Nov 2014 Financial News

Direct economic links (Barbados)

Nov 05, 2014

Its location at the beginning of an economic review that contained the news of a required $174.6 million fiscal adjustment in just six months was surprising.

But such is the importance placed on Barbados’ competitiveness that the Central Bank began its recent third quarter release with a focus on this aspect.

“Barbados remains among the most competitive economies in the Caribbean and Latin America, as reported in the Global Competitiveness Index 2014-15,” Governor Dr DeLisle Worrell said.

“Barbados continues to be ahead of its regional counterparts in the strength of institutions, development of infrastructure, the quality of health and education, the efficiency of our labour market, the development of our financial market, and our technological readiness,” he added.

However, while the Central Bank was hailing what it saw as Barbados’ positive competitive attributes and referring to the Global Competitiveness Index 2014-15, there was another dose of reality.

It came days later in the 2015 World Bank Group Doing Business rankings, which contained certain indices showing that Barbados was not as competitive as some officials thought.

The World Bank report showed that Barbados was worse off when it came to business facilitation, and that in nine of ten categories the island had slipped behind countries including Jamaica, Trinidad, Antigua, Bahamas, Dominica, and St Lucia.

Its ease for doing business ranking slipped three places to 106. The slip included a significant eight-place drop for starting a business.

“This is almost beyond belief. It appears to me that Barbados has lost its ability to implement effective change,” Barbados Entrepreneurship Foundation chairman Peter Boos said in response.

One definition of competitiveness is that it is “the set of institutions, policies, and factors that determine the level of productivity of a country taking into account its level of development”.

For a small open economy like Barbados, which is heavily dependent on overseas business and investment – mainly in tourism and international business and financial services – being competitive is even more important.

This is even more the case in the current climate of economic recession and financial constrictions in Barbados where money is hard to come by and growth in gross domestic product is non-existent.

This is why it is important for the $23.6 million Barbados Competitiveness Programme Barbados has started with help from the Inter-American Development Bank’s (IDB) to succeed.

A few months ago coordinator of the programme Terry Bascombe said it had been given a one-year extension by the IDB and that its objectives included “ensuring a coherent framework to support business development incentives and regulations; ensuring a coherent business development services architecture for business development; improving trade logistics and trade facilitation and enhancing access to infrastructure; and strengthening public-private dialogue on competitiveness.

“Competitiveness is a national issue and should be treated as a top agenda item. Long after the project is completed, matters relating to competitiveness will still be a concern. The project recognises this and makes provision in component four for the institutionalisation of matters pertaining to competitiveness,” Bascombe said.

Source:
By Shawn Cumberbatch
Nation News
Wednesday November 5, 2014

http://www.nationnews.com/articles/view/the-issue-direct-economic-links/