Posts Tagged ‘bahamas’
[ISL] Five islands links: Qatar, Boracay, Vanuatu, Shetlands, CocoCay
- Saudi Arabia is planning to dig a canal the length of its border with Qatar, making that peninsular polity and island one. That is … intense. Gulf News reports.
- The Filipino resort island of Boracay has been declared off-limits by President Duterte, at least until its environment is rehabilitated. The National Post reports.
- The establishment of a Chinese base in Melanesian Vanuatu would upset geopolitical calculations in Australia. The Sydney Morning Herald reports.
- The Map Room Blog notes that some supporters of Scotland’s Shetland Islands are opposed to the idea of putting the archipelago, so far from the mainland, in inset maps.
- Royal Caribbean is making an island in the Bahamas, CocoCay, into a custom-designed resort at a cost of hundreds of millions of dollars. Bloomberg reports.
[ISL] Five islands links: Bahamas, Puerto Rico, Cape Breton, Nova Scotia, Fiji
- I found, from somewhere in the blogosphere, a 1982 essay by June Jordan, “Report from the Bahamas.” How can solidarity and identity be established across great distances, geographic and otherwise, in a globalized world?
- This analysis by Lyman Stone of the impact of Hurricane Maria on the already dire demographics of Puerto Rico is worth reading. Population decline will be at least as sharp as in Ireland and Corsica.
- Will making Cape Breton a province separate from Nova Scotia, as suggested by independent senator Dan Christmas, do anything to stop the island’s sharp decline? The Cape Breton Post reports.
- Climate change and sea level rise may effectively make mainland Nova Scotia an island, cutting the dike-protected roads on the Isthmus of Chignecto. VICE reports.
- Fiji is preparing for an influx of climate change refugees from other, lower-lying and poorer, island nations in the Pacific. Bloomberg reports.
[ISL] “Holland College marine education bridges P.E.I. and The Bahamas”
Michael Robinson of MacLean’s describes how Holland College, the chief non-academic institution of higher education on Prince Edward Island, is involved with teleeducation in the Bahamas.
Despite thousands of kilometres of ocean separating Prince Edward Island and the Bahamas, the allure of a marine education and a shared nautical ancestry has built a bridge between the two island communities.
P.E.I.’s Holland College first began angling for Bahamian students in 2004 as part of a joint effort with the Bahamas Maritime Authority. The object? To train Bahamian youth so they could work on vessels like tugboats and bulk carriers anywhere in the world.
Michael O’Grady, the college’s vice-president of innovation, enterprise and strategic development, says the size and feel of Canada’s smallest province evokes a sense of familiarity with Bahamian recruits.
“We like to say we are more alike than we are different, culturally,” he says. “There is a basic understanding among islanders of the challenges and opportunities of living on a island. You appreciate the importance of your surroundings and sea-faring traditions.”
[BRIEF NOTE] The Power and the Money on the limits of economic influence in the Bahamas
While I’m prepping the first [BLOG] roundup post in too long, I’d like to point my readers over to a Power and the Money post that takes a look at the limited benefits that the Bahamas and China will derive (economic and geopolitical, respectively) from planned massive Chinese investment in a resort complex and general infrastructure in the Bahamas’ time of trouble.
What is the Free National Movement (FNM) government doing about the economy? Monetary policy, of course, is mostly out of their hands. Capital controls mean that the government also has some room to use monetary policy — it recently slashed the discount rate from 5.25% to 4.50% — but the peg to the dollar limits its freedom of action. The government has some scope for a Keynesian boost — the budget deficit is only 3.0% of GDP, and they recently sold the Bahamian Telecommunications Company for $210 million — but it is unlikely to be effective. Why? Simply put, the Bahamas is too small and too open. Imports come to 35% of GDP. Much of any stimulus, therefore, is likely to “leak” away in increased imports.
What’s left, then, besides praying for the United States to get out of the doldrums? Well, Prime Minister Hubert Ingraham has decided to try attracting as much Chinese investment as possible. The Chinese government has taken a $2.75 billion equity stake in the giant Baha Mar resort development. It also provided loans to finance stadium and road construction.
The problem? Well, the economic problem is the same as with Keynesian spending: leakage. The Bahamas is a pretty small economy. It doesn’t produce a whole lot of construction material, and while unemployment is high, it doesn’t have that many skilled construction workers. The Baha Mar construction project will bring in 6,150 Chinese construction workers, while the $70 million new airport road has involved another 200. Not all the construction labor force will be Chinese, of course, but construction is estimated to employ only 4,000 Bahamians. The developers have pledged only $200 million in contracts to Bahamian firms although that might ultimately rise higher.
The China State Construction Engineering Corporation (CSCEC) will get $1.9 billion, or 53% of the total value of the project. Some of that may stay in the Bahamas, of course, but probably not a whole lot: Chinese workers are estimated to remit roughly $12,000 per year. They do, of course, eat and drink — but the Bahamas is a large agricultural importer, and so those expenditures will like benefit American agriculturalists. The government estimates about $80 million or so in tax payments from the CSCEC but that isn’t a lot. The highest estimate is that Bahamian contractors will receive no more than $400 million, or 11% of the total project value — and they will, of course, spend a large chunk of that revenue on imported inputs. In short, at least half the stimulus will leak away and possibly as much as 90%.
