SINCE?WE?HAVE had our Independence, the local economy has never been an easy one to manage. Our first prime minister, the Rt Excellent Errol Barrow, had his trials with managing the economy and dealt with them in a quiet reflective manner buttressed by hard work and creative thinking
He created the very clear framework of an economy and also had the equally challenging task of creating a society. He succeeded in establishing the Cave Hill campus of the University; but he had major challenges with the declining importance and earnings from sugar; and he managed the oil crisis in the early 70s without creating shocks of any kind.
We mention his studied approach to the economy because he did not always succeed. He passed an International Business Companies Act in 1965, but never managed to get it going until 10 years after.
It was left to the Tom Adams administration in the mid 70s and early 80s to establish a suite of legislation and to amend the act to make it the viable economic and financial instrument that it is today, making a huge contribution to our economy. But governance is a continuum and today both parties are agreed on the need to support the offshore financial sector.
The recent budgetary news out of Canada is distinctly against the establishment by Canadian companies of offshore subsidiaries where profits can be collected free of domestic Canadian taxes.
This seems to be a major challenge to what has become a major plank of our economic and foreign exchange structures. We must prepare to fight this latest challenge with every legitimate weapon at our disposal. These challenges are not new and we have fought them off before.
In 2001 this country mounted a major international response to the OECD challenge to the integrity and legitimacy of offshore centres, and the thousands of jobs which had been created therein for our young people. Then Prime Minister, Owen Arthur spearheaded that international response at what was then Sherbourne and we were successful in beating back that challenge.
But we suffered a significant blow to our offshore financial sector when we lost thousands of Foreign Sales Corporations established here, when the
World Trade Organisation ruled that such offshore companies were contrary to WTO regulations.
We had for many years enjoyed a special treaty advantage with Canada which enhanced our offshore sector. Alas it is no more, and this threat from Canada is every bit as serious as the OECD challenge. Both Government and the offshore professionals must come together to respond in a timely, learned and appropriate manner to these Canadian proposals.
Government being the continuum, we would suggest that the copybooks of previous approaches, such as those of former prime ministers Barrow and Arthur might usefully provide guidelines for mounting the most sustained response to these Canadian legislative changes.
We have fought these battles before, and given the state of our economy we have an added incentive to tackle this matter head-on. This is a matter which requires the support of all Barbadians, at all levels.
