Barbados is losing out on hundreds of millions of dollars in investment due mainly to “antiquated” and “dysfunctional” administrative processes, says former Central Bank Governor Dr DeLisle Worrell.
He complained that at the end of 2016 the Central Bank outlined a number of major investment projects, the majority of which were foreign-funded to the tune of some $2.248 billion.
However, he said that at the end of two years over half the expected investment has not yet started, adding that at the end of January this year only $363 million in those projects have been completed and another $400 million worth are underway.
“The reasons for the slow implementation rate vary, but they almost always relate to administrative failures in the public sector,” he said in his February newsletter issued on Tuesday.
Without naming specific projects that have been held up, Worrell pointed to a number of instances in which he said lengthy delays were hindering the progress of critical investment projects.
“It is frequently the case that the required permissions are so long in process by Government agencies that investors lose interest. Funding sources may be lost in the interim, and market conditions may change, causing potential investors to move on. In one case, the ownership of an interested party changed during a lengthy approval process. By the time that approval was secured, terms had to be renegotiated with the new owners. In another highly publicized case, legal challenges caused a two-year delay in securing approval, and the project has not yet started,” said Worrell.
He said that by the end of December 2016 several feasible projects in alternative energy and in the public sector had also been “abandoned in frustration”, after years of bureaucratic delays.
“Renewed growth in the Barbados economy depends on removing a dense barrier of complex, antiquated Government administrative processes. Poorly performing Government departments, agencies and state corporations stand in the way of new projects, in the public and private sectors,” he said.
“Barbados remains an attractive destination for investment that brings foreign exchange to fuel economic growth. However, the channels for incoming investment are choked up by dysfunctional Government administration. To release potential investment, there has to be a sea of change in the quality and performance of our public sector,” he added.
Worrell said government’s plan for investment inflows up to the end of 2016 did not include the stalled Four Seasons Paradise Beach project, nor the planned sale of the Barbados National Terminal Company Limited (BNTCL).
“Together, these excluded projects might have added $500 million in foreign investment, but for Government administrative failures,” said Worrell.
The economist said countries such as Canada, Iceland, Singapore and New Zealand offered examples of reforms that may be used to raise the implementation capacity of the public sector to the level that was required.