The 'Prostitution' of Development in the Bahamas

by Larry Smith

"This is how the islands from the shame of necessity sell themselves; this is the seasonal erosion of their identity, that high-pitched repetition of the same images of service that cannot distinguish one island from the other, with a future of poiluted marinas, land deals negotiated by ministers, and all of this conducted to the music of the Happy Hour and the rictus of a smile." -- Derek Walcott, Fragments of Epic Memory.

The stark contrast between lavish government incentives for "huge hotels" and the starvation of Caribbean culture by "stupid" politicians ,"threatens us with intellectual extinction", according to St Lucian poet and playwright Derek Walcott.

Walcott, who won the Nobel prize for literature in 1992, provided star material for the Construction Seminar Group's biennial event at the College of the Bahamas last week. Although pushing 80, deaf and visibly frail, he is a master of the epigram - a concise, clever way of expression - and still wields a cutting wit that he likens to Don Quixote's lance.

In style and appearance Walcott resembles Bahamian songwriter Eric Minns. But he was able to draw a standing room-only audience of the local literati at the COB's Anatol Rodgers lecture the night before the Construction Group's workshop. At both events he pushed a lifelong argument that nation-building requires more than just big, foreign-owned hotels that steal the landscape.

"If they were a little more daring they could use art to make money. Tourists have nowhere to go, nothing to fulfill themselves in terms of the local experience. We should produce more artists as an economic proposition," he said. "There's a lot of work in art, but our governments don't accept that. They think art is just fun, a hobby, but it's an industry."

Tripping off the names of illustrious Caribbean writers and artists, Walcott revelled in the regional output of genius: "And if the arts were endorsed," he added, "it would be even more phenomenal. At 80 I feel betrayed by what has happened in the Caribbean in the arts. In St lucia we don't even have a theatre or a museum because the people we elect don't think they are necessary."

Walcott, who is also a painter, is especially angered by the fact that "every view is now on sale in the Caribbean". This is something he has referred to over the years as "prostitution" in numerous lamentations on the erosion of West Indian culture. And this was - in a way - the theme of the Construction Seminar Group's event, which provided a hard-nosed economic backdrop to Walcott's dramatic prose.

The CSG was formed by local engineers Hammond Rahming and Lelawattee Manoo-Rahming to keep contractors, engineers and architects up to date on industry trends, whilst addressing key development issues. Last week's seminar focused on sustainable growth, with speakers like former finance minister James Smith, COB professor Olivia Saunders, engineer Ray McKenzie, Contractors Association chief Steve Wrinkle, and KPMG Bahamas managing director Simon Townend.

Smith, who presided over one of the largest expansions of foreign investment in Bahamian history from 2002 to 2007, now questions whether these capital flows connected to big real estate projects were of much use to the country's long-term development.

"Our policy has always relied on tax concessions, requiring very little from investors in terms of linkages with the domestic economy," he said. "The evidence suggests we should focus on improving the quality of our labour force, and upgrading infrastructure and public institutions to add value to the economy. We need to apply a consistent cost-benefit analysis to each project. We should liberalise, deregulate and make things more transparent."

Breaking down the country's work force of 185,000, Smith said the government employed 25,000 people with hotels absorbing another 13,000. The rest of us work for small and medium-sized businesses in the private sector that are often scorned and overlooked, although Smith admitted the return from stimulating domestic investment could be greater than that from foreign investment.

College of the Bahamas business professor Olivia Saunders took this train of thought to its illogical conclusion, arguing for a revolution as the only way to achieve greater economic benefits for Bahamians:

"It is often said that the FNM sold out the country and the PLP outdid them, but foreign investors have owned and controlled the commanding heights of our economy ever since the Royal Victoria Hotel was built 150 years ago," she said. "We have to ask what purpose foreign investment serves. Wealth never lies in jobs, it lies in capital, which is the profits that don't belong to us."

Saunders traced our current economic model not to Stafford Sands but back to the 1920s to promoters like Harold Christie, who pioneered land development. "Do the benefits of foreign investment exceed the giveaways?" she asked. "We don't know, but perhaps someone in the Office of the Prime Minister does. I say we get very little because most of the capital goes right back out in profit-taking or to pay for imports."

Arguing that the country's persistently high unemployment rates have not been relieved by more and more foreign investment, she pointed to back-room deals and the absence of any requirements for investors to follow as evidence that our current business model was detrimental to long-term development. "But we can't change our economic regime without changing our whole political and social structure."

Contractor Steve Wrinkle had a different take, noting that our dependency on tourism and foreign investment is a fact of life that is unlikely to change: "The question is how do we maximise our return on foreign investment, and the simple answer is that we have to participate in the development and operation of projects. But this means raising the standards of our local industries."

