The Minister for tourism has issued a call for the Caribbean to take a defiant stand against the international community’s imposition of standards on small states – even as his own Government was racing to comply with new financial reporting rules set by a global watchdog.
In a short riveting speech on the floor of the House of Assembly, Kerrie Symmonds said the time is now for small island developing states to have a collective voice on topics such as de-risking – in which corresponding banks in North America have dropped ties to Caribbean banks owing to the cost of complying with anti-money laundering standards – and international financial regulations.
He was speaking during the debate on the Companies (Amendment) Bill.
“This is part of the challenge that requires a robust and unrelenting conversation between us who are the small and the affected economies and the rest of the world. This conversation must take place not only as Barbados speaking to the rest of the world but as Barbados continuing to interact with Caricom. Barbados continuing to interact with all other small island developing states globally because our voices have to be heard on this matter,” he told fellow lawmakers.
Citing an incident where a British bank was heavily fined for failing to comply with regulatory requirements, Symmonds said small states, too, were hit by such action.
“You penalise a bank to the tune of US$8.9 billion for failing to comply with regulatory requirements. That approach makes the banks automatically more risk averse. Instead of working towards building relationships with the customer if the risk of making a mistake is so high to attract a US$8.9 billion fine then what do they do they flee. They engage in de-risking since the cost of not complying is too high.
“Latin America and the Caribbean were among the hardest hit by this phenomena [ of de-risking]…. In Belize only two of nine banks were able to maintain their corresponding banking relationship. Every bank was cut off from the rest of the world. We are the small entities that must trade in financial services as a critical component of our financial tools…. Outside of tourism the next economic earner is international financial services.”
The MP for St James Central said Barbados depended heavily on good relations with international banks and the impact of losing corresponding banks because of de-risking would be severe.
“All of us have constituents who know what is it to have to rely on Western Union get lil money send down from overseas cause things tough….It is true in Jamaica, Antigua, St Vincent. There are some parts of the eastern Caribbean where the economies rely more on that money coming in than what they earn by way of trade. These small vulnerable economies are placed in a perilous position by this, phenomena we know as de-risking.”
The lawyer-parliamentarian warned that failure to speak up or act could hurt prospective business and future generations of business people.
Symmonds said: “We will fail largely because of the fact that the rest of the world is turning a deaf ear to the reality of small islands like ours…. We tell our young people think not only in terms of little Barbados but do your business across borders…. But it is meaningless if you can’t move money.”