. Galanis




There has been considerable discussion lately about the changes that are taking place all around us in today's Bahamas. With the dismantling of public entities such as the Hotel Corporation, the privatization of BaTelCo, the massive capital public works projects that are largely being supervised and staffed by foreign companies and foreign workers, and now the relaxation of the Bahamas Investment Policy, this week we would like to Consider This... When the history of The Bahamas is written about this era, will the prime minister and his sidekick minister of state for finance be described as progressive and enlightened agents of change for a modern Bahamas, or will they be perceived as myopic enemies of the people who presided over the public auction of The Bahamas, having allowed too many foreigners to rapaciously highjack our patrimony, leaving us all asking, “What’s left for us?”

This consideration and a public discourse becomes more urgently relevant in a globalized world, where too often our political leaders seem overly eager to use globalization as an excuse for their shortcomings on our behalf, instead of boldly mounting a well thought out approach as to how we should embrace this rapidly-developing and ever-changing phenomenon for the betterment of our citizens.

The prime minister recently announced in Parliament that his government has changed the policy with respect to foreigners investing in areas that have traditionally been reserved for Bahamians, with specific reference to non-ethnic restaurants and entertainment businesses. He suggested that this will provide greater inward or foreign direct investment into the country's economy, and it therefore follows that this is a good thing. In the wake of this announcement, let's consider this... while the rapid advancement of globalization will of necessity require us to rethink long-established ways of how we conduct our affairs, are there not certain fundamental principles that we must maintain? Are there not certain foundational norms that should be unassailable, non-negotiable and immutable — simply off the table — with anyone at anytime? Like many Bahamians, I believe there are. And irrespective of whichever government has the gall to tamper with such indisputable fundamental principles, we should demand of them that they consider what kind of long-term effects their decisions will have on The Bahamas for many generations to come.

One such fundamental principle is Bahamian citizenship. Given the recent decisions taken by this government, are we going to arrive at a place where, in the interest of wishing to be seen as "enlightened adherents and advocates of globalization" or perhaps the more crass and accurate justification of financial expediency, we are going to begin to sell Bahamian citizenship to all and sundry? It is not that farfetched. We have or are in the process of selling every other aspect of our patrimony. We have done it with the public corporations. We have done it with the major capital projects. We are now doing it with certain aspects of our Judiciary. Daily we continue to allow foreigners in the workplace as a matter of course to consistently abuse and frustrate our citizens with impunity? So what is there to give us any confidence that the sale of Bahamian citizenship is not a distant possibility? The difficulty with beginning down this road is the uncertainty of where it will end and just how far we will go for the sake of someone’s idea of how to advance our country.

So now the Government has decided that foreigners can invest in and own any restaurant or entertainment business. How can the Government justify such a decision? There are several pernicious developments that will result from such a decision.

First, this decision will invite and encourage foreigners to compete in The Bahamas in those areas that have long been reserved for Bahamians. And make no mistake — those foreigners who will come here to open restaurants and entertainment businesses will have very deep pockets indeed. This kind of competition can very realistically force competing Bahamians out of business because of the kind of capital or financial firepower those foreign competitors would bring to the local marketplace. Do not be mislead, either, that they will contribute greatly to our wholesale grocery businesses. Realistically, entrepreneurs with this kind of financial investment will be much more apt to bring in trailer-loads of food and other supplies, bought more cheaply from our neighbor to the west than they could ever purchase it here.

Secondly, persons who are employed by those businesses that will be marginalized by such competition will be forced to seek employment elsewhere. And they should not rely on being able to simply apply for jobs at these new, foreign owned ventures. These businesses, much like the foreign-owned hotels that we are so used to, will insist upon a much higher level of training and experience. Who knows? This may even be the beginning of a "renaissance of foreign workers" in the restaurant and entertainment business, just as we saw decades ago.

Thirdly, foreign investors will want to repatriate their profits, and that is completely understandable. But consider the drain of foreign reserves that will ensue because of the profits that would leave the country, as well as the money spent on provisions imported by these businesses. Those closely-coveted profits that are earned from Bahamians and non-Bahamians alike on Bahamian soil will quickly be transferred out of the country, for the benefit of those investors elsewhere.

Finally, this ill-conceived policy shift will make it more difficult for future generations of Bahamians to enter the marketplace in these sectors. Bahamians already encounter many barriers to entry into the local economy, most notably adequate funding for their projects. Which bank here, Bahamian or foreign-owned, will be inclined to lend to prospective local entrepreneurs when, as a result of this ill-conceived policy, they will likely adopt the posture that there are already too many "foreign-owned" businesses chasing a finite number of patrons?

If the government felt such an urgent need to alter the existing policy, would it not have made more sense to first ensure that there would be greater participation by Bahamians in these sectors? The government, instead of giving away the entire shop, lock stock and barrel, could have tweaked the policy to allow foreigners to participate in these sectors, if they agreed to partner with Bahamians, with specific, clearly-defined investment parameters to ensure that such partnerships are meaningful. This would have expanded the possibilities for our own citizens.

What is next? Will the government, the repository of all knowledge and wisdom, next invite foreign doctors, lawyers, accountants, engineers, architects and the like to set up businesses here justified with the same twisted reasoning and logic proffered for this decision? Let's take it further. In virtually every major capital that I have visited over the years, I have used foreign cab drivers who shuttle me between the airport, the hotel or whatever destination that I might require. Is that what the government has in store for the future of our country? To allow foreign taxi drivers to enter into competition in an area that has long been reserved for Bahamians? I believe you get the point, although I doubt that they do.

For those who would suggest that we should not become xenophobic, I submit that there will be no need for xenophobia if our leaders would demonstrate the courage to ensure that, despite the rapid onslaught of globalization and their dogged determination to give away the store, and notwithstanding their lack of confidence in Bahamians, one of their immutable, non-negotiable and indisputable first principles should be that today, tomorrow and forever, The Bahamas is and must be first and foremost for Bahamians. It seems sad, but true, that somewhere along the way, they have forgotten this.

Philip C. Galanis is the managing partner of HLB Galanis & Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to: pgalanis@gmail.com.

5/2/2011

The Nassauguardian

Bahamas Blog International