03162023 BUSINESS

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Sir Franklyn: Gas woe ‘won’t cripple country’

By NEIL HARTNELL Tribune Business Editor

FOCOL’s chairman yesterday said he was “very confident a solution will be found” to the Bahamian petroleum industry’s financial woes, and added: “This will not be fatal to the country.”

Sir Franklyn Wilson, speaking after the BISX-listed petroleum products provider and its two competitors met yesterday with the Government, told Tribune Business the wholesalers were asked to review “some options and ideas” that were discussed and respond “within a few days” with their position to the Davis administration.

Describing the sector’s issues as “complex” and “challenging”, he added that that it has “seen this rodeo before” in terms of retailers’ complaints about how their survival and profitability are being squeezed by inflexible

• Three oil majors brought into Gov’t talks

• FOCOL chair: Don’t leave our needs out

• Hints at ‘central purchasing’ scepticism

price-controlled margins that are insufficient to cover ever-escalating operational costs. Hinting that the three oil companies are subject to similar pressures, the FOCOL chief said the issues were “not at one level”.

Sir Franklyn told this newspaper that the outcome had often resulted in “benefits” for gas station operators, the petroleum industry’s retail level, while the three wholesalers - FOCOL (Shell), Esso (Sol Petroleum) and Rubis

- “get nothing” in terms of margin or other concessions from the Government.

However, he said he was “encouraged” that on this occasion the retailers - who are supplied with the fuel and related petroleum products that they sell by their respective wholesalers - have not made allegations or complaints they have been “mistreated” by the latter.

The FOCOL chief, though, hinted he had doubts over the “central purchasing” that the

Atlantis, cruise port: ‘Room’ for PI lighthouse restoration

Government plans to explore as potentially generating cost savings and efficiencies through buying The Bahamas’ fuel supplies in bulk. Michael Halkitis, minister of economic affairs, said earlier this week that the Davis administration wanted to assess a mechanism used by other Caribbean states, but Sir Franklyn indicated the

SEE PAGE B4

Kwasi: IMF holds ‘serious concern’ on fiscal reforms

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Opposition’s finance spokesman yesterday asserted that the International Monetary Fund (IMF) had voiced “serious concerns” over legal reforms that seemingly reduce the Fiscal Responsibility Council’s (FRC) independence.

Kwasi Thompson, former minister of state for finance

in the Minnis administration, conceded to Tribune Business he had not been directly informed of the Fund’s position but rather the Opposition was “advised” it had misgivings over legislation to replace the existing Public Financial Management Act 2021 and Fiscal Responsibility Act 2018 via one consolidated Bill. The Government, while not addressing the IMF or any purported misgivings it may have,

reiterated its long-stated position that both those Acts as well as the Public Procurement Act had proven “unworkable” in practice because they were not tailored to the -on-ground realities of The Bahamas. The Prime Minister again accused his predecessors of implementing the legislation without any of the systems or human

Gov’ts Central Bank debt soars 85% on IMF SDRs

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE GOVERNMENT’S

controversial borrowing of IMF special drawing rights (SDRs) reversed five years of decline by causing its net debt to the Central Bank to soar by 85.4 percent to $805.6m.

The Central Bank, unveiling its quarterly economic review for the three months to end-December 2022, provided further details on the impact of the Davis administration’s decision to access low-cost foreign currency financing by borrowing $232.3m in SDRs advanced to The

Bahamas by the International Monetary Fund (IMF).

Besides causing the Central Bank’s net claims on the Government to neardouble, growing by $371m during that quarter, the report revealed that the increase “contrasted” with a five-year “average quarterly decline” of $47m in what was owed to the monetary policy regulator.

“Reflecting lending to the Government against the IMF SDR allocations, the Central Bank’s net claims on the Government expanded by $371m (85.4 percent) to $805.6m in the fourth quarter as compared to the

SEE PAGE B5

New Procurement Act to end large firm ‘dominance’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE PRIME Minister yesterday said the Government’s digital procurement platform has generated $2.6m savings in just four months since its launch as he slammed his predecessors for giving large firms “dominance” in contract awards.

Philip Davis KC, leading-off House of Assembly debate on reforms to the Public Procurement Act, said close to 1,500 companies have registered with the electronic portal with almost 300 public

sector contracts put out to bid through it.

“We will also have fully digital public procurement with the roll out of the Go Bonfire Platform: A best-in-class procurement platform that is being implemented throughout the public sector and in the Public Hospitals Authority,” he told MPs.

“Since the launch of the platform last November, 1,490 vendors have been registered. Two hundred and ninety-nine opportunities have been contracted during this period and the estimated savings from the use of the platform is $2.6m. This number is expected

• Both say revival of ‘iconic’ landmark ‘desperately needed’

• And that project can co-exist alongside Royal Caribbean’s

• Atlantis: Toby’s proposal ‘lower impact, more sustainable’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

ATLANTIS and the Nassau Cruise Port both say there is “room” for a restored Paradise Island lighthouse to provide an “iconic” visitor experience and boost New Providence’s status as a tourism destination.

Michael Maura, the cruise port’s chief executive and director, told Tribune Business that “improvement is desperately needed” to what he described as a “fixture” that greets all cruise ships and passengers as they enter Nassau’s harbour.

Besides enhancing Nassau’s product offering, and adding to the menu of tours, excursions and attractions available to guests, he added that there was sufficient room for the lighthouse’s revival to co-exist alongside Royal Caribbean’s $100m Royal Beach Club that is also targeted at western Paradise Island’s Colonial Beach area.

PHILIP DAVIS KC

PARADISE ISLAND LIGHTHOUSE

SIR FRANKLYN WILSON

FROM L to R: Alfred Joseph (Veritas, project consultant), Cameron Edgecombe (FES Construction, general contractor), Victoria Smith (Doctors Hospital Grand Bahama supervisor; Pedro Berkeley (Doctors Hospital Grand Bahama assistant manager); Kendra Sturrup (Doctors Hospital Grand Bahama assistant vice-president); Gregory Paton-Ash (philanthropist); Pietro Stefanutti (philanthropist); Dennis Deveaux (Doctors Hospital chief financial officer); Rashae LewisAriste (Doctors Hospital Grand Bahama assistant manager); Donald Dean (The Architects Incorporated); Kesna Hunt (The Architects Incorporated); Ashley Archer (Veritas, project consultant), John-Michael Clarke (Veritas, project consultant)

DOCTORS HOSPITAL BREAKS GROUND ON $20M FACILITY

Doctors Hospital has broken ground, and started construction, on its $20m Freeport hospital that will ultimately employ 90 persons once fully operational.

The 25-bed facility will be located in Freeport’s First Commercial Centre, which was acquired through the BISX-listed healthcare provider’s co-operation with a trio of philanthropists. Kent Rockwell, Pietro Stefanutti and Gregory Paton-Ash facilitated the property’s acquisition and will support various aspects of its renovation.

Plans for the hospital involve establishing a 5,000

square foot emergency room with nine critical care rooms/bays; the delivery of select out-patient services; full in-patient accommodation up to intensive care level; maternity/labour and delivery suites; accommodation for local/visiting specialists; and two modern operating suites for certain surgical procedures. The facility, when completed, will be around 52,850 square feet.

“We recognise that an unmet need has existed in the healthcare landscape in Grand Bahama for decades. Our groundbreaking is another milestone in

Doctors Hospital’s commitment to the delivery of quality medical care in the northern Bahamas. This is an important critical step,” said Dr Charles Diggiss, Doctors Hospital’s president and chief executive.

