The Bahamas: An Overview

The Bahamas: An Overview

Updated August 8, 2023
The Bahamas: An Overview
Political Environment
Figure 1. Map of the Bahamas
The Bahamas, a Caribbean nation of some 700 islands off
the southeast coast of the United States, has been a stable
parliamentary democracy since its independence from the
United Kingdom (UK) in 1973. The country’s bicameral
legislature has a 39-seat House of Assembly directly elected
for five-year terms and a 16-member appointed Senate.
The Bahamas at a Glance
Population: 398,000 (2023, IMF est.)
Area: 5,359 square miles, slightly smaller than Connecticut
GDP: $14.1 bil ion (2023, est., current prices, IMF)
Per Capita GDP: $35,460 (2023 est., IMF)
Real GDP Growth: -23.8% (2020); 13.7% (2021); 11%
(2022); 4.3% projected (2023 est.) (IMF)
Life Expectancy: 72 years (2021, WB)
Sources: International Monetary Fund (IMF) and World Bank
(WB).
Since independence, two political parties have dominated
elections, the center-left Progressive Liberal Party (PLP)

Source: CRS.
and the center-right Free National Movement (FNM). The
Economic Situation
PLP was formed in 1953 as an opposition party to the
United Bahamian Party (UBP), which governed the
The Bahamian economy has faced a series of challenges
Bahamas when the country was under British rule. In 1967,
over the past few years. In September 2019, Hurricane
the PLP won control of the government and oversaw the
Dorian caused widespread damage to the northwestern
country’s independence from the UK. It ruled continuously
Bahamian islands of Abaco and Grand Bahama. Starting in
from 1967 until 1992 under the leadership of Lynden
2020, the COVID-19 pandemic further damaged the
Pindling, commonly referred to as the “father of the
Bahamas’ tourist-based economy, resulting in an economic
nation.” The FNM was formed in 1971 by former members
contraction of almost 24% in 2020, according to the
of the UBP and dissidents from the PLP. Under the
International Monetary Fund (IMF). The Inter-American
leadership of Hubert Ingraham, the FNM won the 1992
Development Bank (IDB) estimates that the two disasters
general elections, governing over the next decade until
cost the Bahamas a combined $13.1 billion in losses and
2002. Since then, the two parties have alternated winning
damages. Despite a recovery that began in 2021 with a
national elections.
rebound in tourism, the IDB does not expect the economy
to return to its pre-pandemic level until 2024. The IMF has
Current Prime Minister Philip Davis led the PLP to a
expressed some concern about high levels of public debt,
landslide electoral victory in September 2021, winning 32
currently estimated at around 90% of GDP, although the
lower chamber House of Assembly seats; the FNM, now
government has plans to reduce its debt gradually over a
led by Michael Pintard, who serves as leader of the
10-year period to a more sustainable level of 50% of GDP.
opposition, won 7 seats. The difficult economic situation,
brought about by the damage caused by Hurricane Dorian
In 2020, the Central Bank of the Bahamas launched a
in 2019 and, beginning in 2020, the Coronavirus Disease
digital currency known as the Sand Dollar, a digital version
2019 (COVID-19) pandemic, was a key factor that led to
of the Bahamian dollar, which is pegged one-to-one to the
the PLP’s win in 2021. Since taking office, the Davis
U.S. dollar. The action was taken in the aftermath of
government has been challenged by the economic fallout
Hurricane Dorian as a way of ensuring that citizens have
from the war in Ukraine, which has sharply increased the
access to needed currency and can receive aid more quickly
cost of imported energy and goods, and by opposition
when banks and ATMs are damaged by natural disasters.
claims that it failed to curb a rise in violent crime linked to
According to the IMF, the Sand Dollar has the potential to
increased gang activity and drug trafficking. The next
help foster financial inclusion and payment system
national elections are due by September 2026.
resilience in the event of a natural disaster. The IMF also
recommended that the Central Bank maintain careful
oversight of the initiative to safeguard financial integrity.
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The Bahamas: An Overview
U.S.-Bahamian Relations
FY2021, DOD also donated three high-speed boats, radio
The United States enjoys close economic linkages and
communications equipment, biometrics and forensics
cooperative relations with the Bahamas, with the nearest
equipment, and a radar system to support Bahamian
Bahamian island, Bimini, just 45 miles from Florida. A
maritime and law enforcement efforts. Most of the
majority of tourists visiting the Bahamas are from the
remainder was applied by the U.S. Bureau of International
United States, according to the State Department,
Narcotics and Law Enforcement Affairs (INL).
highlighting the dependency of the tourism sector on U.S.
economic conditions. Because the Bahamas has a services-
Since FY2010, the Bahamas has received support under the
based economy, the United States historically has run a
Caribbean Basin Security Initiative, a regional program that
