In Monday\uffb4s Punch (October 7, 2002) the Editor reviewed the \uff93big mess\uff94 left by Hubert Ingraham and the plans of Prime Minister Perry Christie to privatize Batelco. Let\uffb4s not discuss the \uff93big mess\uff94 and concentrate on the specifics of the alleged deal that The Punch describes as the \uff93perfect combination\uff94. The author contends that it is in fact an \uff93imperfect combination\uff94 and will suggest ways to perfect it.<\/P><\/p>\n
The deal…<\/B><\/P><\/p>\n
The Punch contends that the privatization deal will have an \uff93International\uff94 Bahamian buying 49% per cent as the Government\uffb4s \uff93strategic partner\uff94 who will have a management contract with a leading telecommunications company to run the day-to-day operations. This strategic partner will presumably sell a portion of his shares to the competent North American telecom company and to several leading local partners. The \uff93Government and the people will own the controlling 51 per cent.\uff94<\/P><\/p>\n
The Editor concludes that this deal is the \uff93best\uff94 because the competent North American telecom company is the day-to-day manager and the strategic partner, the leading businessmen and obviously the Government are Bahamians. Apparently, the most critical issue to The Punch is \uff93the Government will not be \uff91selling off the peoples\uffb4 assets to \uff91a bunch of foreigners.\uffb4\uff94<\/P><\/p>\n
The Editor does not address the fact that this deal leaves Batelco as a government controlled corporation. Private management and government control do not constitute \uff93privatization\uff94. The deal is the proverbial \uff93half a loaf\uff94.<\/P><\/p>\n
Government control<\/B><\/P><\/p>\n
Although it provides for non-Government management, it perpetuates the top-down political control of the company that characterizes this economy. Let\uffb4s face it\uff85Batelco must drastically re-invent itself so that it becomes innovative and responsive to the present and future needs of its customers. It must become the technological sparkplug for e-commerce. The Government\uffb4s record, including the alleged \uff93big mess\uff94, is the very reason to remove Batelco from its direct control. <\/P><\/p>\n
Let\uffb4s step back for a moment and review what has happened in the last century. The 20th century saw the rise and fall of centrally controlled and managed economies under many and radically different political guises. These included Nazism, Fascism, Communism, Fabian socialism, National Socialism, central planning and Keynesianism. All were touted as the ideal and even utopian ways to harness the industrial revolution.<\/P><\/p>\n
\uff93In rich and poor countries alike, the prevailing consensus of informed opinion now holds that boundless centralization, as a general principle, is a failure. It has been tried, exuberantly and repeatedly, and found wanting.\uff94 The top-down economic system brought down the walls of Communism and revealed the inherent long term weakness in the central planning of Japan Inc. Free markets and free market solutions simply work better. (Brink Lindsey, Against the Dead Hand, Wiley, 2002, p. 250)<\/P><\/p>\n
The description of the Bahamas contained in the Economic Freedom of the World Report of 1997 is still correct. \uff93Probing beneath the surface\uff85one discovers that [the Bahamas] is a highly regulated, centrally managed economy.\uff94 When that Report was written the FNM had already sold its largest hotels and growth was beginning. The Report ended with \uff93Hopefully, a decade of economic stagnation is ending and this country will move toward deregulation and economic liberalism in the near future.\uff94 Growth did occur but the FNM took major steps toward greater regulation. These steps in part created the \uff93big mess\uff94. <\/P><\/p>\n
A better deal<\/B><\/P><\/p>\n
With a true privatization of Batelco the PLP can take a major step toward freer markets. Its plan should be structured to include the following:<\/P><\/p>\n
The success of the Initial Public offering would in part depend on whether the underwriters and the equity market perceive the strategic Bahamian investor and the North American telecom manager\/partner to be creditable contributors to the success of the enterprise. <\/P><\/p>\n
The alleged deal allows for concentrated control whereas the better deal passes an important review and control function to shareholders who can make their views known at annual meetings or immediately with their buy, sell or hold decisions. Without these changes corruption by \uff93management in the closet\uff94 is likely to prevail. <\/P><\/p>\n
Furthermore, it \uff96<\/B><\/P><\/p>\n
This would be a more \uff93perfect combination\uff94. <\/B><\/P><\/p>\n","protected":false},"excerpt":{"rendered":"
by Ralph J Massey, The Nassau Institute<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_10223285771444175_51037792744":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[12],"tags":[],"class_list":["post-239705","post","type-post","status-publish","format-standard","hentry","category-headlines"],"_links":{"self":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/239705","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/comments?post=239705"}],"version-history":[{"count":1,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/239705\/revisions"}],"predecessor-version":[{"id":241372,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/239705\/revisions\/241372"}],"wp:attachment":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/media?parent=239705"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/categories?post=239705"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/tags?post=239705"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}