we do have to appreciate that developments will not wait for us. equally, in the provisions of electric power to our economy, particularly in the more developed centers of the bahamas, we should not be driven by protectionism, but should seek to offer to the bahamas economy the very latest and most developed technology by way of commercial arrangements which allow our consumers to enjoy terms as similar as possible to those available anywhere else. those who would have us believe that this has anything to do with our birthright or national pride are wrong! the best long term interest of bahamians in a globalized environment is served by policies which embrace all opportunities available to us, and which force us to be challenged by the highest standards practiced anywhere. legal services : there is, i think, an increasing realization that the maintenance of a strict legal monopoly in favour of members of the bahamas bar, certainly as it affects the delivery of international financial services, is highly counter - productive. the best that one can say for this anachronism is that it fails to appreciate to what extent legal services have become synonymous with this industry ; some feel that like some of our labour union leaders, legal practitioners who refuse to contemplate any compromise in this regard are simply pursuing naked self interest. if the policy - makers refuse to takeon the bar in a meaningful way on this issue, this is a matter which should be put to the bahamian people to decide. it is simply too important to the future of a potentially more vibrant and dynamic financial services industry to leave it as it currently stands. immigration : there is a view that there needs to be a separation of border protection from immigration issues related to the development of those business sectors which the bahamas most favour if our economy is to compete globally. while, as i suggested earlier, tourism and financial services have probably not been significantly disadvantaged in this regard, especially during the last ten to fifteen years or so, there is room for considerable reform in this area, to provide the flexibility and efficiency which business should enjoy. the bahamas needs to overcome the underlying unwillingness to accept the meaningful and equal participation in our economy by persons from elsewhere. this, i admit, will probably change more quickly, when more bahamians, themselves, venture to invest and pursue business beyond our borders. again, though, if we have to wait for this type of “ organic ” acceptance to occur before we can reform the way our economy works, we risk missing - out on the positioning phase of this new global

coverage provided by external reserves for b $ currency liabilities has declined. note : the reserves to demand liabilities coverage spiked in 2009 because of the bahamas ’ share of the special drawing rights allocation that the imf provided to its membership during global financial crisis. source : central bank of the bahamas the central bank had to take this into account in how the 2017 liberalisation measures were framed. 8 | page the question will still come up as to how far the bahamas should go with liberalisation, both for direct investments and portfolio transactions. the extensive work that the imf has done has been to advise that countries should sequence liberalisation at least one step after the upgrade to institutional and policy arrangements has been made, which allow the country to optimally manage the transformed environment. 9 at the extreme, the imf ’ s view is that a flexible exchange rate would be ideal to allow a country to absorb the effects of large movements in short - term capital. this assumes that a country has well developed and functioning financial markets, and that the regulatory frameworks exist to ensure that financial institutions operate in a sound fashion. adequate fiscal policy tools should also exist to incentivise the right course for the private sector. this would also mean less reliance on administrative measures, in favour of tools that affect a wider cross - section of the markets directly. 10 being able to pre - empt adverse outcomes, which is critical, also means that sufficient capacity must exist to collect timely data to monitor private sector activities. the central bank and policies affecting the banking sector are a subset of the elements in this required stronger framework. indeed there is already progress in on the banking side. our local banking system is sound, with the required regulatory framework, and high frequency reporting requirements to ensure safety and soundness, even if the composition of balance sheet flows were to change or become more fluid. moreover, the central bank is developing expanded frameworks to monitor economy - wide indicators of financial soundness. with modernisation of the government securities market, the bank will also have a more flexible set of tools to manage financial sector liquidity. that ’ s said, we have to continue to improve data quality and coverage for activities outside of the banking sector. 11 consideration also has to be given to harmonised policies that influence other parts of the financial sector. this means progressing to a legal framework for financial stability that see the liberalization and management of capital flows - an institutional view ( imf, 2012 ). http : / / www.