Why is it important that the Bahamas

embrace the Digital Media Age and the world of e-commerce?

Clearly, we are in a new era of globalization, thanks to the rapid development of the Internet and the end of the “Cold War.”. While the previous era of globalization was built around falling transportation costs, today’s era of globalization is built around falling telecommunications costs --- thanks to microchips, wireless technologies, satellites, fiber optics, and the World Wide Web. The new era of globalization is here to stay … and nations around the world can either get on board or risk falling further and further behind at exponential rates as technologies progress rapidly. E-commerce is the engine driving the new era of globalization, and requires a flexible competitive telecommunications infrastructure as well as a technologically-educated workforce.

The Bahamas is particularly well-situated to become a significant player in the digital media and e-commerce arena.  Failure to move quickly to establish itself in that arena will relegate the Bahamas to an ever-decreasing piece of the global business pie.

Our Background
NetworkBahamas has been active in a number of projects in the Bahamas and the Caribbean, including the establishment and continuing operation of the online community portal Briland Modem; assisting in the establishment of several Briland Modem-supported computer training centers on Eleuthera and Harbour Island in tandem with cooperative local government; and development of the first pan-Caribbean portal, CaribeNetwork.com and its subsidiary NetworkBahamas.com. We are active with the Bahamas Financial Services Board, the Briland Modem Fund, the North Eleuthera Economic Development Board, the Bahamas Film Commission, and participate in the BFSB’s E-Commerce Working Group that is advising the Bahamas Government.

Briland Modem Fund logo donated by Harvey Roberts

Our successful experience to date with the overwhelming popularity of these Out Island computer training centers only confirms our belief that exactly such a potential workforce exists in the Bahamas, which will allow it to fully participate in this new era of globalization.  No longer will our country’s youth be forced to emigrate from their home islands in search of suitable employment.   To date, we have 11th and 12th graders forming web design shops in order to design websites that support local businesses.  Thanks to their entrepreneurial drive – which was focused by the development of these computer centers -- our islands’ local industries will be able to market their unique skills to the outside world.  The NetworkBahamas campaign is an outgrowth of the success experienced by Briland.com and the requests for additional sites, computer centers, and coverage received from private individuals, businesses and local governments on neighboring islands.

Our Players
CaribeNetwork/NetworkBahamas.com owns and operates Briland.com, a Web site that was created to facilitate communication between Harbour Island and Eleuthera, Bahamas, and off-island individuals who wanted news of friends, family and property after Hurricane Floyd hit Harbour Island in 1999.  The original post-Hurricane Floyd Web site was little more than a bulletin board that helped organize relief efforts and reconstruction.  Today, the site is specifically not tourism-focused and still receives an average of 150-200,000 unique visits per month from 30 countries around the world, and is a main source of news for the many Harbour Island locals living away from home as well as for regular visitors who own property on the island.

The Briland Modem Fund, a 501(c)(3) not-for-profit foundation, has been instrumental in working with the local Bahamian government to coordinate community development projects, aid in hurricane relief, work in tandem with Lang Fincher of the Exceptional Education Outreach developmental education program to roll out the EEO campaign throughout the Out Islands of the Bahamas, promote local and regional community initiatives, encourage community, cultural and business development on Eleuthera, and to establish six successful computer training centers on Harbour Island and Eleuthera, Bahamas to date.

CaribeNetwork.com/NetworkBahamas.com on
evaluating the viability of a significant internet play

in the Bahamas and Caribbean

Established Market
The targeted Bahamas and Caribbean audience is a motivated purchasing group with demonstrated buying power of U.S. and international goods. The GDP for the Caribbean territory is in excess of $150 billion and imports to the region total $50 billion per year. The Caribbean imports more U.S. goods than India, with its population of 1.4 billion, or Russia, with its population of 146 million.

The Caribbean Basin
More than 20 countries and hundreds of islands make up what is called the Caribbean Basin. The Caribbean Basin is defined as those countries that touch the Caribbean Sea and as those countries participating in the region's key international trading groups: CARICOM, ECLAC, and the Caribbean Basin Initiative.

For the purposes of a digital media play, those countries include Anguilla, Antigua & Barbuda, Bahamas, Barbados, British Virgin Islands, Cayman Islands, Dominica, Dominican Republic, Grenada, Guadaloupe, Haiti, Jamaica, Martinique, Netherlands Antilles, Puerto Rico, St. Kitts & Nevis, St. Lucia, St. Vincent & the Grenadines, Trinidad & Tobago, Turks & Caicos, and the U.S. Virgin Islands, in addition to the U.S. and European expatriate community living in the region as well as Caribbean expatriates residing overseas.

