The Bahamas Trade Commission officially released yesterday what it said is the country’s first national trade policy, with the Commission’s Chairman Philip Galanis saying during a press conference that the trade policy is designed to lower the country’s trade deficit by not only empowering local businesses to carry out more trade in goods, but by improving the ease of doing business in the country.
Galanis and Director of Trade Brickell Pinder agreed during the press conference, that if trade in services was included in the overall understanding of the country’s balance of trade, there would be a surplus.
They explained that the focus is getting local companies to move more goods across borders than have been traded in the past.
The press conference panel, which included Minister of Economic Affairs Michael Halkitis and Deputy
Chairman of the Bahamas Trade Commission Senator Barry Griffin, also weighed in on the need for the country to improve its ease of doing business and the factors of production that the government can partly control, such as the cost of electricity in the country.
“There’s no question that there are a number of barriers to trade generally, one of which is the high cost of electricity,” said Galanis.
“I see recently, there was a request for proposal by a government corporation for photovoltaic development, and that is a system that converts sunlight into electricity.
“We see recently there was an announcement by the Grand Bahama Port Authority, where a private sector entity with the assistance of the IDB, I think, is expanding a 15-acre solar farm.
“I think what we recognize is that before we can really move forward with trade in terms of export, there are some things we have to overcome. First of all, the ease of doing business is not only the ease with which business is done, and the bureaucracy that affects it, but also the costs associated with business.
“And so until we are able to really get a better handle on the reduction of costs, we’re not likely to see Bahamas becoming competitive in the production of manufacturing.”
He said while the country is a big exporter of spiny lobster, polystyrene, pharmaceuticals and salt, there is not much else produced in the country that is shipped out.
Within its pages, the national trade policy covers strengthening domestic competitiveness. One of the problems the policy seeks to overcome is capacity building.
“According to parts of the business community, the education sector and businesses are not sufficiently connected, which has led to an education sector producing skillsets that are not always in demand by businesses, in turn affecting the productivity of businesses, and the competitiveness of the economy in general. Training and vocational education need to become more entrepreneurial oriented,” the policy states.
The national trade policy’s response to the problem is to have the government undertake a number of complementary actions, such as completing a “comparative strategic study into the skills that are likely to be required for successful exporting in the future, and assessing the extent to which education and training in The Bahamas provide these skills”.
It adds: “This will comprise in particular issues of importance for a small economy with limited resource endowments, including IT, digital, creative and professional services skills, and also focus on the application and use of new technologies such as additive manufacturing, blockchain technology, artificial intelligence, and others, for use by Bahamian businesses across all sectors.
The policy also mentions the development and implementation of export capacity building programs for companies; and the development of curriculum to “impart export-relevant knowledge and skills to become part of technical vocational education and training curricula, complementing the already existing and ongoing revisions of broader curricula and general management and entrepreneurial skills trainings”.
In terms of addressing high operating costs for companies, the policy speaks to undertaking a study that compares the cost structure businesses across the economy that export versus businesses that do not, focusing on energy, labor, and transport costs.
“This will prepare recommendations on potential further measures to be taken, including potential subsidization of certain cost items,” the policy explains.
The 53-page policy covers analysis and challenges to be addressed; national trade policy rationale and objectives; managing imports; expanding exports; diversifying exports; strengthening domestic competitiveness; and implementation.
Halkitis said the policy is “key” to a wider development strategy to diversify this country’s economy and empower Bahamian businesses domestically and internationally.
“Key areas that are being targeted by the government such as niche agricultural and fisheries products, uniquely Bahamian craft, food and goods; and other green, blue and orange economy products and services, will all benefit from this policy,” said Halkitis.
We constantly hear phrases like trade, economic development, and resiliency. Terms like these are constantly tossed around. To properly appreciate their relevance to our economic future, we must stop to consider the impact that expanding international trade will have on our economy, as well as on individual businesses,” Halkitis pointed out.