Updated June 17, 2020
The Bahamas: An Overview
Political and Economic Environment
shutdown of economic activity in response to the pandemic,
The Bahamas, a Caribbean nation of some 700 islands off
the IMF is now forecasting a contraction of 8.3%. On June
the southeast coast of the United States, has been a stable
1, 2020, the IMF approved $250 million in financing for the
parliamentary democracy since its independence from the
Bahamas to help it meet urgent balance-of-payments needs
United Kingdom (UK) in 1973. The country’s bicameral
stemming from the pandemic.
legislature has a 39-seat House of Assembly directly elected
for five-year terms and a 16-member appointed Senate.
Figure 1. Map of the Bahamas
Since independence, two political parties have alternated in
power, the center-left Progressive Liberal Party (PLP) and
the center-right Free National Movement (FNM). The PLP
was formed in 1953 as an opposition party to the United
Bahamian Party (UBP), which governed the Bahamas when
the country was under British rule. In 1967, the PLP won
control of the government and oversaw the country’s
independence from the UK. It ruled continuously from
1967 until 1992 under the leadership of Lynden Pindling,
commonly referred to as the “father of the nation.” The
FNM was formed in 1971 by former members of the UBP
and dissidents from the PLP. Under the leadership of
Hubert Ingraham, the FNM won the 1992 general elections,
governing until 2002. The PLP returned to power in 2002
under the leadership of Perry Christie, lost in 2007 to the
FNM (still led by Hubert Ingraham), and won again in
2012, with Perry Christie as prime minister.
Current Prime Minister Hubert Minnis led the FNM to
victory in the May 2017 elections, capturing 35 House of
Assembly seats compared to 4 for the PLP. At the outset of
2017, many observers thought it was likely that the PLP
under Christie would retain power, largely because of
disarray within the FNM. Once the election was called,

however, observers predicted the elections would be close,
Source: CRS.
in large part because of the country’s stagnant economy.

Ultimately, the economy along with rising crime and
The Bahamas at a Glance
controversies associated with the Chinese-financed Baha
Mar resort in the capital of Nassau led to the PLP’s
Population:
381,000 (2019, IMF)
thrashing at the polls.
Area (square miles):
5,359, slightly smal er than
Connecticut (CIA)
Over the past year, the Minnis government has faced two
enormous challenges: recovery and reconstruction in the
GDP (current prices):
$12.7 bil ion (2019 est., IMF)
aftermath of Hurricane Dorian, and the current challenge of
GDP Growth:
1.6% (2018; 1.8%); (2019 est.);
contending with the health and economic effects of the
-8.3% (2020 est.) (IMF)
Coronavirus Disease 2019 (COVID-19) pandemic. In
September 2019, Hurricane Dorian caused widespread
Per Capita Income:
$33,261 (2019 est., IMF)
damage to the northwestern Bahamian islands of Abaco and
Life Expectancy:
73.8 years (2018, UNDP)
Grand Bahama, with 74 confirmed deaths and many more
missing. An Inter-American Development Bank-led
Sources: International Monetary Fund (IMF); Central Intel igence
assessment estimated $3.4 billion in damages and losses.
Agency (CIA); United Nations Development Programme (UNDP).
COVID-19 is having a significant economic impact on the
Tourism and related construction are important sectors for
Bahamas. As of June 15, 2020, the Bahamas reported 103
the service-based Bahamian economy, employing about
cases and 11 deaths from the virus . Before the pandemic,
half of the country’s workforce. The sector essentially shut
the International Monetary Fund (IMF) estimated an
down in response to the pandemic, but the Bahamas began
economic contraction of 0.6% for 2020, but because of the
a limited economic opening on June 15 for private boats,
https://crsreports.congress.gov

