by Rick Lowe
Mr. Mario Carey confirmed in The Nassau Guardian yesterday that "the more things change, the more they remain the same" when complaning that foreign investment approvals are taking longer to be approved.
When we first moved back home in 1982 similar complaints were being aired. Not only with investments, but work permits, business licenses, shop licenses, electricty and phone connections and more. Almost every area where a permit or service is required from a government agency, official or corporation there were delays and hang ups.
Rumours about "greasing the right hand" in order to get what you needed were rampant in those days.
Fast forward to 2012 and the country is still equally dependant, (maybe even more so), on foreign investment to help create some economic growth and we get reports like this from Mr. Carey. It's simply astonishing.
Sure, there are so many problems in the country today it must be difficult to know where to begin, but as Mr. Carey points out if the government wants income and employment one good place to start is approving real estate purchases by foreigners.
We really do not seem to have come very far over the past 30 years in some respects.
Hi Rick,
‘Real estate purchases by foreigners’ may well fall within the remit of foreign direct investment (FDI) but it is not FDI as we know it (to steal a phrase from 1st Office Spock, Star Trek).
Whilst the premise of your piece is correct that The Bahamas is dependent upon and needs FDI (see my earlier Blogs), the following five types are the ones that we should pursue and increase our competitiveness to attract:
1. FDI … ‘to gain access to specific factors of production, e.g. resources, technical knowledge, material know-how, patent or brand names, owned by a company in the host country’.
2. FDI ‘to gain access to cheaper factors of production, e.g. low-cost labour’.
3. FDI involving ‘international competitors undertaking mutual investment in one another, e.g. through cross-shareholdings or through establishment of joint venture, in order to gain access to each other’s product ranges’.
4. FDI to gain ‘access to customers in the host country market’.
5. FDI relating ‘to the trade diversionary aspect of regional integration’ through location advantages (and where The Bahamas must seek to position itself).
Millar & Clegg (1997) as cited on: http://www.quncy.com/five.html
Not to mention that continued unregulated purchases of land by foreigners could have an inflammatory effect (not that we wish to go back to the days of the nationalistic ‘Immovable Property Act’).
Thanks S3S.
While I did not refer to foreign real estate purchases in the post as FDI, you’ll get no quibble from me on the strict definition of FDI, nor any of your suggestions, but why leave the real estate deals, that Bahamian’s don’t seem to be buying, on the table?
We need foreign investment by whatever name it’s called though.
The obvious question then begs:
What happens when foreigners speculate on properties in The Bahamas, as many have done over the decades? In fact, many have died leaving the Lands & Registry Office in a quandary as it tries to chase their next of kin or well-intentioned developers interested in the land cannot effect a deal because the owners cannot be found.
Is it ‘foreign investment’, even if they use their home banks to underwrite the purchases and the mortgage payments are going home?
The same thing that happens when Bahamians die and leave it that way. That’s a legal question I’m not able to answer.
Yes, it is foreign investment to purchase the property here, unless they are buying from a foreigner.
In any event, we need some economic activity no?
Yes indeed Rick, yes indeed. We are desperate for economc activity, including the five types I mentioned above.
But when we appear not to know the bases of national competitiveness; are ignorant about exploiting the few competitive advantage(s) that we possess and seem oblivious to the dangers of not preparing ourselves adequately for the intensifying competition ahead, for a long time we will have to content ourselves with the crumbs from the tables of the regional leaders…. :(:(