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Wednesday, December 17, 2014

End of 2014 wrap up! What happened this year?

Well, as we end the year 2014, the obligatory wrap up of this year's events must be conducted.

First of all, I thank everyone for reading my submissions and sending me feedback. I thank all of you, from the bottom of my heart. It's not often the average citizen, like myself, gets a chance to communicate his thoughts, ideas and feelings with a broader audience, regardless if people care about my topic or not. But, I truly do appreciate it and I thank you for being a part.

Well, this 2014 has been a relatively mundane year. Perhaps it's me that's getting older, and the regular things that used to titillate and excite me just doesn't anymore? But, in all honesty, this year seems like a continuation of the regular. Sad, I know.

The first thing that comes to mind is the upheaval in the Ukraine and the standoff between that country and their former colonizer, Russia when under the former communist bloc, the USSR pre-1991.

The upheaval was bloody, unnecessary and very much avoidable. The situation was also embarrassing for the United States, and particularly to president Barack Obama leading NATO during the crisis.

President of Russia, Vladimir Putin, flipped the entire Western world the bird and said that as a result of this crisis, he will annex Crimea- a territory within the Ukrainian border- and no one would be able to do a blessed thing about it.
Russian President, Vladimir Putin.

For those thinking that president Putin was "punking out" president Obama, forgot that Putin did something more egregious back in 2008 to former US president GW. Bush. Not only did Putin induce a war in the sovereign state of Georgia, but simply took massive tracts of land on the North Eastern border of Georgia. That time his intentions were more clear and decisive than in the case of Crimea, because it was a direct response to US defence systems being placed in Georgia as installations of first response in the event Russia and America were to ever go to war.

Another thing that has happened, and still happening, is the revelation and current scandal that comedian Bill Cosby is embroiled in as it pertains to his years and years of alleged rapes of Hollywood starlets.

Over 20 women have come forward and stated that Bill Cosby raped them. What was so startling and shocking about this entire affair is the length and time some of these rapes took place. Some women claim to have been assaulted as far back as the late 1970's.

Bill Cosby, loving the pudding pops.
Further concerning about his entire affair is that almost all of the women have the same story: They were invited to Cosby's home, given drink and in some instances narcotics, drugged to sleep and then woke up and found themselves in compromising positions, with a taxi-cab waiting on them outside and told to get out.

Also, and it seems to feed the stereotype of the ravenous, sex-starved black man, who is only hungry for the poor and defenceless white woman, most of Cosby's accusers are Caucasian.

Whatever ends up as a result of all of this, it appears as if Bill Cosby is not "Dr. Cliff Huxtable", the beloved character and father figure he portrayed on his hit television show of the 1980's. We wish him all the best during his time of trial.

Another major event, albeit very subtle, was the current position of the Catholic Pope Francis. He has taken some very interesting positions that were once anti-religious and anti-Catholic: He has become more and more vocal in his warmth and understanding towards homosexuals and their lifestyle. Something that has angered Bishops within his own ranks, and also provided tremendous criticisms world wide, both pro-gay and anti-gay.
Catholic Pope Francis
Whatever the end game Pope Francis has in mind, his pronouncements are taken very, very seriously. He has a following worldwide and influences not just Catholics and Christians, but people that look to him as a guiding light of morality and voice of reason.

Something also very, very important happened this year, and globally dangerous issue for us as peace loving citizens, and for my case, as a follower of Christ, and that is the emergence of the radical Islamic terrorist group, ISIS.

This group of radicalized Islamic terrorist are responsible for the murder of hundreds of Christians and non-Muslims within the Middle East. They have displaced thousands of people inside Iraq and Syria, and sent them on the road to no-man's land and to their slow death of starvation and elements.

Who or whatever started this group is unimportant at this time. I condemn their actions, and so too should you. I condemn their radical form of Islam. And anyone that stands with them are too condemned and should be rooted out, eradicated.

I say that because, oddly enough, there were not only American citizen that went to fight with ISIS, but there were European men and women in addition to, and most puzzling, Caribbean nationals that were reported to have joined ISIS in their Jihad. This puts the peace and conscience of Caribbean people on edge, as we do not have the security or response measures to combat a major terrorist attack on our soil.

Baroness, Patricia Scotland
of Asthal
Further with regard to the Caribbean, there were a host of issues that resonated with me region-wide. The kerfluffle with the Dominican appointee to head the Commonwealth Secretariat, Baroness Patricia Scotland of Asthal, sparked major controversy. An appointee that was a British parliamentarian, which was the primary reason persons around the Caribbean cried foul. Foul because how can you have a British parliamentarian, sit on meetings for the Caribbean nations and other former colonized nations, and at worst be the head of such a grouping with Britain, where her current allegiance lies, as the former colonizer of all of the English speaking Caribbean- the predominant Caribbean nations.