Engineer Ray McKenzie agreed, pointing to the reality that the small number of Bahamians, and the even smaller number of wealthy capitalists among us, are simply incapable of driving the economy at the levels that are needed. He also acknowledged a significant trickle-down effect from foreign investment.

"Twenty years ago we had only six engineering firms, and now there are over 20, they focus on a much broader scope of business, and up to 75 per cent of their income comes from foreign projects." Still, he argued, there could have been much more growth over those 20 years, "and if we manage things in a more thoughtful way we can do better going forward."

Reviewing current economic data, accountant Simon Townend noted that foreign investment in the region had accounted for as much as 15 per cent of GDP in recent years, mostly due to large real estate and tourism projects, but these capital flows had dropped by a startling 40 per cent over the past year, producing a "sizeable economic contraction"

Regional economies are now undergoing "huge checks and balances", Townend said. These have taken the form of major financial collapses (like CLICO), pressures on offshore financial centres from Group of 20 countries, the collapse of external financing for development projects, and a 10-15 per cent fall-off in tourism, which is not expected to rebound in the Bahamas before 2013.

In fact, the IMF is forecasting a prolonged recovery for the Caribbean, with a return to pre-crisis growth rates seen as unlikely. So in the medium term, Townend said, public spending must be more focused and policies will have to work harder in order for governments to maintain some financial headroom.

"There will be a slow recovery in tourism as people need to rebuild equity and confidence," Townend said. "Without second home buyers there are no big real estate projects, and we've lost all the banks that were financing these projects anyway. There is still vulture-equity around looking to pick up deals that have fallen apart, but that is not the type of investor we want."

He said the global crisis had increased already high public debt levels, even as revenues declined. As a result, governments across the region were looking for alternative financing models, with the Bahamian energy and communications sectors already being liberalised. He said that public private partnerships may soon be forged to build a new port and hospital in Nassau, with schools perhaps next on the list.

"Leaving aside government infrastructure projects we think there will be a very slow recovery for foreign investment," he said. "And that will be dependent on our being more competitive in tourism and financial services."

These issues were discussed in a paper on development impacts presented by the CSG last year at a conference in Trinidad and Tobago. The main conclusions drawn were that local professionals lacked sufficient capacity to participate significantly in big complex projects, and the government did not encourage such participation anyway.

The CSG pointed to the lack of consultation between government and local professional bodies representing the built environment, as well as to a labour force woefully unprepared to work on major projects due to a lack of skills. More technical training and the setting of professional standards were seen as key to gaining increased benefits from foreign investment projects.

As Derek Walcott put it last week, "every city depends on tourism, but we are so small, and it is the imbalance of scale that is so crucial. But governments are here to provide more than huge hotels." In other places Walcott has talked of the "obscenity of greed", the "prostitution of development" as well as bribery and corruption when speaking of foreign land grabs that offer little for the local economy beyond low-paid service jobs.

But, as his College of the Bahamas interlocutor Ian Strachan has already observed in print, "Tourism has afforded Bahamians a level of material prosperity envied throughout most of the region, and this, of course, stands as its principal virtue...(But) other than increased spending on marketing and continued recruitment of foreign capital, how has the Bahamian government sought to secure the future of this industry."

It may be Walcott's role to use strong words to paint stark images of what is wrong with development in our island nations, but it is our job to come up with realistic solutions to prevent the loss of cultural identity and to exploit the opportunities that foreign investment can bring.

Comments

[Rick Lowe]

Good stuff.
I like your closing paragraph.
Should Mr. Walcott to offer alternatives to sustain economic growth?
Other than saying the government should promote the arts.
The artists should promote themselves like everyone else has to do locally to survive.
Maybe people don't want what we offer in that regard?

[las]

Just about every business here is protected or supported to some degree. I am not sure where we should strike the balance in terms of the arts, but I think the end justifies some means.

[Erasmus Folly]

@Larry
As always, well written. I agree with the sentiment and thrust of Walcott's polemical stance, but, taken literally, it is impractical. However, the points are very valid and should 'temper' our actual positions on development. For example, Baker's Bay is a complete disgrace, considering the pristine natural beauty of the Abaco's. Any development should attempt to truly 'harmonize' with the land - especially on fragile cays. I accept that main land New Providence, Grand Bahama and probably Great Abaco will get a variety of 'heavy' development, but, if we are smart, we can preserve more than 90% of the Bahamas and live there still - if we do it sustainably and right. Isn't that the kind of country, we want? I fully accept Atlantis as the engine of our growth, but who the hell wants an Atlantis on every island? This anchor idea is asinine! Keep up the great work!