---

The Bahamas: An Overview
yachts, and aircraft. Commercial airlines, hotels, and
operations during the first 10 months of 2019 led to the
vacation rentals are to be allowed to resume operations in
seizure of almost 226 metric tons of marijuana (up
July, with safety protocols in place to mitigate against the
significantly from 5.7 metric tons in 2018) and the
spread of COVID-19. Most observers expect that it will
eradication of 217,031 cannabis plants (up from 2,520 in
take time for the sector to recover, given the global
2018). The State Department maintained that it is unclear
economic recession and continued concerns about travel
whether these seizures were part of a wider trend by drug
because of the pandemic. Financial services, also an
traffickers to move marijuana production closer to the
important sector for the economy, have not been as severely
United States. Cocaine seizures also increased, from 176
affected as tourism and could play a role in the country’s
kilograms in 2018 to 1,000 kilograms in 2019.
economic recovery.
The State Department’s 2020 INCSR notes that as an
High rates of violence have afflicted the Bahamas for
international financial center, the Bahamas is vulnerable to
several years. According to the United Nations Global
money laundering in various sectors, such as financial
Study on Homicide 2019, from 2012 to 2016, the Bahamas
services, real estate, casino gambling, and online gaming.
had a homicide rate of about 32 murders per 100,000, the
According to the State Department, although the Bahamas
sixth-highest rate in the Americas. In 2018, the number of
took significant steps in 2019 to strength its anti-money
murders decreased to 91, the lowest count in nine years,
laundering regime, vulnerabilities in the online gaming and
bringing the homicide rate to 24 per 100,000—although in
money transfer business sectors are exacerbated by some
2019, the number of murders increased to 96.
regulators’ reluctance to acknowledge them.
Some 30,000-60,000 Haitians or persons of Haitian descent
U.S. bilateral assistance to the Bahamas amounted to about
live in the Bahamas, according to estimates cited in the
$350,000 in FY2018 (latest full year available) according to
State Department’s Country Reports on Human Rights
the U.S. Agency for International Development’s online
Practices for 2019. The report noted widespread bias
Foreign Aid Explorer (https://explorer.usaid.gov/). This
against those of Haitian descent, and it stated that many
included $138,000 in International Military and Training
persons of Haitian origin live in shantytowns with limited
and smaller spigots of assistance for fiscal transparency,
government services. According to the report, Hurricane
education and training for combating terrorism, HIV/AIDS
Dorian displaced thousands of persons of Haitian descent,
programs, and international aviation security technical
which led to increased interethnic tensions and inequities
training.
for the Haitian community.
Among other spigots of U.S. assistance, the Bahamas
U.S.-Bahamian Relations
receives support under the Caribbean Basin Security
The United States enjoys close economic linkages and
Initiative (CBSI), a regional program begun in FY2010 that
cooperative relations with the Bahamas, with the nearest
focuses on advancing citizen security and reducing illicit
Bahamian island, Bimini, just 45 miles from Florida. A
trafficking. From FY2010 to FY2018, the Bahamas was
majority of tourists visiting the Bahamas (a total of 7.2
allocated almost $35 million in CBSI assistance. In the
million in 2019) are from the United States, according to
aftermath of Hurricane Dorian in 2019, the United States
the State Department, highlighting the dependency of the
provided almost $34 million in humanitarian assistance to
tourism sector on U.S. economic conditions. Because the
support the recovery effort. Most recently, as of late May
Bahamas has a largely service-based economy, the United
2020, the State Department maintains that the United States
States historically has run a large merchandise trade
is providing $750,000 in previously announced health
surplus. According to Commerce Department statistics,
assistance to help respond to the COVID-19 pandemic.
imports from the Bahamas amounted to $411 million in
2019, whereas U.S. exports to the Bahamas totaled almost
Among other aspects of bilateral cooperation, CBP
$3.3 billion (with fuel oil accounting for 37%).
maintains preclearance facilities at airports in Nassau and
Freeport for those traveling to the United States. The port of
Because the Bahamas is a major transit country for illicit
Freeport participates in the Container Security Initiative, a
drugs bound for the United States and other markets —
CBP-run program that uses a security regime to ensure that
largely marijuana from Jamaica and cocaine from South
all containers that pose a potential risk for terrorism are
America—cooperation on antidrug efforts has been a
identified and inspected before they are placed on vessels
central component of bilateral relations. U.S. agencies such
destined for the United States. The port also participates in
as the Coast Guard, the Drug Enforcement Administration
the Megaports Initiative run by the Department of Energy’s
(DEA), and the Department of Homeland Security’s
National Nuclear Security Administration, which involves
Customs and Border Protection (CBP) assist the country in
the use of radiation detection equipment to deter, detect,
drug interdiction efforts, and the Royal Bahamas Police
and interdict illicit trafficking in nuclear and radioactive
Force cooperates closely with U.S. law enforcement.
materials. The U.S. Navy also operates an underwater
research facility, the Atlantic Undersea Test and Evaluation
The Bahamas participates actively in Operation Bahamas,
Center (AUTEC), on Andros Island.
Turks and Caicos (OPBAT), a combined Coast Guard,
DEA, and government of Bahamas partnership to combat
Also see CRS Insight IN11171, Bahamas: Response to
drug smuggling to and from the Bahamas. According to the
Hurricane Dorian.
State Department’s 2020 International Narcotics Control
Strategy Report (INCSR), coordinated U.S.-Bahamian
Mark P. Sullivan, Specialist in Latin American Affairs
https://crsreports.congress.gov

---

The Bahamas: An Overview

IF10666


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permissio n of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF10666 · VERSION 5 · UPDATED

---