This is an area rich in history, having been governed by Great Britain, France, Holland, Spain, Portugal, and the United States, to varying degrees of influence at varying times. The layering of races, religions, cultures, and influence, have created a region of great diversity yet unified by similar problems.

New Media Activity Within The Bahamas & Caribbean

In a recent ECLAC (the United Nations Economic Commission for Latin America and the Caribbean) study, 98% of the respondents felt "positive" or "very positive" about changes, which the Internet had brought to their lives. Approximately 80% were of the view that the Internet would promote rather than erode Caribbean cultural values or at least, have no negative impact.

Three main themes emerged out of the survey:
* Most respondents recognized that the immense marketing potential of the Internet could be used to promote the region and its culture, to develop niche markets, and to sell goods and services promoting the Caribbean as a tourist destination;
* Respondents spoke of the possibilities for education and knowledge transfer such as research, self-improvement, distance learning, technical information, and global familiarization that would be provided by the Internet.
* Respondents cited the enhanced communication possibilities among the Caribbean people via e-mail and chat.

Because of the political and geographical barriers between these island countries, communication throughout the area has been difficult and expensive. The advance of the Internet and related technologies promises to change that. The region possesses some valuable new-economy resources, including English, French, Dutch, German, and Spanish speakers. With a solid telecommunications infrastructure, the region is ripe for hosting businesses from telemarketing and customer service call centers to Internet services of all kinds. The Bahamas in particular boasts of former U.S. naval bases throughout the country that can be renovated as information technology and new media hubs of activity.

Cable & Wireless, for example, provides extensive services in the Caribbean, but lack of competition keeps prices high. T1 service in Barbados runs approximately $18,000/month compared to similar service in northern Mexico costing $3,000/month, and in the Dominican Republic costing $9,500/month. The English-speaking countries of the Caribbean are negotiating to dismantle the company's monopoly, and, in reaction, Cable & Wireless has moved to lower prices for Internet service throughout much of the Caribbean market.

The Turks and Caicos Islands are establishing a telecommunications regulatory authority empowered to detect, prevent, and curtail anti-competitive practices as well as ensure that the dominant telecommunications operator does not abuse its dominant position. Its stated goal is to provide every citizen with affordable prices on Internet and telecommunication services so that the national economy will achieve unprecedented growth through increasing employment and revenue inflows directly attributable to a vibrant telecommunications industry.

Political, business, and education interests throughout the Caribbean Basin view the Internet as a valuable tool in expanding the economy of the region and in raising the standard of living for all residents regardless of their income levels.

In a press conference with President Clinton and Caribbean leaders during President Clinton's May 1997 trip to Mexico, Costa Rica, and Barbados, one of the concerns expressed even then was whether the United States would be able to assist Haiti in providing Internet connectivity in all its schools. Haiti has the lowest per capita income of the region, making the educational benefits available via the Internet particularly attractive.

* The Bahamas and the Cayman Islands are preparing legislation to encourage e-commerce that is similar to that recently enacted in Bermuda, a British territory in the North Atlantic.
* The Dominican Republic and private business are creating a cyberpark in Santo Domingo, the country's capital, that will provide facilities for software development, e-business, call centers, and data entry operations.
* In Jamaica, the government has guaranteed jobs for all graduates of the Caribbean Institute of Technology, which provides training for computer programmers.

NAP of the Americas

In 2001, the 41-member carrier consortium of NAP of the Americas (NOTA) announced the selection of a developer for the Network Access Point to be located in the Park West technology corridor in Miami.  This will be the fifth Network Access Point in the United States, along with San Francisco, Chicago, Houston, and New York. It is expected that this new NAP will not only make Miami a major Internet/NewMedia industry center, but will open up the Caribbean to easier less expensive Internet access.

Benjamin Finzi, Executive Vice-President of EPIK Communications, Inc. and a NOTA spokesperson said, "The Miami NAP of the Americas will become a major hub of Internet traffic in South Florida for all of Latin America, South America, and the Caribbean, as well as provide a link to Europe and other parts of the world. The entire Florida economy will benefit as Miami assumes a leadership role in the creation of the fundamental infrastructure of the new Internet and telecommunications economy."  The developer's parent company, Terremark Worldwide, Inc., believes the NAP of the Americas will be the beginning of and key link in a new generation of Internet connectivity and communications facilities for Latin America and the Caribbean.

Economic & Business Outlook
Tourism contributes 25% of GDP in the Caribbean Basin, according to the Caribbean Development Bank, with bananas, textiles, and craft goods making up most of the remainder. The CIA Factbook describes large industrial components in most of these countries, including Trindad, Jamaica, and the Dominican Republic. Although statistical information, analysis and market research is difficult to find and often contradictory, this is an economically vigorous region. Most notably for the present case being made, the Caribbean people have a higher per capita income than South or Central America.

