The Bahamas has apparently lost its growth-potential edge, at least in the eyes of leading Caribbean bankers, who've recently booted it off a list of Caribbean nations set to perform well even in this difficult environment.

A 2008 KPMG survey of the banking industry has firmly placed Jamaica, Anguilla and St. Lucia in the top spots that The Bahamas, Turks and Caicos and the Dominican Republic (DR) proudly held only a year ago. But, unlike us, the DR dropped down just one notch this year, ranking fourth on the growth potential list.

According to the report, which will be introduced today by Bahamian Simon Townend at a Trinidad conference, the winners demonstrate the strongest "ability to attract European travelers, diversified economies, good airlift and low-cost carriers."

The Bahamas, overwhelmingly tied to the fortunes of the U.S., has lost ground on a number of those fronts. Its spotty airlift from Europe, for example, is something the Ministry of Tourism is now actively trying to change.

Its fall from grace comes on the heels of last year's glowing assessment, with bankers lauding its proximity to the then-key U.S. market as the chief reason for their bullish stance.

"The Bahamas, with its historically strong tourism product, has significant growth potential," reads the 2007 KPMG report. "As the market for condo-hotels in the region continues to grow, regional lenders are becoming more optimistic about the growth and sustainability of such projects."

Recent falloff from the U.S. subprime market and its effect on credit markets, both in the States and around the world, have dampened that enthusiam. They've also limited the scope and scale of resort development.

Added to the mix, the Caribbean now faces competition from nearby resort destinations.

"More than half (of respondents) considered Central America to be the region that posted the greatest competitive threat to the Caribbean," the report states. "Lower costs, lower perceived crime rates and strong airlift capabilities were given as reasons for its competitive strength."

Their reasoning may be in part based on a hike in regional crime rates and perceptions about the safety of Caribbean destinations. This nation, itself, has grappled with a rise in murder and overall crime. The homicide count last year hit an unprecedented 79 and the potential impact on its tourism product.

Coupled with a declining value of the U.S. dollar, it could have the potential to drive visitors to competitors increasingly ready to receive them.

— By INDERIA SAUNDERS