Need for incentives to attract more FDI

Finance and accounting representatives are lamenting Barbados’ failure to attract more foreign direct investment through incentives and also make it easier to do business on the island against the backdrop of an economy struggling to record favourable growth.

Participating earlier this week in a panel discussion to mark the Institute of Chartered Accountants of Barbados (ICAB) Accountants’ Week 2015, the representatives said unless there is an improvement in incentives and business facilitation, hopes of attracting more foreign direct as well as local investment would continue to be difficult.
Certified accountant David Simpson said a recent conversation with a colleague who was carrying out a study in Jamaica, revealed that a lot of people who are looking to invest in the region are not necessarily looking for incentives.

Certified accountant David Simpson

“They are interested in . . . how quickly can I get a company set up, how quickly can I get a judgment in court, . . . so the business processes and efficiencies are what they are most interested in.

“That I think is something we need to look at as a means of attracting further investment. I am not saying there is not room for incentives but I think we have been so heavily dependent on incentives to get people to come.”
“There (are) other issues and I think we seriously need to consider that if we are still going to attract the investment from outside,” Simpson noted.

Director of Investment Promotion at Invest Barbados, Kenneth Campbell, acknowledged there are “some challenges” that need to be addressed, but quickly pointed out that the island is actively pursuing a number of ITC-related companies to invest here.

He said focus is on attracting financial services, support services including call centres and medical transcription.
“In some markets, we focus on the captive insurance market,” Campbell added.
“We do have some challenges with the infrastructure and some on the regulatory side of things but we are actively working on these,” he said in response to a question from the audience.

Pointing out that he has the task of bringing business into what one would consider a difficult environment, Campbell said the work requires a united effort.

“We do have dialogue with all of the regulatory bodies and departments that are required to set up the companies and we do let them know the expectations that the investors have when they come in,” he explained, agreeing that the turnover rate in some Government departments needs to be improved.

President of the Barbados Economic Society (BES), Jeremy Stephen, said in the process of business facilitation, good leadership is important. He added that Barbados needs to “considerably extend” its model of industrialization, which currently focuses more on offering tax incentives.

Barbados Economic Society President Jeremy Stephen.
Barbados Economic Society President Jeremy Stephen.

“But in this day and time, intellectual property has way more value than physical plants,” he said.

“So then you realize if you want to compete as a country, the incentives have to include the doing business indicators . . . So I do believe one of the things that will drive the so-called foreign direct investment in the future, comes down to treating those indicators as a measure of what incentives to give,” Stephen added, while suggesting a model where higher fees could be charged in relation to faster approval time.

“What’s wrong with charging somebody that wants to come in with $100 million investment? What’s wrong with charging them extra so they can get their papers processed in less than a minute? What is wrong with price discrimination? It is a central thing in economics,” Stephen argued.

4 Responses to Need for incentives to attract more FDI

  1. jrsmith November 7, 2015 at 12:20 pm

    The problem with Barbados economics , it has become tourism based. and short term, that’s why we are loosing to others in the region who never came close decades ago to challenge Barbados. the other failure we are not finding the right persons qualified to balance an economy based on tourism and the local economic functions. this is where Barbados has gradually priced itself out of the upper level of tourism.

    The industry needs to restructure itself , making the tourism market more competitive to the visitor and to the world marketing of the Barbados product and also, balancing the local market as the back up to fill the gap as the seasons come and go.

    Why certain businesses in Barbados is struggling, its because of tourism, persons coming to have a short break in Barbados will find a higher price market, but then that’s for a couple of weeks, but then they leave behind the local bajans and some of the region, having the same issues, to filled the gap , which then becomes non affordable .

  2. jrsmith November 7, 2015 at 12:33 pm

    As for getting the level of foreign investment, this is a massive issue, you have to blame the government and the minister for industry and commerce. earlier in the year an investor made a statement , as to how long it took on finalize business deals in Barbados, for me its just laziness, and certain people at the top of management who are politicians , need to be reminded they are employed by the people of Barbados to run BARBADOS LTD, is not they personal business to do what they like when they like.


  3. Sue Donym November 7, 2015 at 5:26 pm

    Nothing wrong with charging higher fees to who can afford them – for a premium service. However, we do not want to appear so desperate that we sacrifice thoroughness. In fact everyone should get an efficient turnaround, because if we can achieve it for X we should be able to achieve it for Y. At the same time, we want to guard against being too attractive to money launderers and shady deep-pocket concerns.

    We have to be sure that we do not send the message to potential corporate citizens that one can get anything done for the right price. As long as we are prepared to make the necessary kind of background checks and insist on regulatory compliance, it should be smooth sailing.

  4. RDB November 8, 2015 at 1:23 pm

    I can confirm that as a site selection specialist representing primarily BPO and ICT based multi-national companies seeking to enter the CALA region, and having specifically engaged with Invest Barbados on several occasions, that your agency is not well prepared to respond to investor enquiries in these sectors. Incentives are certainly part of the evaluation process, but when we knock on your door and the response we receive is slow, unprepared, and seemingly one of little interest, then our first opinion is that you are clearly not ready to facilitate and support these types of businesses. Since we are under a strict business decision timeline, and we are evaluating all locations across the CALA region, we tend to drop those alternatives quickly and seek to engage with countries that are prepared.


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