“Our vision for the Grand Bahama hospital is a bold one, and we now work to create a private flagship healthcare facility of which all Grand Bahamians can be proud.” Prior to starting construction at its new Freeport hospital, Doctors Hospital took over and renovated the former practice of Dr Mallikharjuna R. Kavala in Eight Mile Rock.

The BISX-listed healthcare provider has also recently concluded construction of a new clinic in Freeport on West Mall Drive, which will provide urgent care and accommodation for visiting specialists. Doctors Hospital Grand Bahama said it accepts National Health Insurance (NHI) for covered services and features affordable financing arrangements.

“We are approaching the need for healthcare in Grand Bahama with affordability in mind,” said Dennis Deveaux, Doctors Hospital’s chief financial

officer and project lead.

“We intend to design fixed payment arrangements that will feature unlimited access to primary care providers, and will be deliberate in developing similar programmes for inpatient admission for both insured and cash-paying patients.

“These offerings will create the access needed, and will fall within the umbrella of our Loyalty Advantage Membership Programme (LAMP).”

“We are pleased to work with Doctors Hospital and believe they are the right partner to build a modern urgent care centre and

hospital on island, a much needed service,” said Mr Paton-ash, who has coordinated the engagement of other philanthropists. These included Mr Rockwell, an American industrialist and principal donor, and Mr Stefanutti, a prominent Freeport businessman. The group is not expected to participate in the ongoing operation, which is left to Doctors Hospital. Total employment will grow to 90 once operations reach a mature stage.

Photo:Preston Knowles Photography

THE PRIME Minister yesterday pledged that eliminating waste of taxpayer monies is a “high priority” while blasting legislation passed under the former Minnis administration as “unworkable”.

Philip Davis KC, leading off House of Assembly debate on the Public Procurement Bill 2022 and Public Finance Management Bill 2023, argued that the former administration had failed to ensure the legislation they are replacing was “practical and consistent with sound public policy”: The new Bills are designed to repeal, and replace, the Public

Procurement Act 2021 and, in the case of the Public Finance Management Bill, the Public Financial Management Act 2021 and Fiscal Responsibility Act 2018.

“The Public Procurement Bill before us today repeals and replaces the 2021 Public Procurement Act. The 2021 Act produced some of the unintended public policy consequences that we are keen to avoid,”

Mr Davis said. The new Bill, which was tabled in fall 2022, allows the Government to offer preferential treatment to micro, small and medium-sized, womenowned and Family Island businesses in the competition for, and award, of government contracts.

Mr Davis said: “These are high priority areas we are targeting as a government

to diversify opportunities in The Bahamas. I think this point bears repeating. Under the current Act, the most well-established, wellresourced businesses were able to dominate government contracts under the guise of them being the best fit for the job. This sounds good on paper but ignores the reality on the ground.”

As for the Public Financial Management Act, the Prime Minister said the necessary systems and human resources capacity were not in place in the Ministry of Finance and elsewhere in government to ensure it could be properly implemented.

“We have ensured that the necessary pre-requisites are in place for the successful modernisation of public finances in The Bahamas,” Mr Davis said. “Our first

priority was to look out for the finance and accounting officers who were overlooked by the previous administration.” He pointed out that the Government’s payroll system, which has been in use since 1998, employs software that is no longer supported by the manufacturer. Hitting out at the former Minnis administration for failing to upgrade it, Mr Davis said: “The real victims of their inaction were the thousands of public servants who showed up to work every day but were unable to receive the money they earned.

“This is not just a hiccup in the system. We are talking about people’s careers and livelihoods here. The Government’s Enterprise Resource Planning system was last updated during the

last PLP administration. This is yet another area where very little progress was made.

“There were additional upgrades necessary to assist with facilitating operational, financial and human resource processes. Once again, it now falls on us to take up the mantle of digitisation and address these outstanding issues,” the Prime Minister continued.

“To correct these deficiencies we have signed an agreement with a leading company named Oracle to put in place a cloud-based Enterprise Resource Planning application. This is going to modernise the financial operations of the Government at a much lower cost, as the vendor is providing both the hardware and software for this application.”

Mr Davis said the Public Finance Management Bill will allow for the “strengthening” of the Fiscal Responsibility Council by improving the “confidentiality of information and enhanced qualification requirements for members; greater flexibility for budgetary reallocations, increasing the limit from 3 percent to 5 percent; the introduction of a code of corporate governance to provide oversight of government agencies and business enterprises; the establishment of a Public Sector Audit Committee; better facilitation of the transition to accrual accounting; and re-inserting the provisions related to the deposit fund account, among other significant changes”.

‘Compelling reasons’ absent over public finance reforms

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

THE OPPOSITION’S finance spokesman yesterday urged the Davis administration to provide more “compelling reasons” to justify reforming the Public Financial Management Act 2021.

Kwasi Thompson, former minister of state for finance in the Minnis administration, told the House of Assembly during debate on the Public Finance Management Bill and Public Procurement Bill that the changes being made weaken fiscal accountability and transparency.

Focusing on the Public Finance Management Bill, which is designed to repeal and replace both the existing Public Finance Management Act 2021 and Fiscal Responsibility Act 2018, as well as parts of the Financial Administration

and Audit Act, Mr Thompson said: “You have taken away powers that the previous Act gave to the treasurer or the accountant general.

“One of the main powers that you’ve taken away from them, which will remove from this Bill, is the ability of the accountant-general to compel public servants to give evidence under oath before the treasurer or before the accountant general.” This power to compel public servants to give evidence

under oath has been reserved primarily for the courts and Parliament, but the east Grand Bahama MP said this is a “significant” change to the current Bills.

Mr Thompson added:

“The second thing that this Bill does is it removes the statement, and removes the offence in the previous Fiscal Responsibility Act 2018 which, in Section 5 (4), says a public officer and a public office holder shall not expend public money, create debt, enter into any commitments or otherwise create liabilities for the Government without lawful authority. That was an offence in the previous Act.”

He argued that the new Bill removes this provision “without any justification”.

The reforms also make the annual Fiscal Strategy Report part of the Budget process, and Mr Thompson said doing so undermines the purpose of the Fiscal Strategy Report as a guide for the Budget process.

“The Fiscal Strategy Report is so significant it should not be a part of the Budget process, and it is taking away the ability of the House to debate it,” Mr Thompson said. “They are also significantly changing the exception circumstance clause of the previous Public Financial Management Act. There was a specific reason that you must justify, and you must show, if you wish to deviate from fiscal targets.”

The existing Act allows deviation only in the event of external shocks, natural disasters or national security issues, but Mr Thompson accused the Davis administration of having “watered”

these down in the new Bill before Parliament. Now, only an “unforeseeable event” is required.

The current Public Financial Management Act mandates that

the government must come back to Parliament to justify any deviation from the fiscal targets, but the new Bill removes the need for a debate in Parliament if this occurs.

Sir Franklyn: Gas woe ‘won’t cripple country’

present structure had worked well for this nation to-date.

The Government has moved swiftly, following Monday’s talks with the Bahamas Petroleum Retailers Association and its members, to engage with the three oil major wholesalers as part of its promised strategy to review the industry’s costs and pricing at every level as it bids to square its ‘no increase

in pump prices’ stance with gas station operators’ demands for relief.

“There was a meeting held today with the local leaders of the petroleum industry with minister Halkitis and other advisers to the Government,” Sir Franklyn told this newspaper. “The parties are in discussion, and they’ve asked the industry to consider some options and ideas. The industry will meet and get back to the Government in the time

that the Government has requested them to do so; in a matter of a few days.”

He declined to go into detail, or provide specifics, on what was discussed between the three oil companies and the Government or what the trio’s likely proposals and solution will be. However, the rents, franchise fees, royalties and other levies that the wholesalers charge gas station operators will likely have come up in the talks.

