Industries of The Bahamas

Conceptual Framework of Industry and Economic Categories

Industry is defined as the production of goods and or related services within an economy. This broad field is systematically organized into four distinct categories based on the nature of the economic activity. The first category is Primary Industry, which involves the direct extraction or harvesting of raw materials from the environment. This sector is fundamentally rooted in the use or extraction of natural resources and includes activities such as mining, forestry, farming, and fishing. The second category, Secondary Industry, focuses on manufacturing, which is the process of transforming raw materials into more valuable end products. Key examples of this manufacturing process include the processing of coconut into oil, the conversion of bauxite ore into aluminum, and the refinement of coffee berries into coffee. This sector also encompasses energy generation and food processing. The third category is Tertiary Industry, a service-oriented sector where the end product is the actual service provided using materials derived from prior industries. This sector includes professionals such as chefs, nurses, teachers, and bus drivers, and it constitutes the vast majority of employment opportunities globally. The fourth category is Quaternary Industry, which involves intellectual services driven largely by technology and information. This include services such as research and development, consultancy, financial planning, design, and information sharing. Professionals in this sector include computer programmers, IT specialists, technology developers, information sharing experts, professional bloggers, digital stockbrokers, educators, and financial planners.

Overview of the Bahamian Economy and Key Industrial Sectors

The economy of The Bahamas relies heavily on the tourism industry, which is a critical component of the tertiary sector. Tourism is responsible for approximately half, or $50\%$, of the country’s Gross Domestic Product (GDP). Beyond tourism, The Bahamas maintains several other industries including offshore banking, fishing, oil refining, mining, cement making, and boat building. While manufacturing is not a dominant part of the national economy, the country does engage in specific manufacturing activities such as salt production, rum distilling, aragonite extraction, and pharmaceuticals. Notably, Freeport on Grand Bahama holds the distinction of being the nation’s largest manufacturing sector. Banking and tourism are highlighted as the two key areas in the tertiary industry that are vital to the growth of the Bahamian economy.

Fundamental Principles and Types of Farming

Farming is a primary industry defined as the act or process of working the ground, planting seeds, and growing edible plants, as well as raising livestock for milk or meat. There are two primary methodologies of farming discussed. Subsistence Farming is the practice of growing crops and raising livestock sufficient only for one’s own use, without producing any surplus for trade. In contrast, Commercial Farming is the practice of growing crops and raising livestock specifically for sales and export profit. Common examples of various farm types include dairy, fish, poultry, and those producing grains and vegetables. In the specific context of The Bahamas, farmers focus on products such as poultry, winter vegetables, and citrus fruits. National exports consist mainly of grapefruits, limes, okra, papaya, pineapples (primarily from Eleuthera), and avocado.

Geographical Distribution of Agriculture in The Bahamas

Agricultural production is distributed across several regions of the Bahamian archipelago. In New Providence, farming activities are present, though specific products are not detailed for this location. The Central Bahamas region includes Andros, which is known for fruits and vegetables; Eleuthera, which specializes in pineapples, tomatoes, watermelons, and avocados; and Cat Island, which focuses on the production of cassava and okra. The Southern Bahamas region includes Long Island, which produces vegetables, potatoes, and poultry, and Exuma, which is known for peppers, onions, and corn.

Historical Analysis of the Salt Industry

The salt industry in The Bahamas has deep historical roots, with the export of salt starting during the era of the Eleutheran Adventurers. It transitioned into a major primary industry in the $1900s$. Prior to the Emancipation of $1838$, enslaved people were used to gather salt; following emancipation, these individuals found work in the salt ponds. The labor was exceptionally grueling, as the salt and sun were damaging to the workers' hands and eyes. Wages were low, and workers were often displaced from their homes for long periods, living in primitive shacks or bush houses. The industry entered a period of decline from $1850$ onwards due to several factors: first, the separation of Turks and Caicos (the top producer of Bahamian salt) in $1848$; second, the high cost of labor and an unreliable workforce; third, harsh working conditions that limited production capacity; fourth, the tendency for rain to spoil collected salt; and fifth, tariffs from the United States which led to falling prices.

The Sponging Industry: Evolution and Collapse

Sponging was introduced to The Bahamas by a Frenchman named Gustave Renouard. The first export of natural sponges occurred in $1843$, consisting of $132$ bales. By $1917$, the industry had peaked, with an annual export value of $\$492,000$. The primary sponging area was The Great Bahama Bank, also known as "The Mud," though sponges were also harvested from Long Island, Abaco, and Exuma. The sponging fleet typically consisted of two or three men, including roles designated as "the hooker" and "the sculler." Harvested sponges were stored in a Kraal, which is a shallow water enclosure, where they were soaked before being scraped to remove unwanted organic matter. The sponges were then sold at the Nassau Sponge Exchange, primarily to Greek merchants, through a silent auction method. Final preparation, including cleaning, chipping, and dying, took place in warehouses prior to export. The industry's decline began in $1938$ when a strange fungus attacked and killed the sponge beds. Today, the industry is no longer a major focus and is conducted only on a very small scale.

