Ambassador James Smith
Bahamas Ambassador for Trade, James Smith, recently addressed a BFSB Industry Roundtable on the impact of Supranational Organisations on the Bahamas.
Multilateral agencies like the IMF and the World Bank are encouraging developing countries to adopt policies relating to the reduction of fiscal deficits, the privatisation of state-owned enterprises and the liberalisation of their trading regimes. According to the Ambassador, developing countries are being told that in order to achieve developed status, they must modernise their economies — e.g. by adopting the same rules, regulations and standards as financial centres in both Europe and North America. This modernisation is in keeping with the globalisation process institutionalised by most multilateral organisations.
The local economy, with a foundation built mainly on its services industry, has made it possible to avoid a dependence or “an over-dependence” on the World Bank and other regional development banks for loans to finance infrastructure. “Indeed, up to a few years ago,” said Smith, “the Bahamas studiously avoided participating in any regional, hemispheric or global arrangements which it felt might compromise its sovereignty or rob it of its cherished independence.”
Trade liberalisation initiatives, coupled with technological advances, have induced higher economic interaction between nation states and national economies, however, and Ambassador Smith predicted that globalisation and the insistence from multi-lateral organisations for compliance with international standards would only increase. Small states like the Bahamas must accept both philosophically and practically that these changes are inevitable.
The Trade Ambassador observed that there is a need for intensive training and development of the local work force both in the public and private sectors to prepare the country for the increased competitiveness of the emerging single global economy.
With specific relation to the financial services sector, The Bahamas must respond to the increasing international competition by becoming more pro-active in developing new products and structures which are uniquely Bahamian, but which at the same time are tailored towards the long-term needs of its international clients.
“The sustainability of our financial services sector cannot rely on copying legislation or practices from other jurisdictions;” Smith said. “We must take the lead in establishing our own