VZCZCXYZ0003
RR RUEHWEB

DE RUEHBH #0056 0282023
ZNR UUUUU ZZH
R 282023Z JAN 09
FM AMEMBASSY NASSAU
TO RUEHC/SECSTATE WASHDC 6070
INFO RUEHBE/AMEMBASSY BELMOPAN 0108
RUEHWN/AMEMBASSY BRIDGETOWN 5691
RUEHKG/AMEMBASSY KINGSTON 8610
RUEHPO/AMEMBASSY PARAMARIBO 0935
RUEHPU/AMEMBASSY PORT AU PRINCE 3623
RUEHSP/AMEMBASSY PORT OF SPAIN 4778
RUEHDG/AMEMBASSY SANTO DOMINGO 2916
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS NASSAU 000056 
 
SIPDIS 
 
STATE FOR WHA/CAR, SANTO DOMINGO FOR USFCS, USDOC FOR ITA 
MICHELLE BROOKS 
 
E.O. 12958: N/A 
TAGS: BEXP EFIN ETRD ELAB PGOV BF
SUBJECT: A GRIM OUTLOOK FOR 2009 FORECASTED AT THE BAHAMAS 
BUSINESS OUTLOOK SEMINAR 
 
REF: A. NASSAU 013 
     ¶B. NASSAU 041 
 
¶1.  SUMMARY:  Presenters at the Annual Bahamas Business 
Outlook Seminar held on January 15 painted a grim financial 
picture for the year ahead.  Prime Minister Ingraham 
delivered the key note address, noting diversification is not 
necessarily the golden ticket to alleviating economic woes, 
while public and private sector participants offered ideas on 
how to make the economy viable once again.  Each presenter 
echoed the same message:  the present circumstances are 
bleak, the future is uncertain and one can only hope that 
ingenuity will bring some reprieve to this economic storm. 
The Minister of Tourism detailed plans aimed at making The 
Bahamas a more affordable destination in hopes of spurring 
tourism.  END SUMMARY. 
 
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OVERCAST FORECAST 
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¶2.  During the keynote speech at the annual Bahamas Business 
Outlook seminar on January 15, PM Ingraham said he expects 
2009 to mirror last year's economic woes.  He emphasized that 
diversification is not the solution to the present economic 
condition, noting that countries that are diversified have 
not been exempt from economic adversity.  On the good news 
side, the PM said tourist arrivals performed better than 
projected at the end of 2008 and property values for high-end 
real estate remained stable despite a decrease in property 
purchased by foreigners.  The PM also noted that the GCOB is 
creating a capital works proposal geared towards creating 
jobs and business opportunities for Bahamians. 
 
¶3.  Sarkis Izmirlian, Chairman and CEO of Baha Mar, decried 
the high energy costs that led to a significant loss for Baha 
Mar resorts on Cable Beach in 2008.  The hotels were charged 
a daily energy utility fee of $37 on occupied rooms, which 
created a financial burden for hotel properties already 
suffering from low occupancy rates.  Izmirlian reported the 
desire to protect jobs but noted that lay-offs are a 
possibility if Baha Mar properties do not generate more 
business in 2009.  The resort has already decided to close 
for eight weeks beginning in August of this year (reftel A). 
 
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SILVER LINING 
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¶4.  In an attempt to attract travelers to their properties, 
Baha Mar is currently working with the Ministry of Tourism to 
make The Bahamas a more affordable destination.  Minister of 
Tourism Vincent Vanderpool-Wallace explained the GCOB is 
unwilling to decrease wages for hotel employees and instead 
is seeking ways to reduce the costs of air travel.  The 
Minister noted that discussions with U.S. Congress to grant 
an international tax concession to airlines traveling to the 
Caribbean have been favorable so far. 
 
¶5.  In an effort to boost travel and investment from other 
countries, Izmirlian's team will meet with high level 
officials from China in the next two weeks to discuss 
partnership in the Baha Mar project (reftel B).  Izmirlian 
was optimistic about the upcoming meeting and said he hopes a 
partnership with China will be announced within the next six 
months.  However, he made clear Baha Mar will continue to 
operate the resort, albeit with financing by the China ExIm 
bank and construction by China State Construction Co.  If the 
arrangement is successful the project is expected to be 
completed within the next three years. 
 
¶6.  COMMENT:  The PM is reluctant to hold an economic summit 
at this time because he says there is little more the GCOB 
can do to stimulate the economy given the global economic 
climate.  The Business Outlook conference provided clear 
signals that the country should brace itself for a difficult 
year.  Even if Chinese tourism to The Bahamas picks up, it is 
unlikely it will make up for the drop in U.S. tourism levels 
to the island nation.  Most Bahamians agree that the best 
course of action is to brace for a bad 2009 and hope for an 
upswing in the economy in 2010. 
ZUNIGA-BROWN