Folks in these meetings, meetings that are very important because they are few and far between, for obvious reasons, like and need to talk shop. Talking shop means issues sensitive to our former colonizers. Not that anything damaging would be discussed, but some things we just don't want the British government to know.

Speaking of politicians, former premier of the Turks and Caicos, Michael Misick, was given bail for his corruption charges and is walking around to many a warm reception by his people in the TCI. For whatever that's worth. We wish him all the best.

Also, and this takes me back to my opening salvo that 2014 seems to be a year filled of more of the same, the current upheaval in Haiti. The prime minister, Laurent Lamothe, has been forced to resign amidst allegations of corruption that spurred these protests.

Former Haitian Prime Minister
Laurent Lamothe
Several other ministers have resigned with him. This has put the spotlight back on president Martelly, as he is now the only other person Haitians can blame because things aren't going right. To me, he was doing a fairly decent job as president of Haiti, barring his lack of formal skills and training.

Whatever has Haiti bound by this spirit of upheaval and chaos, I pray that one day, and one day soon, it all will be solved. For their sakes.

With that, let's look to the new year, 2015 with vigour, new resolve and committed spirit to do better.

I wish you all a very Merry Christmas and a Prosperous New Year. Thank you for reading, God bless you all and I wish to see you again soon.

Saturday, December 13, 2014

The World Trade Organisation and The Bahamas!

The Minister responsible for Financial Services and Trade, The Honourable Ryan Pinder, resigned his post as Minister to take up a private post. This leaves his Ministry without a Minister. In addition, just previously to his resignation, the Director of his Ministry, was selected to head up the secretariat charged with producing a national development plan for The Bahamas. Without a doubt, international trade and integration for The Bahamas has been put under a very serious test: With or without the understanding that the ministry of finance has dual carriage for trade matters.

Over the last 15 years The Bahamas has been making greater steps towards becoming a member of the World Trade Organisation (WTO). This is an important step in the development for any country that wishes to become a member of this grouping. So far, the Bahamas is among a particularly awkward group of countries that are currently not members: Iran and Iraq are some other notable countries, with Russia officially joining in 2012.

Just for background information, the WTO has been around since the end of the Second World War. It was formerly called the General Agreement on Tariffs and Trade (GATT), before the conclusion of the 1996 Uruguay Round of world trade talks which then established a universal name for the grouping and tighter rules on goods and services. Before 1996 it was promoted as a post-war economic integration mechanism for European and North American countries and since then, it has been promoted even more so, but with more countries included along with their contentions and complexities.

The WTO is currently in the middle of a seemingly endless round of trade talks, which started in Doha Qatar in 2002. Having a round of talks in the Middle East, post 9-11 attacks and the US Middle Eastern invasion, was supposed to be the olive branch extended to the Middle Eastern world by Western powers (well, let's just say by the USA) as a way to show them "peace through trade”. Sort of like the US's Iraq invasion strategy of bombs and bread, with trade added to it.

More importantly, however, the idea that the WTO is a complex organisation is true to a great extent. Its rules based arrangements are designed purposefully to be intrusive on sovereign authority and sovereign economic policy making.

This international rules based mechanism, makes the interconnection and coordination of multi-national protocols and standards, based on traditions and customs as well as sovereign protection on industries deemed as sacred, difficult, when this system has to cater to the needs, the flexibilities and sometimes inflexibility of its members.

The position the Bahamas finds itself in at this stage by not being a member, can be good, or bad, depending on the premium placed on the economic position of the Bahamas and what Bahamians feel as their best interests for the future.

For one, not being a member makes you a pariah. Even though the Bahamas is a member of a lot of other international bodies and agreements and has a good political and economic track record, not being a member of this standard bearing group looks a little dubious. Along with being a pariah, doing business with international firms that expect a transparent system for them to invest, becomes problematic if national standards aren't, at least, at baseline international standards and compliance benchmarks.

The second thing is with regard to tax reform and the need for The Bahamas for taxation reform. Tax reform has never just been a trivial matter in any country, let alone for a country that has no other forms of taxation other than from import tariffs and public service charges and some minor, real property taxes- with the latter not taken very seriously. But, the matter of proper taxation is critical to being successful at world trade level and at the same time, protecting domestic interests.

One thing is clear with WTO economic principles: Reducing tariffs on import competing products is at the essential core of the WTO. In fact, two foremost policies are: 1. The non-Discrimination of goods and services and 2. The reciprocity of that trade openness, between countries, either by direct tariff cuts or through modality approach- that being, phased in over a period of time.