Citrus and Sisal: Rise and Fall of Export Crops

Citrus fruits, including oranges, lemons, and grapefruits, were introduced to The Bahamas early in its history, thriving in the country's black soil and frost-free climate. The industry saw significant growth in the $1890s$ after a severe winter climate hit Florida, combined with the fact that the Bahamian tomato industry was failing due to American tariffs. However, the citrus industry eventually declined because Florida's industry recovered, and the United States imposed a citrus tax. Additionally, local consumers began to prefer Florida oranges over domestic ones. Sisal, a plant with long, strong fibers used for rope making, was brought from Yucatan, Mexico, in $1845$ by C.R. Nesbit. It grew well in thin soil and was promoted by Governor Sir Ambrose Shea to foreign investors like the Chamberlain family, leading to the creation of the Andros Fiber Company. The industry received a boost when the Philippines could not export due to war and the Bahamian government taxed imported sisal. The decline of sisal was caused by poor soil quality, cheaper production costs in the Philippines following the American takeover, a decrease in the quality of Bahamian sisal, and a drop in global prices that made the industry economically unviable.

Minor Industries and Factors of Failure

Several other industries were attempted in The Bahamas but failed for specific reasons. The tobacco industry failed because it could not overcome the intense rivalry of Virginian and Cuban tobaccos. The cotton industry was undermined by infestations of Red bugs and Cheyenne bugs, poor soil quality, and the end of slavery. Wrecking, the process of salvaging goods from wrecked ships, also failed as an industry due to improved technology, better ship construction, the building of lighthouses, and more accurate maritime charting.

The Wrecking Industry: Tradition, Regulation, and Decline

Wrecking is defined as the action of causing the destruction of a ship to steal its cargo. While many wreck sites were initially caused by natural occurrences like reefs, shallow water passageways, and rocks, the practice was turned into a deliberate industry due to economic desperation. It was introduced by the Eleutheran Adventurers who settled in $1648$ and wrote the first constitution in $1647$. Wrecking was so integral to the Bahamian way of life that captains dedicated their vessels to it. During the $17th$ and $18th$ centuries, as trade between Europe and the Americas increased, wrecks became frequent. Wreckers were known for aggression and violence; notably, Bahamian wreckers drove Spanish sailors from their own wreck during the proprietary government era, leading to a savage Spanish reprisal on New Providence. Following the elimination of piracy, the government established regulations: all boats had to be registered, the first person on the scene was named the "Wreck Master," gains were codified in law, all salvaged goods had to be auctioned in Nassau, and wreckers required a government-issued license. Despite this, some wreckers withheld items with the complicity of officials. Wreckers typically received between $40\%$ and $60\%$ of salvaged goods. At its height, the industry involved $302$ ships and $2,679$ licensed men out of a population of approximately $27,000$, with salvaged cargo valued at $£97,304$. The industry declined due to improved navigation, the building of lighthouses, the advent of steam ships (which could travel more during the day and resist storms), and accurate reef charts.

Maritime Safety Infrastructure and Lighthouses

Some wrecking was caused by deliberate, unnatural acts, such as extinguishing guide lights or erecting false beacons, often made from pine wood in Eleuthera, to lead ships off course. Consequently, many Bahamians opposed the construction of lighthouses, viewing them as a threat to their profits. In Abaco, residents refused to supply food to lighthouse construction workers and once even sank boats transporting building supplies. However, these lighthouses eventually succeeded in guiding ships from distances of up to $20$ miles. A notable landmark is the Elbow Reef Lighthouse in Hope Town, Abaco; it is the last kerosene-burning lighthouse of its kind in the world and is recognizable by its red and white candy-striped exterior.

The Banking System of The Bahamas

Banking is defined as the business of accepting and safeguarding money owned by individuals or entities, conducted for profit. The Bahamas hosts four main types of banks: Central Bank, Offshore Banks, Commercial Banks, and Trust Companies. The functions of these banks include facilitating securities dealings to support the Bahamian dollar, storing money for individuals and businesses through savings and investments, offering loan facilities, facilitating financial management (such as payroll and purchases for businesses), and regulating the economy by controlling the circulation of foreign currency. Banks are critical to the national payment system, aiding the exchange of goods, services, and financial assets.

Historical Development and Regulation of Banking

The history of banking in The Bahamas began with the establishment of the first public bank, the Government Savings Bank, in $1835$. This institution expanded to include commercial services in $1837$, renaming itself the Public Bank of The Bahamas. The first private bank, the Bank of Nassau, was formed in $1889$. The Royal Bank of Canada (RBC) became the first international bank in the country, opening its flagship branch in Nassau on November 2, $1908$. RBC eventually took over the Bank of Nassau in $1917$. Other significant banks that opened include Barclay’s Bank, People’s Penny Savings Bank, Bank of Nova Scotia, and the Canadian Imperial Bank of Commerce. The Central Bank of The Bahamas was formed later, in $1974$. Its regulatory responsibilities include overseeing the buying and selling of gold and foreign currency, managing the amount of money flowing through the economy, and regulating national interest rates.