Minister Reports Slowdown In Investments
"You can see the general slowdown, particularly in the last month because it's a very serious business going on," he said.
There has been a slow-down in investments over the past month, a direct result of the threat of war in the Middle East, Minister of State for Finance James Smith told the Bahama Journal yesterday.
But Minister Smith said while some investors defer projects, others continue to plan.
While not revealing which particular investments have been reduced to a trickle, he said a serious investor would take into account all uncertainties and calculate exactly what they mean for his business.
"We've been seeing this because the Mid-East crisis has been looming for a number of months now," Minister Smith said. "But we still have people coming in and going forth with their plans because the world goes forward with or without a war."
But he added, "We have seen obviously some slowdown, some re-thinking, but nothing has come to a halt."
He said that putting investments on hold may be more practical for investors who plan to add rooms to their hotels. But for those who have already started such projects, Minister Smith pointed out that it may be more difficult - and more expensive - to stop the work.
"Investments are at different stages and clearly, I don't know of any that have come to a halt," Minister Smith said.
Despite the unstable economies of major foreign markets, four months ago during the 47th national convention of the Progressive Liberal Party, Prime Minister Perry Christie was encouraged by the countries economic prospects. This optimism was due to what he described as an "impressive range" of investment and development projects that were underway or at the time, were receiving the active consideration of the government.
But the pace of such investments has slowed, Minister Smith told the Journal.
"You can see the general slowdown, particularly in the last month because it's a very serious business going on," he said. "If there is a war we know that there would be an impact on energy prices which could in fact have an adverse impact on the demand for travel, meaning, therefore, that we can see a dip in our arrivals [and] that drives our economy."
There is a bright spot for investors, however, he said.
Minister Smith considers the slowdown in major investments a period for opportunities of another kind. "For instance, if you're in the construction industry and if it's pretty crowded, you find that during a time like this when things slacken off, this may be the time to go into repairs, renovations and the upkeep of your property," he said. "So you still end up investing, but along another line, in terms of maintenance. So I really don't see things coming to a standstill. I see a moderation of activity. The investors, I think, will make those decisions that I think are in their best interest.
"Moreover, going forward, if there is a slowdown in demand, there is a chance that prices in some areas may come down. So it isn't all bad news. There are compensating factors in any crisis," he added.
Minister Smith said he understands that there are risks in any investment. He said therefore, that it is not strange that a prudent investor would assess the Middle East crisis, to determine whether or not he should move forward with making further investments.
Late last year, Prime Minister Perry Christie expressed optimism about a number of investment proposals he felt would invigorate the economy.
Included in the planned investments Prime Minister Perry Christie announced yesterday was a $500 million expansion of the Atlantis Paradise Island Resort. The project includes the construction of 1,200 new hotel rooms and the addition of further water-themed amenities. It also includes a $50 million development comprising 122 time-share units.
The entire expansion is expected to create 1,000 new jobs, but Kerzner International officials have since indicated that this project too may be slowed due to economic uncertainties.
Additionally, $762 million in new resort investment was being pumped into Exuma, translating into 2,000 jobs. Two five star resorts - Four Seasons and Aman - with the possibility of a Ritz Carlton were expected to be included in that project. Exuma is also expected to be the site of a Greg Norman PGA 18 hole golf course at Emerald Bay.
A Bahamian investment group headed by Garet Finlayson and Al Collie, also planned to invest in a resort in North Andros, Mr. Christie announced.
A $50 million 250-room hotel and 150-slip marina along with a championship 18-hole golf course was scheduled to be built at Morgan's Bluff in North Andros.
By Hadassah Hall, The Bahama Journal