President’s Address BIBA Luncheon Seminar July 22, 2016
by Mr. Gregory McConnie
Protocol having being established, good afternoon ladies and gentlemen and thank you for joining us for our luncheon seminar.
It gives me great pleasure to greet all of you this afternoon.
I must truly thank Senator the Hon. Darcy Boyce for taking the time out to engage and inform us about the function of his new role, the approaches he intends to employ, as well as receive feedback on the very serious issues affecting the way business is done in Barbados.
The topic is a timely one as business facilitation is in our view the most pressing issue to be addressed. We see two main elements to business facilitation, certainty of process and agility. All users of services provided by both the private and public sectors require consistency and certainty of process in order to be able to effectively manage their affairs. This means having timeframes within which transactions are processed and delivering on them, every time. This is particularly important for the international investor where Barbados is competing against other jurisdictions for their business. Barbados must demonstrate that it can meet the high standards of service expected by international business investors and practitioners, and that it can do so consistently if it is to continue to be perceived as a high quality jurisdiction.
Agility, the other aspect of business facilitation that is vital to being able to compete effectively for international business, includes initiating and implementing legislative changes and effecting the relevant business process changes in relatively short timeframes after new legislation is passed. While other jurisdictions have been able to implement new initiatives quickly, like the new LLC legislation recently passed in the Cayman Islands and similar legislation planned for Bermuda, in Barbados the Private Trust Companies and Foundations vehicles legislation have been passed but still cannot be utilized and the implementation of Incorporated Cell Company legislation has not been smooth. Our timeframes for execution must be measured in days and weeks rather than months and years.
Wherever there is adversity there is generally also opportunity, and amongst the externally imposed challenges arising from BEPS, the Panama Papers and “de-risking” opportunity lies. There is no doubt in my mind that the IB Sector in Barbados can take advantage of these to expand and grow exponentially under the right conditions. However, we need to step up our game if we are to really take advantage of the opportunities available.
Just this week the Central Bank of Barbados released its review of Barbados’ economic performance for the first six months of 2016. Part of the review stated that there was a 3 percent decline in the number of international business and financial services (IBFS) licenses granted during the first half of the year. Of course we know that this statistic by itself is not cause for alarm because many new companies doing international business are opting to operate as regular Barbados companies to take advantage of our tax treaties, rather than as licensed entities. However, one of the main statements made by Central Bank Governor Dr DeLisle Worrell which stood out was that Barbados’ foreign exchange reserves fell by a further $43 million to $884 million. It has fallen consistently over the past 5 years by about 40% from the 2011 levels of $1.4 billion.
It should be known by now that the international business sector is the most reliable and consistent earner of foreign exchange for Barbados. This sector contributes has been $1billion to Barbados Gross Domestic Product annually. That is all foreign exchange because this sector earns no revenue from Barbados.
Again, there is potential but we need to address business facilitation issues first and we need to address them immediately. Therefore, BIBA welcomes the recent appointment of Senator Boyce to provide that dedicated effort towards reducing, if not eliminating, the difficulties currently being experienced in doing business on this island.
In support of Senator Boyce’s business facilitation role, BIBA intends to work collaboratively with the key Government departments to ensure that everyone involved understands the potential that the IB sector holds for Barbados’s growth, while we seek to understand the challenges those departments face when interacting with the private sector and share with them the challenges the private sector encounters, with the intention of working together to develop solutions to the issues identified.
As a nation celebrating 50 years of independence we need to commit ourselves to making Barbados the easiest place for doing business in the world. This is not just the responsibility of the government but it should be a national commitment so that every man and woman sees himself or herself as having a responsibility for making this a reality and will approach their work whether it be in the private or public sector with a mindset that says I am helping to generate business activity in my country that will lead to the creation of jobs, and the generation of government revenues that will go towards financing healthcare, education and other social programmes.
Thank you for your time and interest.