Bahamas

 

Bureau of Western Hemisphere Affairs                                          
June 2007                                                                     
                                                                       
  Background Note: The Bahamas                                                
                                             
  A woman dances in annual New Year's                                         
  Day Junkanoo parade in Nassau, The                                          
  Bahamas. January 1, 2007. [© AP                                             
  Images]                                                                     
                                                                       
  The Bahamas flag is three equal horizontal bands of aquamarine (top), gold, 
  and aquamarine, with a black equilateral triangle based on the hoist side.  
                                                                       
  PROFILE                                                                     
                                                                       
  OFFICIAL NAME:                                                              
  Commonwealth of The Bahamas                                                 
                                                                       
  Geography                                                                   
  Area: 13,939 sq. km. (5,382 sq. mi.); slightly larger than Connecticut and  
  Rhode Island combined.                                                      
  Cities: Capital--Nassau, New Providence. Second-largest city--Freeport, Grand
  Bahama.                                                                     
  Terrain: Low and flat.                                                      
  Climate: Semitropical.                                                      
                                                                       
  People                                                                      
  Nationality: Noun and adjective--Bahamian(s).                               
  Population (2005): 323,000.                                                 
  Annual growth rate (2005): 1.2%.                                            
  Ethnic groups: African 85%, European 12%, Asian and Hispanic 3%.            
  Religions: Baptist (32%), Roman Catholic, Anglican, Evangelical Protestants,
  Methodist, Church of God, Rastafarian, Traditional African.                 
  Language: English (official); Creole.                                       
  Education (2003): Years compulsory--through age 16. Attendance--92%. Literacy
  --95.5%.                                                                    
  Health (2005): Infant mortality rate--19.0/1,000. Life expectancy--70.5     
  years.                                                                      
  Work force (2004): 176,330; majority employed in the tourism, government, and
  financial services sectors.                                                 
                                                                       
  Government                                                                  
  Type: Constitutional parliamentary democracy.                               
  Independence: July 10, 1973.                                                
  Branches: Executive--British monarch (nominal head of state), governor      
  general (representative of the British monarch), prime minister (head of    
  government), and cabinet. Legislative--bicameral Parliament (41-member      
  elected House of Assembly, 16-member appointed Senate). Judicial--Privy     
  Council in U.K., Court of Appeal, Supreme Court, and magistrates' courts.   
  Political parties: Free National Movement (FNM), Progressive Liberal Party  
  (PLP), Bahamas Democratic Movement (BDM).                                   
  Suffrage (2007): Universal over 18; 150,689 registered voters.              
                                                                       
  Economy                                                                     
  GDP (2005): $5.8 billion.                                                   
  Growth rate (2005): 2.7%.                                                   
  Per capita GDP (2005): $18,062.                                             
  Natural resources: Salt, aragonite, timber.                                 
  Tourism (2004): 40% of GDP.                                                 
  Government spending (2004): 20% of GDP.                                     
  Financial services (2004): 15% of GDP.                                      
  Construction (2004; 10% of GDP): Products--largely tourism related.         
  Manufacturing (2004; 8% of GDP): Products--plastics, pharmaceuticals, rum.  
  Agriculture and fisheries (2004; 3% of GDP): Products--fruits, vegetables,  
  lobster, fish.                                                              
  Trade (2005): Exports ($450.8 million)--plastics, fish, salt, rum, chemicals.
  Markets by main destination--U.S. (66.6%), EU (18.3%), Canada (5.1%), South 
  Africa (1%). Imports ($2.57 billion)--foodstuffs and animals, machinery and 
  transport equipment, chemicals, mineral fuels. Suppliers by main origin--U.S.
  (84%), Curacao (7.2%), Puerto Rico (1.9%), EU (1.2%), Japan (1.2%).         
                                                                       
  PEOPLE                                                                      
  Eighty-five percent of the Bahamian population is of African heritage. About
  two-thirds of the population resides on New Providence Island (the location 
  of Nassau). Many ancestors arrived in The Bahamas when the islands served as
  a staging area for the slave trade in the early 1800s. Others accompanied   
  thousands of British loyalists who fled the American colonies during the    
  Revolutionary War.                                                          
                                                                       