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“It’s a complex situation, it’s a challenging situation, and certainly speaking for FOCOL, we will be as responsive as we can in the circumstances,” Sir Franklyn said of the margin and other financial pressures facing the entire petroleum industry. “Everyone knows what the facts are, and it’s important for the industry to meet and discuss what role the wholesalers will have in this process.

“I’m sure the dealers and the Government will be aware we’ve seen this rodeo before. There’s been any number of times. Politics is politics. The dealers, the retailers, get benefits and the wholesalers don’t. That’s happened any number of times. That’s life. We understand that. I think the wholesalers understand that, and I think the retailers and the Government at the appropriate time will understand that.

“This will not be the first time that the retailers got something and the wholesalers nothing. I’m sure everyone is aware of that.. I’m sure the Government is aware this exact same movie has happened previously. They get something and the wholesalers get nothing. That has happened any number of times. I’m done making that case. I’m sure the retailers will confirm it’s any number of times.”

Gas station operators last enjoyed a margin increase more than 11 years ago under the former Ingraham administration in 2011, when it was increased by 10 cents per gallon of gasoline to the present 54 cents. However, wholesale margins remained much where they were at 34 cents per gallon.

Breaking down the components of gas prices, besides the landed cost of fuel, consumers also pay the price-controlled margins of 34 cents and 54 cents for retailers and wholesalers, respectively. However, the biggest financial beneficiary from the industry is the Government via the Public Treasury, due to the fact that on every gallon of gasoline sold it earns $1.16 plus 10 percent VAT. Yet it incurs none of the industry’s costs.

“The only other point I can make is throughout this process I am not aware of

any claims from the retail-

ers that the wholesalers are mistreating them or being unreasonable; that type of stuff, which is encouraging to see,” Sir Franklyn said.

“These types of allegations have surfaced in prior circumstances, but have not raised their head in these discussions.

“The retailers know the facts, and the Government knows the facts. They know it’s a long time since the wholesalers got an increase. It’s the exact same process identified by the retailers. It’s not at one level. The capital costs are at the wholesale level. It’s not the retailers. It’s a team effort. We’re all in business to serve our various stakeholders.”

Asked how optimistic he was that a mutually beneficial solution to the industry’s woes will be reached for all, including consumers, Sir Franklyn replied: “There’s no choice. The country has to go on.

I have no doubt that this won’t cripple the country.

“It is what it is. This will not be fatal to the country. It doesn’t rise to that level. A solution will be found. We have to. The country has to survive these types of issues. We survived Hurricane Dorian. This doesn’t rise to the level of Dorian. We’ll get through it. We’ve been asked to consider certain things, and we will in a very responsive manner.”

Mr Halkitis, on Tuesday, suggested the Government may also explore the “central purchasing” used by other Caribbean countries.

“We resolved to look at the entire model,” Mr Halkitis said. “Certain Caribbean countries have a system of central purchasing. We want to take a look at that and see if that is suitable in our environment. And we just want to look at the entire chain - from wholesale straight down to the consumer and just examine it.

“So there’s nothing we want to propose right now, but it’s just some other options that we’re looking at. And I could tell you that, you know, if you look right down the chain, everyone is going to say they’re under pressure. The overall concern of the Government is anything that would cause an immediate

increase in gas at the pumps for consumers.”

Sir Franklyn, while not explicitly saying he was opposed to the “central purchasing” concept, or that it would not work in The Bahamas, yesterday hinted at reservations. “My understanding is that there’s some countries in the region where, in effect, the Government has become one wholesaler,” he explained. “We hear that, but The Bahamas has distinguished itself from many countries in the Caribbean.....

“I don’t think it’s very common for us to look to the region necessarily for creative policy initiatives. We tend to look to our own creative genius and what we think makes sense for The Bahamas. We hear it, and policymakers have a responsibility to do what is best for the country, and if they think that’s best for the country then so be it.

“There are many things that happen in the Caribbean that do not happen in The Bahamas. The second statement is The Bahamas has a higher per capita income than other countries in the Caribbean. Oftentimes there’s a relationship between the two.”

Petroleum retailers say their main problem is that a fixed 54 cent margin is no longer sufficient to absorb ever-increasing costs, which include higher overdraft and card fees, plus rising utility and labour costs.

The minimum wage rise has hit gas stations hard, given that many persons were employed at this salary level. The resulting $50 per week, or 24 percent, increase has also required them to pay increased National Insurance Board (NIB) costs. And last year’s spike in gas and oil prices, while increasing dealer’s top-line sales, means higher turnover-based Business Licence fees even though profits have not changed due to the fixed margins.

NIB contribution rate increases and the up to 163 percent increase in Bahamas Power & Light’s (BPL) fuel charge also await, with many already struggling to cover the elevated Business Licence fees due by March 31.

BAHAMIAN SOFTWARE DEVELOPER CUTS DOCTORS’ PROCESSES 45%

A BAHAMIAN software developer says its latest project for Doctors Hospital has slashed the time spent on internal processes at the BISX-listed healthcare provider by 45 percent.

Plato Alpha, in a statement, said is has now constructed the Doctors Hospital (DH) TeleConnect system just one year after developing a digital solution that modernised the company’s COVID-19 testing portal. The TeleConnect system digitises many of Doctors Hospital’s internal processes.

“The TeleConnect project propels our digital transformation, streamlining our operations by automating internal processes and creating portals that make our services more accessible to the public anytime and from anywhere,” said Sherzel Smith, Doctors Hospital’s director for results management and outpatient clinics.

The phased project, now in stage two, took a team of four Plato Alpha specialists some three months to complete. The group included software developers, project manager and a

graphic designer. The TeleConnect project simplifies a cross-section of Doctors Hospital departments and procedures, including managing prescription requests;

Gov’ts Central Bank debt soars 85% on IMF SDRs

FROM PAGE B1

year earlier expansion of $222.1m (94.2 percent). The outcome contrasted with an average quarterly decline of $47.2m (1.7 percent) over the preceding five years,” the Central Bank said.

The transaction’s implications for the external (foreign currency) reserves and credit growth were also unveiled in the Central Bank’s report. “External reserves contracted by $615.8m (19.2 percent) to $2.584bn during the review quarter, exceeding the $277.1m (10.2 percent) reduction in the corresponding period of 2021, partly on account of the drawdown in SDRs from the IMF......

“At end-December, the total stock of external reserves stood at an estimated 33.6 weeks of the current year’s total merchandise imports (including oil purchases), as compared to 36.1 weeks in the same period last year. After adjusting for the 50 percent statutory requirement on the [Central] Bank’s demand liabilities, “useable” reserves reduced by $69.2m (5.7 percent) to $1.147bn vis-à-vis the corresponding quarter of 2021.”

As for the credit market, the Central Bank said:

“During the fourth quarter, largely attributed to the Government receipt of SDR allocations, total domestic credit growth accelerated to $550.9m (6.3 percent) from $129m (1.5 percent) in 2021.... “A disaggregation by sector showed that net credit to the Government rose by $529.2m (19.6 percent), extending the $168.5m (6.1 percent) build-up in the previous year, mostly reflecting proceeds from the IMF SDRs, though the five-year quarterly average showed a decline of 1.7 percent.”

The Opposition has seized on the SDR transaction by

arguing that it goes against the intent of reforms to the Central Bank Act made under the Minnis administration in 2020, which were designed in part to reduce the sums lent by the regulator to the Government so that it was no longer always acting as a lender of last resort.

The Free National Movement (FNM) has also accused the Government of effectively undertaking an illegal transaction because there was no basis for the SDR borrowing in law under the Central Bank Act. Subsequent reforms to this law, which have been tabled in the House of Assembly but not debated or passed, are viewed by the Opposition as confirmation of their accusations.

