A favourable choice as a place to invest

Owen Arthur, President of Barbados, writes for Corporate Finance Journal on the current investment opportunities within his country

Since achieving independence in 1966, the Barbados economy has transformed from a monocultural agrarian system to a diversified modern economy. Over the years, the right mix of monetary and fiscal policies has effectively been used to maintain a stable economic environment that favors economic growth and investment development. Today, Barbados to a great extent bears some features of a developed country.

The economy has historically been based on the free market system. The philosophy behind Government’s economic thrust is that of private sector led growth. This is where Government’s role in economic production is that of a facilitator of business development rather than a producer of goods and services. This philosophy is engraved in the country’s national strategic plan for the period 2006 to 2025.

During the past twelve years the Government has taken a strategic path that involves the gradual privatisation of its limited number of public sector run enterprises. These are enterprises that Government established, not for the purpose of competing with the private sector, but to fill gaps in production left by that sector. These gaps occurred in certain services that Government viewed had the potential to add productive impetus to economic activity but which private sector enterprises did not anticipate as viable ventures. Government’s interest in these areas, therefore, was to highlight their productive viability and to encourage private sector activity.
 
Global change
Being cognisant of the dynamics of the new world order, Government continues to reform the Barbados economy to keep pace with global change. This includes honoring its obligations under the World Trade Organisation and its commitment to regional integration. Recently, Government has embarked on a program to liberalise its capital market in an effort to allow investors greater access to capital and to a wider scope of investment opportunities.

The country’s economic productive sectors are supported by a relatively advanced physical infrastructural platform. Its small size, being just 166 square miles, does not in any way impede programs of physical development. The relatively flat natural topography of the island is ideal for any form of infrastructural construction that may be necessary to support business activity. There is a highly developed transport system and network of roads that allow easy access to the country’s modern air and sea ports from any point on the island. The advanced telecommunication system which is comparable with any in the developed world gives businesses an advantage in the use of the most modern and state-of-the-art technologies.
 
Macro-economic policy is designed and administered within a stable political and industrial relations environment. The political system, based on the West Minister parliamentary framework, also adopts the model of governance by tripartite participation. This allows for the social partners, comprising Government, the private sector and labor to consult on social and economic policies and other issues that may impact on the general populace and corporate citisens before such policies are implemented. With respect to regulation of the business environment, Government ensures that burdensome regulations do not impede business activity. With the existence of regulatory institutions such as the Securities Commission and the Fair Trading Commission, rules and regulations administered by these bodies are designed in such a way that they effectively meet the objective of protecting the rights of investors and consumers but at the same time having little or no negative impact on the smooth running of business.

Human resource development ranks high on the Government’s agenda. As such, the country prides itself of an ongoing comprehensive and broad based human resource development program that embraces free access to health care and education and that caters towards life long learning. Barbados’ well developed educational system provides for free education from the primary level to the tertiary level. In some respects, the system also caters to education at the nursery level.

Meeting demands
Complementing the General Educational system is a highly developed Technical and Vocational Education System (TVET) that is designed to meet the demands of industry. This system also allows for the input of employers into the design of training programs offered by the country’s training institutions The main purpose of the overall human resource development strategy is to produce a healthy individual and a productive, trainable and flexible labor force that meets the changing demands of industry. Functional literacy is estimated at approximately 98 percent and almost 100 percent of Barbadians within the working-age population has been exposed to education at the secondary school level.

Prospects are that Barbados will maintain steady economic growth far into the future. It is viewed that with good governance, its relatively high level of social and economic development, its highly developed physical infrastructure together with its developed stock of human capital and flexible labor force will continue to provide that business-friendly environment that makes Barbados a first choice for domestic and foreign investment.