large merchandise trade surplus. According to the Census
focuses on advancing citizen security and reducing illicit
Bureau, U.S. imports from the Bahamas amounted to $1.7
trafficking. Support has included the purchase and repair of
billion in 2022, whereas U.S. exports to the Bahamas
maritime interdiction patrol assets; training and equipment
totaled $5.5 billion, with oil and gas products accounting
for OPBAT’s counternarcotics operations; and technical
for 54% of the total.
assistance, equipment, and training to strengthen Bahamian
law enforcement institutions.
Counternarcotics Efforts and Cooperation. Because the
Bahamas is a major transit country for illicit drugs bound
In June 2023, Vice President Kamala Harris and Prime
for the United States and other markets—largely marijuana
Minister Philip Davis hosted the U.S.-Caribbean Leaders
from Jamaica and cocaine from South America—
Meeting in Nassau. Leaders discussed security and firearms
cooperation on anti-drug efforts has been a central
trafficking; the need for an enhanced U.S. diplomatic
component of bilateral relations for decades. U.S.
presence in the eastern Caribbean; the crisis in Haiti; and
agencies—such as the Coast Guard, the Drug Enforcement
climate change.
Administration (DEA), the Department of Homeland
Security’s Customs and Border Protection (CBP), and the
Migration. Irregular migration of mostly Haitian and
Department of Defense (DOD)—assist the country in drug
Cuban nationals through Bahamian waters reached
interdiction efforts and cooperate closely with the Royal
historically high levels during 2022. The Royal Bahamas
Bahamas Police Force and the Royal Bahamas Defense
Defence Force (RBDF) reportedly apprehended 3,605
Force. The Bahamas participates actively in Operation
migrants in 2022—more than the last three years combined.
Bahamas, Turks and Caicos (OPBAT), a combined Coast
As of July 2023, the RBDF has apprehended roughly 1,736
Guard, DEA, and government of Bahamas partnership to
migrants. Some 30,000-60,000 Haitians or persons of
combat drug smuggling.
Haitian descent live in the Bahamas, according to estimates
cited in the State Department’s Country Reports on Human
According to the State Department’s 2023 International
Rights Practices for 2022. The report noted many persons
Narcotics Control Strategy Report (INCSR), further
of Haitian origin lived in informal settlements with limited
progress against drug trafficking will significantly depend
government services, although Haitian children generally
on Bahamian government efforts to combat corruption,
had access to education and social services. The report
increase extraditions, and strengthen prosecutions. The
noted that ethnic tensions and inequities persisted.
report noted that the United States encourages the Bahamas
to invest resources in its courts to meet caseload demand
Among other aspects of bilateral cooperation, CBP
and increase the speed of judicial operations.
maintains preclearance facilities at airports in Nassau and
Freeport for those traveling to the United States. In
Money Laundering. The 2023 INCSR notes that, as an
February 2022, the Transportation Security Administration
international financial center, the Bahamas is vulnerable to
established its expedited security screening process,
money laundering. The report noted that the Bahamas
PreCheck, at the Nassau airport, the first established outside
enacted legislation in 2020 and 2021 to enhance its anti-
of the United States. The U.S. Navy also operates an
money laundering/combating the financing of
underwater research facility, the Atlantic Undersea Test and
terrorism/countering the financing of proliferation
Evaluation Center (AUTEC), on Andros Island.
(AML/CFT/CFP) regime and in 2022, the Bahamas
amended five AML/CFT/CFP laws and enacted the Digital
The Bahamas falls under the area of responsibility of the
Assets and Registered Exchanges (DARE) Act, which
U.S. Northern Command (NORTHCOM), with a bilateral
monitors and sanctions unlicensed digital asset business
security cooperation framework in place. NORTHCOM
activities.
Commander General Glen VanHerck maintains that
because of the Bahamas’s geographic location close to the
U.S. Foreign Assistance. U.S. bilateral assistance to the
United States, domain awareness and control are in the vital
Bahamas amounted to $10.3 million in FY2020 and $2.5
national interests of both countries.
million in FY2021 from all U.S. agencies
(https://foreignassistance.gov/cd/bahamas/, latest full year
For additional information, see CRS In Focus IF10789,
available). The U.S. Agency for International Development
Caribbean Basin Security Initiative.
implemented almost half of the FY2020 assistance to
This In Focus updates an earlier version written by former
support recovery in the aftermath of Hurricane Dorian.
CRS Specialist, Mark Sullivan.
DOD implemented much of the balance, providing
equipment and training to help increase maritime and
Karla I. Rios, Analyst in Latin American Affairs
border security and improve interdiction capabilities. In
IF10666
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The Bahamas: An Overview

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