Bahamas Tourism Faces Grim Economic Outlook

Friday, 17 July 2009 06:57 Lisa Wells
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Bahamas' Ambassador Cornelius A. Smith is worried that the "twin pillars" of his country's economy - tourism and offshore banking - are cracking under the global economic crisis and U.S. efforts to close foreign tax shelters.

"I need not tell you that the economic situation facing the Bahamas - indeed the world - is grim," he said at a National Day celebration at the Bahamian Embassy in Washington this week.

"The global financial crisis that has brutalized world economies has shaken the twin pillars of the Bahamian economy. Tourism and financial services are reeling from the effects of the global economic meltdown."

Hotel owners in the Caribbean island chain are complaining about a sharp decline in tourism because "potential visitors to our shores are tightening their belts and hunkering down, as they ride out the credit crunch," Mr. Smith said.

He also complained that "our offshore financial services sector is under attack."

The Bahamas is known as an international tax haven because its government imposes no taxes on income, capital gains, corporations, retail sales, inheritance or corporate dividends, according to shelteroffshore.com, a Web site for investors.

In May, Mr. Smith and other Caribbean ambassadors grumbled over President Obama's call for a crackdown on offshore banking. They complained that proposed congressional legislation makes no distinction between foreign banks that comply with current U.S. law and banks that deliberately aid tax cheats.

"This legislation proposes to name, shame and otherwise take punitive actions toward countries that are believed to be participating in tax evasion, without regard to the level of compliance," he said at a press conference.

Ambassador John Beale of Barbados added, "The offshore sector feeds the tourism sector, and the tourism sector feeds the offshore sector."

At his National Day reception, Mr. Smith added a touch of optimism.

"We Bahamians are a resilient people, and through it all, we have every expectation that we will weather the storm," he said.

CREATIVE AMBIGUITY

Taiwan is sometimes referred to as the "land of creative ambiguity" because it gingerly treads between proclaiming its independence and pacifying China, which militantly claims the island nation as part of the communist "people's republic."

This week a Taiwanese official visiting Washington brought a new definition to "ambiguous" when she explained the "three Nos" of the administration of President Ma Ying-jeou.

"There are three 'Nos,' " Shin-Yuan Lai, the minister for mainland affairs, told editors and reporters at The Washington Times. "No unification. No independence. No military solution."

The last "no" is a reference to China's threat of force should democratic Taiwan formally declare its sovereignty.

However, no unification with China and no independence leaves no other option. Or does it? Or is it just ambiguous?

DOWN IN DELHI

The new U.S. ambassador to India arrived in New Delhi on Thursday, racing a deadline to get to the capital in time to greet Secretary of State Hillary Rodham Clinton, who is arriving in Mumbai on Friday on a three-day visit to the country.

Ambassador Timothy Roemer was confirmed by the Senate only a week ago.

"He is coming here primarily for the Clinton visit," an official at the U.S. Embassy told the Indo-Asian News Service.

Mr. Roemer is a former six-term Democratic congressman from Indiana and an early political backer of President Obama.

Source: The Washington Times