Government is being forced to sacrifice developmental projects in order to save the island’s international business reputation, a senior administration spokesman has revealed.
Acting Minister of International Business Senator Jepter Ince said Monday night the international business and financial services sector was being threatened by “indiscriminate blacklisting” by international agencies, leaving Government with little option but to defend the country’s reputation.
Consequently, he told a reception hosted by the Barbados International Business Association (BIBA) as part of its week of activities, funds have had to be diverted from developmental projects to ensure the island’s standing remained intact.
Ince made reference to the Panama Papers – the 11.5 million leaked documents that detailed financial and attorney–client information for more than 214,488 offshore entities – saying there would likely be some fallout.
The acting minister gave no figures, but he also said de-risking and the severing of correspondent banking relationships between international and local banks had also affected the financing of trade and investment, which was becoming costlier and more difficult to administer.
“Over the past few years the sector has had to grapple with indiscriminate blacklisting of Barbados, characterized by inconsistencies and based on misconceptions by international groupings, countries and even federal districts.
“These events most often result in the diversion of limited Government resources from otherwise developmental projects to mitigate against potential negative consequences. It is often necessary to deploy efforts to defend the country’s legitimacy as a transparent, reputable and compliant jurisdiction,” Ince told the gathering at the Fairmont Royal Pavilion, which included a range of industry and Government officials.
Despite the challenges, Ince said there were lessons that had been learnt, such as the role international financial centres such as Barbados played in optimizing strategies for global business and the value of ensuring that regulatory framework adhered to international standards and best practices.
“We have also been sensitized to some of the real concerns being experienced by some capital exporting countries, which when faced with the dynamism of global trade and business, find themselves vying for the right to tax the profits of the businesses they helped to develop. It is imperative that the right balance between all these realities be struck,” Ince said.
BIBA President Greg McConnie, who also addressed last night’s reception, said the international business and financial service sector had contributed about $1 billion and 4,500 jobs to the Barbados economy in 2013 and 2014.
“We have good reason to be proud of the contribution our sector makes to the Barbados economy and this week of activities is about showcasing all that it has to offer,” he said.
McConnie also used the occasion to announce that this year the BIBA Charity, through the annual 5K fun walk/run, was seeking to raise approximately US$85,000 to support the Eunice Gibson polyclinic through the purchasing of necessary equipment.