  Haitians form the largest immigrant community in The Bahamas. 30,000-50,000 
  are estimated to be resident legally or illegally, concentrated on New      
  Providence, Abaco and Eleuthera islands.                                    
                                                                       
  School attendance is compulsory between the ages of 5 and 16. The government
  fully operates 158 of the 210 primary and secondary schools in The Bahamas. 
  The other 52 schools are privately operated. Enrollment for state primary and
  secondary schools is 50,332, with more than 16,000 students attending private
  schools. The College of The Bahamas, established in Nassau in 1974, provides
  programs leading to bachelors and associates degrees. Several non-Bahamian  
  colleges also offer higher education programs in The Bahamas.               
                                                                       
  HISTORY                                                                     
  In 1492, Christopher Columbus made his first landfall in the Western        
  Hemisphere in The Bahamas. Spanish slave traders later captured native      
  Lucayan Indians to work in gold mines in Hispaniola, and within 25 years, all
  Lucayans perished. In 1647, a group of English and Bermudan religious       
  refugees, the Eleutheran Adventurers, founded the first permanent European  
  settlement in The Bahamas and gave Eleuthera Island its name. Similar groups
  of settlers formed governments in The Bahamas until the islands became a    
  British Crown Colony in 1717.                                               
                                                                       
  The late 1600s to the early 1700s were the golden age for pirates and       
  privateers. Many famous pirates--including Sir Francis Drake and            
  Blackbeard--used the islands of The Bahamas as a base. The numerous islands 
  and islets with their complex shoals and channels provided excellent hiding 
  places for the plundering ships near well-traveled shipping lanes. The first
  Royal Governor, a former pirate named Woodes Rogers, brought law and order to
  The Bahamas in 1718 when he expelled the buccaneers.                        
                                                                       
  During the American Revolution, American colonists loyal to the British flag
  settled in The Bahamas. These Loyalists and new settlers from Britain brought
  Colonial building skills and agricultural expertise. Until 1834, when Britain
  abolished slavery, they also brought slaves, importing the ancestors of many
  modern Bahamians from Western Africa.                                       
                                                                       
  Proximity to the U.S. continued to provide opportunity for illegal shipping 
  activity. In the course of the American Civil War, The Bahamas prospered as a
  center of Confederate blockade-running. During Prohibition, the islands     
  served as a base for American rumrunners. Today, The Bahamas is a major     
  transshipment point for narcotics on the way to the U.S.                    
                                                                       
  Bahamians achieved self-government through a series of constitutional and   
  political steps, attaining internal self-government in 1964 and full        
  independence within the Commonwealth on July 10, 1973. Since independence,  
  The Bahamas has continued to develop into a major tourist and financial     
  services center.                                                            
                                                                       
  GOVERNMENT AND POLITICAL CONDITIONS                                         
  The Bahamas is an independent member of the Commonwealth of Nations. It is a
  parliamentary democracy with regular elections. As a Commonwealth country,  
  its political and legal traditions closely follow those of the United       
  Kingdom. The Bahamas recognizes the British monarch as its formal head of   
  state, while an appointed Governor General serves as the Queen's            
  representative in The Bahamas. A bicameral legislature enacts laws under the
  1973 constitution.                                                          
                                                                       
  The House of Assembly consists of 41 members, elected from individual       
  constituencies for 5-year terms. As under the Westminster system, the       
  government may dissolve the Parliament and call elections at any time. The  
  House of Assembly performs all major legislative functions. The leader of the
  majority party serves as prime minister and head of government. The Cabinet 
  consists of at least nine members, including the prime minister and ministers
  of executive departments. They answer politically to the House of Assembly. 
                                                                       
  The Senate consists of 16 members appointed by the Governor General,        
  including nine on the advice of the prime minister, four on the advice of the
  Leader of the Opposition, and three on the advice of the prime minister after
  consultation with the Leader of the Opposition.                             
                                                                       
  The Governor General appoints the Chief Justice of the Supreme Court on the 
  advice of the prime minister and the Leader of the Opposition. The Governor 
  General appoints the other justices with the advice of a judicial commission.
  The Privy Council of the United Kingdom serves as the highest appellate     
  court.                                                                      
                                                                       
