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| Wendy M. Craigg, The Governor of The Central Bank of Bahamas |
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| Central Bank of The Bahamas |
Foreign investors pouring tens of billions of dollars into off-shore banks and development projects in The Bahamas rank its economic stability as high among the reasons for choosing to do business there.
For Wendy Craigg, Governor of the Central Bank of The Bahamas, the importance of economic stability is central to the bank’s very purpose. She assumed the top position in June, 2006, becoming the bank’s fifth governor and first woman to hold the post. Previously, she served nearly eight years as deputy governor.
“This was my first job after completing college,” says the soft-spoken Craigg who has an amicable and professorial demeanor. “I spent most of my years in the research department, and eventually advanced to my present position. It continues to be a very rewarding career journey.”
Tha was 29 years ago – five years after The Bahamas gained its independence from Britain, and four years after the creation of the Central Bank. Since then, the bank has lived up to its succinct motto: “To foster an environment of monetary stability conducive to economic development, and to ensure a stable and sound financial system.”
The Central Bank of The Bahamas undertakes most of the traditional roles of highly independent central banks. Perhaps most importantly, it ensures that credit growth and foreign reserve levels are supportive of maintaining the parity of the Bahamian dollar with the U.S. dollar, a situation that has existed since 1973.
The Central Bank of The Bahamas has more than a few bragging rights with respect to its contribution to a stable economy. Rating agency, Standard & Poors (S&P), has given The Bahamas ‘A-’ long-term and ‘A-2’ short-term sovereign credit ratings.
Indeed, The Bahamas stands out in the region for its sound economy and the fact that it has one of the highest annual per capita incomes – about $18,000. Other pluses cited by S&P are its political stability, economic prosperity, and low public-sector indebtedness.
“It’s a very good rating, which also takes into consideration the prospects for sustainability of economic growth. S&P shared our view that The Bahamas is poised for strong economic growth over the next five to 10 years,” Craigg said. The Bahamas prides itself in offering an “enabling environment for business,” Craigg noted, one in which the “government and private sector are working closely to ensure that the foreign investor is able to succeed in his project.”
“From my vantage point, the Central Bank has a significant role to play in the economy; it’s a very awesome responsibility that we have – one that we take very seriously, as a team.”
The Central Bank continues to play a major role in ensuring that The Bahamas remains a jurisdiction of choice for financial services, through maintaining a robust supervisory and regulatory framework—one that strikes the right balance between the need to protect the integrity of our jurisdiction, and at the same time is cost effective and allows the flexibility for innovation and adaptation as new opportunities emerge.
Despite such bragging rights, the Central Bank cannot afford to rest on its laurels. “It must remain ‘proactive’ and constantly monitor changes in the international environment and ensure that it is efficient in what is does and is delivering the best service to its stakeholders,” Craigg said.
In that respect, she said the bank “has been supportive of the modernization of the payments system, and has placed emphasis on improving the mechanism and systems used to support its functions. We will continue to leverage technology to enable us to meet some of our objectives in a more efficient manner.”
Among other things, the bank has been revamping its popular 10-year old website (www.centralbankbahamas.com), which brings together information from the bank and other sources. “The Central Bank has always been an important source of information on the Bahamian economy for the public at large, and we have taken this a step further in the material made available on our website,” Craigg said.
Last year, the Bahamian economy grew about 4.0 percent. In 2007, “The consensus view is that growth will be maintained at a rate of at least 3.5%,” Craigg said. She added that growth is being fueled by foreign direct investment in the tourism sector, strong residential construction activity, and robust domestic demand. The new government’s economically conservative polices are expected to keep the economy moving forward, according to S&P.
“The positive economic fundamentals are expected to support the government’s efforts to achieve greater fiscal consolidation, and we see in the improved buoyancy of revenues which will help to achieve further reduction in the debt to GDP ratio,” Craigg said.
Craigg noted that one thing over which the Central Bank has very little control is inflation, which generally reflects price trends, particularly in the United States, The Bahamas’ major trading partner. “Inflation is basically an imported phenomenon to The Bahamas, because we import over 75 percent of what we consume,” she said.
Although exchange controls do not apply to foreign investors, they are a reality for Bahamians. The new government has vowed to eliminate them, and Craigg acknowledges that globalization has created increasing demands for policy changes in respect to exchange controls.
Since January, 2006, she noted, additional measures have been implemented toward additional relaxation of exchange controls for Bahamians. “One of the measures that we took in 2006 was to allow, for the first time, the National Insurance Board to have foreign investments.”
Craigg has had life-long interest in economics. She graduated from the College of Mount Saint Vincent in New York, where she studied economics and business. She earned an MBA from the University of Miami and a master’s in economics from Fordham University.
In addition, she’s published a number of papers on economic issues. She serves as a director on the National Insurance Board and the Securities Commission of The Bahamas, and she’s an executive committee member of the Caribbean Center for Monetary Studies.
And even after some 29 years as a central banker, she says she finds the work “challenging and interesting at the same time.”
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