The Bahamas - Economic development
The promotion of tourism and financial activity by foreign firms continues as a basic tenet of the Bahamas government. Since the late 1960s, increased emphasis has been focused on development of local industry, with the liberal tax structure remaining the key incentive. In 1976, the government began a series of measures to foster greater participation by Bahamians in the economy. The new ruling included increased work-permit fees for foreigners and sharp rises in property-transfer taxes and business licensing for non-Bahamians. Since late 1979, government permission has been required for the sale of land to non-Bahamians. The Bahamas Development Bank helps provide financing for non-Bahamian entrepreneurs. In 1996, the government implemented an income tax on foreign workers. The government is attempting to diversify the economy and attract new industry, as well as to conserve and develop the country's 324,000 hectares (800,000 acres) of forest.
A number of policy measures were introduced in 1996 that had major repercussions in the Bahamian economy. First, the government modified the customs coding system, in preparation for the eventual Western Hemisphere Free Trade Area in 2005. The number of rates were reduced from 123 to 29, and the rates themselves were lowered as well. Second, the government awarded increases in public sector wages across the board. Third, a minimum public sector wage policy was implemented. Fourth, all temporary civil service workers with at least five years of continuous service were made permanent. The unemployment rate was 9% in 1999.
In 2000, the government took steps to better regulate the financial sector. Although the government is keen to attract foreign investment, its attention to local concerns about the repercussions of foreign competition led to protection of Bahamian business and labor. The International Monetary Fund (IMF) in 2003 acknowledged the Bahamas had a record of sound macroeconomic policies and financial stability, and the country has never had to seek financial assistance from the IMF, although it has received technical assistance.