The Bahamas is an archipelago extending from Grand Bahama, which lies some 80 kilometers (50 miles) off the southeastern coast of Florida, almost to Haiti on the island of Hispaniola, a distance of about 800 kilometers (500 miles). It consists of some 700 islands, only about 30 of which are inhabited, and has a total area of approximately 13,900 square kilometers (5,400 square miles). The two main islands are New Providence (where Nassau, the capital, is located) and Grand Bahama. Other islands include Andros, Eleuthera, and Great Abaco. The Bahamas straddles the Tropic of Cancer, and the climate is subtropical. It is in the same time zone as the eastern United States.
Nassau on New Providence, Freeport/Lucaya on Grand Bahama, and Marsh Harbour on Great Abaco are the main seaports. Nassau and Freeport also have large international airports and thus serve as the main ports of entry into the Bahamas. The rest of the archipelago is served by numerous smaller airports and landing strips, making most of the inhabited islands easily accessible.
The population of approximately 270,000 is mainly concentrated on New Providence, Grand Bahama, and Great Abaco. The official language is English.
The Commonwealth of the Bahamas is a parliamentary state and is a member of the British Commonwealth of Nations. The Queen of England is its nominal head of state. The government has been remarkably stable for many years. From 1967 to 1992, the ruling party was the Progressive Liberal Party. In August 1992, the Free National Movement won the government in an orderly election.
The government is administered from Nassau, and most matters of consequence are dealt with there, but, under the Local Government Act 1996, elected council members in local government districts control road traffic, port activity, town planning, hotel licensing, and shop and business licensing for their districts.
ECONOMIC FACTORS
The main industry of the Bahamas is tourism, which accounts for at least 70% of the country's gross domestic product (GDP). The trade deficit created by the country's heavy dependence on imports is usually more than offset by the annual volume of tourist expenditures. To encourage tourism, there is a system of duty-free shopping for visitors. Tourism is followed in importance by banking, insurance, and ship registration and management.
The infrastructure is well developed; first-rate telecommunications facilities are available, and there are numerous daily flights to and from important centers in the United States and Europe. All forms of professional services are available in the Bahamas to a high standard.
The Bahamian economy is closely linked to that of the United States, and inflation rates are comparable. The unemployment rate varies according to the tourist season but is currently about 12%. The standard of living is fairly high. The per capita GDP of about B$11,000 is high for the region.
CURRENCY
The monetary unit is the Bahamian dollar (B$; international symbol BSD), which is traded at par with the US dollar. The dollar is divided into 100 cents. See Table 1 for approximate Bahamian dollar exchange rates with some of the world's main trading currencies.
TABLE 1 - Exchange Rates at Mid-May 1996
B$1 = Canada (Cdn$) 1.37
France (FF) 5.19
Germany (DM) 1.54
Japan (¥) 104.61
Switzerland (SFr) 1.25
United Kingdom (UK£) 0.66
United States (US$) 1.00
GOVERNMENT INTERVENTION IN THE ECONOMY
The Bahamian economy is essentially free from government controls, with minor exceptions as noted in this guide. Only the utilities and some essential services are operated by government-owned corporations.
The Bahamas is a member of various international organizations, including the International Monetary Fund and the Caribbean Development Bank. In addition, the country is a member of the Caribbean Common Market (CARICOM) and an associate member of the European Union.
GOVERNMENT ATTITUDE TOWARD FOREIGN INVESTMENT
The Bahamian government recognizes that foreign investment is critical to achieving economic growth and prosperity. Its official policy is to welcome foreign investment projects that will help it achieve its investment objectives. These objectives include the creation of jobs (particularly high-skilled jobs), the increase of exports, the development of new business opportunities, the availability of quality products to consumers, and the protection of the environment. A number of investment incentives are available, as described in `Incentives and Financing'.
Agriculture is encouraged throughout the islands. While all industrial activities are also widely encouraged, the government has specifically set aside 100 acres (about 40 hectares) on New Providence for development as a free trade zone similar to that already operating at Freeport on Grand Bahama.
The only sectors in which the government does not allow foreign investment are those that would compete directly with Bahamian citizens (see Foreign Investment).
SOURCES OF INFORMATION
The Bahamas Investment Authority is the principal government body responsible for advising and assisting foreign investors. It may be contacted at the following address:
Bahamas Investment Authority Office of the Prime Minister Sir Cecil Wallace Whitfield Centre Cable Beach P.O. Box CB 10980 Nassau Bahamas Tel No: +1 (809) 327-5970 Fax No: +1 (809) 327-5907
Both the Bahamas Chamber of Commerce in Nassau and the Grand Bahama Chamber of Commerce in Freeport are also prepared to provide information to potential traders or investors free of charge.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
