NOTES FROM A NATIVE SON: My hopes for Barbados

by HAL AUSTINWe all have great hopes for our native land. Mine  is for making Barbados a financial centre of excellence, not by preaching and the rhetoric of self-praise, but by improving the level of training, and technology. But the step from a dream, even if an achievable one,  to reality is a rocky road which calls for a sound vision  and dynamic leadership, both of which is presently  in short supply.  To achieve this, we need a national programme  of training – front and back office – in order to support  new and innovative businesses.  One of the first training objectives should be to equip local people with internationally recognised qualifications  so that overseas-based providers can feel confident  in the competence of staff.  It means equipping the Community College – rather than the university – to train people to be fund managers, actuaries, specialist lawyers, pension administrators, benefits and financial consultants, investment bankers, computer programmers, analysts, and so on. It also means investing more in basic education, from nursery to sixth form and specialist colleges, by radically overhauling the educational system.  It means using the small funds we have for education – at present about eight per cent of GDP – and making it work for the individual, the community and the nation.  It means selling the quality of our education, as we did between the wars, by creating a structure for the middle classes of the other islands to send their children to be educated in Barbados, to buy in to the Barbadian dream.  Education and culture are the two biggest intangibles the nation could have, and the task is to maximise those. This calls for boarding schools, student hostels [changing  the use of some of the unprofitable hotels], approved families as guardians for young people.  It also means creating an environment in which every  fit young person under the age of 25 would be in education, work or training and feel part of society.  We must teach young people about the various types  of investment instruments, markets, about custody  and settlement, how stock markets work.  This youth and education strategy would be supported  by a National Youth Service in which all 16 to 18-year-olds must undertake a form of national service. Funding this would be simple: such activities would reduce the cost of criminal behaviour and that saving could be redirected to engaging these vulnerable people.  This drive for financial and business excellence must grow from the bottom up, meeting the needs of consumers, along with greater consolidation of small shops and garages, to the cottage-industry like professional firms, merging  into big equity partnerships and reaching out to the whole of the Caricom area.  Once we have small businesses realising their limitations they will aim for economies of scale and  the huge advantages that bigger firms could bring them.  First, however, it means educating these small business people about finance and how to overcome their ingrained suspicions of each other. Funding is simple. At present Exchanged Traded Funds (ETF) look as if they fit the bill for funding small businesses – passive, low total expense ratios and transparent. A customised small business index aimed at the Caricom market could lead to the development  of an ETF venture capital fund, which will meet  the starting needs of these businesses. Similarly, Caricom-wide property ETFs, investing  in an index and in bricks and mortar, will go a long way towards providing affordable housing for the moderately paid people in that market.  Finally, one potential growth area that has so far been neglected is that of non-bank credit cards, competing with Visa and Mastercard.  There is an opportunity for credit and trade unions  or venture capitalists to introduce a local credit card with modest limits for low paid borrowers, those who fall outside the lending criteria of the local banks.  [email protected]