Speeches & Op-Eds
How the United States sees The Bahamas
Remarks at the 2006 Bahamas Chamber of Commerce Globalization Conference
April 25, 2006
Mr. Moderator, Ambassador Joseph, Ambassador Li, High Commissioner Agrawal, it is a pleasure to be in such distinguished company today. To the Chamber, with whom the U.S. Embassy works very closely, thank you for the invitation to participate in this high-powered gathering of the best business talent in The Bahamas. As is your custom, you have pulled together an exceptional agenda, and are doing much to spark discussion of some of the most critical issues facing business and government in today's fast-changing world.
I understand my task today as being to offer an American perspective on how the United States views the Bahamas, and I will endeavor to do so with the caveat that in a country as big and diverse as the United States, there is no single perspective. I will offer my thoughts as the deputy U.S. representative to The Bahamas, drawing on the broad range of contacts and observations I have heard since coming to your fair shores last year.
Globalization and Competitiveness
I am pleased to see that the Chamber has targeted its conference this year on "Globalization and Competitiveness: The 21st Century Bahamas." This theme lines up closely with how the United States sees its role in and goals for the Caribbean region. In fact, the focus of the recent meeting here one month ago between Secretary of State Rice and her Caribbean counterparts was precisely to assess how the United States could work more closely with The Bahamas and other countries in the region to enhance the region's competitiveness, productivity, and prosperity.
Before offering my observations on how Americans view The Bahamas, I wanted to step back briefly to share my understanding of the term "globalization" and the concept of competitiveness.
Too often, globalization is used as a convenient catch-all phrase for describing anything and everything about the modern international economy, and too often everything we don't like about it. In reality, the world economy has been global for centuries. Trade routes have spanned the seas, and overland trade routes carried goods from Asia to Europe and back again. What is different today is the rapidity and intensity of these global contacts and exchanges, and who is driving the contacts.
Tom Friedman in his superb book, "The World is Flat," which I commend to all of you, argues that there have been three eras of globalization: The first began in 1492 when Columbus set sail for The Bahamas. Nation states were the principal agents of this globalization, driven by imperial ambitions and religious fervor. Success was determined by how much brawn, muscle, or steam power you could deploy. The second began around 1800, and was lead by multinational companies, who built global markets and drew on global labor, fueled by lower transport and then communications costs. The third phase, according to Friedman, began around 2000, and is marked by the newfound power of individuals to collaborate and compete globally. As Friedman notes, it is no longer horsepower and hardware driving development, but software and a global fiber optic networks that makes us all neighbors. Today's globalization is not only shrinking and flattening the world, but truly empowering individuals -- for good, as in the case of Indian software developers, or bad, as in the case of terrorists.
To stick with Friedman a bit longer, he sees the defining characteristics of the global economy today as a "triple convergence" of new players, on a new playing field, developing new processes and habits for horizontal collaboration. This convergence will allow people in developing countries to participate in the global economy in ways that would have been unimaginable a decade ago.
For businesses and governments, the factors that have traditionally determined where a business would be located now matter less than ever before. Goods and information can easily move from place to place. Producers can sell their products globally without being constrained by the size of their domestic market. Managers can network their production chain across countries and across time zones. Businesses and individuals can 'go global,' and governments must not only keep up, but also reduce barriers for their people and businesses to participate in and take advantage of this fast-moving global economy.
The Bahamas Today: An American Perspective
So what does all this mean for The Bahamas? Let me begin by offering my American perspective on what Americans see when they look across the Florida straits to The Bahamas and where I believe The Bahamas is in today's "flat" world.
For most Americans, the Bahamas is a recognizable, attractive tourist destination, whose turquoise seas and warm year-round weather draw 4 million American visitors a year to your shores. The Bahamas is a close, safe and comfortable destination -- a good escape for a long weekend or an appealing retreat on a secluded beach in the Family Islands. We see a people with close cultural and family ties, whose history has long been intertwined with our own.
Americans also see a country that shares its democratic values, its respect for true human rights -- the right to worship freely, to assemble, to speak freely -- even to criticize the government without fear of retribution or arbitrary arrest, a country with an active and independent media and an impartial judiciary where the right to choose representatives through free and fair balloting is cherished.
