business@tribunemedia.net
THURSDAY, JUNE 3, 2021
$4.91
$4.91
$5.01
$5.01
Royal Caribbean: No Crown IDB: Just 54% of COVID loan firms Land lease for $110m project still doing business
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
A
SENIOR Royal Caribbean executive has confirmed it has yet to secure a crown land lease for its $110m Paradise Island project as he indicated a willingness to “co-exist” with rival developers in that area. Russell Benford, Royal Caribbean’s vice-president of government relations for the Americas, told Tribune Business that an executed lease was part of the approvals the cruise line is still seeking for a Royal Beach Club development it had hoped to begin construction on next month. His admission raises further questions as to the fate
• Still among approvals awaited from govt • Cruise giant willing to ‘co-exist’ with local • PI project ‘magnet’ for passenger tripling
RUSSELL BENFORD of the crown land being sought by competing projects at Paradise Island’s Colonial Beach, with a rival developer having already initiated legal action seeking a Supreme Court
declaration that he has a valid lease for some of the acreage also desired by Royal Caribbean. “We do not,” Mr Benford replied, when asked by this newspaper if the cruise giant has a valid lease for seven to ten acres of crown land. “We purchased several acres and own that land. The crown land belongs to the government. We’re requesting approval of the crown land [lease] along with other project approvals, but have not received those yet.” His comments will likely greatly encourage Toby
Smith, the Bahamian entrepreneur behind the $2m Paradise Island Lighthouse & Beach Club Company proposal that is focused on Paradise Island’s western tip. He has been attempting for several months, without success, to obtain confirmation from both the government and Royal Caribbean as to whether the latter has a valid crown land lease. The issue has also concerned government agencies. Rochelle Newbold, the Department
SEE PAGE 7
PM’s GDP growth targets ‘nothing to write home’ on By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE prime minister’s ambitions of achieving a “consistent” five to six percent annual GDP growth rate are “nothing to write home about” when set against COVID-19’s economic devastation, it was argued yesterday. Governance reformers and economists told Tribune Business that while the target unveiled by Dr Hubert Minnis was appropriate for a robust economy, it was far less impressive when measured against how much the Bahamian economy had shrunk due to the fall-out from the pandemic and Hurricane Dorian. The Department of Statistics recently revealed that the Bahamian economy had contracted by 14.5 percent or $1.641bn in real terms
Under 50% of Bahamian firms use social media By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
LESS than 50 percent of Bahamian businesses are using social media to drive sales and promotions, it was revealed yesterday, exposing just how much work the government faces in its digitisation drive. The Inter-American Development Bank (IDB), in a report accompanying its latest $140m loan to The Bahamas, said local companies as well as their Caribbean counterparts are not investing sufficiently in technology despite the impetus provided by the
• Tells House 5-6% annual expansion ‘within our grasp’ • Governance reformer: Nothing in budget to achieve it • Ambition not as impressive set against COVID fall-out
DR HUBERT MINNIS
ROBERT MYERS
in 2020, and by 24.7 percent or $3.256bn in nominal terms that includes inflation’s impact, prompting one observer to argue that this nation needs to expand its output by sevem to eight percent annually for “at least the next five years” to escape its escalating
economic and fiscal crisis. However, Dr Hubert Minnis yesterday told the House of Assembly the measures unveiled during the 2021-2022 budget communication will ensure that five to six percent annual GDP expansion is within reach as he sought to focus
COVID-19 pandemic and associated lockdowns. Drawing on the findings from a Compete Caribbean survey, and contrasting the region with others, the multilateral lender added: “The COVID-19 crisis has accelerated the digitsiation of businesses, forcing companies to develop new business models. “During 2020, and compared to 2019, Latin America experienced a 150 percent growth in the adoption of digital technology, with 1.7m new users of the e-commerce site Mercadolibre, teleworking of up to 25 percent of the population in large cities, and a 40 percent increase in use of digital education platforms. This has been recognised as an irreversible trend.”
SEE PAGE 6
Hurricane VAT holiday to have ‘net zero’ effect By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
AN ex-Bahamian Contractors Association (BCA) president yesterday said building material price hikes mean the government’s hurricane readiness VAT “holiday” and other tax breaks will just have a “net zero” effect. Leonard Sands told Tribune Business that the Minnis administration’s initiatives were unlikely to stimulate increased construction activity because clients were “taking a beating” from cost increases that have seen key materials
such as lumber double in price and the tax breaks are only likely to offset this. While praising the government for “doing the right thing” with its 20212022 budget measures, he said that the VAT ‘holiday’ planned for July as well as duty reductions to 20-25 percent on other key construction components are simply not sufficient to counter cost increases that have been driven by global construction demand as well as supply chain backlogs caused by the COVID-19 pandemic.
SEE PAGE 4
public attention on the government’s bid to grow The Bahamas out of its debt and deficit predicament. “We believe that with targeted structural reforms, consistent growth in the range of five to six percent is well within our grasp,” the prime minister argued in leading-off yesterday’s budget debate in the House of Assembly, placing his faith in freeing up the private sector via a combination of ease of doing business reforms, targeted tax incentives and financial assistance to small and medium-sized enterprises. However, Robert Myers,
SEE PAGE 8
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE effectiveness of the government’s COVID-19 small business support has been called into question by a report that found just 54 percent of loan recipients have remained operational. The Inter-American Development Bank (IDB), in a paper accompanying its latest $140m loan to The Bahamas, said initial findings on the Business Continuity Loan initiative revealed that only 298 out of 557 micro, small and medium-sized (MSME) funding recipients had remained in business. “To support MSMEs during the COVID-19 crisis, a Business Continuity Programme (BCP) was executed by the Small Business Development Centre (SBDC), allocating $30m in loans to small businesses, ranging from $5,000 to $300,000 as well as grants for payroll assistance,” the IDB report said. “The programme is targeted to formal MSMEs, with the requirement to retain at least 51 percent of employees and share their credit performance with the credit bureau and other financial institutions. Preliminary findings show that the continuity rate of beneficiary MSMEs is 54 percent (298 out of 557), with a retention rate of 56 percent employees on average. “Of the continuing firms, 56 percent (168 out of 298) managed to retain 95 percent of employees on average. The remaining 44 percent of continuing beneficiaries retained 30 percent of their employees on average.” If correct, that suggests a number of businesses
breached one of the conditions required to receive the Business Continuity Loan, which was that they retain at least 51 percent of their prepandemic staff. The IDB report, revealing that 34 percent of firms that received loans were headed by women, conceded that its findings were preliminary and that more research was required. It based its numbers on data obtained from the SBDC as well as National Insurance Board (NIB) administrative records, defining a “continuing” business as one that was recorded by both organisations. “Conclusions are still preliminary, and the initial monitoring exercise on the results of the BCP highlighted the need for a strengthened system with quick access to the control variables in the NIB and the Department of Inland Revenue (DIR),” the IDB report added. “To broaden the scope of the beneficiaries and reduce informality, the SBDC also developed a programme to encourage and support business registration, which supported around 50 percent of their beneficiaries to formally register their businesses. “However, BCP experienced difficulties regarding the monitoring and evaluation of its beneficiaries, as the administrative records for firms have different identification numbers in each relevant institution, such as the National Insurance Board (NIB) and the Inland Revenue.” Nevertheless, the IDB report raises concerns that the Business Continuity Loan may not have been as
SEE PAGE 9