Moving to a more proactive private sector
In the economic model followed by Barbados, the private sector is assigned the crucial role of “engine of growth”. In other words, society is saying to the private sector: “You are responsible for taking the lead, which involves exposing yourself to risks, in order to generate economic activity for the good of the country.”
Business activity supports the overriding national objective of promoting and achieving economic growth. It satisfies market demand for goods and services, drives spending which causes money to flow through the economy, creates employment for the population, and generates tax revenue for Government to finance its operations and spend on vital public services.
Business activity is also the major determinant of changes in the gross domestic product (GDP), the commonly used yardstick for measuring an economy’s performance. If there is a sustained increase in business activity, the impact on GDP is usually positive in the form of growth. On the other hand, if business activity is sluggish or in decline, the impact on growth is negative.
Against this backdrop, one naturally would expect the private sector to be generally proactive in seeking to influence the environment for conducting business. This happens for sure in developed countries where the business community engages in continuous advocacy, lobbying, and so on to get government decision-makers in particular to adopt policies that make it easier and more rewarding to do business.
Regrettably, it is not so in Barbados and the Caribbean. Though there are some encouraging signs of change, the private sector historically has waited on Government for the cue when, in fact, it should be driving the engine. That is why a call this week from the executive director of Caribbean Export, Pamela Coke-Hamilton, for the Barbados and regional private sector to “own and drive the agenda” is so timely and important.
She made the call as she proposed that the private sector should spearhead the creation of a special court to adjudicate on business-related matters, which it should either fully or jointly finance with Government. The proposal was put forward as a solution to get around the current backlog of cases in the regular court system that has been holding up business decisions and hurting the island’s competitiveness.
“It could be done at the Barbados level or . . . at the regional level, but I think it would be important to set up something like that to enable the process to be more quickly addressed rather than 1,340 days for a contract to be seen through, and that is at the best. It will increase our competitiveness and viability,” Coke-Hamilton told the annual general meeting of the Barbados Chamber of Commerce and Industry.
The Caribbean Export executive director also highlighted the need for mindset change on the part of the private sector.
“A part of the difficulty is that the private sector, unfortunately, does not see that it ought to put money into some of the things that need to be changed and they expect the government, which is under severe pressure, to do what is in your benefit. . . .
“If I am the private sector and I have a vested interest in making billions more than I am currently making, why wouldn’t I put some money in the game?” she asked. “There has to be a point where the private sector, whether in Barbados or in the region generally, begins to own . . . and drive the agenda. It cannot just be Government, and it cannot just be regional institutions because there is no money . . . . There has to be a partnership.”
In our view, another area where the private sector can make a major contribution in relation to the economy is through the establishment and financing of think tanks, which are important research and advocacy organizations in developed countries. A lot of the ideas shaping public policy in countries like the United States, Canada and Britain emerge from research and position papers produced by think tanks like the Conference Board.
Why can’t Barbados have a private sector-financed think tank that does research and puts out reports on economic performance, especially to coincide with when the Central Bank and Ministry of Finance and Economic Affairs give their versions of economic reality? Such would be a welcome contribution to facilitating more balanced and informed debate on the economy in the country.
We hope the private sector seriously considers Coke-Hamilton’s call to start owning and driving the agenda. Such a refreshing change of mindset and modus operandi would be a welcome sign that the private sector is modernizing its approach to boldly face the reality of globalization and getting fully into the driver’s seat of the economic engine.