A country, like The Bahamas, which is heavily dependent on tariffs/customs duties for government revenue, once the phasing in of WTO standards and honouring commitments to other members on reducing customs duties on certain items, indicates very bluntly that the Bahamas will have to find other sources of revenue, as it is poised to implement Value Added Tax by January 1st, 2015.

Everything from tax reform, to increasing the transparency in public and private investments, to even proper record keeping, speaks to a larger issue of broader public sector reform and also to the cultural way we tend to do business. Not only broader private and public sector reform, but having the capacity to commit to contracts and agreements over the time period in which you said you were going to do exactly that.

Cutting this point short: The entire way we do business has to change. A colleague of mine from Trinidad, who worked in the Bahamas for a short time stated to a group he was presenting to; "Do you remember when your mother used to bake that sweet bread every Sunday? (YEA!) And the neighbour used to fix her door or cabinets for her in exchange for that baked bread? (YEA!) Well, those days are long gone! (OOOOOOHHHH!!!)"

The changes needed in the way we do business do not have to be drastic and done overnight. It can be done bit by bit to suit our needs, or, actually- “GASP”- structurally planned! The issue of whether or not what change comes first; to what extent should certain institutions- whether they are public or private- should change; and how to sensitively change what we know needs to change without public insurrection, is where the discussion on WTO accession should be. But it isn't.

The reason why the discussion isn't where it ought to be is because the broader public, on average, tend to become frustrated when we speak about large macro-economic and macro-financial jargon and concepts. It's like, for example, an accountant trying to understand quantum physics. They would be no better off than a person who has the reading capability of a second year college student- or perhaps even a first year college student.

The other reason why the discussion isn't where it ought to be- and that being on the institutional and the economic way of how we do business- is because no one has been able to break down the large concepts and ideas, into bite sized nuggets for the citizens to digest.

For the most part in The Bahamas, the public discussion comes in after the fact. In fact, not only does public discussion come in after the fact, it sometimes isn’t very fruitful to the issue at all. The reason being that the persons explaining the issues, become frustrated at times at the lack of, seemingly, intellectual depth by the broader public on the matter (like the average Joe understands stochastic measurements and the difference between the HO model and the Laffer curve).

In addition, the broader public become angry at the persons making these decisions and making them without their input and apparently always in secret- a very open secret I may add. So, the cycle of confusion and obfuscation continues.

All of this uncovers another problem (well, not really another problem uncovered, because anyone who has ever done anything in The Bahamas understands this by now), and that is the lack of information that is readily available for the general public to digest. Not just transparency in the public sector, or private sector for that matter, but, the transparently coherent of initiatives for the broader public.

My sentiment is that: You can't blow my mind if I don't understand what it is you are blowing my mind with. This goes a very long way in educating the public on the importance, for them, of what trade agreements and in particular, what the WTO means.

The issue of knowing what to expect is critical to putting in place the safety mechanisms in order to protect the state revenue and the public interest with regard to consumer protection, commercial protectionism and cultural influx.

What should happen with labour and unions? What should happen with tax reform and state revenue? What would happen when legal immigration and immigration become larger problems? What would happen to sovereign rights? What should happen to infant industries? What should happen to the inflow of capital becomes too much or too little? What should happen to import competing companies? What should happen with regard to exports and export support? What should happen to the lives that depend on the decisions made upon all of these?

There's no cookie cutter solution for these problems. This WTO accession approach simply needs a touch of policy flexibility, imagination and creativity, put into realistic institutions that don't harm the domestic economy or be damaging to global competitors and the clout they carry.

The proper discussions need to take place. Not discussions on what people have done after the fact. But, what should we do and why it affects you. There is no easier other way!

Saturday, December 6, 2014

The BNCC: The courage of common sense!

The Bahamas National Citizens Coalition (BNCC)  published in one of the local dailies a 25 year development plan for The Bahamas. This plan was published, almost simultaneously, with the national development plan launched by the government of The Bahamas a few weeks back.

As we discussed at length in a previous article, "A National Development Plan: What should be expected?", we tried to make the case of the importance of long term planning for The Bahamas, and highlighted some of the merits, challenges the planning committee may face in addition to addressing some of the bottlenecks that may occur. We wish to afford the BNCC the same level of respect that their courage to publish their views on planning deserves.

Through speaking to one of the progenitors of the BNCC's plan, they have assured me that a fair amount of research went into their statement and that one can conclude that it was not prepared in a peloton.

A statement of intentions is more in line with what was published, to be quite frank. One can't really fathom how lengthy the back notes, white papers, green papers, policy notes, analysis and impact assessments went in to their published product. But we should take the team at their word that work was done.