  Local government districts elect councils for town planning, business       
  licenses, traffic issues and maintaining government buildings. In some large
  districts, lower level town councils also have minor responsibilities.      
                                                                       
  For decades, the white-dominated United Bahamian Party (UBP) ruled The      
  Bahamas, then a dependency of the United Kingdom, while a group of          
  influential white merchants, known as the "Bay Street Boys," dominated the  
  local economy. In 1953, Bahamians dissatisfied with UBP rule formed the     
  opposition Progressive Liberal Party (PLP). Under the leadership of Lynden  
  Pindling, the PLP won control of the government in 1967 and led The Bahamas 
  to full independence in 1973.                                               
                                                                       
  A coalition of PLP dissidents and former UBP members formed the Free National
  Movement (FNM) in 1971. Former PLP cabinet minister and member of Parliament
  Hubert Ingraham became leader of the FNM in 1990, upon the death of Sir Cecil
  Wallace-Whitfield. Under the leadership of Ingraham, the FNM won control of 
  the government from the PLP in the August 1992 general elections. The PLP   
  regained power in 2002 under the leadership of Perry Christie, but the FNM, 
  again led by Ingraham, returned to government by capturing 23 of the 41 seats
  in the House of Assembly during the May 2007 election. The next election must
  be held no later than May 2012.                                             
                                                                       
  Principal Government Officials                                              
  Governor General--Arthur Dion Hanna, Sr.                                    
  Prime Minister--Hubert Ingraham                                             
  Deputy Prime Minister and Minister of Foreign Affairs--Brent Symonette      
  Ambassador to the United States and to the OAS--vacant (Charge d'Affaires,  
  a.i.--Rhoda Mae Jackson)                                                    
  Ambassador to the United Nations--Dr. Paulette Bethel                       
  Consul General, Miami--Alma Adams                                           
  Consul General, New York--Eldred Bethel                                     
                                                                       
  The Bahamas maintains an embassy in the United States at 2220 Massachusetts 
  Ave., NW, Washington, DC 20008 (tel: 202-319-2660) and Consulates General in
  New York at 231 East 46th Street, New York, NY 10017 (tel: 212-421-6420), and
  in Miami at Suite 818, Ingraham Building, 25 SE Second Ave., Miami, FL 33131
  (tel: 305-373-6295).                                                        
                                                                       
  ECONOMY                                                                     
  The Bahamas is driven by tourism and financial services. Tourism provides an
  estimated 40% of the gross domestic product (GDP), with an additional 10% of
  GDP resulting from tourist-driven construction. Tourism employs about half  
  the Bahamian work force. In 2005, more than 5 million tourists visited The  
  Bahamas, 87% from the United States. There are about 110 U.S.-affiliated    
  businesses operating in The Bahamas, and most are associated with tourism and
  banking. With few domestic resources and little industry, The Bahamas imports
  nearly all its food and manufactured goods from the United States. American 
  goods and services tend to be favored by Bahamians due to cultural          
  similarities and heavy exposure to American advertising. The Bahamian       
  economy, due to its heavy dependence on U.S. tourism and trade, is deeply   
  affected by U.S. economic performance.                                      
                                                                       
  Following economic struggles in 2001-2002 fueled by a drop in tourism after 
  September 11, 2001, The Bahamas has enjoyed a period of economic recovery and
  an upturn in large-scale private sector investments in tourism, which will  
  boost construction and provide long-term employment. Future goals include   
  continued development of tourism properties, including increased Bahamian   
  ownership, redevelopment of the Grand Bahama economy following major        
  hurricane losses in 2004, and the expansion of the robust Bahamian financial
  sector.                                                                     
                                                                       
  Economic challenges facing The Bahamas include meeting continued employment 
  demands, jumpstarting a lagging privatization process, and monitoring       
  increasing levels of government debt. Another major challenge for Bahamians 
  will be to prepare for hemispheric free trade. Currently, Bahamians do not  
  pay income or sales taxes. Most government revenue is derived from high     
  tariffs and import fees. Reduction of trade barriers will probably require  
  some form of taxation to replace revenues when the country becomes a part of
  the Free Trade Area of the Americas (FTAA). As evident by domestic opposition
  to the Caribbean Single Market Economy (CSME), the advantages of free trade 
  may be hard for the government to sell.                                     
                                                                       
