PM INGRAHAM'S ANNUAL ADDRESS TO THE NATION -

UNCLAS SECTION 01 OF 02 NASSAU 000073

SIPDIS

STATE FOR WHA/CAR

E.O. 12958: N/A
TAGS: ECON ELAB PGOV PREL BF
SUBJECT: PM INGRAHAM'S ANNUAL ADDRESS TO THE NATION -
ECONOMIC STIMULUS PLAN TOP PRIORITY

REF: A.NASSAU 041

B. NASSAU 064


1. (SBU) Summry: Prime Minister Ingraham gave his annual
addess to the nation on January 29, presenting a hopeful
message in the wake of an economic downturn that hit The
Bahamas especially hard the last three months of 2008.
Ingraham pointed to an increase in foreign direct investment
in 2008, a moderate rise in inflation, and an economic
stimulus plan focused on infrastructure projects as proof
that all is not dark for the tourism-based economy of The
Bahamas. In addition, the PM pledged to make The Bahamas a
more appealing vacation destination by decreasing airfares,
increasing flights, and launching an aggressive advertising
campaign in the U.S. Ingraham cited crime and public sector
performance as other important domestic issues. He focused
on recent restructuring measures within the police and
immigration forces as a positive sign of his
administration's fight against corruption. Ingraham's
focus on the economy was no surprise given the recent bout of
hotel layoffs and the decline in tourism. End Summary.

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I'VE GOT GOOD NEWS AND BAD NEWS
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2. (U) Prime Minister Ingraham gave his annual address to
the nation on January 29, presenting a hopeful message in the
wake of an economic downturn that hit The Bahamas especially
hard the last three months of 2008. Ingraham noted the
economic downturn in The Bahamas is a direct result of the
decrease in U.S. tourists and that those events are &beyond
our control.8 He instead emphasized that despite the
tourism drop, the situation is not all bad news in The
Bahamas. He pointed out a 7.3% increase in foreign direct
investment through September 2008 and a moderate 1.8%
increase in inflation compared to 2007 levels for a total
rate of 4.3%. He also noted an increase of 108.8 million
dollars in international reserves and a stable ratio of
national debt to GDP of 42%. Despite the positives,
Ingraham's message throughout his address was clear: we are
facing a crisis and now is "not a time for excessive
discretionary spending." He highlighted the need for the
Bahamian public to take responsibility in breathing new life
into the tourism sector by providing good and friendly
service to every visitor to the island.

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ECONOMY -- DON,T WORRY, WE HAVE A PLAN
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3. (U) Ingraham spoke at length about the GCOB's economic
stimulus plan which he said will soften "the impact of the
crisis without endangering our national economic welfare."
The stimulus plan focuses primarily on public infrastructure
and construction projects, such as the new straw market in
downtown Nassau, new government office complexes and the new
sports stadium that was a gift from the Chinese government
(reftel A). The Prime Minister said the goal of accelerating
many of these projects is to "cushion the effect of job
losses in other parts of our economy." Ingraham also
mentioned an environmental clean-up project, public-private
partnerships, international shipping and agriculture as other
potential avenues for economic growth.


4. (U) The Prime Minister focused attention on the need to
prepare for "the increasingly demanding expectations of
modern travelers and to prepare for future tourism growth
when the economy in North America rebounds." He pledged to
work with the Ministry of Tourism and the private sector to
make The Bahamas a more appealing vacation destination by
reducing air fares, lowering or eliminating airport costs,
creating additional flights into Nassau and Freeport, and
launching an aggressive marketing campaign in the U.S.
Ingraham also highlighted the need to continue marketing The
Bahamas as an ideal locale for business conferences, pointing
out that two important international conferences are already
booked to take place in The Bahamas in 2009.


5. (U) Continuing his focus on the economy, the Prime
Minister highlighted his intention to strengthen financial
services, the second-biggest sector of the economy. He said
"the government will continue to partner with private sector
practitioners to ensure that we remain competitive and
compliant with international best practices, thereby
safeguarding this second pillar of our economy." In
addition, he mentioned his pleasure over the upcoming launch
of the Automated Clearing House system, which will require
banks to credit and debit client accounts for the dollar
value of checks from the date of issuance and deposit.
Ingraham noted this system will incrase transparency in the
Bahamian financial syste and as a result promote further
investment in te country.

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OTHER KE DOMESTIC ISSUES
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6. (U) The Prime Minister linked the expansion of busness
and the overall economy with improvements in public sector
performance and efficiency. He promised to continue reforms
in the public service to improve customer satisfaction, in
line with the "Trust Agenda" on which the FNM campaigned in
the May 2007 elections. "We fully intend to work towards a
new culture of excellence in the service of the Bahamian
people, a culture of ethical conduct on the part of those who
serve, a culture that is hostile to slackness and corrupt
practices," he said.


7. (U) Ingraham cited a pilot program implemented from May
- December 2008 in six agencies, including the Passport
Office and Road Traffic Department, but devoted far more
attention to improvements in the uniformed services
(defense, police, immigration and customs). Recurring themes
were "streamlining" and "modernizing" management in order
to improve performance, whether for "reducing the fear of
crime", speeding work permit processing or rationalizing
customs revenue collection.


8. (U) Citing crime as a priority issue, the Prime Minister
touted the recent police leadership restructuring (reftel B)
and proposed new police legislation as measures to improve
crime-fighting capabilities. He also promised improvements
to the justice system through constructions of new and
refurbishments of existing court facilities, and filling
judicial vacancies. Before closing, the Prime Minister
touched very briefly, almost perfunctorily, on the importance
of improving public education and health infrastructure,
without venturing specifics beyond promising a prescription
drug benefit for certain chronic illnesses.

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COMMENT
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9. (SBU) Prime Minister Ingraham continues to exude calm and
steady helmsmanship even as the Bahamian economy slumps more
deeply. A plainspoken leader, Ingraham reminds his listeners
that given its size The Bahamas has little choice then be
swept along by global currents. The same rising tide of
strong U.S. growth that raised the Bahamian economy over the
last decade is today a low tide. Throughout his recent
speeches, Ingraham has never dwelt on blame or sounded bitter
at the markets, capitalization, or the U.S. To the contrary,
he prays for a speedy U.S. recovery to speed along a recovery
in The Bahamas.


ZUNIGA-BROWN