Clash of views over Economic Diversification and Growth Fund Bill

Former senator and attorney-at-law Tricia Watson has sharply criticised the Economic Diversification and Growth Fund Bill, describing it as appalling, poorly drafted and failing to meet basic standards for the management of public funds.

But Minister of People Empowerment and Elder Affairs Kirk Humphrey has pushed back by defending the measure as essential for job creation, foreign exchange earnings and long-term economic stability.

The bill, debated in the Lower House last week, authorises the disbursement of $225 million from the Consolidated Fund over three years, in annual instalments of $75 million.

In a statement posted on social media, Watson said the 12-page legislation lacks clarity, rigour and transparency. “This is not acceptable,” she said.

She took particular issue with how qualifying companies are defined. Under the bill, eligible entities are described as having a “real and substantial economic presence in a jurisdiction other than Barbados” and engaging, or intending to engage, in “real and substantial economic activity in Barbados”.

“The problem is ‘real and substantial economic presence’ and ‘real and substantial economic activity’ are not clearly defined, and ‘intends to engage’ is not defined,” Watson said. “Anyone can intend anything and not actually do it.”

Watson also criticised the proposed application and oversight framework, arguing that it lacks sufficient safeguards. While applications would be reviewed by a committee that advises a minister and monitors compliance, she said the bill sets out no clear requirements for companies to submit financial information, shareholder details or fit-and-proper assessments of directors and senior officers.

She further objected to provisions allowing a minister to enter into agreements with companies for the disbursement of funds, noting that ministers are not ordinarily empowered to contract on behalf of the government.

“This bill and the fund are utter nonsense,” Watson said. “They do not meet the standard that is set out for handling public funds under our own laws.”

She also questioned whether the funding would take the form of grants or loans, pointing out that the bill makes no reference to repayment, and criticised the absence of provisions requiring the government to disclose who has applied for or received public money.

Watson argued that the bill is being debated while many Barbadians are distracted by Christmas activities, despite its far-reaching implications, and pointed out that the fund is aimed at large foreign companies rather than local or small businesses.

But in a statement issued on Sunday, Minister Humphrey said while public concern about the bill is understandable, Barbadians should assess the legislation calmly and on the basis of facts rather than fear.

He said support from the fund is tied to clear and measurable outcomes, with companies required to create significant employment for Barbadians, earn foreign exchange, comply fully with tax obligations and commit to remaining in Barbados over the long term. Where commitments are not met, he said, funds could be withheld or recovered.

Humphrey explained that eligibility is limited to companies that create at least 100 jobs for Barbadians and maintain those positions for a minimum of seven years. He added that the fund is capped at $225 million over three years, describing it as targeted, time-bound and manageable.

He rejected suggestions that local businesses are being sidelined, noting that Barbadian companies operating internationally are not excluded if they meet the criteria.

He agreed that these resources belong to the people of Barbados and said this is why they must be applied carefully and deliberately, in ways that strengthen the economy and expand opportunity over time for all Barbadians.

“There has also been an implication that this bill vests excessive or questionable power in a minister. That implication does not reflect how government functions. Under this framework, the minister does not act alone or at will. Decisions are informed by a multi-agency committee, guided by public officers, aligned with national priorities, and subject to reporting, monitoring, and independent audit. The committee advising the minister represents the key officials in charge of critical aspects of the economy – the Director of Finance and Economic Affairs, the Governor of the Central Bank, [and]CEOs of Invest Barbados and Export Barbados.”

While acknowledging that disagreement over the policy is legitimate, Humphrey said debate should remain grounded in facts rather than fear. (BT)