ON THE RIGHT: International business alive and kicking
THE INTERNATIONAL BUSINESS SECTOR is a very important sector for Barbados’ economy. In fact, it is somewhat underappreciated. I always say this and I get some people a little riled but it is a fact.
When you think of this sector and its contribution in terms of corporation tax, this sector’s contribution to corporation tax was $350 million when it was at its peak in 2007.
If you want to know why Barbadians believe that they are overtaxed now it is because the international business sector is not able to make that kind of contribution because of all the things that have happened in the international business space.
It is a major employer; it employs about 4 500 people, it is a major contributor of foreign exchange and, in fact, it is the only sector that guarantees net foreign exchange contribution to the Barbados economy. The $1 billion estimated as a contribution to the gross domestic product of Barbados is all foreign exchange because the international business sector does not earn anything in Barbados, so it all comes from outside.
International business companies provide high-skilled jobs, many rewarding and fulfilling careers, as well as great opportunities for training and knowledge transfer in global industries such as banking, insurance and marketing, to name just a few. And this reduces the need for educated Barbadians to flee overseas and look for lucrative job opportunities commensurate with their skills, thus reducing the brain drain.
Sometimes there is this question of why we have expatriates. The survey which we have done shows that there is only one expatriate for every ten employees in Barbados and those expatriates bring skills that make the business in Barbados possible. So you wouldn’t have the nine Barbadians employed if you didn’t give that one permit. So we need to understand this thing and not approach these things in a very general sort of way.
Several thousand more Barbadians earn indirect income from this sector, including legal professionals, accounting professionals, people in the catering business. Even small business gets taken care of, such as taxi drivers.
The hotel sector benefits significantly from the operation of international business in Barbados. One company the other day was saying that in one year it had over 350 room nights for people who came in – and that was a small company. There are companies that are having 3 000 room nights for people who come here to do business in one way or another, and, of course, they get counted as tourist arrivals.
By attracting world-class brands, people and know-how to Barbados, this also allows for skills and technology transfer that boosts Barbados’ human capital.
I can attest to this fact because I have been in this business for a long time. I have seen first-hand how international businesses have moved Barbadians from just graduates out of university to world-class professionals and some of them are playing on the field in Silicon Valley.
The Barbados international business sector has room for enormous expansion because it does not have the capacity constraints that tourism, manufacturing and agriculture have.
You can generate a significant amount of contribution to the GDP and to wealth in the country in very small operations. We know that Barbados still appeals to investors in spite of all the international external challenges which are threatening our success.
Henderson Holmes is executive director of the Barbados International Business Association.