The Bill, as tabled, contains language stating it “shall be deemed to have come into force on December 1, 2022”, thus making its implementation and legal effect retroactive to when the $232.3m was advanced to the Government.

That will now be permitted by the new legislation, which states in its ‘objects and reasons’ section: “The Central Bank of The Bahamas (Amendment) Bill 2023 seeks to make provision.... of a new section 17A to empower the minister to access, utilise or convert special drawing rights allocated by the IMF for the purpose of reducing its foreign currency debt obligations and to manage its foreign currency debt operations.”

Combined with total issued Treasury Bills, and securities issued or guaranteed by the Government and its corporations, total outstanding loans to the former by the Central Bank cannot exceed 30 percent of the Government’s “average” or “estimated” revenue. Based on forecast revenue of $2.854bn for the 2022-2023 fiscal year, the Government’s $805m debt to the Central

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Bank is still some way below this threshold, which would be around $950m.

Simon Wilson, the Ministry of Finance’s financial secretary, previously said the MoU would provide the Government with access to financing that was an estimated 700 basis points below prevailing market rates. He argued that this seven percentage point differential could generate close to $20m in annual interest savings for hardpressed Bahamian taxpayers compared to the likely rates if the Government had to borrow in the international capital markets.

Mr Wilson also argued that the Government’s SDR borrowing was aligned with the IMF’s stated reason for issuing them, which was their use for “fiscal purposes”. Meanwhile, another

laboratory requests; automation of client finance and payment agreements; and clinical appointments.

“The most rewarding aspect of this project thus

far has been automating the bill collection process and the overwhelmingly positive reaction from the finance team on the significant difference this makes to streamline their daily work,” said Plato Alpha chief executive, Duran Humes. “Building the mobile application that supports this project has also been incredibly satisfying.”

The mobile app enables the public to more easily access Doctors Hospital services and keep updated with available services, prescription renewals and laboratory requests. It also

gives Doctors Hospital a direct line to communicate with patients and clients in real time.

Keith Roye II, Plato Alpha’s chief operating officer, said: “For each project, we start by outlining the client’s objectives and selecting the best tools to execute the job. Communication is pivotal in creating a system that works, so we always keep the client updated as we go along. Finally, we present the final product to the client and make any requested changes.”

initiative temporarily introduced last year resulted in a four-fold increase in net investment outflows from the Bahamas during the 2022 fourth quarter. The Central Bank’s temporary elimination of the 5 percent Investment Currency Market (ICM) premium for Bahamians and residents wishing to purchase the Government’s international foreign currency bonds saw such

outflows increase by more than $90m year-over-year.

“Largely reflective of residents’ purchase of Government’s external bonds in the secondary markets, net portfolio investment outflows increased markedly to $123.7m from $32.7m as outflows related to debt securities accelerated to $162.1m from $16.6m in 2021,” the Central Bank said.

“However, equity and investment fund shares reported a $38.4m net inflow vis-à-vis a $16.2m net outflow a year earlier. In contrast, net direct investment inflows expanded to $225.4m from $62.6m, mainly attributed to a more than four-fold increase in inflows related to equity and investment fund shares to $275.8m from $59.7m the year earlier.”

DURAN HUMES KEITH ROYE

THE CENTRAL BANK OF THE BAHAMAS

IMF HOLDS ‘SERIOUS CONCERN’ ON FISCAL REFORMS

resources expertise to give it proper effect.

“The Bills before us are the product of deep consultation with public sector financial management and procurement experts who have communicated great concern about the lack of practicality in the existing legislation,” Philip Davis KC said in the House of Assembly. “We must let common sense reign as far as effective policymaking and legislating is concerned. Rules that cannot be practically implemented are not good rules. A policy that is introduced without preparatory work being done is doomed to fail. A law that does not account for local context cannot effectively address the legislative needs of the Government.”

Mr Thompson, addressing parliament on the Public Finance Management Bill 2023 soon after the Prime Minister, alleged that the IMF harboured concerns over reforms that will see the minister of finance appoint the Council’s five members instead of them being recommended by the House of Assembly speaker as happens currently. The east Grand Bahama MP, who had previously questioned this change given that it will mean the Council’s members have to judge the performance of the very same person who appointed them, told the House of Assembly: “The IMF itself said they have serious concerns with what is being done to the Fiscal Responsibility Council.”

The Council is a key fiscal watchdog, charged

with reviewing the annual Fiscal Strategy Report; annual Budget; mid-year Budget review; pre-election economic and fiscal update; the Government’s annual accounts and any deviation from the established fiscal targets, and Mr Thompson repeated the IMF-related charges in a subsequent interview with Tribune Business

“My understanding is that at least one of the agencies, the IMF, had serious concerns with respect to the provisions as it relates to the Fiscal Responsibility Council, and so those concerns should really be dealt with by the Government,” he asserted. “We have not seen that the Government has in any way adjusted to accommodate any of those concerns.”

Conceding that he has had no direct contact with the IMF on the matter, Mr Thompson said: “I haven’t spoken to them, but we were advised the IMF did have concerns with respect to the Fiscal Responsibility Council. What also concerns us is that it does not appear the Government has heard from the Fiscal Responsibility Council which will be subject to the reforms.

“I think the Government should pause and listen to these stakeholders because the direction we are headed in is the wrong direction in relation to accountability and transparency. It is a complete turnaround from the legislation that was previously put in place as it relates to the Public Financial Management legislation.”

Mr Thompson argued that the Government, through repealing and replacing the existing Act, was watering down controls and safeguards such that it was lowering “the standard” for fiscal responsibility, transparency and good governance of taxpayer monies rather than seeking to improve and meet the existing benchmark.

“We shouldn’t reduce the standard that has been set,” he told Tribune Business, “and this Bill reduces the standard that has been set. We must cause ourselves to rise to that standard, and do what is necessary to cause ourselves to rise to that standard.”

The Public Finance Management Bill was tabled in the House of Assembly with the mid-year Budget debate just over two weeks ago, meaning that the Opposition and external stakeholders both in The Bahamas and outside have had very little opportunity to review the legislation, compare it to the existing versions to see what changes have been made, and properly benchmark it against other jurisdictions.

The House of Assembly debate often veered into a political battle rather than deal with the substance of reforms to critical legislation that is vital to countering corruption,

waste, patronage and the misuse of taxpayer funds, as well as fostering greater trust, trust and accountability in government. The Public Procurement Act is also key to fostering economic growth via the development of small and micro businesses via the award of public contracts in a competitive process.

Mr Davis and his Cabinet ministers yesterday argued that the Minnis administration had sought to give the impression it was committed to fiscal transparency and accountability, but in reality was only paying lip service to such concepts as shown by the fact it waited more than five months to bring the Public Procurement Act into effect on September 1, 2021 - just over two weeks before that year’s general election.

Noting that the Act was passed and received the governor-general’s assent on March 26 that year, Mr Davis suggested that the dates and timing showed the former administration was simply seeking to portray itself as wedded to good governance so as to win general election votes. He argued that it had done nothing to ensure the legislation was properly implemented and that there were sufficient systems and resources in place to do so.

Referring to both the Public Financial Management and Public Procurement Acts, the Prime Minister said: “Now, while I am sure the many technical experts who developed the framework for these Acts put in a lot of hard work, there was a clear failure on the former administration’s part to ensure that these two pieces of legislation were practical and consistent with sound public policy.

“While the stated purpose of the legislation was to demonstrate that the former administration was reform-minded in its approach to managing the country’s finances, the legislation itself was unworkable from the start. After all of their talk and empty rhetoric about raising standards, the truth is that their legislation failed to meet the reality test.

