Wednesday, March 10, 2010

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Smarter use of resources Every so often commentators on the local economy offer suggestions on how this country could place itself on the path to sustainable development. More often than not, those suggestions invariably involve some reference to diversification of the economy beyond the twin pillars of tourism and financial services, and the simultaneous expansion of the agro-industrial sector together with increase emphasis on the promotion of light manufacturing industries. That call for a new direction of the economy has not gone unheeded over the years. Indeed, successive governments have actually embraced the concept in principle and have responded by creating institutions and directing resources to that effort. In the early 1970s, two separate state institutions were established for the expressed purpose of assisting in the country's diversification effort. The Bahamas Agricultural Corporation was intended to assist local farmers by providing technical assistance, small farm loans, seeds, and packing houses for the storage and distribution of their agricultural products. The Bahamas Industrial Corporation in a similar manner was to provide assistance to the local light manufacturing industries inclusive of providing factory sites on industrial parks. Buildings, equipment and raw materials were accessed by way of concessionary loans advanced from the then newly established Bahamas Development Bank. The effort, no matter how well-intended, could not be regarded as a success in any way, shape or means. The combined contribution of agriculture, fisheries and light industries to gross domestic product (GDP) shrank from a little over 10 percent in the 1970s to a little over seven percent today, some 30-plus years later. Indeed, the same or a similar playbook of economic development for underdeveloped economies in Africa, Asia, the Pacific and the Caribbean yielded similar disappointing results. In essence, that model for development directed national resources into areas (light-manufacturing, food processing, and low-value assembly) where the developed economies were well established, having gained efficiencies and cost-effectiveness after many years of operation. There is a desperate need in developing countries in general and in The Bahamas in particular to utilize the scarce resources more efficiently; to work them smarter rather than harder, so that the yield could be more beneficial to the country. And where possible, to identify resources that may be peculiar to the country and at the same time, in demand by the rest of the world. A smarter use of resources would demand an increased emphasis on the use of research and development and the application of high-level analysis before embarking on projects and programs which are intended to assist with our economic development. It could also mean paying closer attention to the ongoing research in The Bahamas and obtaining, where appropriate, access to and use of any findings that may have a commercial value in order to ensure that the country receives a fair return for the use of its resources. A case in point is a reportedly significant marine-based resource which is found in only two countries in the world: Shark Bay, Australia and in Abaco, Bahamas. That resource is a small marine organism, similar to the coral reefs, which have been in existence even before the dinosaurs. That organism (stromatalite) is reportedly under intense research as a possible cure for some types of cancer. It would appear therefore that the country may have a resource with the potential to transform the global health market. If that is indeed the case, there is an urgent need to implement a system which would require foreign researchers in The Bahamas to make their published results available to the government and in the event that the findings lead to commercial usage, the country ought to receive some type of royalty. Monday February 08, 2010