The local manufacturing sector can be rescued even in one of the world’s worst economic periods.
But it’s up to the Government of Barbados and others in the region, as well as manufacturers to move with urgency to make the required necessary changes, according to Pamela Coke-Hamilton, executive director of the Caribbean Export Development Agency (Caribbean Export).
The latest Central Bank of Barbados half-year economic review noted that following a seven per cent contraction in manufacturing in 2011 and 2012, no improvements were recorded in any of the major sub-categories – rum and beverages, food, chemicals and electronics – for the first six months of this year.
Outlining some of the incessant problems facing the declining sector, Coke-Hamilton told BARBADOS BUSINESS AUTHORITY this island and the rest of the region were “clinging to a string”.
She said the cost of production, especially electricity cost, was one of the major hindrances to the growth of the sector, adding that the cost of inputs and duties that were put on certain items were also stifling the sector.
Other areas which needed to be addressed, she said, were the improvement of branding and packaging, being able to meet local, regional and international demands, as well as being able to meet international health and phytosanitary standards.
“The whole issue of trade facilitation is another one; how quickly can you get things off the port and how that affects business. Those are some of the issues across the board,” Coke-Hamilton said.
“In Barbados the cost of labour is another issue. I am not sure quite frankly how you get around that because it has been a high-labour-cost jurisdiction for a very long time and people are used to a certain standard of living. Perhaps what one might want to begin to look at is the 24-hour work day.
“I know that the unions seem to have some difficulties with that but I think it will definitely make production more efficient and more cost effective but that is a political decision that needs to be made.”
She said to tackle the high production costs Government should move with haste “to look more at alternative energy in a really serious way”.
Coke-Hamilton said that despite the challenges it would be “dangerous” to abandon manufacturing here and leave it to larger jurisdictions which had the raw materials and equipment for mass production. Instead, the advocate for export said a part of the solution was to “make Haiti the China of the Caribbean”.
“What you have is each [island] clinging to a string, so to speak,” she added.
“If we can find a way to develop the products and mass produce it in Haiti, probably it would serve the whole region very well, but that is a decision that has to be made at the regional level,” she said.
“I don’t think Barbados need to dismiss manufacturing entirely. What it probably needs to do is focus on those areas where they can have higher value-added, for example, the fact that we are importing molasses to make rum . . . could produce the molasses and make the rum instead of importing it.”
She said Barbados was primarily a service economy with a good tourism product, but added that importing most of its food “makes the cost of the tourism product that much higher and therefore less competitive . . . and less attractive”.
