Barbados’ economy is well on the road to recovery. After 17 months in office, P.M. Mottley has improved our fiscal balance by some Bds $420 million. Property taxes have made a significant contribution to this recovery. This source of Government revenue has more than compensated for the reduction in Corporation Tax from 25% to 5%. Land Tax rates have increased but are still acceptable in the context of a government committed to improving all infrastructure and related facilities. For example, a house or condominium valued at US$1 million would pay an annual tax of US $6,935 (after a prompt payment discount of 5%) and a house valued at US$5 million would pay a discounted sum of US$44,935. The maximum land tax is capped at US$50,000.
Barbados remains the Caribbean’s most attractive tourist and second-home destination. It has also become a place where wealthy people want to spend more than just the winter months. The opportunity to invest in a house or business and achieve residency is real. In the past five years, many high net worth families have become Barbadian residents. Unlike several other Caribbean islands, Barbados does not offer a CIP or Citizen by Investment Programme. The difference is clear – Barbados offers residency as opposed to passports.
What Makes Barbados Attractive
Barbados has not suddenly emerged as the place to live. Much of what exists here is God-given. A compact 166 square miles of rolling land separating the Atlantic Ocean on the East coast from the
Caribbean Sea on the West coast. A constant North Easterly breeze sweeping over a lush landscape which the British kept as their ‘Jewel in the Crown’ for 340 years. It was a jewel that produced huge fortunes from the cultivation of sugar and rum and fuelled lavish lifestyles. Slave labour made all this possible and emancipation in 1837 left an uneven playing field, with one obvious opportunity to achieve upward mobility – education. Today, Barbados boasts one of the most educated and sophisticated populations (approx. 280,000) whose U.W.I campus is rated among the top 4% of universities globally.
What an Independent Barbados inherited is today a coral island with infrastructural integrity and historical authenticity. There is a pride that binds all of the moving parts.
As a result, we recognize that today’s connected world allows business to be conducted from any point on the globe. The new approach is to stretch the imagination in making Barbados, even more, user friendly. Self-sustainability is at the tip of our leaderships’ tongues as we aim to drive electric vehicles and get rid of single-use plastics, use solar energy and improve the delivery of basic necessities such as water, health, power and housing.
Our P.M. spoke on climate issues at the U.N. in September. One statement that resounded was, “the fate and needs of 20% of the United Nations’ membership rests in the hands of major nations.” That concern extends to managing the limited land area of our island. We are therefore committed to development following a master plan. That is why our towns and cities have been identified as the key areas for new development to occur under the banner of ‘redevelopment’. Our capital city, Bridgetown, is a UNESCO World Heritage Site and the vision for that city starts with a futuristic image of its attached Carlisle Bay.
Foreign Investments and Real Estate
Our Central Bank’s foreign currency reserves, which measure our ability to pay for imports whether this be fuel, food or other items, stood at BDS. $1,225.6M or the equivalent of 15.6 weeks of imports as of September 2019. Receipts from tourism, our largest foreign exchange earner, stood at approx. BDS. $2.3 billion for the year 2018. In order for our economy to grow, foreign investments must play a key role in attracting capital inflows. Such investments, while creating employment, also improve and expand our capacity to attract more visitors and provide for our own citizens. It also serves as a way to maintain and regenerate our built and natural environment and to improve our infrastructure.
The objective, therefore, is to encourage foreign investments in areas that serve our best interests, one such area is the redevelopment of our cities and towns rather than greenfield development. The Pierhead Project is an excellent example of urban redevelopment through foreign investment.
The Pierhead Project anchors Government’s vision for the Carlisle Bay redevelopment, this stretches from the Pierhead in the north, to the Hilton at the southern end of Carlisle Bay, while giving consideration to the UNESCO World Heritage Designation that encompasses Bridgetown and most of Carlisle Bay. This project includes the entire careenage waterfront from the Chamberlain Bridge to Fort Willoughby as well as the historical screw dock which leads onto a magnificent beach on the northern end of Carlisle Bay. The Pierhead Project is best described as a ‘mixed-use’ development which will include a signature hotel and apartments aimed at the international market as well as young, entrepreneurial, trendy Barbadians who see themselves living, working and enjoying the facilities being offered in this one location. Altman Real Estate/ Property Consultancy Services are working with a team to ensure that all of the targeted objectives are met, leading into the sales and tenanting of the residential and commercial spaces. The project is currently in the planning phase. Altman Real Estate/Property Consultancy Services is negotiating with potential commercial tenants as well as a hotel brand for the project. Barbadian architect, Doug Luke, who designed Limegrove Lifestyle Centre, has been appointed as the architect for this project.
While plans are progressing well for The Pierhead Project, The Apes Hill Golf Resort has a new owner who has engaged Ron Kirby, a world-recognized golf architect, to carry out a significant upgrade to that course. As plans emerge, Apes Hill promises to be even more spectacular as its new signature should attract many well-qualified purchasers of their villa product.
The prevailing view in the business sector is that Barbados’ economy is ready for take-off. As our government stabilizes its finances under the current IMF programme (after approximately half of the four-year programme, it has met all targets set) and as we attract new investment, there is a sense of confidence not felt for the past ten years. Sometimes we have to look beyond our shores. One may ask how the oil find in Guyana, projected to boost that economy enormously, can have an effect on
Barbados. Let’s just say that 120,000 barrels of oil per day, along with a GDP of $3.63 billion and a population of 778,000, makes a great neighbour with whom we have an ongoing close relationship. The opportunities for Barbadians to invest in Guyana, the wider Caribbean, and even further abroad, have never been better.
Many multinational companies working in Guyana have identified Barbados as a base to locate the families of their key employees, who will shuttle between Barbados and Guyana.
Other strengths exist and have the capacity to build confidence and influence investment.
Our Government recently granted permission for Barbadians to open US dollar bank accounts and the expectation is that this will not only be used by residents living here but also by our wider diaspora of nationals. The local banking system is holding deposits in the amount of Bds$10.2 billion as at June 2019, which translates to Bds $36, 248.00 per citizen, all ready to be invested in meaningful opportunities. This all amounts to that take-off reality.
One Major Project
Barbados is back on track. Proposals for new projects or expansions of existing projects are coming into our town and country planning office at an accelerated pace. While Government is aiming to attract a new hotel adjacent to the Hilton, expansion is taking place at the Crane and Ocean One on the South Coast, while two major hotels are close to starting construction – Blue Horizons and the Bridgetown Hyatt – with Sam Lords Castle hoping to continue work on its new hotel. On the west coast, the owners of the Royalton brand will commence construction of a new hotel to replace Discovery Bay Hotel and the new Sandals and the Four Seasons are still hoping to push forward.
With all this activity, our plan to build an offshore island is gaining momentum. One such project that would move the goal post forward by ten years.