Remarks by Mr Gregory McConnie, President
Barbados International Business Association
BIBA Business Forum: Is the Barbados International Business Sector Under Attack?
Lloyd Erskine Sandiford Centre, Two Mile Hill, St Michael
March 31st, 2017
Protocol having being established, good morning ladies and gentlemen and thank you for joining us for this very timely and important Business Discussion Forum.
There is much anxiety surrounding Barbados’s current economic situation, and with good reason.
And as we cast our minds towards solutions and strategies for recovery we become painfully aware that challenges we are facing are both external and, sad to say, internal.
Within these shores, ease of doing business remains one of our biggest downfalls. We have not shown ourselves capable of delivering consistent service in order to meet the expectations of international clients in establishing and/or operating their businesses here or domestic ones for that matter.
This is evidenced in the 2016-2017 Global Competitiveness Report which placed the island at 72nd out of 138 countries when it came to competitiveness.
The World Economic Forum’s report showed that Barbados had slipped 17 places since 2014. It also listed some of the factors which hinder the smooth flow of doing business on the island, including “poor work ethic in the national labour force” and “inefficient Government bureaucracy”.
The two recent downgrades in the credit rating of the country from Standard & Poor’s and Moody’s and the response to them from some of our leaders, together with the public dispute and eventual dismissal of Dr Worrell as Governor of the Central Bank, have not only deservedly generated a lot of national concern and discussion, but are no doubt having a negative impact on the country’s image as a place for doing business.
We have much work to do to restore that image and get these metrics moving in the right direction. But getting it right can produce great rewards and contribute to a turnaround in our fortunes in respect of the growing national debt and the shrinking foreign reserves.
However, there are also significant external, unpredictable and uncontrollable factors that are creating a challenge for the international business sector.
Numerous articles and news reports, mostly international, have been published labelling Barbados as a tax haven.
Just this year the country was placed on a blacklist by the UK-based aid and development charity Oxfam as one of the world’s 15 worst tax havens. Investipedia, a leading source of financial content for the web, has Barbados listed among the Top 10 Caribbean Tax Havens even though it mentions that “Barbados is not a pure tax haven” adding that “it is a very low-tax environment for offshore corporations incorporated in Barbados.”
However, it is the rhetoric coming out of our number #1 investing jurisdiction, Canada, that is most worrisome.
The concern began last year with the new Canadian Prime Minister, Justin Trudeau, and his administration, whose plan is to spend a considerable amount on the Canadian Revenue Agency so it can tackle what the public perceives as Canadian businesses and individuals who park their money in low-tax jurisdictions like Barbados and don’t contribute their ‘fair share’.
The rhetoric continued with bodies such as the Canadians for Tax Fairness which estimated that “wealthy individuals and corporations shifted CAN$270 billion into the world’s tax havens resulting in an annual revenue loss to the Canadian government of about CAN$8 billion”.
Executive Director, Dennis Howlett, who also serves with the Global alliance for Tax Justice, claims that the top Canadian “haven of choice” is Barbados where Canadians have parked nearly CAN$80 billion.
Much of the discussion in the media demonstrates a lack of understanding of the true nature of the issues and policy considerations that have led to the growth of Canadian international business.
As the number one jurisdiction where Barbados gets most of its business, has this relationship been ruined or adversely affected? If so, what restorative action should we take now?
On the UK front the impact of Brexit is also a concern particularly with the fall in value of the British currency and the impact that it can have on local tourism business. Also with the UK making noises about reduced tax rates will London be soon branded a tax haven by the EU as well? Are there opportunities for Barbados in the fall out from Brexit?
As it relates to the new US administration, what are the implications for Barbados? Will the recent failure of the attempt to repeal or amend Obamacare negatively impact President Trump’s ability to proceed with other initiatives on his agenda? Particularly those related to deregulation of business and tax reform? Is his planned deregulation and tax reform a good or bad thing for us in the context of his ‘America First’ stance?
So today we explore these questions under the umbrella question, is the Barbados international business sector under attack? This question will no doubt be thoroughly explored by the impressive line-up of speakers we have this morning.
We look forward to the very dynamic discussions from all of our panels and we sincerely thank all of the panellists for taking the time out to participate in this forum today.
Thank you and have a great day.