Tourism & Anchor Projects in the Bahamas

by Larry Smith

There's been a lot of of caterwauling lately about big foreign resort investments on the out islands. Most of us know them as anchor projects.

Some argue that the hotel industry is just an updated version of the master/slave "plantation economy". Others say our birthright is being sold out. And still others worry about the thoughtless destruction of islands that will never be the same again.

Here are some representative comments gathered from Bahamian news and discussion sites recently:

"(Christie's) entire economic outlook is pinned to these poorly planned mega-resorts. Deals that benefit nobody but the greased hands and developers. These deals are made possible by (giving) away Bahamian land that is your birthright."

"Until we stop looking at this as an FNM- or PLP-created problem, it'll never change. We are bred and educated to be someone's waitress, butler, housekeeper, cook, etc. How can we break that glass ceiling?"

"The government needs to get out of this current economic model which involves the cheap sale of land. Not everyone's calling is to be a taxi driver, housekeeper or straw vendor."

"Both the government and the opposition need to look at the best interest of the country and not their own personal gain. This current model is deeply disturbing because there will be no land in the future for Bahamians to live and invest - just enormous hotels and resorts that facilitate the oh so cherished jobs."

"Don't let the FNM and PLP blind you by this outcry about selling out the Bahamas. Both parties would do it regardless. Instead, (they) should be creating ways for Bahamians to get in on the game. It's amazing how the "black" Bahamian elite keeps us polarized on insignificant issues while they go on setting up their lil under the table deals."

"Certain members of the government think the natives are too stupid to catch on, or too desperate for investment to care. They'd rather give land to companies that are blatantly using the Bahamas!"

The clear implication is that the Bahamian economic model - our national way of making a living - is fatally flawed. In this view we are selling the entire country to foreign speculators and resigning ourselves to be a nation of servants and bootlickers.

The Tourism Track Record

Over the last half-century tourism has produced enormous economic growth and employment for Bahamians. It is already the world’s largest industry - and in this new century it will become the largest the world has ever known.

It began in our islands with a just handful of winter visitors, But after the Second World War the numbers rose from 45,000 in 1950 to 342,000 in 1960 to 4 million today. And by most accounts this has produced one of the most remarkable and resilient economies of any small state in the world.

Although tourism is often referred to as a "fickle" industry, it has produced sustained growth and unprecedented progress for Bahamians. Even when an American recession in the late 1980s, combined with Bahamian government corruption and mismanagement, sent the economy into a tailspin, the foundation held firm.

At the time, many thought we might never recover. Foreign investment evaporated, unemployment rose to almost 15 per cent, hotels closed, and morale plummeted. But the fundamental strength of our major industry was such that the Bahamas continued to outperform others in the region.

Today, we earn almost $2 billion from this industry - money which pays the wages of some 40,000 Bahamians in hotels, shops, tour companies, restaurants and other services. And these are not just low-level jobs. This industry - like most others - produces a full spectrum of employment opportunities—from unskilled to semi-skilled to professional.

Nationally, the benefits are on a similar scale. Tourism contributes more than half of all government revenues—the money we use to build roads, hospitals and schools and to pay our hardly working civil servants. In fact, it accounts for 70 per cent of our gross domestic product - the country's total output of goods and services. There is no doubt that tourism has transformed the Bahamas into a modern state.

The policy of siting anchor developments on major islands dates back to the Pindling era, (when the Family Island Master Plan was drafted) and was hotly pursued in the latter years of the Ingraham administration (once investor confidence had been restored).

Like a major tenant that helps carry a shopping mall, the idea is for investors to build residential/resort complexes that will provide basic infrastructure for small communities and spur their growth. These projects are thought to make the best use of our limited resources.

The Anchor Project Track Record

In 1997, a Florida developer launched a huge residential resort on the tiny island of Bimini, turning it into a virtual suburb of Miami. Following howls of protest about the unnecessary destruction of important ecosystems, the project was scaled back.

But it continues to transform Bimini into a Florida gated community, destroying the very assets that it disingenuously promotes. Anyone going to Bimini today cannot help but be shocked by its overwhelmingly inappropriate footprint. It is perhaps the most tragic example of mistaken development in our history.

In 2001 the Hotel Corporation sold almost 11 acres of land at Ocean Bight in Exuma to the Emerald Bay Resort Company for $2 million. These developers went on to build a $70 million community, including a luxury hotel brand and all the usual upscale amenities.

Emerald Bay opened three years ago but has yet to achieve critical mass. Reports are that few homes have been built and the hotel is up for sale. According to a recent Tribune article: "the costs of infrastructure at Emerald Bay, such as roads and all the utilities - paid for at least in part by the developers - coupled with the high operating cost environment both inside and outside the resort, have made it difficult for the owners to generate a return on their investment."

On Abaco, the $100 million Winding Bay Club near Cherokee was launched at about the same time that Emerald Bay opened. A couple of years later, the Rum Cay Resort Marina began work on 900 acres of old plantation estates in the southern Bahamas.

And the government recently agreed to a joint venture with Arab investors involving 10,000 acres of Crown land on sparsely populated Mayaguana. This project promised $1.8 billion of investment over 15 years, and has yet to get off the ground.

But the multi-million-dollar Baker's Bay resort development approved in 2005 on Great Guana Cay in the Abacos was the first project to arouse well-publicised resentment in local communities.

