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The Bahamas officially the Commonwealth of the Bahamas, is a nation consisting of more than 3,000 islands, cays, and islets. It is located in the Atlantic Ocean north of Cuba and Hispaniola (Dominican Republic and Haiti), northwest of the Turks and Caicos Islands, and southeast of the United States (nearest to the state of Florida). Its land area is 13,939 km2 (5,382 sq mi), with a population of 353,658. Its capital is Nassau. Geographically, The Bahamas lie in the same island chain as Cuba, Hispaniola and the Turks and Caicos Islands; the designation of Bahamas refers normally to the Commonwealth and not the geographic chain.

Originally inhabited by the Lucayans, a branch of the Arawakan-speaking Taino people, The Bahamas were the site of Columbus’ first landfall in the New World in 1492. Although the Spanish never colonized The Bahamas, they shipped the native Lucayans to slavery in Hispaniola. The islands were mostly deserted from 1513 to 1648, when English colonists from Bermuda settled on the island of Eleuthera.

The Bahamas became a Crown Colony in 1718 when the British clamped down on piracy. After the American War of Independence, thousands of pro-British loyalists and enslaved Africans moved to The Bahamas and set up a plantation economy. The slave trade was abolished in the British Empire in 1807 and many Africans liberated from slave ships by the Royal Navy were settled in The Bahamas during the 19th century. Slavery itself was abolished in 1834 and the descendants form the majority of The Bahamas’s population today.

In terms of GDP per capita, the Bahamas is one of the richest countries in the Americas (following Bermuda, the United States, Cayman Islands, Canada, and the British Virgin Islands)

History of The Bahamas

Taino people moved into the uninhabited southern Bahamas from Hispaniola and Cuba around the 11th century AD. These people came to be known as the Lucayans. There were an estimated 30,000+ Lucayans at the time of Columbus’s arrival in 1492. Christopher Columbus’s first landfall in the New World was on an island named San Salvador (known to the Lucayans as Guanahani), which some researchers believe to be present-day San Salvador Island, (also known as Watling’s Island) in the southeastern Bahamas.

An alternative theory holds that Columbus landed to the southeast on Samana Cay, according to calculations made in 1986 by National Geographic writer and editor Joseph Judge based on Columbus’s log. Evidence in support of this remains inconclusive. On the landfall island, Columbus made first contact with the Lucayans and exchanged goods with them.

The Lucayans throughout The Bahamas were wiped out as a result of Spanish forced migration of the population to Hispaniola for use as forced labour there, and exposure to diseases to which they had no immunity. The smallpox that ravaged the Taino Indians after Columbus’s arrival wiped out half of the population in what is now The Bahamas.

It is generally assumed that the islands were uninhabited by Europeans until the mid-17th century. However, recent research suggests that there may have been attempts to settle the islands by groups from Spain, France, and Britain, as well as by other Amerindians. In 1648, the Eleutherian Adventurers migrated from Bermuda. These English Puritans established the first permanent European settlement on an island which they named Eleuthera—the name derives from the Greek word for freedom. They later settled New Providence, naming it Sayle’s Island after one of their leaders. To survive, the settlers resorted to salvaged goods from wrecks.

In 1670 King Charles II granted the islands to the Lords Proprietors of the Carolinas, who rented the islands from the king with rights of trading, tax, appointing governors, and administering the country. In 1684 Spain’s corsair Juan de Alcon raided the capital Charles Town, and in 1703 a joint Franco-Spanish expedition briefly occupied the Bahamian capital during the War of the Spanish Succession.

Economy of The Bahamas

One of the most prosperous countries in the Caribbean region, The Bahamas relies on tourism to generate most of its economic activity. Tourism as an industry not only accounts for over 60 percent of the Bahamian GDP, but provides jobs for more than half the country’s workforce. After tourism, the next most important economic sector is financial services, accounting for some 15 percent of GDP.

The government has adopted incentives to encourage foreign financial business, and further banking and finance reforms are in progress. The government plans to merge the regulatory functions of key financial institutions, including the Central Bank of The Bahamas (CBB) and the Securities and Exchange Commission.[citation needed] The Central Bank administers restrictions and controls on capital and money market instruments. The Bahamas International Securities Exchange currently consists of 19 listed public companies. Reflecting the relative soundness of the banking system (mostly populated by Canadian banks), the impact of the global financial crisis on the financial sector has been limited.[citation needed]

The economy has a very competitive tax regime. The government derives its revenue from import tariffs, license fees, property and stamp taxes, but there is no income tax, corporate tax, capital gains tax, value-added tax (VAT), or wealth tax. Payroll taxes fund social insurance benefits and amount to 3.9% paid by the employee and 5.9% paid by the employer. In 2010, overall tax revenue as a percentage of GDP was 17.2%. Authorities are trying to increase tax compliance and collection in the wake of the global crisis. Inflation has been moderate, averaging 3.7 percent between 2006 and 2008.

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