“An administration that waits to pass transparency and financial management laws until the very last days of its term in office is not a group that values transparency or financial management. That is how we ended up with laws that were passed with none of the pre-requisite work done for successful implementation,” Mr Davis added.

“There was no new investment in technology and no comprehensive training programme for public officers to facilitate buy-in and ensure that the public service was prepared. None of the things needed to implement this very complex compendium of legislation were put in place.”

ATLANTIS, CRUISE PORT: ‘ROOM’ FOR PI LIGHTHOUSE RESTORATION

The cruise port chief’s thoughts were echoed by Vaughn Roberts, Atlantis’ senior vice-president of government affairs and special projects, who revealed that the mega resort would “definitely like to see the lighthouse restored” and had even considered taking on the challenge itself.

Both men were careful not to wade into the ongoing dispute between Toby Smith, the Bahamian entrepreneur who has been asked by the Prime Minister to reapply for approval of his $2m lighthouse restoration proposal, and the Government and Royal Caribbean on the other side. However, they each separately said its restoration will be an asset to Nassau harbour’s appearance and the quality of this nation’s tourism offering.

“I absolutely remain very firm in the need that Nassau develop experiences that are both exciting, adventurous but also serve to introduce our culture or heritage to our visitors,” Mr Maura said. “I’m on record as saying the Royal Caribbean beach club serves to support and expand the experiences that are so desperately needed in New Providence, and there’s also room for a lighthouse development experience as well.

“The Paradise Island lighthouse is an iconic fixture in our history which is in tremendous disrepair. There was a plan to improve that area, and it would be a shame if something is not done with that area to improve it because that improvement is desperately needed.

“I think that area as well, subject to government review and approval, does offer potential and I do feel areas around New Providence that offer similar opportunities include the Clifton Heritage Park, Fort Charlotte, Fort Fincastle, the Queen’s Staircase and the water tower.”

Mr Roberts, voicing similar sentiments on Atlantis’ behalf, told Tribune Business: “We would love to see the lighthouse restored. We’ve had some internal discussions at Atlantis

about taking on that initiative as a community initiative. Its very historic and should have been restored.

“Toby [Smith] came to the Government with a proposal to do it. Toby’s proposal was definitely lower impact, more sustainable in what he proposed to do. We don’t have a view on Toby versus Royal Caribbean, but we would definitely like to see the lighthouse restored.”

Asked whether the Paradise Island lighthouse and Royal Caribbean projects could co-exist side-by-side as neighbours, Mr Roberts replied: “It seems so. From what we can tell based on what’s been put in the public domain, Toby is only focused on the lighthouse, the lighthouse quarters and a beach attraction to generate some revenue to support ongoing maintenance of the lighthouse.

“There’s some Crown Land outside what the Government agreed to give up to Royal Caribbean.” Chester Cooper, deputy prime minister and minister of tourism, investments and aviation, has repeatedly said that Royal Caribbean’s reduced Crown Land footprint - which has shrunk from seven to four acres - does not include the disputed portion that was involved in Mr Smith’s Supreme Court action where he sought a declaration he had a valid, binding lease.

That action was unsuccessful, but the fact a two-acre parcel sought by Mr Smith will now seemingly no longer be included in Royal Caribbean’s Crown Land footprint potentially paves the way for a resolution and the two projects to co-exist as western Paradise Island neighbours if the Government is so minded.

Mr Davis, though, on Tuesday said the Government has invited Mr Smith to reapply for the necessary permits and approvals - something that might cut across, and undermine, a potential appeal of the Supreme Court verdict if he takes up the offer.

Tribune Business has also seen a December 23, 2022, letter from Mr Maura to

Mr Cooper in which he confirms Nassau Cruise Port’s support for Mr Smith’s proposed Paradise Island lighthouse restoration. This newspaper understands that the letter was written at Mr Smith’s request, and was intended to support the development of further visitor attractions rather than as any effort to advocate for the entrepreneur in his fight with the Government and Royal Caribbean.

With Nassau Cruise Port promoting the city as “the place to be in 2023”, Mr Maura wrote: “Deputy prime minister, you have

repeatedly encouraged our Bahamas to be creative, be innovative, to develop quality experiences for both our seven million international visitors and our Bahamas residents to enjoy.

“We note there are several heritage and beachbased shore excursion projects under consideration and we respectfully encourage the Government to act swiftly in its review so that these tourism-oriented investments may materialise in the months ahead.

“We wish to extend our support to the Paradise Island Lighthouse and

Beach Club Company, which we believe will make necessary improvements to the entrance of our iconic Nassau harbour and offer a wonderful historic venue and beach experience for both visitors and Bahamians to enjoy,” Mr Maura continued.

“Not only will this investment address the unsightly look of our west end of Paradise Island, but it will bring confidence to others considering tourism-related investments in and around Nassau. Our current 2023 and 2024 confirmed passenger forecasts describe

passenger arrivals at 4.1m and 4.5m respectively. We urgently need quality venues and experiences for these guests to enjoy.

“As you know, Nassau Cruise Port has invested over $20m in new marine ferry infrastructure to support the safe transport of millions of guests to venues in and around the Nassau harbour. In addition to other authorised operators, Paradise Island Lighthouse and Beach Club will be able to utilise these facilities to collect guests.”

VAUGHN ROBERTS MICHAEL MAURA

NEW PROCUREMENT ACT TO END LARGE FIRM ‘DOMINANCE’

to grow as more agencies move their procurement processes online.”

Arguing that the current Act, passed under the former Minnis administration and brought into effect just weeks before the general election on September 1, 2021, had produced “unintended public policy consequences that we are keen to avoid”, the Prime Minister said one impact had been to favour large companies in the award of government contracts.

While not naming the company or group involved, he identified food supplies

as one area where this had occurred. “One of the worst examples of this is seen in the unequal granting of contracts. The processes put in place created an environment in which large vendors are able to dominate the competition,” Mr Davis asserted.

“For example, in the procurement of food, one vendor by virtue of its size and corporate relations, dominated the procurement of food on behalf of the Government. Under the current Act, this dominance is allowed. In fact, it is an outcome that the Act, as written, intentionally brings about.

“However, common sense would tell you that the Government nor the Bahamian people want to exist in a reality where only the largest, richest companies with the most resources get every contract. We can all agree that the role of government should be to broaden opportunities for a diverse range of Bahamians. Our small and medium-sized businesses deserve opportunities too. The Bill before us today allows for that possibility.” Public procurement, if used correctly, and in a fair, transparent and accountable manner with open, competitive bidding for

VACANCY FOR SALES AGENT

Applications are invited from suitably qualified and experienced individuals for the position of Sales Agent in a travel agency.

The core duties include:

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• Maximize sales and customer holiday experience by suggesting upgrades

• Have the ability to assess each customer’s unique needs, preferences, and budget to ensure their trip goes as smoothly as possible; and

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Deadline to apply is March 22nd. Compensation will be commensurate with relevant qualifications and experience.

government contracts can be an important tool of national development by facilitating the growth of small and medium-sized businesses. It can also ensure taxpayers receive value for money, and eliminate waste, inefficiencies and other unnecessary expenses and loss in the tender process.

“The new Bill does the opposite of what the current Act does by allowing for the preferential treatment of specific groups,” the Prime Minister added. “We will introduce preferences for micro, small and medium-sized enterprises, women-owned business, Family Island businesses and youth-owned businesses. These are high priority areas we are targeting as a government to diversify opportunities in The Bahamas.

I think this point bears repeating. Under the current Act, the most wellestablished, well-resourced businesses were able to dominate government contracts under the guise of them being the best fit for the job. This sounds good

on paper but ignores the reality on the ground.”

