The islands of the Bahamas can admit, despite being head long in the path of natural disaster such as hurricanes, they have had a stroke of luck in regard to their thriving economy. Due to the strong ties to the US economy, the islands were greatly impacted by the major financial crisis of 2009. This islands ability to deal with current difficult economic environment. It is evident in the obvious pace of rapid development in the tourism sector suggesting that the islands economy is on its way to recovery. The major development projects more recently announced development of 3000 room capacity resort, which will eventually employ over 2000 Bahamian persons.
Obviously, the economy of these 700 islands is largely dependent on tourism, overnight and day visitors, and cruise ship passengers, find that the Bahamas is a grand act to follow. Its proximity to the US mainland is one of the main advantages. Bahamas free port is open to cruise ship on night cruises out of the US, who capitalize on access to international waters within miles of pulsating activities and entertainment.
The currency of the Bahamian archipelago is the Bahamian dollar, which has equal to the SU dollar, mighty strong fact for many, US consumers. The tourism trade is consciously developed as the islands administrators throughout the years realize the great significant of maintaining the islands as a prime tourist destinations in a very competitive environment. It fiscal policies, and other major policies are tied into the country’s main directive. More recently though the country has seized the opportunity to diversify it economic base and has progressively encouraged the growth and development of the financial services industry specifically the areas of banking and reinsurance. With much effort and emphasis placed on the development of this product, the financial service sector does already represent substantial components of Bahamas’s GDP.
Because the Bahamian economy is closely linked to that of the US, the inflation rates are comparable. The country is incapable of producing food due to the in arable lands, and the import bill is staggering. The goal is to maintain a working balance between the country high import bill and generating enough revenue on island to offset the high import levels.
The Bahamas is considered part of the few prosperous countries in the Caribbean region, following Bermuda and Turks and Caicos, Since most of the islands economic activity is driven by tourism, it is also accurate to say that this sector but is one of the Bahamas biggest employment areas. When the Bahamas experienced fallout in late 2008, and a number of foreign investment project either were cancelled or postpones, the country experiences a great increase in unemployment rates as construction, development and the service industry provides jobs for more than half the country’s workforce. The Bahamas enforces a very competitive tax regime to compete with other financial centers in the region. Outside of tourism related products, the rest of the country’s revenue is derived from import tariffs, corporate license fees, and property and stamp taxes. Though the Bahamas imposes no income tax, corporate tax, capital gains tax, value-added tax (VAT), or wealth tax as the icing on the cake that attracts investors and encourages foreign financial business.
The IMF has forecast an upswing for the Commonwealth of the Bahamas, and all indicators are there, for as third quarter 2010, many stalled projects are on-stream again, unemployment rates are way down and the economic activity is ever present.