For American investors, the Bahamas is seen as a prosperous, well-developed country that offers an attractive destination for tourism-related development. The dependable infrastructure, educated English-speaking workforce, generally safe environment, and low taxes give it an appeal that continues to generate new development across the island chain. Many of the basic challenges found elsewhere in terms of infrastructure, education, or legal institutions are less pronounced or even absent here. There is a base to build on -- a sophisticated financial sector, established commercial shipping lanes, a widely accessible fiber optic communications network, and an extensive network of roads (even though you insist on driving on the wrong side of them.) All of those elements give The Bahamas an important head start over countries that lack them.
For Americans in the United States government such as myself, we see The Bahamas as a strategically located country - in fact our closest neighbor in what forms our "Third Border." We see a leader within the CARICOM group of countries -- a country that is open to and willing to work with us to address common problems. For example, when we look to the Bahamas, we see one of the closest and most successful law enforcement partnerships we enjoy anywhere in the world through Operation Bahamas Turks and Caicos (OPBAT), which has succeeded in dramatically reducing the flow of drugs though our countries. We see commercial ties running to the billions of dollars as businesses trade with each other and invest in each other's country. We see a partner committed to the safety of the millions of American tourists who visit each year, and to working with us to combat terrorism. In short, we see a country that shares our values, goals, and interests, whose success or failure could directly impact the United States -- a partner that is doing well in the flat world, and who we want to work with to do even better. Perhaps we could give rise to a new slogan: "It's EVEN better in the The Bahamas!"
The Challenges for The Bahamas Today
With every opportunity, comes challenge. The many advantages The Bahamas enjoys are not enough to guarantee The Bahamas a prosperous future. Other countries have similar advantages, or are developing them. Now that the world is flat, those countries -- even if located half a world away -- are directly competing with The Bahamas for investment projects, business opportunities, and tourist dollars. If The Bahamas -- or the U.S. for that matter -- stands still, it could lose its competitive advantages.
Friedman observes that when developing countries start thinking about the challenges of the 'flat' world, they need "to engage in some brutally honest introspection." They need to ask to what extent my country is advancing or being left behind? Are we adapting to and taking advantage of new opportunities? Staying ahead in today's economy takes constant fine-tuning in some areas and energetic overhauls in other areas, and every government must concern itself with the reality of the business environment it offers to investors both foreign and domestic.
Every region and country in the world has some natural advantages and disadvantages. The Bahamas is blessed with its beautiful seas and beaches, and its proximity to the biggest tourist market in the world. Its many islands are also a challenge that requires providing basic services and schools in many disparate locations. Regardless of these, The Bahamas has to be sure it is undertaking what Friedman calls "reform wholesale" -- upgrading infrastructure, regulatory institutions, education, and culture (by which he means how the country and leaders relate to the world). The goal, he said, is to enable the greatest number of your people to have the best legal and institutional framework to innovate, start companies, and become attractive partners for those who want to collaborate with them from elsewhere.
In 2004, the IFC (International Finance Corporation) conducted a business survey based on five questions: How easy or difficult is it to:
1) start a business in terms of local rules, regulations, and license fees;
2) hire and fire workers;
3) enforce a contract;
4) get credit; and
5) close a business that goes bankrupt.
Countries where these are easy are on the road to adapting; countries where these are hard, have work to do. For example, the IFC found that it takes two days to start a business in Australia and 203 days in Haiti; 7 days to enforce a contract in Tunisia and 1,500 days in Guatemala.
In real terms, therefore, modern business needs modern governance to thrive. If the procedures for setting up and running a business are complicated and cumbersome, then very few businesses will be set up. In too many Caribbean countries, structures of governance in use today are little different from those inherited from the colonial era decades ago. Government structures must be nimble and transparent. E-government, for example, is transforming the way government can operate. An investor can log onto a computer from anywhere in the world and find out if a shipment has cleared customs, or if a work permit has been processed, or if a government contract has been put out to bid. Transparency forces government to be more responsive and efficient, and minimizes opportunities for corruption.
