The Bahamas Financial Services Board

Bahamas

Details

The Bahamas, a wide-spread archipelago in the Atlantic Ocean located off the eastern coastlines of Florida and Cuba, includes over 700 islands, along with dozens of cays and hidden coves.

Columbus first sighted these islands in 1492, and at that time they were the established home of the Lucayan Indians.

Over the next few centuries the Indian population was decimated, and the islands became a major launching base for the Spanish conquest of the Caribbean, as well as the American mainland.

In the 18th, 19th and 20th centuries, American and British factions gained control of this valuable real estate, until the Bahamas finally gained total independence on July 10, 1973.

These low-lying islands (all similar in appearance) are ringed by coral reefs and aqua-green waters that teem with sea life of all descriptions.

Today tourism is the major industry, and these stunning islands of gregarious people, beautiful scenery and sunny skies are one of the most popular vacation destinations in the Caribbean, and for that matter - the world.

 

Lucayan Indians inhabited the islands when Christopher COLUMBUS first set foot in the New World on San Salvador in 1492. British settlement of the islands began in 1647; the islands became a colony in 1783. Since attaining independence from the UK in 1973, The Bahamas have prospered through tourism and international banking and investment management. Because of its geography, the country is a major transshipment point for illegal drugs, particularly shipments to the US and Europe, and its territory is used for smuggling illegal migrants into the US.

 

 

Quick Facts and Figures

Official Name Commonwealth of the Bahamas

Capital City Nassau (222,000)

Languages English, Creole

Official Currency Bahamian Dollar

Religions Baptist, Anglican, Catholic, others

Population 320,000

Land Area 10,010 sq km (3,864 sq miles)

Latitude/Longitude 24º 15N, 76º 00W

 

 

Economy

The Bahamas is a stable, developing nation with an economy heavily dependent on tourism and offshore banking.

Tourism together with tourism-driven construction and manufacturing accounts for approximately 60% of GDP and directly or indirectly employs half of the archipelago's labor force. Steady growth in tourism receipts and a boom in construction of new hotels, resorts, and residences had led to solid GDP growth in recent years, but the slowdown in the US economy and the attacks of 11 September 2001 held back growth in these sectors in 2001-03.

The current government has presided over a period of economic recovery and an upturn in large-scale private sector investments in tourism. Financial services constitute the second-most important sector of the Bahamian economy, accounting for about 15% of GDP. However, since December 2000, when the government enacted new regulations on the financial sector, many international businesses have left The Bahamas.

Manufacturing and agriculture together contribute approximately a tenth of GDP and show little growth, despite government incentives aimed at those sectors. Overall growth prospects in the short run rest heavily on the fortunes of the tourism sector, which depends on growth in the US, the source of more than 80% of the visitors.

Analysis 2007-08

The Bahamas have been doing well recently as a result of increased tourist activity, especially from the USA.   The economy is up with GDP growth around 3% and inflation down around 1% (it was up around 3% before).  Taxes are being held at the same level.  The budget is an issue this coming year as increased oil prices will put pressure on the government to raise taxes in the future. 

Districts

Main article: Districts of the Bahamas

The districts of the Bahamas provide a system of local government everywhere in The Bahamas except New Providence, whose affairs are handled directly by the central government. The districts are:

Acklins Berry Islands Bimini Black Point, Exuma Cat Island Central Abaco Central Andros City of Freeport, Grand Bahama Crooked Island East Grand Bahama Exuma Grand Cay, Abaco Harbour Island, Eleuthera Hope Town, Abaco Inagua Long Island

Mangrove Cay, Andros Mayaguana Moore's Island, Abaco New Providence North Abaco North Andros North Eleuthera Ragged Island Rum Cay San Salvador South Abaco South Andros South Eleuthera Spanish Wells, Eleuthera West Grand Bahama

Districts of the Bahamas

Economy

Main article: Economy of the Bahamas

 

Tourism plays an important part in the economy of the Bahamas.

 

 

In the mid-1980s, the Bahamas was classified as an upper middle-income developing country and ranked among the wealthiest nations in the Caribbean region. In addition, the Bahamas is the third (3rd) wealthiest country in the western hemisphere. Tourism was the nation's primary economic activity. In 1986 the World Bank reported that tourism directly and indirectly accounted for approximately 50 percent of employment. Tourism's share of the gross domestic product (GDP) was estimated at 70 percent by the United States Department of Commerce.

In order to lessen the economy's dependency on tourism, the government has followed a policy of diversification since the 1970s, emphasising development in the industrial and agricultural sectors. Success, however, has been limited. The nation experienced setbacks in the early 1980s with the closing of steel and cement plants and oil refineries. Because industries locating in the Bahamas tended to be capital intensive, the industrial sector's share of the labor force was estimated at just 6 percent in 1979. Industry's share of GDP was estimated at about 10 percent in the mid-1980s. The agricultural sector (including fishing) also employed only about 6 percent of the labour force in the early 1980s. Despite various programs to boost production, the World Bank estimated that agriculture in the Bahamas accounted for less than 5 percent of GDP in 1986. The nation's banking and finance sector experienced significant growth in the 1970s and 1980s. This sector contributed approximately 7 percent to GDP in the mid-1980s but employed only about 3,000 Bahamians.

