VZCZCXRO2951
RR RUEHGR
DE RUEHBH #0073/01 0351552
ZNR UUUUU ZZH
R 041552Z FEB 09
FM AMEMBASSY NASSAU
TO RUEHC/SECSTATE WASHDC 6090
INFO RUCNCOM/E CARICOM COLLECTIVE

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. 
 
------------------------------- 
I'VE GOT GOOD NEWS AND BAD NEWS 
------------------------------- 
 
¶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. 
 
-------------------------------------- 
ECONOMY -- DON,T WORRY, WE HAVE A PLAN 
-------------------------------------- 
 
¶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. 
 
------------------------- 
OTHER KE DOMESTIC ISSUES 
------------------------- 
 
¶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 
------- 
 
¶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