by Felicity Johnson
by Felicity Johnson
The Baha Mar saga is an epic and cautionary tale. It is a story of grand ambition, hubris and spectacular miscalculations by three major players now desperately seeking to rescue their reputations amidst the unravelling of one of the biggest single tourism projects ever in the Western Hemisphere.
While none of the players will come out as clear winners, the clear losers from the fallout of the unravelling are the Bahamian people who are watching in horror and anxiety as the country heads toward a possible recession and the potential loss of thousands of jobs.
And while all of the players bear responsibility for the current mess at Baha Mar, the party most responsible for protecting the country’s interests is the government of the day headed by a prime minister even more delusional and grossly incompetent than even his fiercest critics imagined.
The Baha Mar saga will be retold in books and studied in university classrooms. It is a case study in international relations and high finance in the 21st century, bringing together a small country, the Chinese state and a foreign investor in a relationship which began in mutual accord but that descended into recrimination amidst misunderstanding and misjudgement, and emerging questions of greed and mass corruption.
by Larry Smith
by Larry Smith
Back in 2006 most analysts believed little would change in the immediate aftermath of Fidel Castro's departure as Cuba's pre-eminent leader.
At the time, Fidel had just stepped down as president due to failing health, ceding power temporarily to his younger brother Raul, the armed forces chief. Just two years later - in 2008 - he made his resignation permanent.
Two years after that, I visited Havana and had this to say: “As the largest island in the Caribbean, Cuba has mountain ranges, fertile plains and valleys, and a 2300-mile coastline with deep harbours, coral islands and miles of beaches. Cuba also offers a proud history and culture blending Spanish and African influences."
And Havana - with a population of over 2 million - is the Caribbean's major metropolis, as well as Cuba's greatest attraction. In 2010, Cuba already received a million more stopover visitors than the Bahamas. It now has over 60,000 hotel rooms (compared to under 15,000 here), and thousands more are said to be on the way.
At the time of my Havana visit, the competitive threat to Bahamian tourism from the inevitable opening of Cuba to the closed US travel market was still years in the future. But those portentous changes are now much closer to reality.
Castro took control of Cuba in 1959 after an armed revolt against a military dictatorship. One of his first acts was to shut down casinos, brothels and hotels, many of which were owned by American organised crime figures.
When foreign businesses were nationalised, the US imposed trade restrictions. And in 1962 the embargo was formalised, preventing most Americans from visiting an island which is less than 100 miles from Florida. Those international tourists who did come were segregated from the general population.
Cuba settled into a defiant role as a member of the communist bloc. But after the collapse of the Soviet Union in 1991, Castro allowed limited reforms to encourage tourism and earn hard currency. The Clinton administration eased travel restrictions, but they were reinforced by the Bush administration in the 2000s.
In 2010, Raul Castro embarked on a long-term reform of the country's political and economic system. And analysts say Cuba looks much different today than it did in 2006, when Fidel stepped down.
An article in the US magazine Foreign Affairs says: “the emerging Cuba might best be characterized as a public-private hybrid in which multiple forms of production, property ownership and investment, in addition to a slimmer welfare state and greater personal freedom, will coexist with military-run state companies in strategic sectors of the economy and continued one-party rule."
Since the election of Barack Obama and the start of Raul's reform process, relations between Cuba and the United States have improved. A few months after he assumed office in 2009, Obama began rolling back the Bush-era sanctions. And last December, he opened up travel to Cuba as much as his executive authority would allow.
Today, travel service providers can arrange trips to Cuba for US citizens without a government license – but only if the travel conforms with restrictions in current law. General tourism remains banned under the embargo.
A bipartisan group of legislators is pushing for passage of a Freedom to Travel to Cuba Act in the US Congress, but the law is stuck in committee and not expected to be enacted. A full lifting of the embargo will probably have to wait until after the 2017 presidential election.
The American Society of Travel Agents strongly supports normalisation of relations with Cuba, estimating that at least two million more Americans would visit the island by 2017 if restrictions were lifted. Last year, about half a million US residents visited Cuba, mostly Cuban-Americans visiting family.
The key point for us to keep in mind is that, even in its present run-down condition, Cuba manages to earn some $2.5 billion a year from 3 million visitors, and it is seeking to double those numbers. Despite an inefficient, government-operated and expensive product, the island has a lot to offer. It is a competitive threat that we should not ignore.
Former Bahamas tourism minister Vincent Vanderpool-Wallace, who is now a private consultant and board member of the Caribbean Hotel and Tourism Association, recently helped draft a position paper for the CHTA on Cuba's competitive threat.