Without rehashing what was written earlier with regard to the plan launched by the government of The Bahamas, I wish to give a little more context into the thinking behind the BNCC in an attempt to grasp the spirit of what was produced and why it seemed so important to bring it to the public at this particular point and time.

The tenor of the BNCC's plan was harmonized around one particular theme: The Stafford Sands Economic model of Tourism (in that of the Promotion of Tourism Act,. 1965) and Financial Services (in the Bank and Trust Regulations Act., 1964), and the schemes born out of it that has retarded growth in the BNCC's estimation. 

I would like to add that the reliance on the Holy Grail of Economic models in The Bahamas, in that of the Sir Stafford Sands model, has in fact served it's usefulness, and perhaps is retarding growth if more than a healthy share of people fail to see any way past it.

There was an interesting report given at the Bahamas Economic Outlook, 2011 by Dr. Olivia Saunders from the College of the Bahamas. At this forum, she had challenged the understanding of the Sir Stafford Sands model for economic development in the Bahamas.

She had asserted that it really should not be credited to him to any great extent. She further claims that the Sir Stafford Sands model, is based solely on economic activity that was already present in the Bahamas from the 19th century. I could not have agreed more. In fact, I think the insipid repetition of the "model" is not only mystifying, but also borders on cult-like rabidity, which lends itself to mental images of faithful and loyal clansmen, dressed in their dark hooded robes gather in their covens surrounded by a pentagram neatly drawn in white chalk, kneeling in front of an altar with a sacrificial Potcake atop, with a menagerie of warmly lit blue candles smattered about while the chants of the name of Sir Stafford Sands with selected quotes from speeches echoing through the room, interrupted only by short outbursts of orgasmic like screams of glory, while pictures of Sir Stafford flicker in the dim mist.

Just to add some clarity on what the Sir Stafford Sands model is; it is a model for economic development of the Bahamas, using the pillars of financial services and tourism as the primary base for economic activity.

Without fear of sounding as if I am bashing the efforts of a deceased former cabinet minister, the ballyhoo over the "economic model" of Sir Sands is overplayed to a great extent. The brilliance of Sir Sands relied not in some grand mental faculty that was overlooked by mere mortals, but in fact the genius of it rested in basic common sense.

Tourists were coming to The Bahamas from the 1700's. In fact, The Bahamas, as were colonies like Jamaica, Barbados and the Caymans and Bermuda, were all vacation hideaways for the rich and the famous in Britain that extended to wealthy American and Canadian elites.

We had what every other Caribbean country had- sun, sand and sea with a more than amenable government structure that was kind to European visitors and controlled the masses as if they were cattle.

We also inherited our financial services model from the British. In fact, almost, if not all of the former and current British colonies have large offshore banking sectors. This was not something Sir Sands created, but facilitated because it was happening already.

The Banking Act. of 65' was repealed in 2000 due to OECD anti-money laundering strictures and replaced with another, which directly means that at least half of the Sands model was either washed or neutered; and the Tourism Act., 64' had minor changes to include taxation provisions in 1970, etc, etc. but too has been rendered antiquated and under constant threat from crime, other rival destinations in the region and the threat of the opening up of Cuba.

All of this indicates that the obsession with a Sir Stafford Sands model that never really was, is now proving injurious to the growth and development of The Bahamas as it chokes out anyone and any thing that merely mentions ideas challenging its genesis, usefulness then and now and practicality on any level.

This makes calls for things to be new, like the BNCC has provided for us, a breath of fresh air, even though some of the ideas, concepts and features should be fleshed out in detail.

For example, we all can agree that a Sovereign Wealth Fund for The Bahamas is perfect common sense. There is no empirical reason why we can't and shouldn't have one, with the capitalization of such an institution taken into consideration.

More importantly, the opening up of our natural resources to Bahamian, which shifts away from the current practice of open secrets on it's viability, the persons currently engaged in mining our natural resources and seeking to mine our natural assets, also makes perfect common sense.

It has been noted that Caribbean countries that use their natural resources for their benefit can and in fact are able to control economic cycle dynamics for the better, and hence control the growth of their respective economies.

Some of the other portions of the BNCC's statement are also ideals we should strive for and finds ways and means to doing so: From the elimination of the pre-requisite of grossly unneeded concessions for foreign direct investment; public service transformation to one that is more accountable and efficient; and the goal of creating 1,500 new millionaires over the first five years.

A lot of the BNCC's plan hinges on the exploitation of natural resources as a key pillar of economic development, but a lot of it hinges on the participation and the willingness for citizens to see the fundamental core of some of our problems and seek new and meaningful ways of correcting them.

While the BNCC's statement is not clear on the "how much", the "where do we start" and "the mechanics of getting all of this done", but common sense is what many of their proposals are, even before we begin to discuss the realistic mechanics of some of their proposals.