Modern governance and aggressive reform can also ensure that The Bahamas maintains the vigor and competitiveness of its traditional tourism and financial services sectors. The Bahamas, though well-endowed, does not have a monopoly on sun and sand. Moreover, the quality of service is becoming ever more important to the discerning (and high spending) traveler. The tourist sector must therefore constantly compete with other destinations in terms of quality, cost, and service to keep attracting millions of visitors each year. It must also be sure to preserve its environmental riches by improving its treatment of waste and preventing dumping of garbage along the shores. And, it must be attentive to preserving and developing the cultural riches that make The Bahamas unique, as tourists don't travel to see the same things they can find in their home country.
Similarly the financial sector must remain well-regulated to facilitate the legitimate provision of its services to its many clients. The future of financial services is in well-regulated, stable, and reliable destinations, as corporations and individuals alike seek to invest and move funds through recognized financial service providers.
At the same time, new sectors and new opportunities are presenting themselves everyday, and merit serious consideration. Diversifying the Bahamian economy into areas like energy, including Liquefied Natural Gas, data storage, and high technology, offers promise that could pique the interest of investors and generate new sources of jobs, income and government revenues.
A Solid Foundation for Continued Close Ties
As The Bahamas moves forward in this ever more competitive world, it also has the advantage of having a strategic partner in the United States that is both grappling with the same pressures and willing to work with its neighbors to ensure their success -- a partner that shares its values and shares ties of family and geography.
Secretary Rice's recent visit reinforced the United States' commitment to deepening and broadening our relationship in ways that advance our positive agenda of cooperation. In fact, no sooner did she get back to Washington than she convinced the U.S. Trade Representative to meet with CARICOM trade ministers to discuss ways to deepen regional trade and investment ties. A meeting of the U.S.-CARICOM Trade and Investment Council will be held later this year to discuss ways to facilitate and expand trade and investment. The Secretary has also committed to host a Conference on the Caribbean in Washington in the coming year that would bring together government and business leaders from our countries.
Similarly, Governor Jeb Bush's visit in February highlighted the potential for closer ties with Florida, encompassing educational exchanges, environmental partnerships, and cooperation in energy and disaster preparedness. We thank the Chamber for hosting the Governor so superbly during that visit, in which he too stressed the importance of government and economic reform and transparency. Florida is also strongly committed to building closer ties with the Bahamas.
And as we move forward together to seize the opportunities presented by globalization to build a more secure and prosperous future for our people, we also need to be cognizant of our larger purposes as nations. For it is these purposes that underpin any economic success we may enjoy and ensure that we will continue to enjoy them in freedom.
Our larger purpose as a nation on the international scene, as President Bush has often emphasized, is to promote the dignity of mankind" rooted in mankind's God-given rights to worship and think freely. That is why, for example, the United States has publicly pledged to support candidates for the new United Nations Human Rights Council that share a genuine commitment to human rights, and why we have asked all UN member states to make a similar pledge.
The UN Charter and the Universal Declaration of Human Rights clearly delineate the inherent human rights and fundamental freedoms of every person -- rights such as freedom of conscience and religion, of assembly and expression that are instantly recognizable to every Bahamian. That is why we see the Bahamas as a true partner, one that shares our commitment to fundamental human rights and the dignity of mankind. A drive in any direction in New Providence makes clear that The Bahamas is a country that believes its citizens should be able to worship freely, without government interference or restriction, and where people can write freely and speak freely.
Conclusion:
At the end of the day, it is these larger purposes and these fundamental values that will ultimately determine the success or failure of our economies and our societies. As Friedman notes, the only countries that will ultimately be successful in this new era of globalization are those that are open and free, because only those countries will have new ideas, new technologies and the people behind them flowing to their shores. Our challenge is to work to shape globalization, make it more compassionate and compatible with the human dignity we both treasure.
Globalization offers unprecedented opportunities to forward-looking countries willing to embrace new ways of doing business. To the American observer, The Bahamas, by virtue of its core values, strong democratic traditions, openness to the world, physical endowments, and the strength and education of its people appears well-positioned to take advantage of the opportunities of our global world, particularly if it takes the steps needed to enhance its competitiveness and increase its openness.
As you move forward, you can always count on the United States to be at your side as your partner of first resort. We are committed to building on our foundation of shared values to create a more secure and prosperous world for Bahamians and Americans to enjoy together.