  Two major hotel projects promise to increase economic growth and create     
  short- and long-term employment. The Atlantis Resort and Casino on Paradise 
  Island is in the third phase of a billion-dollar expansion expected to create
  3,000 new jobs. A second hotel resort development project costing nearly $2 
  billion is planned for the Cable Beach area of Nassau. The Baha Mar Company 
  has negotiated purchase of three major hotels and a development site,       
  including the last assets of the state-owned Hotel Corporation. As a        
  condition of these large-scale investments, the government promises to expand
  Nassau International Airport and has turned over management to private      
  operators. The Bahamian Government also has adopted a proactive approach to 
  courting foreign investors and has conducted major investment missions to the
  Far East, Europe, Latin America, India and Canada. The government continues 
  to pay particular attention to China to encourage tourism and investment. For
  their part, the Chinese are funding the construction of a new $30 million   
  sports stadium in New Providence. While the new FNM government has expressed
  a desire to increase Bahamian ownership interests in developments, The      
  Bahamas' dependence on foreign investment is unlikely to change.            
                                                                       
  Financial services constitute the second-most important sector of the       
  Bahamian economy, accounting for up to 15% of GDP, due to the country's     
  status as a tax haven and offshore banking center. As of 2005, the government
  had licensed 262 banks and trust companies in The Bahamas. The Bahamas      
  promulgated the International Business Companies (IBC) Act in January 1990 to
  enhance the country's status as a leading financial center. The act served to
  simplify and reduce the cost of incorporating offshore companies in The     
  Bahamas. Within 9 years, more than 84,000 IBC-type companies had been       
  established. In February 1991, the government also legalized the            
  establishment of Asset Protection Trusts in The Bahamas. In 2000, in response
  to multilateral organizations' concerns, the government passed a legislative
  package of stronger measures to better regulate the financial sector and    
  prevent money laundering in the country's banking sector, including creation
  of a Financial Intelligence Unit and enforcement of "know-your-customer"    
  rules. Some of these measures have been challenged in Bahamian courts, and  
  the number of offshore banks registered in The Bahamas has declined         
  substantially since 2002. As many as half of the IBCs have also closed shop.
  As a result, the government is considering additional legislation to keep the
  industry competitive while complying with international standards, including
  possible reform of the regulatory structure.                                
                                                                       
  Agriculture and fisheries together account for 3% of GDP. The Bahamas exports
  lobster and some fish but does not raise these items commercially. There is 
  no large-scale agriculture, and most agricultural products are consumed     
  domestically. Following an outbreak of citrus canker on Abaco in 2005, The  
  Bahamas lost a main agricultural export, and the Ministry of Agriculture    
  banned the export of plant materials from Abaco. The Bahamas imports more   
  than $250 million in foodstuffs per year, representing about 80% of its food
  consumption.                                                                
                                                                       
  The Bahamian Government maintains the value of the Bahamian dollar on a par 
  with the U.S. dollar. The Bahamas is a beneficiary of the U.S.-Caribbean    
  Basin Trade Partnership Act (CBTPA), Canada's CARIBCAN program, and the     
  European Union's Lome IV Agreement. Although The Bahamas participates in the
  political aspects of the Caribbean Community (CARICOM), it has not entered  
  into joint economic initiatives, like the CSME, with other Caribbean states.
                                                                       
  The Bahamas has a few notable industrial firms: the Freeport pharmaceutical 
  firm, PFC Bahamas (formerly Syntex); the BORCO oil facility, also in        
  Freeport, which transships oil in the region; the Commonwealth Brewery in   
  Nassau, which produces Heineken, Guinness, and Kalik beers; and Bacardi     
  Corp., which distills rum in Nassau for shipment to U.S. and European       
  markets. Other industries include sun-dried sea salt in Great Inagua, a wet 
  dock facility in Freeport for repair of cruise ships, and mining of         
  aragonite--a type of limestone with several industrial uses--from the sea   
  floor at Ocean Cay.                                                         
                                                                       
