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‘Barbados must keep up with global competition’

by Marlon Madden
3 min read
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One of Barbados’ development partners is calling on authorities to continuously review policies and make necessary changes in order to keep abreast with global competition when it comes to the international business and financial services sector.

In addition, President of the Barbados-based Caribbean Development Bank (CDB) Dr Warren Smith said it was critical that lawmakers move more speedily to take advantage of the untapped potential of the sector.

“The international business and financial services sector is still highly attractive to multinational investments. However, with other developing countries also striving to access an increased share of foreign inflows, Barbados must continuously review its policy interventions in order to keep pace with the global marketplace,” Smith told the opening of the Barbados International Business Association’s (BIBAs) annual conference, at the Lloyd Erskine Sandiford Centre today.

The theme was Harnessing Global Opportunities.

Smith argued that the international business sector had “unrealized potential”, adding that in the current global environment markets were constantly transforming and creating new obstacles and opportunities.

He said it was therefore critical that “we move with alacrity in order to circumvent the obstacles and take advantage of these opportunities”.

“Our region should embrace a regional approach that supports regulatory convergence and the adoption of common principles among CARICOM countries,” Smith recommended, while pointing out that the region’s international business sector was small compared to the rest of the world.

“In Barbados the international business and financial services sector is a major source of foreign exchange, ranking second only to tourism and directly injects the equivalent of nine per cent of GDP (gross domestic product) into the domestic economy through the payment of taxes and operational expenditures, based on 2016 data,” he said.

However, he stated that a growing attractiveness of economies to multinational corporations came at a price, including increased visibility and greater scrutiny and intensified pressure to improve the structure of international taxation.

“Against this background and to ensure continued development of its international business and financial services sector, Barbados will also need to address pertinent issues regarding competitiveness and regulation,” said Smith, as he insisted on continuous policy review.

He said improving the ease of doing business and embracing new technology, were critical steps toward attracting more investors, growing the competitiveness of the sector and the economy.

Smith acknowledged that several steps have already been taken, but insisted “much more needs to be done”.

“Barbados has taken some notable steps to reduce its taxes and these should have a positive impact on its competitiveness,” he acknowledged.

“Other areas requiring priority attention for improvement include the incorporation of companies, issuing of licenses, construction and work permits and tax clearance certificates,” he added.

“I am of the view that for the most part, the role of the public sector is to provide the appropriate policy framework, the institutions, the regulatory frameworks that facilitate growth and development. It is the private sector however, that is the engine of growth, to provide the jobs and to earn the foreign exchange that we need through exports,” said Smith, who congratulated the over 20-year-old BIBA for its advocacy over the years. 

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