It is a pleasure and an honour to be able to address you on this occasion on a subject of keen interest to our citizens.

At the last press conference that I held this week, I congratulated Barack Obama on his being elected President of the United States on behalf of the Progressive Liberal Party.  At that time, I repeated what I had said at my party’s convention in February of this year.

We do not normally comment on who is elected President of the United States of America.  We have to work with whomever is elected President.  However, this was not a normal situation given who he was and the keen public interest of our citizens.  I referred to the expression of the late Dr. Martin Luther King Jr. who said that one day America must live out the true meaning of its creed that all men are created equal.  In the election of Mr. Obama, the world was watching to see whether America would indeed do so.

I was in Washington on the night of the election, and following the result I was at the gates of the White House where thousands of young people of all races and creeds gathered to usher in and mark the new era.  I was with friends who are of African descent in the U.S. and many of them were in tears as they witnessed an event that they thought they would never see in their lifetimes, a man of African descent elected to the presidency of the United States.
Even as he walked the long walk from behind the stage to give his acceptance speech, they were on pins and needles because many thought that some harm would come to him and end the dream.  Many are still fearful that it will not happen.

The issue of his electability is however behind us now. The question is where to from now?

The day after the election took place, I was the guest of the American Enterprise Institute, a conservative think tank in Washington D.C.  It was there that they who are mainly Republicans and conservatives, were quiet concerned about the new ideology that has swept into town.  They were concerned about the statement sharing the wealth made by Mr. Obama during the campaign.  Some have accused him of being a socialist because he said that.  It should be pointed out that income tax is in fact a measure that redistributes the wealth of a country.  Taxes generally are that way.  The point is taxation cannot be so onerous that it deters wealth creation and accumulation. The Bahamas can make that case.

The business community and the conservative think tanks and pundits in this country have also expressed their opposition to Mr. Obama by suggesting that his Presidency will be bad for The Bahamas because he plans to shut down the offshore financial services sector in this country and the region.

In fact, on 17th February 2007, Mr. Obama along with Senator Carl Levin of Michigan and Senator Norman Coleman of Minnesota introduced a measure to the Senate that is not now listed as inactive legislation called the Stop Tax Haven Abuse Act.

Mr. Levin said that it was designed to recapture the loss of 100 billion dollars of revenue to the U.S. Treasury.   Mr. Coleman said “that it is unacceptable that some individuals are using offshore tax haven and secrecy jurisdictions to shelter trillions of dollars in assets from taxation.  These tax schemes cause a massive revenue shortfall and sadly, it is the honest American taxpayer who must bear a disproportionate burden of investing in areas like education and healthcare.  We are introducing this bill to close those loopholes, shut down offshore tax schemes, and ensure that every America pays their fair share of taxes.”

Mr. Obama said on the day it was introduced: “This is a basic issue of fairness and integrity.  We need to crack down on individuals and businesses that abuse our tax laws so that those who work hard and play by the rules are not disadvantaged.”

The regime of the Bill is that it will establish certain rebuttable evidentiary presumptions in tax and securities legal proceedings for non-publicly traded entities located in what is termed in the bill “Offshore Secrecy Jurisdictions.”  Among those presumptions are: a person who transfer assets to such an entity in one of the countries listed as an offshore secrecy jurisdiction will be  deemed to be the person who exercises control over the entity.  Further, that when income is transferred to such an entity it is presumed to be unreported income to that person.

The bill lists 34 jurisdictions that are called “Offshore Secrecy Jurisdictions”.  The Bahamas is one of those countries.

It would seem to me that the basis upon which the bill proceeds is false, but in the past that has not stopped legislation in developed countries from proceeding.

One of the local pundits is predicting that at the upcoming G20 summit in Washington there will be greater pressure brought to bear through the Organization for Economic Cooperation and Development to clamp down on jurisdictions like The Bahamas who specialize in financial services.

There has been much hand wringing in The Bahamas about this.  The critics who oppose Mr. Obama's election say the Bahamians ought to think again about their support for him because of this policy.  I think their criticism is misapplied.  They argue that the Republicans are in fact better for The Bahamas and the region than the Democrats.  They supply in aid of their case the decision by then President Clinton to support the case of the Central Americans against Caricom on bananas at the World Trade Organization that gut the banana industry in the region.  President Clinton himself admitted that he thought that he had made a mistake but then it is done and cannot be undone.

My own response is more sanguine. I argue that we are dependent on the United States economy come what may. We do not impact the electoral result there.  Our complaint then is almost an idle complaint.  I use the expression from The Lion In Winter: “why complain about the air when there is nothing else to breathe?”

More seriously though, there are changes in market conditions all the time. The question then is not so much what Mr. Obama will do; the more important question is what will the Prime Minister of The Bahamas do to adjust to the changing market conditions. Mr. Obama will be the President of the United States of America as he is fond of saying.  He will presumably act in the best interests of the United States of America. Our government then must act in the best interests of the Commonwealth of The Bahamas.

We have gone down this road before.  We had significant changes in the market conditions in 2000. We survived.  We ought to be more proactive both the government and the sector in seeking to find out what we can do to face the challenges or to ameliorate them, or to change minds.

By now, the government and the sector ought to have paid a visit to each of those U.S. Senators to find out if there was any way to address their concerns. Indeed is this still an active matter.

Certainly, a more general case can be put for the offshore sector.  One case is that contrary to the assertions in the U.S., the wealth accumulation that leads from tax competition actually helps the developed countries because the monies are reinvested in the developed economies.  There is a national security interest for the United States in ensuring that these societies survive economically and not become economic basket cases and dependent upon the U.S.  Tax competition is an honest enterprise and low tax jurisdictions are part of that honest tax competition.  In addition, The Bahamas has signed a Tax Information Exchange Agreement (TIEA) with the United States.  Further, our government and the sector ought to be able to tell us what the prospects are for the passage of this legislation and can it be amended.

None of this however, ought to cause us to naysay the victory of Mr. Obama. He is obviously a balanced and well educated, thoughtful man.  We ought to enjoy the moment.  Whatever his policies are to come, his victory is so important to the lifting of the self-esteem of young people of African descent in this country that if are outweighs any potential economic issues at this time.  They can see that one of their own can make it, if they work hard, learn their lessons and be honest.  The victory negates the thug culture that threatens to overtake us even up to the halls of government in this country.

I add that on that night in Washington, I saw thousands of young people in front of the White House.  They came to take pictures, beating drums; some were honking horns and shouting “yes we did!”  It was joyous and thousands of young people of all races embrace this victory as a signal that the political process can be engaged, and that they could accomplish change through the ballot box.  The young people of The Bahamas have their marching orders.

Many Bahamians plan to go to Washington for the inaugural of the new President.  I plan in my own constituency at the Fox Hill parade to put up a big screen TV on the day so that people can join me to watch history taking place.  I hope that I have been useful this afternoon and I look forward to coming to visit with you again.

Thank you very much indeed.