[Edward Hutcheson]

Perhaps if we see most of the investment for what it is, we would exercise more wisdom regarding who or what we let in.
Mr.Smith's admission about the tax concessions that fund most investments, should wake us up.
Maybe the burgeois can have their cake and eat it too, but there is only so much land that can be given away. How many anchor projects and well dressed parasites driving around in late model vehicles can a culture stand? But they attend Junkanoo with the rest of us so, go figure

[Erasmus Folly]

Well dressed parasites? This isn't rational either. We need FDI and the foreign investors that come with it. Calling them or the tourists they bring parasites is disingenuous. It is our politicians and the lawyer class who function as the parasites in this relationship. They are our representatives and they pass laws, thus they have the power to determine the vision and scope of our development. Baker's Bay didn't happen without a Bahamian saying... hmmm... yes, that is a good idea. Our politicians have to BELIEVE in sustainable development, have a VISION for it and then make a DEVELOPMENT PLAN based on it! They simply don't have this: PLP or FNM and their 'petty politics' is destroying this country's opportunities!

Don't hate the player; hate the game. If we reform our game, then everyone benefits: Bahamians and foreigners! Nothing wrong with that, but we, as a nation, as a people and as a culture must take responsibility for that by demanding accountability and transparency from our politicians! Labelling foreigners and tourists as 'parasites' is counter-productive in the extreme. I assure you, this country falls apart without them. People need to think realistically as well!

[larry smith]

And let's not forget the role that corruption plays in the approval of these big projects.

There were at least two major contenders for what eventually became known as the Baha Mar project. Why was one favoured over the other? We may never know because of the lack of transparency.

[Erasmus Folly]

Totally agreed Larry. In a democracy, the people get the government they deserve. This is a sad tautology that cannot be denied. If we don't demand better, we have no right to expect better. PLP and FNM are both garbage in my view and completely unable to solve the problems facing this country. The only difference between them is the FNM gets a few of the things it promises done. The PLP promises everything and delivers nothing. Neither is good enough in 2009!

[Rick Lowe]

Hi Erasmus Folly:
Should Mr. Walcott offer alternatives to sustain economic growth?
What alternatives are we offering?
Do we presume that if get a new crop of politico's things will be different?

[Erasmus Folly]

Walcott, as a poet and writer, does not need to do the job of the economists, politicians and business people. The artists like him are there to help us preserve a workable, creative, dynamic and practical culture. They are there to criticize and provide insight and remind us there is more to life than just 'economic survival': that economics needs to serve humanity - not the other way around. I don't believe that a 'new crop' of politicos will make a difference, but I do believe that an energized citizenry that takes a stake in its own future can make a difference. We have to hold the fire to the feet of our politicians and demand transparency and accountability and freedom of information - that is the only way things can change. If that means a 'new crop' from time to time, so be it. Politicians mean little to me. They generally get in the way and serve their own interests, in this country, that is especially true. Ego is the name of the game here. The intellectual class (from whichever walks of life) have to demand more and speak vocally about the need for transparency, accountability and sustainability in the vision of the future for this country. Otherwise, all is lost.

[Rick Lowe]

So what alternatives are we offering Erasmus Folly?

[Erasmus Folly]

It isn't about that Rick. We lack a critical mass of an informed and responsible citizenry. Awareness of a 'serious problem' must be raised first, then you can start agitating for this or that policy. The 'alternatives', for lack of a better word are: increased investment in education, increased political emphasis in education, a greater call for government transparency via a Freedom of Information Act and a serious move towards ACCOUNTABILITY. This is where REFORM is seriously needed. To fund education, hammer through a National Lottery that goes to an Education Fund that is distinct from the Public Treasury. Start emphasizing, over and over, the need for REAL RULE OF LAW and the enforcement of the laws on our books. We have to energize 'civil society' in order to reform government. If we don't, the PLP and FNM will play pass the potato for the rest of eternity and laugh all the way to the bank, while the country falls apart. You want more alternatives, suggest them, but this isn't about that at this stage - this is about screaming at the top of your lungs - THE EMPEROR HAS NO CLOTHES. After that, you can make some clothes.

[Erik]

Larry, thank you for the great article. You posed this question, "...it is our job to come up with realistic solutions to prevent the loss of cultural identity and to exploit the opportunities that foreign investment can bring."

I think that we can look at other Caribbean examples for our answers. In short, everywhere where you have central government having a greater say over local communities...everywhere where megadevelopments are the strategy, everywhere where foreign investment comes in big doses for big projects, you completely destroy the culture, and sometimes the environment too.

I think the answer is in sustainable, small scale tourism, grown locally and slowly. This is the blue chip stock of Caribbean tourism, not the Worldcom stock, but it works. On my blog, I list so many examples of other Caribbean nations that are facing the same thing as Guana and Bimini...and the result is always a ruined economy. The facts lie in the history of other islands. Just go visit the southeast shores of Dominican Republican, where empty hotels line the beaches, caterpillar trucks have sunken in the mud.

Abaconians need to have control over the future of development. They know best what is right for their children and their environment. Small and sustainable is one answer, but taking control back from federal government is important too.

Erik
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