wednesday, july 27, 2016
business@tribunemedia.net
Chamber chief: Don’t stoke devaluation fear By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Says such concerns are ‘premature’
Devaluation concerns were yesterday branded “premature” by the Bahamas Chamber of Commerce’s chairman, who argued against using the issue “to cause fear and pandemonium”. With a general election due within nine months, Gowon Bowe urged the political parties not to play on an emotive issue for many Bahamians by stoking devaluation fears as a means to undermine Government policy. He backed assertions by John Rolle, the Central Bank’s governor, that the Bahamian dollar faced “no imminent or mediumterm threat of devaluation”, as both the private sector and foreign currency reserves were performing adequately.
Urges political parties against ‘boy cried wolf’ trap Chamber chief’s view contrasts with predecessor However, he acknowledged the “long-term” concerns created by previous government foreign currency borrowings to support the reserves, given the pressures that might arise when such debts became due for repayment. “I think that it would be pre-
Gowon Bowe mature to make these types of statement,” Mr Bowe told Tribune Business of recentlyexpressed devaluation concerns. “As it currently stands, private sector performance and reserves’ performance have been adequate to support monetary policies.”
Family Island airport revelations ‘damning’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Revelations about ‘the sense of chaos’ at key Family Island airports are potentially “catastrophic” for the tourism industry, a senior airline executive yesterday saying immediate corrective action was required from the Government. Captain Randy Butler, Sky Bahamas’ chief executive, described as “damning” the report that identified numerous health, safety and environmental inadequacies at four Family Island airports targeted for private-public partnership (PPP) arrangements. He added that the findings by ALG Transportation Infrastructure and Logistics should have sparked an emergency Cabinet or ministerial meeting to determine how the Government, as owner of all four airports, should respond. “I would imagine there’s a Cabinet meeting, or the Minister’s in a meeting, because for these Family Island hotels, this is their bread and butter and how they live,” he See pg b6
Airline chief: Potentially ‘catastrophic’ for tourism Calls for ‘emergency’ response from Govt Could deter airline, and hotels’ ‘bread and butter’
Randy Butler
Bran: Youth jobless rate still ‘disturbingly high’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Democratic National Alliance’s (DNA) leader yesterday said unemployment among Bahamian youth remained “disturbingly high”, as he questioned whether the latest job survey accounted for underemployment and reduced work weeks. Branville McCartney told Tribune Business that the four percentage point drop in unemployment among 15-24 year-olds was “nothing to brag about” for the Government, given that more one in four in this age category still cannot find work. “From what you say, youth unemployment fell from 30 per cent to 25.8 per cent,” Mr McCartney said. “That’s nothing to brag about, my friend. “I don’t believe those figures, but there’s nothing to brag about. Twenty-five per cent youth unemployment is too high; disturbingly high.” The DNA leader also questioned whether the Department of Statistics’ May 2016 Labour Force survey would have picked up the reduced hours being worked by many in the hotel industry, where many persons were on two-three day weeks. “In the private sector, there are many businesses that have reduced the hours of work for their employees, and many small businesses
Reduction ‘nothing to brag about’ Govt ministries push businesses on summer hires have been letting people go in one’s and two’s, here and there. That happens on a daily basis,” Mr McCartney said. “I wonder whether they are taking into consideration the part-time jobs that persons were given through the Government, and whether or not they were See pg b7
$3.97 $4.06 $3.98
$3.98
The Chamber chairman said pressures would only likely arise when the Government’s foreign currency debts became due for repayment, as this could impose a drain on the foreign reserves. “There have been times when the Government borrowed in foreign currency to support the reserves,” Mr Bowe explained. “What we should be more concerned about is the longterm when these debts come due, and making sure the current account is in a position to enable us to pay back without a drain on the reserves.” Mr Bowe’s position contrasts with that of his immediate predecessor as Chamber chairman, Robert Myers, who recently told Tribune Business that devaluation of the Bahamian dollar was “a question of when, not if” unless this nation altered course on its economic and fiscal policies. See pg b5
Cable charges BTC recovering ‘seven times’ network cost By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Cable Bahamas has charged that its Bahamas Telecommunications Company (BTC) rival recovers more than “seven times’” the costs it incurs on terminating fixed-line calls to its mobile subscribers at peak hours. The BISX-listed provider, in feedback submitted to sector regulators, argued that the “inbound airtime” charges levied by BTC on such calls were “excessive and detrimental”, and are inhibiting the fixed-line market’s development. Responding to the Utilities Regulation and Competition Authority’s (URCA) consultation on proposed changes to the retail pricing regime, Cable Bahamas focused on how BTC dealt with calls from fixed-line phones to its mobile customers. With the mobile subscriber paying under BTC’s ‘receiving party pays’ (RPP) protocol, Cable Bahamas said fixed-line customers were not
Slams rival’s charges as ‘excessive and detrimental’ Claims inhibiting fixed-line market’s development charged for calling a mobile customer on the same island. Long distance calls to other islands incurred an $0.18 per minute charge, while prepaid mobile subscribers were charged a flat rate of $0.33 per minute, plus an incremental levy on a per second basis at peak hours. “Our estimate is that effective rates are 20-25 per cent higher than the rates presented, depending on call duration,” Cable Bahamas alleged. It added that a sameisland call from a fixed-line phone to a mobile customer could incur an “effective per See pg b4
URCA warned over ‘maximum damage’ New mobile operator fears competition blunted Concerned BTC will employ ‘Club Effect’ Bahamas at ‘unique’ stage in liberalisation By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Utilities Regulation & Competition Authority (URCA) is threatening to “inflict maximum damage” on the now-liberalising mobile market via a major change to its regulatory approach on retail pricing. NewCo 2015 Ltd, the newly-licensed second mobile operator, said the regulator had picked the worst possible time to propose shifting from an interventionist approach, where it took actions in advance to prevent potential market distortions such as anticompetitive behaviour. It warned that unless call termination rates and the methods used for billing customers were determined before this shift, URCA could unwittingly pave the way for the Bahamas Telecommunications Company (BTC) to cripple the competitive threat it poses. The Cable Bahamas-controlled operator, in July 8 feedback to URCA, expressed particular concern that BTC was in “an excellent position” to blunt its new rival’s ability to win customers through the ‘Club Effect’. Describing how this worked, NewCo2015 warned that BTC could levy higher, discriminatory prices and “above cost” termination rates on its subscribers when they called/ contacted the latter’s customers. NewCo2015 warned this would enable BTC to leverage its larger subscriber base to limit its new rival’s growth and market share, as the “discriminatory” tariffs would give no incentive for Bahamians to switch operators. As a result of these concerns, the second mobile operator is urging URCA to revert back to its proactive, interventionist (exante) approach rather than switch to acting only when distortions or anti-competitive behaviour is identified. While the latter approach was adopted in other Caribbean markets, these had all seen the introduction of a second operator when they were in the process of liberalising and growing. In contrast, NewCo215 is arguing that the Bahamas is a “unique situation” in that it is a mature market with an entrenched incumbent, BTC, that has enjoyed a 15-year monopoly. Hence NewCo’s call for a more interventionist, proactive regulatory approach by See pg b4