Bahamas - Tips

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
Announcements, and Travel Warnings. Consular Information Sheets exist for all
countries and include information on entry and exit requirements, currency
regulations, health conditions, safety and security, crime, political
disturbances, and the addresses of the U.S. embassies and consulates abroad.
Public Announcements are issued to disseminate information quickly about
terrorist threats and other relatively short-term conditions overseas that
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,
Public Announcements, and Travel Warnings can be found. Consular Affairs
Publications, which contain information on obtaining passports and planning a
safe trip abroad, are also available at http://www.travel.state.gov. For
additional information on international travel, see http://www.usa.gov/
Citizen/Topics/Travel/International.shtml.

The Department of State encourages all U.S citizens who traveling or residing
abroad to register via the State Department's travel registration website or
at the nearest U.S. embassy or consulate abroad. Registration will make your
presence and whereabouts known in case it is necessary to contact you in an
emergency and will enable you to receive up-to-date information on security
conditions.

Emergency information concerning Americans traveling abroad may be obtained
by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular
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
State's single, centralized public contact center for U.S. passport
information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer service
representatives and operators for TDD/TTY are available Monday-Friday, 7:00
a.m. to 12:00 midnight, Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for
Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP
(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,
and advice on food and drinking water safety for regions and countries. A
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://
www.state.gov, the Department of State web site provides timely, global
access to official U.S. foreign policy information, including Background
Notes and daily press briefings along with the directory of key officers of
Foreign Service posts and more. The Overseas Security Advisory Council (OSAC)
provides security information and regional news that impact U.S. companies
working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market
information offered by the federal government and provides trade leads, free
export counseling, help with the export process, and more.
STAT-USA/Internet, a service of the U.S. Department of Commerce, provides
authoritative economic, business, and international trade information from
the Federal government. The site includes current and historical
trade-related releases, international market research, trade opportunities,
and country analysis and provides access to the National Trade Data Bank. ***********************************************************
See http://www.state.gov/r/pa/bgn/ for all Background notes
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