FROM DR. GILBERT MORRIS: DEATH BY A THOUSAND CUTS
From his Facebook Page 13 July 2019, Gilbert Morris talks about the financial services sector in The Bahamas:
The Bahamas financial services sector is a carnival of failures that exhibits the worst habits, inclinations and character of our self-conception as Bahamians.
That is to say, the decline of the financial services sector; our failure to meet the challenges posed by cross-border unconstitutional fiats from G20 nation’s; our notion that the role of any Minister of Financial Services (a ridiculous title that shows our cluelessness), is just to oversee capitulation and grovelling survivalism, then to lotion the public by claiming such a lack of vision and strategy are an understanding of reality…these are the stilts upholding failure registered in trending decline since 1998.
a. Our reduction of the Ministry as “financial services”, rather than cultivating the “Bahamas International Financial Centre”, means and has meant that defending the survival needs of a few trust companies in large law firms and one or two large domestic entities together again with bottom-feeding back office operations topped off with crawling to Europe to be told what to legislate is the character of this sector; which no self-respecting nation could claim with pride.
b. This means constantly adopting unconstitutional rules drafted by other nations for their purposes, even when those nations engages in practices forbidden to us by these foreign rules.
c. Our mealy-mouthed craven whining leads us to say if we don’t capitulate, the Europeans would close off corespondent banking relationships, limiting transactions. Our representatives say this as if it’s a final irresistible wisdom, as if it’s the view of heaven, which cannot be challenged. It is galloping nonsense!
d. The strategic bottleneck with Europe reveals two things:
1. We have failed to manage the affairs of the Bahamas in a manner that gives us leverage in the world. A small nation should have these strategic leverage considerations in EVERY decision: particularly the Chinese expansion on Bahamian soil, in which we have granted the most precious geostrategic value to the Chinese for NOTHING! Had we been more Nehemiah than Esau, we would have cultivated our relationship with the US and China in a manner that allows us to encounter the European challenge by looking at what it exposed about us and set about to fix that.
2. The European challenge has meant utter unlawful capitulation and the forced adoption of bogus laws, increasing compliance operations rather than profitable business. It has set up the Bahamas as the most reliable domino to fall to EU/OECD demands, with our officials whining that “everyone is against us”, seemingly unaware that that’s like Micheal Jordan complaining about being double teamed. Being ganged upon reveals to the strategist the designs and interests of his opponents: that’s is what sets the terms and foundation for strategy. This shows further that the Minister is a lackey of the sector rather than the master of a financial centre.
e. This exposes another major flaw: The Bahamas (and almost all Caribbean financial services jurisdictions) have treated financial services as a regulatory matter rather than as foreign policy. If your country finds itself capitulating it means you have no foreign policy levers to pull. It means pretending that you are “negotiating” with the EU/OECD or G20 is evidence of stark cognitive dissonance, when the truth is one is being told what to one is going to do. 100% of these meetings are “calls to the principal’s office”, rather than any strategic meeting called by the Bahamas or any of the other begging jurisdictions in the region.
LET ME MAKE SOMETHING ABUNDANTLY CLEAR:
In order to develop an actual financial centre, 70% of the current financial services providers, limited banks, trusts and other licensed entities would have to disappear into an ignominious history: THEY WOULD HAVE TO DIE!
A new strategic platform means the Minister for the “Bahamas International Financial Centre”, has no need to meet with service providers, since his job is to lay out the legal foundation, commercial vision and strategic framework for the financial centre. Service providers would either qualify or not as licensed participants in the new model.
In a recent paper, commissioned by a regional goverment thinking in the right way, I laid out the basics for a financial centre:
a. A legal and foreign policy strategic framework
b. A designated area (like a free trade zone), that is the site of the financial centre
c. Strong anti-defamation laws
d. A Global Professional Registration Centre
e. Digital Company Registry
f. Global Custody
g. Full Digital Platform Cross-listing on National Stock Exchange
h. Arbitration Centre
I. Digital Due Diligence Pre-registry
j. Deputy Attorney General for Financial Centre
k. Deputy Minister of Foreign Affairs for Financial Centre
l. Double Taxation Research and Negotiation team
m. Regulatory Ombudsman team
These requirements can’t just be enacted. They integrate with each other in important ways. For instance, a Global Bond facility for capital aggregation would be a unique option given the Bahamas relationship with China. (An option BVI should have pioneered).
Also, a proper centre means the Bahamas could have been at the forefront of Digital Currency Settlements on a global basis.
Our leaders – in both parties – have a habit of insisting that they have the real concern of “saving a sector”; dismissing practical concerns as “intellectual issues”, even where one has decades more practical experience than they do. But their ‘sector saving’ is nothing more than nursing a rotting carcass!
Sir Stafford Sands has an intuition decades ago and the sector has not moved beyond that…the Europeans arrived to tell us how they would use our Sovereignty, since we knew nothing of the global financial system. Today, we have done little beyond copying legislation and products from other jurisdictions – which we don’t know how to defend – then claiming to have advanced.