external stakeholders to improve the administrative processes for exchange controls. this includes a focus on promoting more informed dialogue on capital and financial flows and on how these relate to an understanding of the way our economy works. our financial literacy program will support this process. we also believe that literacy will encourage more transparency and accountability on policies and fundamentals over which we have control. it will better equip the private sector to ask pointed, relevant questions of policy makers. our dialogue has to draw out the importance of holding policy makers accountable to inspire confidence through the outcomes that they produce. in this regard, the degree of success achieved with liberalisation ought to be gauged by the extent to which private sector decisions around the deployment of capital is based on genuine pursuit of higher productive returns rather than a fear of erosion of wealth from real or perceived risks of domestic economic ruin. fear is still too prominent in the discussion for wanting to go outside. as such the private sector ’ s decisions could be underweighting the returns that their capital would generate in productive investments inside the bahamas. this point should not be downplayed given already significant liquid resources that lay idle in local banks. these resources and others are in need of greater deployment in the enterprise sector. new private sector mechanisms ought to be developed to deploy these resources. the central bank does believe that more benefits can be obtained from liberalisation. prudent reforms should continue to be advanced to put these advantages within the reach of the economy. the bank has stressed though that liberalisation should be gradual. after all, the process of developing the systems and capacity to manage a transformed economy is itself gradual. with these points in mind, the bank trusts that you will find today ’ s seminar useful. we look forward to your constructive input. thank you.

julian w francis : the bahamas economy - critical strategic issues remarks by mr julian w francis, governor of the central bank of the bahamas, at the 13th annual bahamas business outlook, nassau, 20 january 2004. * * * an attempt to form a view on the short - to - mediumterm business outlook must necessarily seek to identify the principal challenges facing us and assess our readiness to confront them. what then are the challenges? these are not new ; for years there has been general agreement on the list ; what is changing is how the bahamas economy is being shaped and affected over time by these challenges, especially in those areas where we have not been able to implement appropriate policy to address and cope with these external forces. the bahamas has generally been able to hold its own and to perform well in the two major economic components of its economy : tourism and financial services. this ability to compete in these two industries can be explained largely by the related comparative advantage held by our country, vis - a - vis those who in fact can compete against us in those industries, given mainly geographic considerations. but, it is the result, also, of a long - standing significant openness in the broad policies governing the operation of those activities in this environment ; there is virtually no restriction on investments by credible and acceptable parties in either sector - with the exception of the domestic retail banking sector where, for a long time, some level of restriction on entry has applied. with respect to the labor policy applicable to these two major sectors, it has generally facilitated the management and technical - including infrastructural development - needs of these sectors and, i believe, would be considered by those operating in the sectors as reasonably flexible. – the bahamas government has consistently sought to provide necessary fiscal and administrative support to these sectors ; the hotel encouragement act, for example, and the incentives which it provides, has been critically important in attracting many hotel projects to the bahamas. in financial services, we need consider only the recent establishment of a government ministry to focus on issues related to that sector to have clear evidence of government ’ s commitment to support this industry. the policy of openness, and determination to be competitive in these two industries, its no doubt the result of the realization that despite the comparative advantage enjoyed in each instance, because these are global industries which cannot be easily controlled by individual countries acting alone, and this is especially true of the smaller countries such as the bahamas, one has to play by the rules of the broader global environment