Bahamas sees further decline in tourism

MEDELLIN, Colombia – The U.S. recession is going to mean another year of declining tourism receipts and a stagnant economy for Bahamas, Minister of State for Finance, Zhivargo Laing, said.

Laing, speaking to reporters on the sidelines of the Inter-American Development Bank’s annual meeting said tourism receipts fell 8 percent in 2008 and were likely to drop again in 2009.

“We expect that that will likely continue in the immediate term,” he said.

Asked if receipts might fall a similar amount this year, he said it would be around that “even though we do believe there are some policy things we can do that may be able to reduce that level of decline. There is nothing at the moment to suggest that we won’t continue on the decline track.”

As a result, the nation of 330,000 people with an economy of roughly $7 billion, could register no growth this year.

“We think that much like the rest of the world, the Bahamas economic outlook is dim, that things are likely to be flat to negative and that’s largely because we depend very heavily on the economic circumstances of the United States of America,” he said, referring to its recession.

Laing said that for the first time in Bahamas history it is offering an unemployment benefit.

The two phase program will cost an initial $20 million.

“Then there is a permanent phase which will involve the participants of the fund actually contributing 1 percent of their insurable wage, which is a maximum of $400 a week, to the fund. It is something that is new and will have to be monitored,” he said.

The Bahamas, relatively speaking, is one of the richest nations in the Caribbean, with a vibrant banking sector in addition to tourism.

Laing said his government does not expect to need to ask for funds from international financial institutions to shore up its economy.