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Barbados economy difficult

The economy of Barbados seems to have fallen from the height of prosperity it enjoyed ten years ago. In 2003, a survey by United Kingdom-based The Economist magazine showed that only the United States, Canada and the Bahamas had higher incomes per capita in the western hemisphere.

Barbados was ranked as a middle-income country with high wages and a stable economy.

Today, those times seem like a distant memory.

The Barbados Central Bank of Barbados reported on Tuesday that the economy there was estimated to have contracted by 0.6 per cent in the first half of 2013, following no real growth in 2012.

The rate of unemployment was 11.6 in 2012 compared to 11.3 per cent in 2012, its Central Bank stated.

Against this bleak economic background, companies from T&T are finding it difficult to operate in Barbados.

Gerry Brooks, chief operating officer, ANSA McAL Group, told the Business Guardian on Monday that the economic situation in Barbados is “difficult.”

“Barbados finds itself in a difficult economic position. Growth has been less than one per cent over the last three years. The challenge is an annualised problem of spurring growth, which can become a systemic problem. That is one of the challenges. Right now unemployment is 11.6 per cent and it is certainly high and not declining. There is even the potential to go even higher,” Brooks said.

He said Barbados has multiple problems of low growth, relatively high unemployment and high debt levels and that ANSA McAL’s operations in Barbados are not immune from the country’s problems.

“Debt level is around 83 to 85 per cent of gross domestic product (GDP). If you look at tourist arrivals, remittance and financial services, none of those has been able to revive sufficiently to continue to spur this growth and to continue to sustain it. In this context, all businesses is Barbados are challenged. Our business is not immune from that.”

Brooks said that the ANSA McAL group had made significant investments in Barbados, including the acquisition of Brydens Barbados, new technology, (Tech One ERP) and the recent repurchase of shares.

He said that the investment represented millions of dollars in vital foreign exchange going into the Barbados economy.

Brooks said: “We are committed to the development of Barbados, our people and business there. We recognize that the economic model in small, vulnerable states must change. Barbados must also look again at its model to ensure that a cyclical economic challenge does not become systemic. Each territory must also relook its cost profile as it seeks to be attractive as a destination to attract future investment flows and foreign direct investment.”

The ANSA McAL executive said countries like Chile, Columbia Panama and other regional destinations including Trinidad have sharpened both fiscal incentives and "ease of doing business" to attract more capital.

Brooks said: “Respectfully, all of the social partners in Barbados must look again at the costs and productivity relationship. Quite simply, costs are too high comparatively. We are prepared to be part of a constructive dialogue on this. We have taken this approach and will continue to try to be innovative as we work with our teams to better service our customers and add value and ensure the longevity of our businesses."