Photo: Mike Toy
It is often quipped that if the UK, the US or Canada catches a cold, then Barbados sneezes. So, at the time of the UK’s risk-laden Brexit from Europe, the unusually turbulent and divisive US Presidential elections, and the significant challenges hindering the Canadian economy, it seems reasonable to assume that Barbados might be in danger of contracting a severe dose of flu. Fortunately, however, over the course of our recent history, Barbados has developed a healthy resistance to such maladies.
During the global recession of the early 1990s, Barbados found itself confronted by rapidly declining foreign reserves, rising unemployment and the real threat of devaluation. In an unprecedented move, the Private Sector came together with the Government and the Trade Unions to establish the Barbados Social Partnership, for the purpose of collaborating to identify and implement the best possible strategies to combat the critical economic challenges facing the country. That bold initiative proved to be a great success and the economy was able to rebound. The Social Partnership still functions today, with an expanded mandate that now includes all aspects of national development.
The ability of the Private Sector and the Government to work together is a valuable asset for Barbados. Government Agencies regularly consult and cooperate with Private Sector Organizations in specific industries, with obvious examples being Invest Barbados working with the Barbados International Business Association, while Barbados Tourism Marketing Inc. is allied with both the Barbados Hotel & Tourism Association and the Tourism Development Corporation. That level of cooperation is a reflection of the maturity of the Barbados economy and its various participants, including a significant number of well-established companies and business associations that have existed for 50 years or more, often much longer.
In the late 1990s, Barbados demonstrated remarkable resilience in a completely different way, when the country sought to protect its sovereignty by declining to sign the USA’s proposed Shiprider Agreement until certain unacceptable conditions were amended. Following a rare war of words with the global superpower, and despite threats of sanctions, ‘little Barbados’ adhered to its principles and successfully pursued the matter until a satisfactory conclusion was reached. This willingness to stand up for its rights was an important step in the preservation of Barbados’ own self-determination, and one that would soon prove useful again.
At the turn of the millennium, the OECD attempted to blacklist Barbados as a ‘tax haven’, but the country refused to accept it and successfully challenged the OECD’s stance. Other similar challenges have been upheld against the Financial Stability Forum and the Financial Action Task Force. By virtue of those favourable outcomes, Barbados achieved the fundamental objective of protecting its carefully planned, well-executed and hard-earned status as a transparent, anti money laundering and appropriately regulated jurisdiction. Barbados has never promoted itself as a secrecy jurisdiction, preferring to attract businesses of substance that adhere to international best practices and follow appropriate regulations. This approach has enabled Barbados to develop a large network of International Double Taxation Treaties, Bilateral Investment Protection Treaties and Tax Information Exchange Agreements that assure investors on matters relating to taxation of business transactions and legal jurisdiction of investments. Barbados is also committed to implementation of the OECD’s Global Forum standard on transparency and tax information exchange.
In addition to its well established capacity to overcome potential obstacles and bounce back from economic adversity, Barbados has proven itself to be an advantageous location for conducting business and enjoying a happy lifestyle, as evidenced by the many success stories involving local and international companies; the significant number of global and Caribbean institutions choosing to locate their regional headquarters here; the increasing investment arriving into the country; and the long list of HNWIs who have purchased homes, with many of them taking advantage of the Special Entry and Reside permits to live full-time on the island.
It is worth noting that Barbados is a Caribbean leader in the development of Renewable Energy sources, primarily solar and wind; we have island-wide fibre optic enabled Internet connections providing very high speeds; and our most important asset is a community of highly educated persons in all sectors. And at the time of writing, despite the economic challenges facing our main markets, Barbados is poised to record its highest ever tourist arrivals by the end of 2016. Very significantly, that includes a further increase in bookings for villa rentals, which often bump-starts property sales activity.
In conclusion, the cumulative benefit of all of the country’s proven capability, stability, robust regulation, strict compliance and good corporate governance is that Barbados, even during these times of global economic uncertainty, can offer an attractive option for international investors seeking a safe and secure jurisdiction to manage their finances or locate their operations. Barbados can justifiably claim to have been tried, tested and proven.