It is said that a man is the sum total of his experiences. I am such a man; I have experienced CSME (Caribbean Single Market Economy) and I have, over the past 43 years navigated though many political and economic waters in The Bahamas. Some will say that comments contained herein are self-serving. These are narrow minded people. Others will say that although these are personal experiences, ﾠsince I am a part of the whole, what affects me could be used as an example of what effects it could have on others.
When we look at business in The Bahamas and it’s competiviness with the outside word, we quickly see that we don’t stand a chance. It is easy enough to say that “everything is too costly in The Bahamas”. This is fine for the man in the street to say, but leaders must ask themselves the question “Why?”.Our tax system is the biggest cause of high prices in The Bahamas. This is evidenced in Heads of Agreement for foreign investors who are in businesses which have to compete with the outside world for the tourist dollar. If you notice the first thing they ask for is a tax break.
This cannot be looked at in isolation. For example, the printing industry gets tax breaks. But the hundreds of people who work in the industry don’t. They pay high school fees, high electricity bills, more for clothes, etc. This is because of our tax structure. Our taxes must be treated as a cost of business. So we pay taxes regardless of whether we make money or lose money. We’re taxed from the bottom. The taxes in The United States and most other Countries depend on how much money one makes. They’re taxed from the top and thus it’s not looked on as a business cost.
The main proponent of CSME, The Prime Minister of Barbados, had a meeting with Parliamentarians to explain his proposals for CSME. The proposal that struck a cord with me was his proposal that The Bahamas give Caricom preferential treatment. In other words give them tax breaks. ﾠI put to him a scenario as follows. A Bahamian manufacturer, faced with high taxation costs at the bottom brings in material and produces an item. A Barbados manufacturer brings in the same material with taxes leveled at the top and produces the same item. Which is cheaper? Naturally the Barbadian manufacturer is cheaper. Having produced the item at a lower price, the manufacturer then is given preferential treatment when he ships it to Nassau. Again who is cheaper? Furthermore, when the Bahamian manufacturer tries to sell his Bahamian produced item to Caricom nations, is he competitive? The answer is no.
What was The Prime Minister of Barbados’ answer? ﾠ”To be honest with you, all the manufacturing would go to Trinidad” he said. In other words, there would be no such thing as a Bahamian manufacturer.
Is this what we want? I should hope not. I always felt that our efforts should be spent saving more of the tourist investment and thus keeping more money in the Bahamas. As I have said almost every year for the past 23 years during the budget debate in the House of Assembly, if a tourist is able to spend just $100.00 more on a Bahamian produced item this would mean a $500,000,000.00 per year foreign investment for the Bahamas. I don’t know why our leaders seem not to understand this. In three years this would dwarf the investment being made at Cable Beachﾅﾅand we won’t have to give away anything!!
If you do business with The First Caribbean Bank you will see on your statements the words “printed by Moore Paragon” The First Caribbean Bank is an amalgamation of Barclays of Nassau and CIBC of Nassau. They are headquartered in Barbados, not Nassau. I am ﾠsure that Bahamian deposits surpass ﾠCaricom nations. The printing of CIBC and Barclays used to be done by the Bahamian printing industry. (Executive did little of their printing).
Moore Paragon is, I understand, owned by Moors of the United States. When the Bahamian printer bids for this workﾅwith our prices higher because of the nature of Bahamian taxesﾅﾅthere is no contest. So Bahamian money is being used to expand foreign owned and based industries and Bahamian workers are out of work!!! But did I forget, we could always wait on tables at Paradise Island!!
If one has seen Lou Dobbs on CNN speak of outsourcing jobs and how it effects local jobs, especially the middle class American we would quickly understand how CSME would affect us. He says that America, once an exporting country is now importing at an alarming rate and if it does not stop the economy could be ruined. And he is right. We must understand that there are three classes of people in most successful countries, high income, middle income, and low income. Some country’s high income can be compared to America’s low or middle income brackets. ﾠIn other words an American CEO is in a higher income bracket than a Pakistani CEO. An American sweeper is in a higher income than a Pakistani sweeper, and so on. So why say the American worker is paid too much or is too expensive? Why not say the American CEO is paid too much when compared to his Pakistani counterpart? It’s like comparing apples to donuts. It can’t be done. It’s as simple as that.
If this is the case we wonder why America tolerates it. The answer is simple. It’s good international politics but bad socio-economics.
Why does the Bahamas do it? Only God knows. It may have something to do with egos.
If the Bahamas wanted to join CSME I would have thought our leaders would first look out for the wellbeing of Bahamians. I would have thought that they would first endeavor to put the Bahamas on an even playing field by changing our form of taxation, training our people in production of items as they pertain to the Bahamian economy rather than rushing into CSME, killing Bahamian industry and our economy, putting us into economic poverty , and then saying, o.k. now, lets compete!
In the meantime Bahamian Industry sits and waitsﾅ.to be or not to beﾅ.that is the question.
Sometimes I wonder if our leaders remember who voted for them.
Regards,
Pierre Dupuch M.P.