  The Hawksbill Creek Agreement established a duty-free zone in Freeport, The 
  Bahamas' second-largest city, with a nearby industrial park to encourage    
  foreign industrial investment. The Hong Kong-based firm Hutchison Whampoa   
  operates the container port in Freeport. The Bahamian Parliament approved   
  legislation in 1993 that extended most Freeport tax and duty exemptions     
  through 2054.                                                               
                                                                       
  Business Environment                                                        
  The Bahamas offers attractive features to the potential investor: a stable  
  democratic environment, relief from personal and corporate income taxes,    
  timely repatriation of corporate profits, proximity to the United States with
  extensive air and telecommunications links, and a good pool of skilled      
  professional workers. The Government of The Bahamas welcomes foreign        
  investment in tourism and banking and has declared an interest in           
  agricultural and industrial investments to generate local employment,       
  particularly in white-collar or skilled jobs. Despite its interest in foreign
  investment to diversify the economy, the Bahamian Government responds to    
  local concerns about foreign competition and tends to protect Bahamian      
  business and labor interests. As a result of domestic resistance to foreign 
  investment and high labor costs, growth can stagnate in sectors which the   
  government wishes to diversify.                                             
                                                                       
  The country's infrastructure is best developed in the principal cities of   
  Nassau and Freeport, where there are relatively good paved roads and        
  international airports. Electricity is generally reliable, although many    
  businesses have their own backup generators. In Nassau, there are three daily
  newspapers, several weeklies, and international newspapers available for    
  sale. There also are six radio stations. Both Nassau and Freeport have a    
  television station. Cable TV and satellite also are available locally and   
  provide most American programs with some Canadian and European channels.    
                                                                       
  Areas of Opportunity                                                        
  The best U.S. export opportunities remain in the traditional areas of       
  foodstuffs and manufactured goods: vehicles and automobile parts; hotel,    
  restaurant, and medical supplies; and computers and electronics. Bahamian   
  tastes in consumer products roughly parallel those in the United States.    
  Merchants in southern Florida have found it profitable to advertise in      
  Bahamian publications. Most imports are subject to high but nondiscriminatory
  tariffs.                                                                    
                                                                       
  FOREIGN RELATIONS                                                           
  The Bahamas has strong bilateral relationships with the United States and the
  United Kingdom, represented by an ambassador in Washington and High         
  Commissioner in London. The Bahamas also associates closely with other      
  nations of the Caribbean Community (CARICOM). The Bahamas has an ambassador 
  to Haiti and works closely with the United States and CARICOM on political  
  and migration issues related to Haiti. The Bahamas has diplomatic relations 
  with Cuba, including embassies in each other's capitals. A repatriation     
  agreement was signed with Cuba in 1996, and there are commercial and cultural
  contacts between the two countries. The Bahamas also enjoys a strengthening 
  relationship with China. The Commonwealth of The Bahamas became a member of 
  the United Nations in 1973 and the Organization of American States in 1982. 
                                                                       
  The Bahamas holds membership in a number of international organizations: the
  UN and some specialized and related agencies, including Food and Agriculture
  Organization (FAO), International Civil Aviation Organization (ICAO), and the
  International Labor Organization (ILO); International Monetary Fund (IMF);  
  International Telecommunication Union (ITU); World Bank; World Meteorological
  Organization (WMO); World Health Organization (WHO); OAS and related        
  agencies, including Inter-American Development Bank (IDB), Caribbean        
  Development Bank (CDB), and Pan-American Health Organization (PAHO); the    
  Caribbean Community (CARICOM), excluding its Common Market; the International
  Criminal Police Organization (INTERPOL); Universal Postal Union (UPU);      
  International Maritime Organization (IMO); World Intellectual Property      
  Organization (WIPO); and obtained observer status in the World Trade        
  Organization (WTO) in 2001.                                                 
                                                                       