According to Freeport lawyer Fred Smith, who has spearheaded a series of legal actions against big-time foreign developers: "Are we ready to accept the complete effacement of what is left of the old Bahamas in the Family Islands? Do we really want everywhere in the Bahamas to become an Atlantis?

"Every day that we don't have a plan or vision for our future, one more piece of our culture, our heritage, our environment and our marine and land resources is irreplaceably lost and disappears into the hands of foreign and Bahamian developers, whose only goal is to get in, make money and go on to the next project."

A Vision for the Future

It's becoming clear to policymakers around the world that development goals cannot be met without protecting the environment. Natural resources are under pressure from poorly planned and difficult-to-sustain development. And in the Bahamas, such decisions are made in a vacuum, with no real understanding of the carrying capacity of either the infrastructure or the environment.

And since the government controls 70 per cent of our real estate and approves all investment proposals – this is an important issue. In fact, we borrowed several million from the Inter-American Development Bank years ago to come up with an integrated land use policy to address these issues. As with most other things, it is still in the works.

Many commentators are concerned that the influx of foreign speculators will squeeze Bahamians out. They complain about the loss of waterfront and hilltop sites throughout the country. They also object to the grant or concessionary sale of public land to help investors build developments that cater to other wealthy foreigners.

The late George Mackey (chairman of the Antiquities Corporation at the time of his death) spoke about an area on Acklins that was recently acquired by a foreign developer.

”Those hills are some of the highest elevations on the island and clearly ought not to be made inaccessible to Bahamians...if we are not careful all those lovely beaches will most likely be gradually acquired in like manner...then, a few decades hence, the natives of Acklins will be without sufficient beaches, just as we are now in New Providence.”

"A bird in a golden cage is no less a prisoner," Mr Mackey said. "And without more balance and control, this will be the plight of future generations." His clear implication was that Bahamians would become slaves again in their own land.

Well, let’s take a look at Abaco. One of my recent ancestors lived in a three-room shack on a postage stamp plot of land at the peak of the Hope Town dune – with a fabulous ocean view. He was a seaman (what else?).

Back then Hope Town was a backwater, so in the 1940s he sold the shack and moved to Nassau. The old homestead eventually ended up in the hands of the Kraft cheese family, and realtors say it is valued at close to a million dollars today. But to my great grandfather it was almost worthless. No doubt he would have considered himself a bird in a cast iron cage.

The point is this: Hope Town is now a very desirable place to live. But it wasn’t always like that...people invested over the years to take advantage of changing circumstances. Luck, hard work, the environment and proximity to the huge American market had a lot to do with it.

But surely it is our mutual responsibility to develop and articulate a rational policy that addresses the key issues discussed here honestly and transparently. And that means accepting the obvious - that the Bahamas requires large amounts of foreign capital to survive as a modern state.

This does not mean tolerating the destruction of tiny island communities like Bimini. Rather, it means the enforcement of up front guidelines, the setting aside of marine reserves and public spaces, and the choice of appropriately scaled development - all within the context of a national land use plan.

Such policies have been on the table for decades. And experts say they are absolutely necessary for orderly and productive development - particularly to avoid the issues that critics refer to. The problem is that this is too much like work for our politicians, who can’t seem to articulate an intelligent way forward.

Their only interest, it seems, is to to create more opportunities for supplicants to come to them for approvals and favours. As the election approaches, here is what the two major parties have to say on the matter:

"The government (does not) fully understand the importance of land use in the creation of wealth, nor does it understand the repercussions of the disposal of public and other lands outside of a considered, environmentally sustainable plan." - Free National Movement.

"There has been no give-away of Bahamian land by the PLP. All of the investments have been carefully prescribed by joint ventures to keep the interests of the Bahamian people uppermost if Crown land was involved. The noise in the market is only the sound of the FNM’s guilty conscience." - Progressive Liberal party.

The plain fact is that most out island developments have failed throughout our history. Even in Freeport where, as Fred Smith notes, "there are miles of beaches and paved roads, where sanitation, water, telephone, cable, internet and electricity facilities are already in place in a master plan designed for 300,000 people...and where there are thousands of unemployed Bahamians in the construction, hospitality, and tourism field available for work. "

According to one commentator on the Bahama Pundit web site, the solution is simple: "Want better jobs than what the tourist industry offers? Let foreigners start businesses in desirable sectors (tech, pharma, logistics, whatever) with no restrictions on hiring 1st-world foreign workers, and no requirement for a Bahamian investment partner.

"These businesses will bring in a few high-salaried experts, and fill the rest of their slots with Bahamians. Bahamians will learn the skills to compete globally through hands-on work. Eventually some of them will start businesses of their own.

Of course, that would mean re-tooling our education system to produce employable techies. As the commentator said, "there is no easy way to get ahead, no way to leapfrog to prosperity. It is work, hard work."

Comments

[fred smith]

Great article and good quote from that Fred Smith fella! keep up the good work!!

[Howard W. Thompson, Attorney at Law]

Thanks for putting partisan politics aside on this issue! You focused on very important matter in your article that needs to be addressed and for that I commend you Mr. Smith.

It is well written (as always) and right on point. Especially concerning the matter of diversifying our economy (“tech, pharma, logistics etc”.

[Kimberly]

Uh oh ... I just read your disclaimer that linkbacks to the site qre allowed, but that there's to be no reposting without permission. May I in hindsight have permission to repost your excellent tourism and anchor projects commentary at Briland.com, to complement the development conversation/battle already underway there? I included a link to the site.