The overall performance of the economy during the past several decades has been positive. In the 1960s, the country recorded robust economic growth; growth rates averaged 9 percent annually as direct foreign investment spurred the development of tourism. Economic performance in the 1970s was not as successful. The international economic recession caused a reduction in investment, especially after the 1973 and 1979 oil price shocks. Bahamian independence in 1973 also caused a certain amount of uncertainty, contributing further to reduced foreign investment. Toward the end of the decade, however, economic performance improved, led by growth in tourism; investment soon followed suit, resulting in a boom in the construction sector and an increase in employment levels.

The economy continued to perform well in the early and mid-1980s. Real GDP growth in the 1980-84 period averaged 3 percent. The only notable setback occurred in 1981, when recession in the United States resulted in a decline in stopover visitors (hotel occupants rather than cruise ship or day visitors) and the manufacturing sector was hurt by the closing of several plants; real GDP for that year fell by 9 percent. Tourism recovered quickly, however. In 1982 about 1.7 million foreign tourists visited the Bahamas, and by 1986 that figure had grown to 3 million. GDP was US$1.8 billion in 1985, and per capita GDP was estimated at US$7,822.

The nation was not without economic problems. Growth and development were not uniform throughout the country. Most development occurred in New Providence and Grand Bahama, causing significant migration from the Family Islands to these two urban centres. This migration strained the infrastructure and social sectors of New Providence and Grand Bahama. The government also was faced with the heavy burden of spreading facilities and services throughout the Family Islands. A second problem of the Bahamian economy was its dependence on a single sector, tourism; that sector's well-being was in turn affected by the economy in the United States, the source of most tourists. To reduce this dependency, the government actively pursued a policy of diversification. Finally, the country was afflicted with the problem of structural unemployment; in 1986 unemployment levels were estimated in the 17- to 22-percent range. Industrial development tended to be capital intensive because of a high wage structure and a scarcity of technically skilled labour.

External Links

• Official website for Bahamas government
• Official website for Bahamas Tourist Office
• Bahamas travel guide from Wikitravel
• Bahamas Financial Services Board
• The Association of International Banks & Trust Companies in The Bahamas
• The Bahamas Constitution
• Bahamian Studies Online
• CIA World Factbook entry on Bahamas
• http://en.wikipedia.org/wiki/Bahamas

Data

Age structure:	0-14 years: 27% (male 41,268/female 41,186) 15-64 years: 66.5% (male 99,961/female 103,230) 65 years and over: 6.5% (male 8,176/female 11,834) (2007 est.)
Median age:	total: 28.1 years male: 27.3 years female: 28.9 years (2007 est.)

Ethnic groups:	black 85%, white 12%, Asian and Hispanic 3%
Religions:	Baptist 35.4%, Anglican 15.1%, Roman Catholic 13.5%, Pentecostal 8.1%, Church of God 4.8%, Methodist 4.2%, other Christian 15.2%, none or unspecified 2.9%, other 0.8% (2000 census)
Languages:	English (official), Creole (among Haitian immigrants)
Literacy:	definition: age 15 and over can read and write total population: 95.6% male: 94.7% female: 96.5% (2003 est.)

