Doing Business in Barbados Gets Harder

In a country starved for foreign exchange, it is disheartening to hear that legislation recently enacted in Barbados, designed to stamp out abuse of the financial system, is allegedly posing threats to small businesses and dampening the appeal of the country to foreign investors.  This is the reported view of Mr. Gregory McConnie, president of the Barbados International Business Association (CBC News online 15 June, 2017).

Such is the nature of the macro-environment in which businesses operate.  On the one hand, regulations must be made to protect customers, national security and relations with other countries. On the other hand, these regulations often hamper businesses in ways sometimes unforeseen.

In this particular case, the issue stems from recent (and not-so-recent) pieces of legislation to curtail money laundering and prevent tax revenue losses in partner countries, viz. the USA.   Apparently, small businesses have been caught in the noose of the red tape associated with the new banking and other regulations brought into force.

Almost a year ago, 25 July 2016 to be exact, Mr. McConnie was quoted in the Barbados Advocate of that date as arguing that business facilitation was “the most pressing issue to be addressed [in Barbados]”.   Perhaps that was an understatement.  If you have ever dealt with government departments or agencies such as Corporate Affairs, you would understand what I mean!

Too many civil servants are blissfully unaware of phrases such as “time is money” and “strike while the iron is hot!”  That is not surprising, because they are not paid for output or meeting deadlines!  Several years ago I ran a field research operation for Heineken in Barbados and I found out, first hand, what the prevailing work ethic in Barbados is!  I had to rehire and retrain several batches of interviewers before we could get a stable interviewer team.  Why? Too many persons could not handle the pace of work required!

One of the problems with the types of complaint made by Mr. McConnie is that they are almost always anecdotal reports, that is, chance observations or complaints, devoid of any hard evidence or metrics.   Whether this is the case with Mr. McConnie’s assertions, I am not clear at this point, but it is a complaint we have heard ad nauseam.

The case I am making, however, is that such complaints need to be reinforced by hard research evidence collected by systematically measuring and reporting relevant indicators such as wait, response or implementation times or other metrics.  Then, armed with international data for comparison, Mr. McConnie’s organization, for example, would be in a position to pressure the powers that be to make changes.   In other words, it is first and foremost, a research problem.  This deficiency in evidence-based prosecution of issues exists because we are not sticklers for detail and measurement. It is one of the reasons why “we are the way we are”; a society of the vague and the mediocre.

Not so, however, the international agencies that we often have to run to for support.   On this web page the CCME has listed links to the World Bank “Doing-Business-in” resources for several Caribbean countries. Here is a sample of the entry for Barbados vis-à-vis electricity supply.

Source; World Bank
Source: World Bank

You will notice that while Barbados does well on cost (as a percentage of income per capita) and decently on reliability of supply, it is woefully slow on time taken to set up a permanent electricity supply (87 days) and has more procedures ( a.k.a red-tape) compared to Latin America and OECD countries.  The position of the CCME is that this is the kind of research and analysis that needs to become common place if we are to force the pace of change in Barbados.

“We are our own worst enemies” is a phrase I find myself using over and over in response to many of the issues I encounter in and out of professional life.  Despite how we try to spin it, the current economic situation in Barbados is OUR collective fault. Consequently, we are the only ones who can really solve it.   What scares me is that we will not get this message until the dreaded “D” word becomes a reality in Barbados.

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