There was an increase in the number of Bahamians who were employed in the financial services sector last year over 2004 levels while the number of expatriates employed in the industry declined, a new survey conducted by the Central Bank of The Bahamas found.
There was also a confident projection about the sector’s continued impact on the level of economic activity in The Bahamas.
Bahamians accounted for 94.8 percent of the total employment in the sector which is responsible for between 15 and 20 percent of The Bahamas’ GDP, according to the newly released report.
There was a marginal increase in employment levels in the banking sector to 4,405 persons in 2005, reflecting what was called a soft upturn from the decreases recorded in 2002 and 2003, it was reported.
Last year, positions held by Bahamian increased by 2.1 percent to 4,176, compared to the rise of 2.6 percent recorded in 2004. Jobs held by non-Bahamians dropped by 16.4 percent to 229, reversing the previous year’s increase of 3.4 percent.
The report, Gross Economic Contribution of the Financial Sector in The Bahamas 2005, provided a comprehensive analysis of the sector. A substantial portion of the sector’s revenue is derived from the marketing of international products and services.
"According to the latest survey, the indications are that the financial services sector’s contribution to the economy increased further, with incremental gains in employment and average wages across most sectors," noted the report.
"Most noticeable growth in the scale of domestic operations contrasted with a less expansionary outcome on the international side – a development which was largely consistent with global trends vis-à-vis the streamlining of the size and location of operations."
Officials found it necessary, because of the operational differences, to analyze separately the effects on the economy of domestic and international banking.
The former comprises a small number of retail banks requiring labour intensive operations while international banking institutions demand more skilled employees, offer private portfolio and wealth management services and have high net worth clients.
Employment levels in domestic banks and trust companies increased by just under 50 to 3,300 during 2005 contrasting with 9 fewer positions in the offshore sector at 1,105. As a result, the share of total employment generated in the domestic sector firmed to 74.9 percent, the report stated.
Bahamian jobs hiked by 1.7 percent to 3,261 while foreigners employed in the sector dropped by 11.4 percent to 39. It left the ratio of Bahamians to non- Bahamians in local operations rising to 84:1 from 73:1 in the previous year.
The employment gains recorded for native workers were not concentrated in the domestic sector. There were also encouraging numbers on the international front where 31 Bahamians were added making the total number 915. On the other hand, the number of non-Bahamians in the sector declined by 40 to 190. The ratio of Bahamians to expatriates in external positions rose to 5:1 in 2005 over the 4:1 ratio in 2004.
"At its base, the sector will continue to be supported by a cadre of highly skilled professionals and expanding product range which permits diversified business growth," the report stated.
"Efforts continue to focus on strengthening the supervisory and regulatory processes, harmonization of external cooperative mechanisms and refining the legislative regimes."
Last year saw the government appointment of the Financial Services Regulatory Reform Commission to consider options for consolidating the supervision of local activities. The Minister of State for Finance James Smith is the chairman and the body has representation from all of the regulatory agencies.
In the interim regulatory efforts were for the most part aimed at implementing the regulatory regime introduced in the 2000 package of financial services laws.
- Austin DWI - New York DWI