Minister of Industry, Commerce, International Business and Small Business Development Donville Inniss has rendered Barbados’ economic model obsolete.
Echoing many of the views expressed by former Prime Minister Owen Arthur last week when he called for a new model of development, Inniss pointed out that “over the past 50 years Barbados’ growth and development has been based on an economic model which placed much emphasis on preferential access to markets of Barbados’ principal trading partners, incentivized tax regimes for the foreign investors designed to inject foreign exchange earners into the economy and high protectionist barriers implemented to give local enterprise the necessary space to become sustainable”.
However, the Government minister warned that this model had now become outdated as evidenced by the demands by international standard-setting agencies to dismantle these systems.
It was during last week’s Innovate Barbados 2017 conference at the Lloyd Erskine Sandiford Centre that Arthur, who resides in Inniss’ constituency but currently sits as an independent in Parliament, had issued pretty much the same warning.
The way he put it though was that “a developmental model based on protectionism, trade preferences, unique tax benefits and on economic sectors which do not make the fullest use of our human capital will lead Barbados into an economic cul-de-sac”.
And without making direct reference to any of the current fiscal policies of the Freundel Stuart led administration or the recent promises of the Mia Mottley-led Opposition Barbados Labour Party that it will make tertiary education free again and that it will immediately repeal the dreaded National Social Responsibility Levy if it is elected to Government in the next election, Arthur cautioned that the heavy provision of welfare services by the state was no longer sustainable with Barbados currently grappling with a high deficit of six per cent of gross domestic product (GDP), a high national debt in excess of 140 per cent of GDP and dwindling foreign reserves in the amount of 8.6 weeks of import or $549.7 million at the end of September.
With the situation as it stands, Arthur was insistent that there must be a new model of development in which innovation, technology and entrepreneurship are the principal drivers of economic and social activity.
This very point was made by Inniss today as he addressed the second annual Students’ Conference, under the theme Chartering the Course, Exploring the Possibilities.
In fact, he warned that Barbados stood to be left behind unless it embraced the international technological revolution that was changing the very way in which the financial system works.
“It is this ease in the geographical mobility of finances which is contributing to the increased complexity of regulation of financial services that we have to focus on in Barbados,” Inniss said.
He told the gathering of over 100 aspiring accountants that increased accountability must be at the centre of transformation with respect to doing business on the island.
“Barbados was ranked 132 out of 190 economies analyzed by The World Bank’s 2018 Doing Business report which looks at Barbados’ economic climate for business and provides a ranking based on a number of business regulatory data indicators,” he acknowledged.
And while continuing to query the methodologies used to arrive at these findings, he said “there is no denying that we have quite a bit of work to do in both the private and public sectors to positively transform service delivery in our island”.