Sunday, April 21, 2024

How to turn around economy


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BARBADOS’ ECONOMIC FORTUNES and global competitiveness can be improved, says Dr Justin Robinson.
And to do so would not cost large sums.
Rather, it would take political and administrative will to implement the necessary procedural changes along with improving Barbadians’ work ethic to generate a greater level of efficiency and more creativity.
Robinson, the dean and senior lecturer in management studies at the University of the West Indies’ Cave Hill Campus, made the comment as one of the panellists at a recent discussion entitled: Capitalising On The Restructuring Process – Positioning Barbadian Businesses To Increase Foreign Exchange Earnings Through Increased Exports And Service Delivery.
He, and the other panellists – Jeremy Stephen, president of the Barbados Economics Society; Lisa Cummins, executive director of the Barbados Coalition of Service Industries (BCSI), and attorney Rommel St Hill – looked at practical solutions for repositioning the economy given what Barbados is doing.
They spoke at the James Tudor Institute of Politics-hosted event at St Leonard’s Boys’ Secondary School, Richmond Gap, St Michael, as part of the ruling Democratic Labour Party’s 59th anniversary celebrations.
The audience included then acting Prime Minister Richard Sealy; Members of Parliament Donville Inniss, Mara Thompson, James Paul and Michael Carrington; Senators Verla Depeiza, Reverend David Durant and Andre Worrell, and Ambassador to CARICOM Robert “Bobby” Morris.
Robinson highlighted the World Economic Forum’s 12 Pillars Of Competitiveness report on Barbados to reveal how well the country was doing and suggested ways in which its performance could be improved.
The 12 pillars of competitiveness are grouped in three areas and are assigned a global rank. They are:
• Basic requirements, which include institutions, infrastructure, macroeconomic environment, and health and primary education;
• Efficiency enhancer, which comprises of higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, and market size; and
• Innovation and sophistication factors, which look at business sophistication and innovation.
“We rank No. 88 out of 148 countries in the number of procedural areas in starting a business. In terms of the number of days you need to start a business, we rank 78th out of 148 countries. In terms of efficiency of our customs procedures, again we rank 64th out of 148 countries and our score is 4.2 compared to an average 4.1 . . . .
“These are the areas that we need to improve, that our policymakers can think about,” said Robinson.
“These are areas where we lag, but improving those areas do not need so much money. It is not costs. These are procedural matters and it is really a matter of creativity, political and administrative will to improve these areas,” he added.
The UWI dean also revealed last Wednesday that Barbados was lowly ranked for its treatment of customers, placing 82nd out of 148 countries with a score of 4.5 compared to an average of 4.6.
“For a service economy, such a low score is completely unacceptable. Again this an area we can make improvements without spending a lot of money.
“It is about mindset, creativity and the political will. Improving efficiency will only get us so far. However, to get to the next level we really have to have more sophisticated businesses and have a greater capacity for innovation.”
Robinson said that as a small island developing state, Barbados would be limited in the number of globally competitive exports it could have.
He noted that at present “the globally competitive sectors appear to be tourism and hospitality (high and medium ends), financial services, specialty rums, renewables, [while] potential areas may be health and wellness and education”.
He advised that policy should be formulated and resources directed to realising the potential offered here.
Furthermore, Robinson wants greater accessibility to the Internet as that has the power to transform the landscape. He called, too, for the passage of an e-commerce bill to give protection to online users.
“One may argue that today’s critical factor of production is not land, labour or capital, but broadband connectivity. Increasing access to, and reducing the cost of, broadband access may well be the single most important investment,” he said.
Picking up from this latter point, Stephen said improving access to technology and a trans-shipment hub were critical areas for Barbados’ development. But he stressed a major aspect for this way forward was the need for Barbadians to look again at the idea of sovereignty.
He contended that many people perceived sovereignty as ownership, but it was really an ideal and the values people stood for.
“My vision for Barbados outside of the economics is that we understand sovereignty is a way of life and not the assets that we hold and underutilise,” he said.
On the issue of establishing a major trans-shipment hub, Stephen said Barbados needed to take advantage of its geographical position as other territories in the region like Cuba, Jamaica and Trinidad were seeking to do.
“Barbados lies along the shortest route between the Panama Canal and the Suez Canal, which is the gateway to the Middle East . . . . A supertanker leaving Barbados at full capacity will arrive in London, England, before a similar one of similar speed leaving Jamaica or Trinidad and Tobago,” he said.
He noted too that with the rise of West Africa as a major trading partner, if Barbados could develop a trans-shipment hub, it would generate big bucks, and given the elements of this business, this would stabilise the island’s cost of living.
As for Cummins, she said there was a need to change the narrative  when talking about services to differentiate between customer service delivery and the services sector, which formed the essential direct and indirect inputs into every productive sector and could be measured in economic terms.
“In order for us to create effective policymaking, for us to have a vision that is coherent, strategic and visionary, it has to take into account what this sector constitutes,” she stressed.
Citing tourism, Cummins said the services sector “has a direct contribution to the tourism sector of over $535 million per year”.
“There is no other sector that has such a large direct input in the tourism sector,” she said, pointing out that agriculture, for example, contributed about $47.9 million.
As to what could be done to reposition Barbados, Cummins said tertiary education must be seen as one of the services from which Barbados could earn more.
She added that it was one of the growth sectors globally and out of 122 countries, Barbados ranked 12th, so it was a market to pursue.
She said the teaching of English globally was worth billions of dollars and Barbados should capitalise on the need for people in Latin America to learn the language.
The BCSI head added that presently 150 students at most come here annually to study English, but Barbados’ capacity was for 1 000 people. She said this was a lucrative market waiting to be effectively tapped.
St Hill called for greater advocacy for entrepreneurs and said business opportunities under the European Partnership Agreement needed to be utilised more.
The attorney said too that the opportunities provided by the CARICOM Single Market and Economy needed to be exploited to Barbadians’ benefit.
• sankaprice


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