The CHTA is a regional federation of 32 national hotel associations with more than 600 member hotels and over 300 allied members. According to its president, Emil Lee of St Maarten, the organisation is not opposed to the lifting of the US embargo, because it would "eliminate a significant barrier to regional cooperation."
But in its position paper the CHTA warned that the opening of Cuba to the huge US travel market would be "the biggest and most disruptive pebble to be dropped into the Caribbean pool in 50 years.” In fact, most analysts conclude that the impact on Caribbean tourism will be “unprecedented."
The CHTA document also sounded a hopeful note that “the coming Cuban disruption just might be the tonic (we) need to build the kind of strategic approaches to tourism development that will yield sustainable results."
As far as the Bahamas is concerned, the impact will be four-fold. First, Cuba will siphon off visitors who have up to now travelled impulsively to the Bahamas from Florida. This market has traditionally provided over 20 per cent of Bahamian visitor arrivals.
Second, the opening of Cuba can be expected to have an immediate impact on the cruise industry, which has been lobbying Caribbean destinations like the Bahamas to develop new products and experiences beyond the traditional sun, sand, sea and t-shirts.
"The likelihood that cruise lines will drop some existing ports to accommodate Cuba visits is real and the proximity of Cuba to the US…can easily impact itineraries to near markets such as the Bahamas,” the CHTA document says.
Third, the airline industry’s willingness to absorb low fares and passenger volumes in order to build routes and market share in Cuba could be disastrous for the region, the CHTA warned, "especially if it also results in US carriers shifting aircraft to new Cuba routes upon the lifting of the embargo."
And finally, the opening of Cuba will also impact the investment outlook for the region. It is likely to have a chilling effect on investment flows as investors take a wait and see position on the opportunities that Cuba may present. But much will depend on the enabling policies of the Cuban government in attracting US capital.
"The fact that Cuba saw over $800 million in hotel-related investments in 2013 is a sobering thought,” the CHTA position paper said. "The Caribbean and its industry will find itself not only competing for American tourists but also for investment dollars.”
According to CHTA chief executive Frank Comito (a former director of the Bahamas Hotel and Tourism Association), "If we continue to operate business as usual, and we all draw from the same pie and Cuba is in the equation...there will be serious economic and employment consequences."
So what does the CHTA recommend? Principally, it urges the creation of a Caribbean Basin Tourism Initiative to help boost investment in regional tourism development. The initiative would promote policy and technical support for the region, in partnership with private sector entities.
“We've developed a draft framework for a regional public-private sector tourism action agenda which would embody some of these elements, but that is still being vetted,” Comito told me. "We’ve advanced the Caribbean Basin Initiative concept as a starting point for collaboration to define together what the actual elements would be."
Among the items that will be reviewed are the removal of visa and travel barriers within the region, the reduction of high air travel-related taxes and fees, speeding up visitor clearance and processing times, and supporting a more co-operative approach among industry stakeholders.
And the CHTA says “we need to look at those factors which have contributed to Cuba's success – product diversity, infusing culture and history into the visitor experience, investments in education and training, competitive pricing, and lower operating costs. We need policies and practices which drive business, and do not drive away business.
"The CHTA believes that by working together, heads of government with heads of industry, hundreds of thousands of tourism-related jobs and hundreds of tourism-related businesses can be created. The indirect impact which tourism has on our broader economies cannot be understated.”
Meanwhile, Bahamas Tourism Director Joy Jibrilu told me she was working with Havanatur to create combination tour packages to both Nassau and Havana. "Folding our arms is not an option, so we will work as partners - not opponents. We have a brand that has global recognition and appeal and we will continue to position ourselves as such.”
by Larry Smith
The Baha Mar resort has been in the works so long that it is easy to forget the way we felt about this massive development at different points along its ponderous trajectory.
The 1,000-acre project was announced in November 2005 - almost a decade ago - as “the largest single-phase development in Caribbean history”. The initial investment was put at $1.6 billion, but it has more than doubled since then.
The original opening was set for 2010, but five years later it has still not opened. Financing and construction delays keep pushing an opening further and further into the unknowable future.
The story goes way back to the 1990s, when Perry Christie was the lawyer for American investor Phil Ruffin. Christie helped Ruffin buy up a large portion of Cable Beach, including the Nassau Beach and Crystal Palace hotels. In the early 2000s, when Christie became prime minister for the first time, he persuaded Ruffin to sell out to new investors headed by Lyford Cay financier Sarkis Izmirlian.
by Larry Smith
Here’s a story that needs to be re-told in full. I knew the protagonist as a high school student at Queen’s College more than 40 years ago, but have had no substantive dealings with him since then.
