By NEIL HARTNELL
Tribune Business Editor
(April 23,2018) NASSAU,BAHAMAS- The Bahamas must crack down on widespread 'fronting' that threatens to become more "ferocious" once this nation joins the WTO, a governance reformer has urged.
Robert Myers, a principal with the Organisation for Responsible Governance (ORG), told Tribune Business that Bahamians will find themselves in a "subservient economy" unless the Government and private sector move quickly to enforce the law.
He warned that the National Investment Policy, and reservation of certain economic sectors for Bahamian ownership only, was constantly being undermined by local attorneys, accountants and politically-connected persons acting as 'fronts' for businesses that were really owned and controlled by foreign companies/investors.
Fearing that this will further shrink Bahamian economic ownership once this nation becomes a full World Trade Organisation (WTO) member, Mr Myers called on the Government to foster self-regulation throughout the economy's key industries, given that private sector players were best-placed to identify 'fronting' and those operating illegally without the necessary approvals.
"The lackadaisical and inequitable enforcement of the rule of law in this country is already causing problems for small and medium-sized enterprises (SMEs) in the Bahamas," Mr Myers told Tribune Business.
"The Government is allowing projects to come into the Bahamas and is not stipulating that they use local SMEs, thereby enabling these investors - at our expense through the tax concessions - to use foreign competitors. They're not giving local entrepreneurs the opportunity to grow from foreign direct investment (FDI)."
Foreign real estate developers have traditionally brought their own project managers, lead contractors, architects and engineers with them, which has often led to complaints by Bahamian professionals that they are excluded from working on major FDI projects in their own country. Yet Mr Myers suggested a far greater difficulty is posed by foreign competitors entering sectors supposedly reserved exclusively for Bahamian ownership, such as construction, retail, landscaping, restaurants and events management, via locals offering themselves as 'fronts'.
He added that Raymond Winder, the Bahamas' leading WTO negotiator, had acknowledged the existence of 'fronting' - and the challenges it causes for Bahamian entrepreneurs - a recent Chamber of Commerce-organised WTO seminar.
"These are industries by law restricted to Bahamians," he told Tribune Business, "but that is being completely violated by people with no experience or track record fronting for foreign competitors.
"That has already decimated a lot of larger companies. The opportunities for growing SMEs and growing entrepreneurship has been significantly impacted without WTO because people are not adhering to the law.