The Bahamas, as a low-lying, small island developing state (SIDS), is not only recovering from the weather and pandemic-induced disasters of the past, but also preparing for the future. Prime Minister Philip Davis gave a much-lauded speech at the United Nations Climate Change Conference (COP 26) in which he cautioned the world to take urgent action on climate change before it is too late. Considering the existential threat posed by climate change, the Bahamian government’s transformative approach to development and growth has become necessary if the nation wishes to recover from the crises of the past while preparing for the storms of tomorrow.
The newly formed economic affairs ministry is tasked with driving growth. During his inaugural contribution to the Senate, Economic Affairs Minister Michael Halkitis outlined the approach to economic development following the deadly Hurricane Dorian and COVID-19 pandemic that have exposed the risks associated with the current tourism-dependent economic model. “As the government prepares to put the worst days of the pandemic behind us,” Halkitis said, “we are initiating key drivers of economic growth. If the past few years have taught us anything, it is that we cannot continue with business as usual.”
While the nation’s tourism sector was severely impacted by COVID-19, the financial services sector (the second pillar of the Bahamian economy) has proven resilient. The country has billed itself as a safe harbour for financial services and investments, with an emphasis on its measured approach to innovation, development of local expertise and jurisdictional advantages. As a result of this approach, The Bahamas has emerged as a global leader in financial services over the past several decades. Its prospects seem set to grow even more as the country positions itself to become a fintech hub.
FTX, the world’s third-largest cryptocurrency exchange, recently moved its headquarters from Hong Kong to The Bahamas. FTX owner Sam Bankman-Fried referred to the government’s recent actions as positioning the island nation to be the “Dubai of crypto.” The move was facilitated by the Digital Assets and Registered Exchanges (DARE) legislation passed in 2020. DARE has been hailed as one of the top legislative frameworks for cryptocurrencies and digital assets in the world.
This is far from the only innovation the Bahamian government is pursuing. On the immediate agenda is the revamping of the national investment framework and promotional strategy to streamline the process for local and international investors, with the economic affairs ministry taking the lead on domestic investment. The goal is to diversify the economy by attracting investments in undeveloped areas within tourism, as well as industries beyond tourism. The government has pledged to develop the orange, green and blue economies to create diverse opportunities across multiple sectors.
The ministry of economic affairs will also be working towards significantly improving the ease of doing business within The Bahamas to support a pro-business and pro-investment environment. This change will be a vital component of the government’s ongoing digital transformation efforts, which Halkitis says will “completely transform the way government does business in every way conceivable.”
The Bahamian government plans to become an international arbitration centre to support the development of new industries and the attraction of diverse investments to its shores. At the end of 2021, the government was in the process of crafting an international commercial arbitration bill that incorporates the United Nations Commission on International Law’s model law and enhances The Bahamas as a preferred jurisdiction for international commercial arbitration.
Even when it comes to trade, our typically import-dependent country is exploring new opportunities, with a particular focus on the integration of micro, small and medium enterprises. There will be particular efforts to link the Caribbean-Canada Trade Agreement with the empowering women and youth initiative and increasing opportunities within the orange, green and blue economies.
In 2020, Canada exported $121 million worth of goods to The Bahamas while it imported $13 million in goods. Canada’s main exports were animals and animal products, vegetables, fats, oils and waxes, food and mineral products. The Bahamas sent mineral and chemical products to Canada, as well as antiques, animals and animal products and machinery and electrical products.
Canadians currently invest in second properties in The Bahamas and also in resort projects.
Halkitis acknowledged the ambitious portfolio under his remit and framed the many elements of the ministry’s agenda as a part of “a single, country-wide plan for progressive change” as the nation modernizes for global competitiveness.
Chanelle P. Brown is the counsellor, consul and acting high commissioner for The Bahamas. Reach her by email at ottawa.mission@bahighco.com or by calling (613) 232- 1724