This investment will benefit the Bahamas, but as a very small and very open economy with a limited ability to absorb investment it can’t benefit that much. That said, this massive investment isn’t going to make China the new hegemonic power in the Bahamas in place of the United States–the United States is far too embedded, far too close, and far too interested for this to happen.
As for Chinese “patronage,” well, patronage in exchange for what? The U.S. already controls large spheres of Bahamian public policy. The Chinese government isn’t about to force the Bahamas to suspend OPBAT, expel the Coast Guard, sever the link to the dollar, seize American property, restrict American imports, replace the Privy Council with a Chinese court, or station nuclear weapons off the coast of Florida. Given the overwhelming dominance of the United States, and its long-standing and multiple links with the Bahamas, I can’t for the life of me figure out what a “patronage relationship” with Beijing would even mean. In point of fact, “Senior GCOB officials privately expressed that China is not their preferred partner and acknowledge that negotiations are difficult.” Moreover, the Chinese government told the Americans that they were unhappy about the need to take the financial lead on the project: “Chinese embassy officials privately told [a U.S. official] the China Ex-Im bank would prefer another investor in the mix to diminish the financial risk.” E.g., Americans just weren’t interested. So much for the rising empire muscling out the declining one.
All this assumes that the Chinese wanted to replace the United States in the Bahamas, of course. Evidence for that is rather lacking, it need hardly be added.
[BRIEF NOTE] The Power and the Money on the limits of economic influence in the Bahamas
While I’m prepping the first [BLOG] roundup post in too long, I’d like to point my readers over to a Power and the Money post that takes a look at the limited benefits that the Bahamas and China will derive (economic and geopolitical, respectively) from planned massive Chinese investment in a resort complex and general infrastructure in the Bahamas’ time of trouble.
What is the Free National Movement (FNM) government doing about the economy? Monetary policy, of course, is mostly out of their hands. Capital controls mean that the government also has some room to use monetary policy — it recently slashed the discount rate from 5.25% to 4.50% — but the peg to the dollar limits its freedom of action. The government has some scope for a Keynesian boost — the budget deficit is only 3.0% of GDP, and they recently sold the Bahamian Telecommunications Company for $210 million — but it is unlikely to be effective. Why? Simply put, the Bahamas is too small and too open. Imports come to 35% of GDP. Much of any stimulus, therefore, is likely to “leak” away in increased imports.
What’s left, then, besides praying for the United States to get out of the doldrums? Well, Prime Minister Hubert Ingraham has decided to try attracting as much Chinese investment as possible. The Chinese government has taken a $2.75 billion equity stake in the giant Baha Mar resort development. It also provided loans to finance stadium and road construction.
The problem? Well, the economic problem is the same as with Keynesian spending: leakage. The Bahamas is a pretty small economy. It doesn’t produce a whole lot of construction material, and while unemployment is high, it doesn’t have that many skilled construction workers. The Baha Mar construction project will bring in 6,150 Chinese construction workers, while the $70 million new airport road has involved another 200. Not all the construction labor force will be Chinese, of course, but construction is estimated to employ only 4,000 Bahamians. The developers have pledged only $200 million in contracts to Bahamian firms although that might ultimately rise higher.
The China State Construction Engineering Corporation (CSCEC) will get $1.9 billion, or 53% of the total value of the project. Some of that may stay in the Bahamas, of course, but probably not a whole lot: Chinese workers are estimated to remit roughly $12,000 per year. They do, of course, eat and drink — but the Bahamas is a large agricultural importer, and so those expenditures will like benefit American agriculturalists. The government estimates about $80 million or so in tax payments from the CSCEC but that isn’t a lot. The highest estimate is that Bahamian contractors will receive no more than $400 million, or 11% of the total project value — and they will, of course, spend a large chunk of that revenue on imported inputs. In short, at least half the stimulus will leak away and possibly as much as 90%.
This investment will benefit the Bahamas, but as a very small and very open economy with a limited ability to absorb investment it can’t benefit that much. That said, this massive investment isn’t going to make China the new hegemonic power in the Bahamas in place of the United States–the United States is far too embedded, far too close, and far too interested for this to happen.
As for Chinese “patronage,” well, patronage in exchange for what? The U.S. already controls large spheres of Bahamian public policy. The Chinese government isn’t about to force the Bahamas to suspend OPBAT, expel the Coast Guard, sever the link to the dollar, seize American property, restrict American imports, replace the Privy Council with a Chinese court, or station nuclear weapons off the coast of Florida. Given the overwhelming dominance of the United States, and its long-standing and multiple links with the Bahamas, I can’t for the life of me figure out what a “patronage relationship” with Beijing would even mean. In point of fact, “Senior GCOB officials privately expressed that China is not their preferred partner and acknowledge that negotiations are difficult.” Moreover, the Chinese government told the Americans that they were unhappy about the need to take the financial lead on the project: “Chinese embassy officials privately told [a U.S. official] the China Ex-Im bank would prefer another investor in the mix to diminish the financial risk.” E.g., Americans just weren’t interested. So much for the rising empire muscling out the declining one.
All this assumes that the Chinese wanted to replace the United States in the Bahamas, of course. Evidence for that is rather lacking, it need hardly be added.
A Bit More Detail 