The Government spent some $274m on goods and services during the six months to end-December 2022, according to mid-year Budget data, which represented a year-over-year rise of $24.1m. This gives an insight into the size of the role that the public sector plays in the Bahamian economy, as well as the scale of the opportunity available to local companies and entrepreneurs to gain a share of this business.

“Contracts below a certain threshold will now automatically be reserved for national bidders,” Mr Davis promised. “Special permission will have to be granted for these procurement processes to allow for international bidding. Specific justifications must be given for approval of this request.

“For example, it could be for a good or service that is not available in The Bahamas. In all other cases, any contract amount below that. In all other cases, any contract amount below that threshold will be reserved and granted to local companies. We are preserving opportunities

for Bahamian business owners.”

The Prime Minister did not specify that threshold in his address. However, the Bill, which passed its second reading in the House of Assembly last night, reduces the threshold above which a government ministry, agency or department’s tenders committee must review a contract award from $50,000 to $25,000. This, the Bill states, is designed “provide an effective control mechanism” on the award. Contracts valued between $25,000 and $40,000 can be awarded on the recommendation of a public entity’s tenders committee, subject to approval from the relevant minister, while those valued between $400,000 and $2.5m will see the recommended winner forwarded to the central Tenders Board. Contracts over the latter sum will have to be approved by Cabinet. “Under the new Bill, bidders who attempt to influence or induce the award of a contract by offer of employment, gratuity or any other offer of value will be disqualified. This is yet another area that will be strengthened,” Mr Davis promised.

BIDEN SAYS HE’S FOCUSED ‘INTENSELY’ ON LOWERING DRUG COSTS

By AMANDA SEITZ AND ZEKE MILLER

Associated Press

PRESIDENT Joe Biden on Wednesday said his administration was focused “intensely” on lowering health care costs and took aim at “MAGA” Republicans who he said are intent on dialing back Medicare coverage for millions of Americans.

Biden used a speech in Las Vegas where he was wrapping a three-day Western swing to make the case there are stark differences in how Democrats are tackling skyrocketing drug prices compared to their Republican counterparts.

The president sought to make the contrast as he gears up for an expected reelection announcement.

The speech on Wednesday in Las Vegas could serve as an early preview of the campaign ahead as Biden aims to make his efforts at lowering drug costs central to his policy and political agenda.

Biden, speaking before a crowd of doctors and nurses at the University of Nevada, Las Vegas, vowed to protect Medicare and Social Security, while touting his administration’s successful efforts to press pharmaceutical companies to lower the costs of insulin for Americans suffering from diabetes.

“MAGA Republicans in Congress don’t think any of this is a good idea,” Biden said. “They think Big Pharma should be able to make the exorbitant profits at the expense of the American people”

The White House thinks it has a winning message in showcasing legislation passed last year that is expected to save taxpayers billions of dollars and lower the cost of drugs for the roughly 84 million Americans who rely on Medicare.

Ahead of the speech, White House officials made the case that issue is central to Americans lives and called on Republicans to work with them to lower prescription costs.

“These kind of savings will give people a little bit more breathing room, more comfort as they decide to go to the grocery store to buy their food, more ability to pay their rent, or maybe it’s just to do something decent for their families,” Health and Human Services Secretary Xavier Becerra told reporters on Tuesday as he previewed the Democratic president’s remarks.

Biden talked up how his administration is rolling out several parts of that law, passed in a Democraticcontrolled Congress last year, that cap the price of insulin, make most vaccines free and allow the federal government to negotiate deals on a handful of pharmaceutical drugs for Medicare enrollees.

The federal government expects to see significant savings from those negotiations and to make money from a rule that requires drugmakers to send Medicare a check when they

raise drug prices higher than inflation.

“Let’s finish the job,” Biden said. “Let’s protect the lower prescription drug costs for everyone” Already, the legislation caps the price of insulin at $35 for disabled and older Americans who rely on Medicare.

Biden has proposed extending that cap to all Americans, but that plan faces an uphill battle. Efforts to pass laws capping the price of insulin for uninsured Americans or those with private insurance failed in the Democraticcontrolled Congress last year. Biden, however, has still championed last year’s bill as a success for the millions of Americans who aren’t on Medicare. Drug companies, facing public pressure after tripling their prices for the life-saving drug over the last two decades, have started to voluntarily lower the cost of insulin. Drugmaker Novo Nordisk announced Tuesday it was cutting the cost of insulin to about $72 a vial, on the heels of an announcement from rival Eli Lilly that it would start selling its generic for $25.

“This builds on the important progress we made last year when I signed a law to cap insulin at $35 for seniors,” Biden said in a statement on Tuesday on Novo Nordisk’s announcement. “I urge all other manufacturers to follow suit and Republicans in Congress to join us and cap insulin at $35 for all Americans.”

Another part of the law that the administration hopes will have ripple effects for Americans: the requirement that pharmaceutical companies pay a rebate to Medicare when they raise the cost of drugs faster than inflation.

The Centers for Medicare and Medicaid Services won’t send a bill to drug companies until 2025, but the federal agency has already started tracking drug prices. The agency on Wednesday identified 27 drugs whose prices were increased too fast, a move that will limit the price that Medicare enrollees have to pay for them. The administration hopes that will motivate drugmakers to lower the cost of those medications.

Biden has sought in recent weeks to draw a stark contrast between how his party and Republicans handle health care affordability, repeatedly raising concerns that the GOP will seek to undo the Medicare cost-savings provisions or try to make cuts to the program.

Last week, Biden promised to fend off financial challenges facing Medicare by instead raising the Medicare tax rate from 3.8% to 5% on those with annual incomes of $400,000 or more.

Republicans leaders — who have publicly disavowed accusations that they’ll the cut the program — have yet to coalesce around a plan to address Medicare’s impending

shortfalls. Last year, the House Republican Study Committee proposed raising the eligibility age for Medicare from 65 to 67.

Senate Minority Leader Mitch McConnell, R-Ky., told reporters last week that Biden’s plan to raise taxes for Medicare “will not see the light of day.”

PRESIDENT Joe Biden speaks about health care and prescription drug costs at the University of Nevada, Las Vegas, Wednesday, March 15, 2023, in Las Vegas.

Photo:Evan Vucci/AP

FED CRITICIZED FOR MISSING RED FLAGS BEFORE BANK COLLAPSE

By CHRISTOPHER RUGABER AND FATIMA HUSSEIN

Associated Press

THE Federal Reserve is facing stinging criticism for missing what observers say were clear signs that Silicon Valley Bank was at high risk of collapsing into the second-largest bank failure in U.S. history.

Critics point to many red flags surrounding the bank, including its rapid growth since the pandemic, its unusually high level of uninsured deposits and its many investments in longterm government bonds and mortgage-backed securities, which tumbled in value as interest rates rose.

“It’s inexplicable how the Federal Reserve

supervisors could not see this clear threat to the safety and soundness of banks and to financial stability,” said Dennis Kelleher, chief executive of Better Markets, an advocacy group. Wall Street traders and industry analysts “have been publicly screaming about these very issues for many, many months going

back to last fall,” Kelleher added. The Fed was the primary federal supervisor of the bank based in Santa Clara, California, that failed last week. The bank was also overseen by the California Department of Financial Protection and Innovation.

Now the consequences of the fall of Silicon Valley Bank, along with New

York-based Signature Bank, which failed over the weekend, are complicating the Fed’s upcoming decisions about how high to raise its benchmark interest rate in the fight against chronically high inflation.

