“To dream, the impossible dream…”
Medical Tourism continues to demonstrate phenomenal growth worldwide, bringing considerable economic benefits to those countries that have embraced it. Yet, despite the apparent – some would say, obvious – fit for Barbados, none of the major projects seeking a home in Barbados have been able to get off the ground. There is some Medical tourism activity here already, the most successful of which is the Barbados Fertility Clinic, but on a relatively small-scale, and so a significant opportunity for economic diversification continues to elude the country.
But is it that the industry is eluding Barbados, or the other way around? Barbados has proven itself as an excellent jurisdiction for hosting international companies conducting their business outside of the island. Indeed, in today’s increasingly OECD-driven, “haven-sensitive” environment, Barbados is rapidly gaining recognition as an ideal jurisdiction – low taxation, good local infrastructure and talent pool to support international business activities, and a functioning regulatory environment that meets international standards, especially on anti-money-laundering and tax information exchange– indeed, exceeds international standards compared to some major G20 jurisdictions.
But while there are several examples of International Business Companies where the core activity – manufacturing or service – is very successfully performed on the island, it would be rare to find a case in the sector where the customers or clients actually have to come to Barbados to access the product or service provided.
In that respect, the Medical Tourism Industry more closely resembles the Tourism industry, perhaps with the added issue of the connotation which the title “Medical” brings, in terms of reputational risk, in the minds of Government officials. That may not be such a good thing, for despite Tourism being the number one foreign exchange earner in Barbados, and despite the array of industry investment incentives, industry executives have tales to tell about the difficulty in accessing incentives promised, and the over-taxation of inputs to the industry. Indeed, local businessmen, generally, complain about the numbing level of Government bureaucracy and inefficiency, and the cost it imposes on doing business locally. Small wonder that the Government have had to make excessive and wide-ranging concessions on taxes and other impositions, and promises on smoother planning permission processes, to attract new Tourism investment -but that is encouraging, in a sense.
Additionally, the medical profession in Barbados is heavily supervised by the bureaucracy, and the process to become accredited to practice here is not exactly a smooth or fast one – neither is the work permit application process. The typical operating business model for successful medical tourism facilities would compound those issues, since it calls for medical professionals flying in for short periods several times a year to perform operations – so a simple, fast and cost-efficient accreditation and work permit process is critical for the Medical Tourism industry to thrive.
Yet, despite these arcane operational and set up problems that investors have found in operating in Barbados outside of the international business sector, the principals of the projects that identified Barbados as a good location for medical tourism still believe it is. They cite geographical location, language, climate, infrastructure, flight availability, good reputation internationally, developed tourism sector, etc., as attributes that keep Barbados high on the list. It has not been so much the concern about the local operating challenges that have kept them away, as it has been the difficulty in raising start-up capital in today’s risk-averse investment climate – although slow Government decision-making processes compounds that difficulty.
Investors looking to fund significant investments and take significant risks in a third world country now seek sovereign guarantees, and wide-ranging concessions on taxes and input taxation. In Barbados’ case, apart from diversifying the economy through a new growth industry, supporters point to the strong boost it would give to both Tourism and International Business if Barbados could boast a world-class, state-of-the art medical facility on its shores.
Nevertheless, it seems the Government has not yet believed the relative potential of medical tourism to improve the country’s economy, so have steadfastly refused to provide any guarantees and appear ambivalent about tax and other concessions. Or else they simply no longer have the financial strength to do what is required, and feel unable to influence the change required in the bureaucratic processes.
Post 2009, the message from the Government of Barbados to Medical Tourism investors seems to have been clear enough, if a little naive in today’s investment climate. Bring your capital and come, and we will facilitate your investment, but don’t ask us for any guarantees or any co-investment, beyond, perhaps, land.
The irony for Barbados is that the ball was in our court, and every ball-player knows that timing is everything. At least two of these projects had their finance in place prior to the tentacles of the 2008-9 world financial crisis reaching our shores, and bureaucratic delays (two years’ worth) stymied the various approvals required until it was too late, and the financing/investors moved on – or lost their financing offers in the ensuing financial crisis.
There is still at least one international medical tourism project trying to get traction in Barbados, but finance remains a challenge. Will the same mistakes be made, or will a visionary Barbados Government and its entrenched bureaucracy rise to the occasion, eradicate the operating road blocks and provide the level of facilitation and incentives required to put Barbados on the Medical Tourism map of the world? Or is Medical Tourism really more of an impossible dream for Barbados?