In the wake of turmoil caused by the announcement that Harrah’s was pulling out of its involvement in the redevelopment of Cable Beach, it seems much has come to light about Bahamian process in the international investment arena.
Once a project with its decidedly huge participants literally gushing in the international business press about the possibilities and potential, (Harrah’s, Heyer’s Starwood Team On Giga-Resort, Forbes Magazine, November 7, 2005), today the Baha Mar project is now struggling to stay alive.
What happened?
Here is a chronology of the significant milestones of this business deal:
November, 2005: One of the largest deals in Bahamian history is announced in late 2005 between world-leaders in hospitality and entertainment and a Bahamian company. The plan is to roll immediately upon receiving government approval.
March 10, 2008: Key partner Harrah’s announces they are not continuing, citing lack of government approvals. Meanwhile, they will continue a Spanish project of roughly the same scope.
Surprising, but that’s about it. The deal died on the vine, waiting for approval.
In an era where in less time than between the first kiss and the last goodbye of this deal, as a matter of necessary business practice, partners of this size assemble, build and begin returns on large projects, overcoming a maze of environmental, regulatory, and code regulations.
In the wake of the bride abruptly leaving the wedding, blame is being meted to every corner, by every corner.
Bahamas Chamber of Commerce President Dionisio D’Aguilar suggests it was the fault of the government for taking too long to approve the project. ( D’Aguilar: Gov’t Took Too Long To Seal Baha Mar Deal Bahamas Journal – Tameka Lundy)
The week previous in the Bahamas House of Assembly, Prime Minister Ingraham relayed his position that he was not satisfied that Baha Mar has the financial resources to pull off the project.
In their last public release, March 10, Baha Mar claims their partners have breached the agreement, alluding that the breach is based on the comments made by Prime Minister Ingraham.
In the same breath as now announcing a few hours ago that Baha Mar approvals have been given, several members of government have now gone on record finely slicing the issue of late government approvals and blaming it on the government of the former Prime Minister, Perry Christie.
To business people, particularly those who deal internationally, I am afraid that the reasons behind this great loss of opportunity are at once simpler and more obvious than being the fault of any one entity.
This is a failure of purpose.
Businesses are not principally driven by faith, morals, ethics, social goals, or promises.
The purpose of a business, any business – for the case of this commentary, the Baha Mar/Starwood/Harrah’s venture – is to make money.
The rule of business is that a venture will inevitably fail when it finds itself in a position where profits are not possible, or where returns are further out than the comfort zone determined in the initial agreement period.
For whatever reasons – or blame if you must – the result is that the time to get a Bahamas venture off the ground is now approaching legendary status in the international business community. Word is getting around, and whatever advantages we had – proximity, tax advantage, etc. – as a country, we do not seem to be able to master the art of the international business deal.
Much as it is painful to contemplate, it seems unlikely that an entity of the size and momentum of Harrah’s will reverse its stance. They are now off chasing their profit potential in what they now consider to be greener pastures.
Rather than look to lay blame for yet another stillborn deal, I think it would be better to consider how to avoid this type of thing in the future.
When business deals seem to be able to be easily created but cannot survive the pre-natal period, it may be time to move some of the power controlling the overall business environment back to the people.
Perhaps it is time to consider evolving our viewpoint of the leadership abilities of our own business community.
Business decisions should be made by the country’s business people, not leaving them entirely in the political. There are several world leading business people in the Bahamas who should quickly be assembled to review every business proposition in front of the Bahamian people.
Under some simple rules such as non-partisanship, no pay for public service, and majority vote decisions, any of the Bahamas business community members now on the Business Development Committee would be in far better position to tell the government which propositions would be likely to succeed or fail.
The government’s role would be to accept the business community’s decisions regarding projects, then serve as a fast-track manager for a positive and swift conclusion of the paperwork involved in regulatory issues.
There are several entities that could serve as the consensus body regarding a submitted business plan – the Chamber of Commerce takes a vital and active role in promoting business direction in other communities and other countries.
I think it is obvious that The Bahamas wants to get to world pace, but that we are frustrated in our attempts. We need to place the responsibility for the solution with ourselves, and stop looking at blame as a mechanism, turning instead to self-empowerment.
Today, we have a tremendous amount of power and responsibility vested in one man who must follow the will of the people, control the purse strings, and lead the charge for international investment.
Leading this charge is just too much work for one person, regardless of how great a man or woman they are. The Bahamas has grown substantially in size and consciousness since this colonial viewpoint of economic management was last effective.
Making our leaders in the business community feel welcome to become responsible for driving the country’s business environment would solve many issues.
Yes, it will undoubtedly create other problems, but it would spread the great workload of quickly making important business decisions for our country to many shoulders, shoulders already accustomed to bearing the load.