The Caribbean Basin, a producer of bananas, textiles, and craft goods, has suffered since NAFTA eased trade between Mexico and the United States. To remedy this, the Trade and Development Act of 2000 created the Caribbean Basin Trade Partnership Act (CBTPA) which, among other things, made Caribbean Basin Initiative trade provisions competitive with those of NAFTA. This will provide U.S. companies with favored access to the inexpensive labor market in the Caribbean for the manufacture of goods to be sold in the United States.

This also means that as the economy in that area grows, it will be expected to increase imports of goods and services from the United States. A strong correlation between the prosperous late 1980s in the United States and years of strong GDP growth in the Caribbean Basin can be seen clearly in the above chart. Similarly, as the United States emerged from the difficult early 1990s recession years, so did the economies of the Caribbean.

Competitive advantage
The Caribbean Basin is an insular region, with the Bahamas strategically located just fifty miles of the east coast of Florida. The entrenched power blocks are made up primarily of localized political interests and wield great power over the region's receptiveness toward outside business interests. U.S. companies successfully doing business in the Caribbean Basin all have Caribbean insiders as their top regional management. An example is IBM, which for the last 30 years has operated in the Bahamas under Felix Stubbs who had previously been important in the educational bureaucracy of the Bahamas. Stubbs is also Chairman of the Junior Achievers Bahamas, among other civic activities.

It must be remembered that the Caribbean Basin is only now receiving the benefit of decreasing Internet access costs, and will continue to progress even more as pervasive wired and wireless technology improves. A major block in the area remains cost effective island-to-island or country-to-country communication. It is possible at this juncture, for example, for a buyer of a certain product to be totally unaware that a supplier of that product is located on a nearby island. The Internet has the potential to break down these communication barriers.

Computer Training Programs
The Bahamas is particularly well-suited to using its regional connections among international computer technology companies to establish strategic alliances with area businesses, local government and educational institutions in order to expedite the importation of computer equipment and the establishment of consumer and business computer training.

To date, NetworkBahamas's affiliate Web site Briland.com has established six community computer centres on two of the Out Islands of the Bahamas, with plans for further development and expansion.  A number of leading computer companies, such as IBM, Cisco, Dell and Microsoft are presently working to establish those Bahamian and Caribbean markets.  Conversely, non-Caribbean companies entering this brand-new market will need to hire and train locals.

Market Potential
The targeted Bahamas and Caribbean audience is a motivated purchasing group with demonstrated buying power of U.S. and international goods. The GDP for the Caribbean territory is in excess of $150 billion and imports to the region total $50 billion per year. The Caribbean is a major importer of U.S., European, and Canadian goods and materials and imports more U.S. goods than India, with its population of 1.2 billion, or Russia, with its population of 146 million.

The Bahamas has long been a tax haven, and the capital, Nassau, is a banking, finance, and insurance center. The Bahamas levies no taxes on capital gains, corporate earnings, personal income, sales, inheritance, or dividends. This tax freedom is available to all resident corporations, partnerships, individuals, and trusts. The Bahamian dollar is pegged to the U.S. dollar on a 1:1 ratio, and both currencies are used interchangeably. Investments are facilitated and protected through the U.S. Government's Overseas Private Investment Corporation (OPIC) and the World Bank's Multilateral Investment Guarantee Agency.

Large Caribbean expatriate populations exist throughout Europe, Canada and the United States, as well as around the world. Traditionally, middle and upper-class Caribbean youth pursue their college educations abroad, and tend to remain in the countries that offer them the greatest potential for career development. Among expatriates everywhere is a longing to come home and use their business skills. It is this group, among others, that the company will target for executives and managers. All business development personnel will be hired locally, as will support staff.

Online ad spending is predicted to grow 600% in the U.S. over the next five years and a whopping 2,500% in the Caribbean, Central and South America over the same period. These increases are understandable when one takes into account the fact that the Caribbean, in Internet terms, is essentially where the U.S. was in 1993. However, given the improved expertise of the technology providers, the rates of increase in the Caribbean will exceed those experienced by the U.S.

Given that the Caribbean has a higher per capita income [The Bahamas enjoys a $20,000 per capita rate as of January 2002], higher rates of growth, and greater connectivity than its Central and South America neighbours, together with governments friendly to high-tech and globalization, it would seem that the Bahamas in particular and the Caribbean in general is poised to experience an even greater explosion of online e-commerce than our popular Latin counterparts.

The Bahamas is particularly well suited to become the E-Commerce center of the Caribbean Basin and to become a significant player in the new era of globalization.   The highly advantageous financial laws of the Bahamas make it one of the most attractive jurisdictions in the world for the operation of E-Commerce companies.   

We are confident that with progressive thinking and the necessary attention to detail, the Bahamas will become a major player in the new global economy.


Spring 2003