After studying engineering in the US, Steven Wrinkle, now 63, eventually took over his father’s construction company in Nassau. And for several years in the 2000s, he was the chief voice of the Bahamas Contractors Association - pushing for legislation to regulate the industry and decrying the lack of transparency in government tendering.
The contractors legislation has been drafted for years, but neither PLP nor FNM administrations will bring it to parliament. Most observers attribute this to the law’s potential impact on the handing out of political contracts to cronies.
Wrinkle’s family is from Harbour Island. His great grandfather, Charles Eugene Albury, went to Miami in 1917 to organise a government shipping service to Nassau. He later set up his own shipping business and was a key player in the early development of Miami’s cruise port.
In 1937, the Albury’s built the Parliament Hotel in Nassau. And after Wrinkle’s mother married his father, Skip, in Miami after the Second World War, the couple moved to Nassau to operate the hotel. In 1964, Skip launched Wrinkle Construction.
The story that needs to be told begins five years ago - in late 2010 - when a Bahamas Electricity Corporation inspector visited the BayParl Building, a small office block on Parliament Street opposite the House of Assembly. One of the meters he checked had no active account, so it was disconnected.
Near the end of November 2012, approximately six months after the PLP’s return to office, a joint session of parliament was held to commemorate the 50th anniversary of Bahamian women attaining the right to vote.
It was a good show. The value of equality was heralded. There were the usual grand speeches. The PLP’s female parliamentarians beamed with pride, though, curiously, a number of male parliamentarians on both sides of the aisle seemed bored.
On cue, Prime Minister Perry Christie strutted, boasted, and emoted. Given his performance in the House of Assembly on the occasion, one would be forgiven for surmising that he is a great champion of gender equality. He promised constitutional equality for women before the 40th anniversary of independence in 2013.
A joint resolution was passed promising an end to constitutional discrimination against women, “so as to fully and irrevocably engage and utilise the indomitable spirit of Bahamian womanhood in nation-building”.
Here we are three years later. There has now been a fifth and counting postponement of a referendum on gender equality. Many have concluded that such a referendum is unlikely during the PLP’s current term.
by Larry Smith
One year ago, the research firm Public Domain conducted a telephone survey on behalf of The Nature Conservancy to gauge Bahamian views on the importance of protecting the marine environment.
by Larry Smith
In an obvious attempt to soothe public anger over the Rubis fuel leak disaster in Marathon, Environment Minister Ken Dorsett recently unveiled draft legislation "for the establishment of the Department of Environmental Planning and Protection”, saying the law would be brought to parliament in October.
This hasty reaction, combined with an unprecedented government apology to Marathon residents for withholding key information on the health risks they faced - indicates the extent of the political damage control the Christie administration feels obliged to take.
But although titled the Environmental Planning and Protection Bill 2015, Dorsett's draft legislation goes back at least 14 years, to when the Ingraham administration first began codifying environmental protections, with help from the United Nations.
Until the late 1990s most Bahamians had no involvement in development proposals whatsoever. The government and the developers made all the decisions - behind closed doors - and there was no statutory authority for environmental controls.
Condolences from the Bahamas Ministry of Foreign Affairs to Singapore following the death of the country’s founding father and first prime minister, Lee Kuan Yew, observed: “The late Prime Minister was a contemporary of the late Sir Lynden Pindling ... Sir Lynden often said that he wanted The Bahamas to be the Singapore of the Caribbean.”
There is much that the Bahamas can learn from Singapore and the legacy of Lee. But there are two major attributes required to replicate Singapore’s success, the absence of which makes such success difficult. The two attributes are the personal discipline and work ethic of citizens, and the quality of political leadership.
Bahamians generally lack the discipline and work ethic of Singaporeans. And for all of his gifts and contributions to national development, Sir Lynden, a leading founding father, lacked the strategic vision and commitment to personal incorruptibility and intolerance for state corruption that characterized the rule of Singapore’s Lee.
One of the reasons for Singapore’s success was the example of the incorruptible Lee, who had a fierce commitment to the rule of law and launched a massive anti-corruption program after becoming his country’s leader.
Given his role and person, and the progressive movement’s desire to turn a page from the vast corruption of the white oligarchy and its political instrument the United Bahamian Party (UBP), Sir Lynden had a singular opportunity to foster a new political culture, an opportunity he quickly squandered, setting the country back for generations as the PLP became synonymous with corruption.