THE ISSUE: Prospects seem favourable
As Barbados searches for ways to diversify its economy Latin America is being mentioned increasingly as a market in need of attention.
In the case of tourism, Barbadian officials have already started their efforts to stimulate activity from Brazil via an airline service from Brazilian carrier GOL, while they are also now trying to do the same with Panama.
But what about international business? This sector, which now earns Barbados the most foreign exchange after tourism, is now also turning its attention to Latin America.
It was more than a year ago that Dominique Pepin and Javier Lemoine of Ernst & Young produced an analysis in which they concluded that Barbados could be a gateway to Latin America.
The duo said Barbados “offers favourable prospects for multinational corporations with business interests in Latin America that are seeking a jurisdiction to structure their international investments”.
They said the island’s “extensive network of double tax treaties coupled with its favourable corporate taxation regime has made it attractive to multinational corporations wishing to improve their tax efficiency”.
Pepin and Lemoine also said that in addition to various tax incentives, Latin American interests would be attracted to Barbados’ “progressive, well regulated environment supported by modern legislation and grounded in a long tradition of transparency”.
Overall, they concluded that Barbados “has the right mix to consolidate its position as a gateway to Latin America”.
These sentiments were previously shared by Barbados-based attorney at law Liza Harridyal Sodha, who said that beyond the tax benefits and products Barbados offered, advantages for Latin America companies doing business here included “the political stability of the island, it’s educated, multicultural and increasingly bilingual workforce, its geographical proximity to Latin America and the good corporate governance practices which are the focus of Barbadian practitioners involved in the area of financial services provision and wealth management”.
Last week’s international business conference, held as part of the Barbados International Business Association’s (BIBA) International Business Week 2014 activities, focused on opportunities for business between Barbados and Latin America.
At that forum, Invest Barbados chief executive officer Emeline Taitt said “we are looking very much at Latin America and how we can work with Latin America to help them grow their economies”.
Speaking recently at the official launch of the week of events, BIBA president Connie Smith said officials were “being very forward-looking as we are staging our flagship conference this year with a Latin American focus” where “we will benefit from the expertise and insight of speakers drawn from seven countries across South and Central America”.
As they look to Latin America, Barbados authorities will be hoping that recent reports of pessimism among executives from that region will not be a damper.
In its recently released third quarter Global Business Outlook Survey, Duke University said 62 per cent of executives there “were less optimistic about their local economies this quarter than last”, pessimism that was “was approximately three times higher than seen anywhere else in the world”.
The report said a year ago “Latin American respondents were leading the world in optimism about their economies”.
“But this quarter, the Latin American index for economic optimism fell to 50.2 out of 100, putting it on a par with the levels seen in the United States only in the aftermath of the Great Recession,” it added.