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January 30, 2008


EB Christen

Again, amen!

However, neither party will reform ZNS because it is a job program and cash cow for government cronies. For government to reform it, a very broad based poll should be started by the newspapers/radio or on the internet.

This poll could gauge Bahamian's attitudes to such things. I believe one would find strong support, but the politicians aren't quite so convinced. We need to convince them to have a referendum that effectively cuts BahamasAir loose and forces it to be market driven and stop draining the treasury, mandates the privatisation of BTC by a certain date and opens up competition IMMEDIATELY on all aspects of telecommunications, including the cellular market, and does away with ZNS as a government run crony institution. Then and only then, you might get something happening. ZNS should be a public run affair as you stated or it should simply be scrapped all together and sold off to an entrepreneur. Bahamians love watching each other on TV, I am sure someone can put some kind of programming up there that will enable them to use the equipment and make some money.

Forget educational programming though. Bahamians have Discovery, TLC, Travel Channel and a plethora of educational options on Cable, yet they still watch Gossip Girl, E! TV and American Idol more than anything else...

The important thing is that the government stop funding these money losing operations, so that they can begin to reduce the level of taxation on the average Bahamian. We are in direct competition with Florida and every tax dollar we add to the price of things here makes local Bahamian consumers and local ex-pat consumers think twice about buying something through local importers/channels and instead buying it in the States and smuggling it in. 90%, if not higher, of what we consume is imported, so we aren't exactly protecting any local industry anymore. In the long run, this ends up costing our economy, and thus the government as well, far more than the revenue those overly high duty tax dollars earns the government. Cut out Florida's massive price edge (due to high duties and stamp tax) and you cut it out as a desirable retail option. This keeps more Bahamians consuming locally, which feeds Bahamian businesses, Bahamian jobs and Bahamian families. The economy will expand which means that although the percentage earned in tax will have dropped, the volume should increase to more than compensate for that loss. Ironically, the USA wants us to do this anyway, with their efforts to scrap or lower import duties.

The entire policy on duties and stamp tax needs URGENT revision. Any business person can tell you that this is the single greatest impediment to the growth and expansion of the local economy. Cut the losses of government corporations, reduce the duty levels on many items across the board (not all, but a great many) and basic economic law will do the rest. How many stupidly loaded flights back from Miami do we need to deal with before that realization clicks. Our government is shooting itself in the foot! Reduce the cost of doing business here and businesses will flourish as well as jobs!

larry smith

I like the idea of a referendum on privatisation, EB. I think I will use that next week.

EB Christen

Glad you liked the idea. Ingraham hasn't had much success with referendums, but if he takes his time and does 2 issues at a time, max, then he might have more success.

Good referendum issues include:

1. National Lottery
2. BTC Privatization
3. BahamasAir Privatization
4. ZNS Privatization
5. BEC Privatization/Alternative Energy Liberalization
6. Citizenship issue (By itself this time, equal rights for men and women.)

(#5 I think the liberalization of the power grid to alternative energy is more pressing. Past experience shows that privatizing power and water utilities can be a mixed bag. Privatization really only works where you can seriously introduce competition to the market. Keeping BEC while supplementing the power grid with alternative energy would be a very different proposition.)

Personally, the privatization scheme is only really worth it in the long run if the government is doing it with a view to reducing the drain on the treasury in the hope of introducing some kind of reduction in duty/stamp tax over the long term. As I said previously, this can't be on all items. We may need higher taxes on say, second cars or on fuel inefficient cars and we should always retain our sovereign right to do this, but on consumables, the taxation is seriously antiquated. Lower taxation is good for an economy; it just can't be done the way republicans in the USA have recently been doing it. Lowering the taxation drain is good, but if you aren't finding creative ways to lower your spending, then it is equally dangerous. We need less money for government corporations like BahamasAir, but we need more money for education, the police and infrastructure. It is a question of prioritizing.

Cheers and keep up the great work.

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