THE BARBADOS PRIVATE sector has been crying out for policy direction from Government. It has also been pleading with the Freundel Stuart administration to accept recommendations from the business community.
Such a stance is not unexpected considering that across the globe, the private sector is seen as key to economic growth and overall development. So the private sector in the Caribbean has an important role to play in ensuring that the region rebounds economically.
There is a view, though, that in order to do so, businesses in Barbados and the Caribbean need a more enabling environment.
The European Commission recently said that “the economic and social impact of private sector development can be substantial”.
“As a driver of inclusive growth and job creation, responsible for 84 per cent of GDP and 90 per cent of jobs in developing countries, the private sector is ideally placed to improve the lives of the poor and deliver on the promise of sustainable and socially inclusive economic development.”
It added that “private sector development plays a key role in creating economic growth, employment and improved living conditions”.
“It incentivises people to invest in education and skills acquisition; improves people’s lives through increased access to goods and services, including basic ones such as clean water, sanitation and energy; enables governments in developing countries to generate increased tax revenues, thereby contributing to the funding of wider development strategies; encourages entrepreneurship and diversification of the economy.”
Stuart shared a similar view last month at the launch of the 11th European Development Fund’s Regional Private Sector Development Programme at the Lloyd Erskine Sandiford Centre.
He said private sector development remained pivotal to Barbados and the region and singled out the foreign exchange earning potential of businesses as one of the main areas in which the private sector could help the region.
“Countries like Barbados need foreign exchange for almost every stage of our production in the various sectors. But if we do not earn it, we cannot spend it without serious effects on our entire economy and society. For example, companies in the retail sector – which use a large proportion of foreign reserves in providing the goods that we both need and want – must be creative and explore how they can assist in producing more foreign exchange, through contributing in some way to our export thrust,” he said.
While such views are often heard from governments in and outside the region, analysts say more fundamental changes need to be made so the private sector can make a more meaningful contribution to economic development.
Compete Caribbean, a private sector development programme that is jointly funded by the Inter-American Development Bank, the United Kingdom Department for International Development and the Canadian government, has identified the need to go beyond cosmetic changes.
“Reforms to stimulate sustainable growth led by the private sector are more important than ever. Although the details vary from country to country, structural reform is needed in most Caribbean countries. Economic diversification is essential for tourism dependent economies,” it said.
“Too many countries are also excessively dependent on imported energy and/or suboptimal solutions for power generation. Another issue is that in many Caribbean economies employment is dominated by the public sector – and at a time when governments’ finances are under strain.”