  U.S.-BAHAMIAN RELATIONS                                                     
  The United States historically has had close economic and commercial        
  relations with The Bahamas. The countries share ethnic and cultural ties,   
  especially in education, and The Bahamas is home to approximately 30,000    
  American residents. In addition, there are about 110 U.S.-related businesses
  in The Bahamas and, in 2005, 87% of the 5 million tourists visiting the     
  country were American.                                                      
                                                                       
  As a neighbor, The Bahamas and its political stability are especially       
  important to the United States. The U.S. and the Bahamian Government have   
  worked together on reducing crime and addressing migration issues. With the 
  closest island only 45 miles from the coast of Florida, The Bahamas often is
  used as a gateway for drugs and illegal aliens bound for the United States. 
  The United States and The Bahamas cooperate closely to handle these threats.
  U.S. assistance and resources have been essential to Bahamian efforts to    
  mitigate the persistent flow of illegal narcotics and migrants through the  
  archipelago. The United States and The Bahamas also actively cooperate on law
  enforcement, civil aviation, marine research, meteorology, and agricultural 
  issues. The U.S. Navy operates an underwater research facility on Andros    
  Island.                                                                     
                                                                       
  The Department of Homeland Security's Bureau of Customs and Border Protection
  maintains "preclearance" facilities at the airports in Nassau and Freeport. 
  Travelers to the U.S. are interviewed and inspected before departure,       
  allowing faster connection times in the U.S.                                
                                                                       
  Principal U.S. Officials                                                    
  Ambassador--vacant                                                          
  Charge d'Affaires--Brent Hardt                                              
  Management Officer--David Elmo                                              
  Consul--Virginia Ramadan                                                    
  Political-Economic Section Chief--Daniel O'Connor                           
  Public Affairs Officer--Daniel O'Connor                                     
                                                                       
  The U.S. Embassy is located at 42 Queen Street, Nassau (tel. 242-322-1181;  
  telex 20-138); the local postal address is P.O. Box N-8197, Nassau, The     
  Bahamas.                                                                    
                                                                       
  Other Contact Information                                                   
  U.S. Department of Commerce                                                 
  International Trade Administration                                          
  Office of Latin America and the Caribbean                                   
  14th and Constitution, NW                                                   
  Washington, DC 20230                                                        
  Tel: 202-482-0704; 800-USA-TRADE                                            
  Fax: 202-482-0464                                                           
                                                                       
  Caribbean/Latin American Action                                             
  1818 N Street, NW, Suite 310                                                
  Washington, DC 20036                                                        
  Tel: 202-466-7464                                                           
  Fax: 202-822-0075                                                           
                                                                       
  TRAVEL AND BUSINESS INFORMATION                                             
  The U.S. Department of State's Consular Information Program advises Americans
  traveling and residing abroad through Consular Information Sheets, Public   
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  Public Announcements are issued to disseminate information quickly about    
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  pose significant risks to the security of American travelers. Travel Warnings
  are issued when the State Department recommends that Americans avoid travel 
  to a certain country because the situation is dangerous or unstable.        
                                                                       
  For the latest security information, Americans living and traveling abroad  
  should regularly monitor the Department's Bureau of Consular Affairs Internet
  web site at http://www.travel.state.gov, where the current Worldwide Caution,
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  Citizen/Topics/Travel/International.shtml.                                  
                                                                       
  The Department of State encourages all U.S citizens who traveling or residing
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  toll line 1-202-501-4444 for callers outside the U.S. and Canada.           
                                                                       
  The National Passport Information Center (NPIC) is the U.S. Department of   
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  information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer service   
  representatives and operators for TDD/TTY are available Monday-Friday, 7:00 
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  Travelers can check the latest health information with the U.S. Centers for 
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  (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the
  most recent health advisories, immunization recommendations or requirements,
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  booklet entitled "Health Information for International Travel" (HHS         
  publication number CDC-95-8280) is available from the U.S. Government       
  Printing Office, Washington, DC 20402, tel. (202) 512-1800.                 
                                                                       
  Further Electronic Information                                              
  Department of State Web Site. Available on the Internet at http://          
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  access to official U.S. foreign policy information, including Background    
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  working abroad through its website http://www.osac.gov                      
                                                                       
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