Economy - overview:	The Bahamas is a stable, developing nation with an economy heavily dependent on tourism and offshore banking. Tourism together with tourism-driven construction and manufacturing accounts for approximately 60% of GDP and directly or indirectly employs half of the archipelago's labor force. Steady growth in tourism receipts and a boom in construction of new hotels, resorts, and residences had led to solid GDP growth in recent years, but the slowdown in the US economy and the attacks of 11 September 2001 held back growth in these sectors in 2001-03. The current government has presided over a period of economic recovery and an upturn in large-scale private sector investments in tourism. Financial services constitute the second-most important sector of the Bahamian economy, accounting for about 15% of GDP. However, since December 2000, when the government enacted new regulations on the financial sector, many international businesses have left The Bahamas. Manufacturing and agriculture together contribute approximately a tenth of GDP and show little growth, despite government incentives aimed at those sectors. Overall growth prospects in the short run rest heavily on the fortunes of the tourism sector, which depends on growth in the US, the source of more than 80% of the visitors.
GDP (purchasing power parity):	$6.556 billion (2006 est.)
GDP (official exchange rate):	$6.159 billion (2006 est.)
GDP - real growth rate:	4% (2006 est.)
GDP - per capita (PPP):	$21,600 (2006 est.)
GDP - composition by sector:	agriculture: 3% industry: 7% services: 90% (2001 est.)
Labor force:	176,300 (2004)
Labor force - by occupation:	agriculture 5%, industry 5%, tourism 50%, other services 40% (2005 est.)
Unemployment rate:	10.2% (2005 est.)
Population below poverty line:	9.3% (2004)
Household income or consumption by percentage share:	lowest 10%: NA% highest 10%: 27% (2000)
Inflation rate (consumer prices):	1.2% (2004)
Budget:	revenues: $1.03 billion expenditures: $1.03 billion; including capital expenditures of $130 million (FY04/05)
Agriculture - products:	citrus, vegetables; poultry
Industries:	tourism, banking, cement, oil transshipment, salt, rum, aragonite, pharmaceuticals, spiral-welded steel pipe
Industrial production growth rate:	NA%
Electricity - production:	1.894 billion kWh (2005)
Electricity - consumption:	1.762 billion kWh (2005)
Electricity - exports:	0 kWh (2005)
Electricity - imports:	0 kWh (2005)
Oil - production:	0 bbl/day (2004)
Oil - consumption:	27,000 bbl/day (2004 est.)
Oil - exports:	transshipments of 41,290 bbl/day (2004)
Oil - imports:	NA bbl/day
Oil - proved reserves:	0 bbl
Natural gas - production:	0 cu m (2005 est.)
Natural gas - consumption:	0 cu m (2005 est.)
Exports:	$451 million (2005 est.)
Exports - commodities:	mineral products and salt, animal products, rum, chemicals, fruit and vegetables
Exports - partners:	Spain 23.8%, US 21.1%, Poland 14.4%, Germany 7.3%, UK 6.1%, Guatemala 5.2% (2006)
Imports:	$2.16 billion (2005 est.)
Imports - commodities:	machinery and transport equipment, manufactures, chemicals, mineral fuels; food and live animals
Imports - partners:	US 24.5%, Brazil 15.6%, Japan 13%, South Korea 7.8%, Spain 7.1% (2006)
Economic aid - recipient:	$4.78 million (2004)
Debt - external:	$342.6 million (2004 est.)
Market value of publicly traded shares:	$NA
Currency (code):	Bahamian dollar (BSD)
Exchange rates:	Bahamian dollars per US dollar - 1 (2006), 1 (2005), 1 (2004), 1 (2003), 1 (2002)
Fiscal year:	1 July - 30 June

Telephones - main lines in use:	133,100 (2005)
Telephones - mobile cellular:	227,800 (2005)
Telephone system:	general assessment: modern facilities domestic: totally automatic system; highly developed; the Bahamas Domestic Submarine Network links 14 of the islands and is designed to satisfy increasing demand for voice and broadband internet services international: country code - 1-242; landing point for the Americas Region Caribbean Ring System (ARCOS-1) fiber-optic submarine cable that provides links to South and Central America, parts of the Caribbean, and the US; satellite earth station - 2 (2007)
Radio broadcast stations:	AM 3, FM 5, shortwave 0 (2006)
Television broadcast stations:	2 (2006)
Internet country code:	.bs
Internet hosts:	248 (2007)
Internet users:	103,000 (2005)

Airports:	62 (2007)
Airports - with paved runways:	total: 24 over 3,047 m: 2 2,438 to 3,047 m: 3 1,524 to 2,437 m: 12 914 to 1,523 m: 7 (2007)
Airports - with unpaved runways:	total: 38 1,524 to 2,437 m: 5 914 to 1,523 m: 11 under 914 m: 22 (2007)
Heliports:	1 (2007)
Roadways:	total: 2,693 km paved: 1,546 km unpaved: 1,147 km (1999)
Merchant marine:	total: 1,213 ships (1000 GRT or over) 40,403,455 GRT/54,276,183 DWT by type: barge carrier 1, bulk carrier 225, cargo 240, chemical tanker 84, combination ore/oil 13, container 72, liquefied gas 49, livestock carrier 2, passenger 117, passenger/cargo 34, petroleum tanker 196, refrigerated cargo 118, roll on/roll off 18, specialized tanker 4, specialized tanker 1, vehicle carrier 39 foreign-owned: 1,134 (Angola 6, Australia 3, Belgium 15, Bermuda 12, Brazil 1, Canada 13, China 9, Croatia 1, Cuba 1, Cyprus 20, Denmark 66, Finland 8, France 43, Germany 40, Greece 214, Hong Kong 3, Iceland 1, Indonesia 3, Ireland 2, Italy 1, Japan 62, Jordan 2, Kenya 1, Malaysia 11, Monaco 11, Montenegro 2, Netherlands 24, Nigeria 2, Norway 232, Philippines 1, Poland 15, Russia 5, Saudi Arabia 15, Singapore 9, Slovenia 1, South Africa 1, Spain 11, Sweden 5, Switzerland 2, Taiwan 1, Thailand 1, Trinidad and Tobago 1, Turkey 5, UAE 20, UK 68, US 162, Uruguay 1, Venezuela 1) registered in other countries: 3 (Barbados 1, Panama 2) (2007)
Ports and terminals:	Freeport, Nassau, South Riding Point