Many economists say the central bank would likely have raised rates by an aggressive half-point next week at its meeting, which would amount to a step up in its inflation fight, after the Fed implemented a quarter-point hike in February. Its rate currently stands at about 4.6%, the highest level in 15 years.

Last week, many economists suggested that Fed policymakers would raise their projection for future rates next week to 5.6%. Now it’s suddenly unclear how many additional rate increases the Fed will forecast.

With the collapse of the two large banks fueling anxiety about other regional banks, the Fed may focus more on boosting confidence in the financial system than on its longterm drive to tame inflation.

The latest government report on inflation, released Tuesday, shows that price increases remain far higher than the Fed prefers, putting Chair Jerome Powell in a tougher spot. Core prices, which exclude volatile food and energy costs and are seen as a better gauge of longer-run inflation, jumped 0.5% from January to February — the most since September. That is far higher than is consistent with the Fed’s 2% annual target.

“Absent the fallout from the bank failure, it may have been a close call, but I think it would have tipped them towards a half-point (rate hike) at this meeting,” said Kathy Bostjancic, chief economist at Nationwide.

On Monday, Powell announced that the Fed would review its supervision of Silicon Valley to understand how it might have better managed its regulation of the bank. The review will be conducted by Michael Barr, the Fed vice chair who oversees bank oversight, and will be publicly released May 1.

A Federal Reserve spokesperson declined to comment further.

Elizabeth Smith, a spokeswoman for the California Department of Financial Protection and Innovation, said, “We are actively investigating the situation and conducting a thorough review to ensure the Department is doing everything we can to protect Californians.”

By all accounts, Silicon Valley was an unusual bank. Its management took excessive risks by buying billions of dollars of mortgage-backed securities and Treasury bonds when interest rates were low. As the Fed continually raised interest rates to fight inflation, leading to higher rates on Treasurys, the value of Silicon Valley Bank’s bonds steadily lost value. Most banks would have sought to make other investments to offset that risk. The Fed could have also forced the bank to raise additional capital.

NOTICE

NOTICE is hereby given that CILNUS METEZE of Blackwood, North Eleuthera, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/ naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 9th day of March, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

JOB OPPORTUNITY

ACCURAD IMAGING CONSULTANTS SEEKING RADIOLOGIST

AccuRad Imaging Consultants is a diagnostic imaging reporting/teleradiology company operating in the Bahamas. AccuRad provides diagnostic imaging reporting services to facilities and doctor’s offices throughout the Bahamas. The imaging modalities reported include, but are not limited to, x-ray, mammography, CT, ultrasound and MRI. AccuRad is seeking a fellowship trained radiologist to join the practice. Fellowship training in oncology imaging and neuroradiology is preferred. On-site work is not required. The candidate is expected to be able to provide coverage on weekends and/or stat holidays. Occasionally, there may be overnight coverage requirements. Competency in reporting all above mentioned modalities is a must. Only candidates who have completed a full radiology residency program and attained board certification by examination will be considered. Fellowship/subspecialty training must have been acquired at an accredited institution in the US, Canada or UK. All applicants must be eligible for specialist licensure in the Bahamas.

A PEDESTRIAN passes a Silicon Valley Bank branch in San Francisco, Monday, March 13, 2023. As the primary regulator of the bank, the Federal Reserve is coming under sharp criticism from financial watchdogs and banking experts.

Photo:Jeff Chiu/AP

CHINESE BUSINESSMAN ARRESTED IN $1 BILLION FRAUD CONSPIRACY

By LARRY NEUMEISTER Associated Press

A BUSINESS tycoon long sought by the government of China and known for cultivating ties to Trump administration figures including Steve Bannon was arrested Wednesday in New York on charges that he oversaw a $1 billion fraud conspiracy.

Guo Wengui, 54, was accused along with his financier and chief of staff of various crimes, including wire and securities fraud. He was charged in court papers under the name Ho Wan Kwok.

U.S. prosecutors said the indictment stemmed from a complex scheme in which Guo lied to hundreds of thousands of online followers in the United States and around the world before misappropriating hundreds of millions of dollars.

At an arraignment in Manhattan federal court Wednesday, Guo pleaded not guilty through his attorney. One of his lawyers did not immediately comment.

The top federal prosecutor in Manhattan, U.S. Attorney Damian Williams, said in a release that Guo was charged with "lining his pockets with the money he stole, including buying himself, and his close relatives, a 50,000 square foot mansion, a $3.5 million Ferrari, and even two $36,000 mattresses, and financing a $37 million luxury yacht."

Guo was once believed to be among the richest people in China. He left in 2014 during an anti-corruption crackdown led by President Xi Jinping that ensnared people close to Guo, including a top intelligence official.

Chinese authorities have accused Guo of rape, kidnapping, bribery and other offenses.

Since then, he has been highly sought by that nation's government, relying on the U.S. for protection. As he lived in New York as a fugitive he became an outspoken critic of the ruling Communist Party and developed a close relationship with Bannon, President Donald Trump's former political strategist. Guo and Bannon in 2020 announced the founding of a joint initiative they said was aimed at overthrowing the Chinese government.

Guo has long argued that the allegations against him in China were false, saying they were intended to punish him for publicly outing corruption there and criticizing leading figures in the Communist Party. For years, his case was the subject of a debate over whether China was abusing international law enforcement cooperation efforts, including Interpol, in seeking his arrest. He sought political asylum in the U.S., saying he feared that if he were forced to leave the country, it might lead to his arrest in a nation with

NOTICE is hereby given that LINDA LYNN BELIZAIRE of Boyd Road, New Providence, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 16th day of March, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE is hereby given that LUCNER ETIENNE of #16 Jennie Street, New Providence, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 16th day of March, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

less power to resist Chinese demands. It was on Guo's 150foot (45-meter) yacht that Bannon was once arrested on federal charges. Just before he left office, Trump made the case against Bannon dissolve with a pardon.

Guo was arrested in his sprawling luxury apartment at the SherryNetherland, one of the

storied Manhattan apartment hotels overlooking Central Park. Hours later, firefighters extinguished a smoky blaze on the same floor as Guo's penthouse. It wasn't immediately clear if the fire was in his home or related to his arrest.

Guo's initial appearance before Magistrate Judge Katharine H. Parker lasted only about 15 minutes because he agreed to be

detained until his lawyers can prepare an argument for bail.

Guo's business associate, Kin Ming Je, 55, who had been living in London, England, was indicted in the case but has not been arrested.

Yanping Wang, described as Guo's chief of staff, faces charges including conspiracy, wire fraud and securities fraud. Her bail was set at $5

million, but she was ordered to be held until certain conditions are met. She was placed under house arrest at her Manhattan apartment. Prosecutors asked that Guo be held because of the risk he could flee and "the danger he poses to the community." They say Guo has harassed critics and would face more than 100 years in prison if convicted of all charges.

Bank fears spread to Europe, drag down shares of big lenders

By JAMEY KEATEN AND DAVID MCHUGH Associated Press

FEARS about the world banking system spread to Europe on Wednesday as shares in the globally connected Swiss bank Credit Suisse plunged and dragged down other major European

lenders in the wake of bank failures in the United States.

At one point, Credit Suisse shares lost more than a quarter of their value, hitting a record low after the bank's biggest shareholder — the Saudi National Bank — told news outlets that it would not put more money into the Swiss lender, which was beset by problems long before the U.S. banks collapsed.

The turmoil prompted an automatic pause in trading of Credit Suisse shares on the Swiss market and sent shares of other European banks tumbling, some by double digits. That fanned new fears about the health of financial institutions following the recent collapse of Silicon Valley Bank and Signature Bank in the U.S.

Speaking Wednesday at a financial conference in the Saudi capital of Riyadh, Credit Suisse Chairman Axel Lehmann defended the bank, saying, "We already took the medicine" to reduce risks.

