The Bahamas Chamber of Commerce and Employers Confederation (BCCEC) has released the World Trade Organization’s (WTO) Impact Assessment, as conducted by Oxford Economics.
And while the consulting group did not give a definitive yes or no to if The Bahamas should join the WTO, it pointed to more positive than negative implications for the country becoming a full member.
The report provides a detailed scrutiny of current laws and regulations in The Bahamas and its level of compliance.
Trade and Investment Consultant with Oxford Economics, Ramesh Chaitoo, told a BCCEC breakfast group that in most instances of regulatory regimes of different sectors scrutinized, the fundamental issue is lack of clarity.
However, Mr. Chaitoo also noted that all investments in the country were decided by the state.
“The economy here has been largely shaped by government policies, not market forces over the last 40 years.
“That’s expressed simply by the fact that all of the investment into this economy is decided by the state. A wonderful little entity called the NEC, which, I guess has its reasons and requirements in its historical basis, however, market forces don’t decide where the capital flow is in The Bahamas.
“And when you look at the regulatory environment, you find that things are unclear; and all the surveys and all the research etc, basically shows that where you have unclear regulatory environments, where it’s not predictable, where it’s not consistant, where it’s not transparent, bad things happen,” Mr Chaitoo said.
Of the sectors assessed, Mr. Chaitoo revealed that the Tourism sector is WTO ready. He also revealed that the Financial Services and Insurance sector have no negative implications; Wholesale and Retail is reserved for Bahamians; Construction Regulatory regime needs development; Professional Services targets a specific sub-sector for market opening and Light Manufacturing and Agriculture’s main threat is tariff reduction.
“So, our recommendations in the report are that the horizontal restriction on investment should disappear and in the sectors in which there is sensitivity that you put Economic Needs Test (ENT) in the sectors specific commitments.
“That is the main problem in terms of the regulatory regime in The Bahamas. You have a very unclear, non-transparent, unpredictable set of procedures, there not rules not qualified in law, in terms of investment,” Mr. Chaitoo said.
Mr. Chaitoo also reiterated what lead negotiator for The Bahamas’ accession, Zhivargo Laing has been pointing out, and that is that joining the WTO will not have a deleterious effect on immigration.
“There is no trade agreement in the world that makes a state or a member of that state give up its right to run its own Immigration rules and regulations and policy objectives.
“General Agreement in Trades and Services (GATS) which has provisions on investment, clearly stipulates that is shall not apply to measures affecting natural persons seeking access to the employment market of a Member, nor to measures regarding citizenship, residence or employment on a permanent basis.
“It also does not prevent a Member from applying measures to regulate the entry or natural persons into, or their temporary stay in, its territory, including those measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across its borders,” Mr. Chaitoo said.
During the presentation, the Oxford Economics group presented several modules and scenarios that suggested that joining WTO is not the panacea, but showed that there has to be structural and regulatory changes.
Mr. Chaitoo, however, during the question and answer period, when asked to give specifics as to why The Bahamas should join the WTO and more specifically to give example samples of countries that have and the success or failure of such, admitted that one thing The Bahamas does not have a National Development Plan, which speaks to a larger conceptual and policy issue for the country.
“What is the vision of where you want to go as a society, as an economy. I have not found any government documents, any public thing that talks about that.
“For example in most countries you can go and find a 2040 or 2050 sort of agenda, but I am not finding that here. So, it’s unclear to figure out where do the powers that be, between the government and private sector, where do you see this economy going; where would you like to take this economy?
“And, that’s the larger discourse that should take place and inform some kind of new thinking around sectoral focus of whether you want to develop self-driving car or whether you want to develop the blue economy or whether you want to get into pharmaceutical research, and that discussion, I think, needs to happen, but that’s outside the remit of what we did,” Mr. Chaitoo said.
Lloyd Barton, Associate Director in the EMEA Macro Division Consultancy of Oxford Economics and Head of Global Trades, also agreed that there needs to be decisive structural reforms.
The country ranks 118 on the World Bank Ease of Doing Business, and with a high GDP per capita, it ranks below some of the low income countries in the region, Mr. Barton revealed.
The consultant group said that joining the WTO does not solve the structural problems of the economy, but three things support The Bahamas’ accession: predictability, transparency and consistency.
