BIBA disputes foreign exchange figures
Monday April 12 2010 | 08:47 PM

BRIDGETOWN, Barbados, April 12, 2010 -- The Barbados International Business Association (BIBA) is disputing the recently released 2009 Balance of Payment Survey Report that the international business sector only contributed 5.5 per cent of the $5.8 billion in foreign exchange that flowed into Barbados for 2008.

Executive Director of BIBA Henderson Holmes pointed out that this would be the equivalent to $319 million, which he said by BIBA’s estimates was questionable given that the Central Bank reported in The Barbados Economy in 2009 and Prospects for 2010 that the sector’s contribution in terms of corporation tax was $274.7 million for the year 2008.

The BIBA executive pointed out that the international business sector does not generate any of its income within Barbados, therefore all the funds required to finance their operations must be brought into the country and is obviously a more substantial foreign exchange contribution than what is accounted for in the Balance of Payment Survey Report.

“Bearing in mind these companies earn all their income from business outside of Barbados it means that all their local expenses must be met by foreign exchange inflows. What the Central Bank’s survey report is saying is that the sum total of the sector’s expenses in the form of property rentals (corporate and residential), salaries and wages, telecommunications services (which is substantial), professional services (legal, accounting etc.), entertainment, hotel accommodations, electricity services, and other ancillary services amounts to a mere $44.3 million,” stated Holmes. “Based on a sample survey BIBA that conducted a couple of years ago, the average payroll cost across the sector is approximately $6,000 per person per month. With an estimated 4,000 persons employed directly this alone gives us a figure of $288 million per year and we are certain that the cost of professional services, telecommunications services and property rentals would exceed that figure”, he added.

However, Holmes stated that he was not placing the full blame for this serious inaccuracy at the feet of Central Bank. The BIBA executive said that he and BIBA have the highest regard for the work of the Central Bank and believe it to be a exemplary professional outfit. However, they are working with the information which they have and what is again being highlighted is the serious deficiency in Barbados regarding the systematic periodic collection and analysis of pertinent data relating to the local economy, to enable reliable reporting and effective decision making at the national level.

He also pointed out that some time ago the International Monetary Fund had indicated that the Barbados gross domestic product (GDP) was being understated by approximately 15 per cent. He said he is not surprised because even though we have had an international business sector since the mid-seventies until the most recent one the official reports on the Barbados economy made no mention of the contribution of the international business sector. He applauds the new Governor of the Central Bank, Dr. Worrell, for this initial effort to include the sector in its account of the economy but said that In his opinion there is an urgent need to improve our data gathering to ensure more accurate and complete coverage of the economy.