When asked if he would rule out government assistance in the future, he said: "That's not a topic. ... We are regulated. We have strong capital ratios, very strong balance sheet. We are all hands on deck, so that's not a topic whatsoever."

But Switzerland's central bank announced late Wednesday that it was prepared to act, saying it would support Credit Suisse if needed. A statement from the bank did not specify whether the support would come in the form of cash or loans or other assistance. At the moment, regulators said, they believe the bank has enough money to meet its obligations.

Credit Suisse then said early Thursday that it is taking measures to shore up its finances, including exercising an option to borrow up to 50 billion francs ($53.7 billion) from the central bank.

"This additional liquidity would support Credit Suisse's core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs," the bank said.

A day earlier, Credit Suisse reported that managers had identified "material weaknesses" in the bank's internal controls on financial reporting as of the end of last year. That fanned new doubts about the bank's ability to weather the storm.

Credit Suisse stock dropped about 30%, to about 1.6 Swiss francs ($1.73), before clawing back to a 24% loss at 1.70 francs ($1.83) at the close of trading on the SIX stock exchange. At its lowest, the price was down more than 85% from February 2021.

After the joint announcement from the Swiss National Bank and the Swiss financial markets regulator, the shares also made up some ground on Wall Street.

The stock has suffered a long, sustained decline: In 2007, the bank's shares traded at more than 80 francs ($86.71) each.

With concerns about the possibility of more hidden trouble in the banking system, investors were quick to sell bank stocks.

France's Societe Generale SA dropped 12% at one point. France's BNP Paribas fell more than 10%. Germany's Deutsche Bank tumbled 8%, and Britain's Barclays Bank was down nearly 8%. Trading in the two French banks was briefly suspended.

The STOXX Banks index of 21 leading European lenders sagged 8.4% following relative calm in the markets Tuesday.

The turbulence came a day ahead of a meeting by the European Central Bank.

President Christine Lagarde

said last week, before the U.S. failures, that the bank would "very likely" increase interest rates by a half percentage point to fight against inflation. Markets were watching closely to see if the bank carries through despite the latest turmoil.

Credit Suisse is "a much bigger concern for the global economy" than the midsize U.S. banks that collapsed, said Andrew Kenningham, chief Europe economist for Capital Economics.

It has multiple subsidiaries outside Switzerland and handles trading for hedge funds.

"Credit Suisse is not just a Swiss problem but a global one," he said.

He noted, however, that the bank's "problems were well known so do not come as a complete shock to either investors or policymakers."

The troubles "once more raise the question about whether this is the beginning of a global crisis or just another 'idiosyncratic' case," Kenningham said in a note. "Credit Suisse was widely seen as the weakest link among Europe's large banks, but it is not the only bank which has struggled with weak profitability in recent years."

Leaving a Credit Suisse branch in Geneva, Fady Rachid said he and his wife are worried about the bank's health. He planned to transfer some money to UBS.

"I find it hard to believe that Credit Suisse is going to be able to get rid of these problems and get through it," said Rachid, a 56-yearold doctor.

The Swiss National Bank declined to comment. The Swiss Financial Market Supervisory Authority did not immediately respond to calls and emails seeking comment.

Investors responded to "a broader structural problem" in banking following a long period of low interest rates and "very, very loose monetary policy," said Sascha Steffen, professor of finance at the Frankfurt School of Finance & Management.

In order to earn some yield, banks "needed to take more risks, and some banks did this more prudently than others."

Now investors are worried that banks "have risks on their balance sheet that they don't know about and therefore have accumulated significant losses that haven't been yet realized." European finance ministers said this week that their banking system has no direct exposure to the U.S. bank failures.

Europe strengthened its banking safeguards after the global financial crisis that followed the collapse of U.S. investment bank Lehman Brothers in 2008 by transferring supervision of the biggest banks to the central bank, analysts said. The central bank is considered less likely than national supervisors to look the other way at developing problems.

The Credit Suisse parent bank is not part of EU supervision, but it has entities in several European countries that are. Credit Suisse is subject to international rules requiring it to maintain financial buffers against losses as one of 30 so-called globally systemically important banks, or G-SIBs.

Share prices plunged after Saudi National Bank Chairman Ammar Al Khudairy told Bloomberg and Reuters that the bank has ruled out further investments in Credit Suisse to avoid regulations that kick in with a stake above 10%.

The Saudi National Bank has invested some 1.5 billion Swiss francs to acquire a holding just under that threshold.

BIDEN SEEKS TO SHOW STABILITY IN BID TO AVERT BANKING CHAOS

By SEUNG MIN KIM AND FATIMA HUSSEIN Associated Press

IN 2016, Vice President Joe Biden warned against efforts to unravel banking regulations that Democrats had fought to implement following the nation’s financial crisis, just as the emerging Trump administration was determined to loosen those strict banking rules.

Biden argued that without the far-reaching 2010 banking overhaul known as Dodd-Frank, financial institutions would continue to gamble with consumers’ cash and ultimately hurt the middle class.

“We can’t go back to the days when financial companies take massive risks with the knowledge that a taxpayer bailout is around the corner when they fail,” Biden said in a speech at Georgetown University in the waning days of the Obama administration.

Now there’s a banking crisis on his watch as president, and Biden is moving aggressively to assure the public that it is contained, bank executives will be fired, deposits are safe and taxpayers aren’t on the hook — measures also designed to calm jittery financial markets.

As he contemplates an announcement for a second term, Biden’s ability to avert a contagion among financial institutions will

test his contention that his administration represents competence and stability in contrast to the chaos of the Donald Trump years. His call for additional regulation, though, is likely to run into stiff resistance in the Republican-controlled House and even among some moderate Democratic lawmakers who joined Republicans to loosen some rules in a 2018 law — not to mention criticism from the still-forming 2024 Republican field that has already labeled his actions a bailout by just another name.

Privately, Biden has been adamant that the government’s intervention would not be like that of 2008, when Congress authorized billions in taxpayer cash to rescue financial institutions that were deemed too big

to fail. That’s according to a senior White House official, who was not authorized to describe private discussion by name.

But administration officials believe that this time they had to act substantively despite bad decision-making by bank executives, given the economic risks and the potential impact on customers who did nothing wrong.

Unlike in 2008, Biden was insistent that bank executives had to pay a price, said the official, granted anonymity to discuss internal White House deliberations.

“The management of these banks will be fired,” Biden declared Monday. If an institution is taken over by the Federal Deposit Insurance Corp., “the people running the bank

should not work there anymore.”

On Monday, Biden also stressed that taxpayers will not bear the cost of his administration’s penalties on the two failed banks, instead tapping into an insurance fund that is paid for by bank fees. And while customers and small businesses who stashed their money with the penalized banks would be protected, Biden emphasized that investors would not.

Overview

“They knowingly took a risk and when the risk didn’t pay off, investors lose their money,” Biden said. “That’s how capitalism works.”

California Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, said that Biden, like others, cannot ignore the lessons of the 2008 financial collapse and that having endured it firsthand, the president was well aware of the stakes.

In conversations over the weekend, the White House

assured her he was on top of it. “I think that his main concern was how to, No. 1, take care of the depositors and avoid contagion so that we would not basically, seriously, disrupt the banking system in this country,” Waters said.

Regulators put Silicon Valley Bank under FDIC control on Friday afternoon after panicked depositors rushed to withdraw all their funds within a matter of hours.

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Related degree from a technical college

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PRESIDENT Joe Biden speaks about the banking system in the Roosevelt Room of the White House in Washington, Monday, March 13, 2023.

Photo:Andrew Harnik/AP