The people, enterprises and government of Chile identified a need for greater industrial diversification in the 1980s as a means to position the economy for more stable growth.  Led by investors and specialized experts, Chile established a public/private institute saddled with the task of researching specific opportunities for job creation and investment.

The government acted as a facilitator, using the recommendations of the institute to build an appropriate policy foundation and strategically organizing the country’s trading relationships.  The private sector acted as the implementer – buying the ideas and research from this institute to invest in profitable businesses.  Chile used this institutional framework to start and develop its salmon industry, building on the experience of Norway, the world’s number one exporter of salmon.  The researchers tested whether salmon could thrive in Chilean rivers and lakes enough to be cultivated on an industrial scale.  After having exported no salmon in the 1970s, Chile was the world’s number two exporter of farmed salmon in 2010.

In The Bahamas today, our economic growth prospects are lackluster, unemployment rates are dismal and our current “tourism or nothing” paradigm is not providing the level of investment and job creation that is desperately needed.

Extraordinary action is needed to maneuver this extraordinary economic environment.  I believe that this framework: widespread industrial engagement, intensive primary and secondary research, and multi-sector investment as witnessed in Chile, is a tried and proven method of economic planning and national organization that The Bahamas should consider.

Collaboration makes it happen

Looking back in time, one can find examples of national stakeholders coming together to proactively engage in economic planning when traditional solutions were elusive or inadequate.

In the United States after the Great Depression, a New Deal was negotiated between government and the private sector – a plan to provide strategic subsidies, generate private investments and relieve ailing industries.  Through this plan, thousands of projects were developed, millions of jobs were created and the economy of the United States expanded substantially.

This public/private partnership made subsequent economic planning more viable because it had the support and involvement of a wide range of stakeholders.  What I like about the Chilean case, though, is that the private sector was placed at the center of the stage.  Throughout the New Deal, the U.S. government orchestrated its plans, but in Chile the government took a more indirect role, laying the groundwork for growth, assuring an ideal policy environment.

The process:

1. Enlist and engage business leaders and academics from finance, agriculture, tourism, economics and venture capital.

2. Use their experience, opinions and expertise to determine best areas for research.

3. Draft and publicize the key areas established as well as areas for “experimental exploration” such as salmon in Chile.

4. Allow for a variety of labor unions, industry associations, the general public and academics to criticize, edit and build on drafts.

5. Make the final draft the mission statement for the research institute.

Researching for the future

Effective and ongoing research has the potential to:

• Sprout new ideas for industry.

• Help make current industries more profitable and efficient through financial, operational and technological analysis.

• Help government better understand the economy in order to facilitate more broad economic planning.

In line with Chile’s experience, extensive research should underpin the process from the planning stage through to implementation.  The research would ideally result in ideas for products/services, options to fund these ideas, policy recommendations for government to facilitate the ideas and detailed marketing/operational recommendations.  This research institute would also produce information on consumer tastes and trends, market analysis and financial projections, etcetera – a holistic research mandate for potential producers.

Investing in innovation

Local and international investors would purchase the idea, packaged with monopoly power, government concessions and start a company based on the recommendations.  Or, the institute can directly start the company and sell it afterward.

The facilitator – government – has a special role in setting up trade agreements that would support the institute’s ideas.  The government could also guarantee certain concessions to aid in the success of the new companies.  For example, Chile started an export promotion government agency, ProChile, to build brand recognition for Chilean goods and to put the country on the radar of international investors.  The same way that the Bahamian government advertises the tourism product to the world, it could support the “products” of this research institute. 

The strength of the framework

• This research-oriented framework brings less obvious economic opportunities to light and to market.

• It mobilizes money and resources in an economy toward high yielding investments.

• Relies on a wide range of actors and thus brings more people directly into the policy process.

• The government can use the research institute and the process to institutionalize economic planning.

Caribbean countries invest a miniscule proportion of GDP into research and development.  Looking at the performance of other emerging markets, there is a clear connection between higher levels of scientific and technological research and higher levels of economic competitiveness.  The result, as witnessed in Taiwan, Hong Kong, China and South Korea has been robust economic growth.

• David Geraldo Frazer is a master’s degree candidate at Johns Hopkins University studying international economics and international relations with a bachelor’s degree in economics and business.  He is also a freelance consultant and can be contacted at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .