Barbados as Co-Host of the 15th UNCTAD Quadrennial Conference in 2020: Looking Forward to the Possibilities

October 2020 will be significant for Barbados’ role in hosting a major international conference, the setting of trade policy and growth strategy as well as tourism arrivals.  What is the common denominator for the three aforementioned points?  Next year, Barbados will be the co-host of the 15th Quadrennial of the United Nations Conference on Trade and Development (UNCTAD), along with the United Arab Emirates (UAE), which will host the World Investment Forum and the first eCommerce Week for Asia in Abu Dhabi.  Barbados is the first small country to do so.

UNCTAD’s Trade and Development Board unanimously endorsed the offers to host by both Barbados and the UAE on June 25, 2019.  The next step is for the UN General Assembly to approve the decision.

To quote directly from UNCTAD, “The Quadrennial Conference is the highest decision-making body of UNCTAD at which member states make assessments of current trade and development issues, discuss policy options and formulate global policy responses.” Additionally, according to Mr. Chad Blackman, Ambassador and Permanent Representative to the WTO and UN Offices in Geneva, Switzerland, “Barbados will be the global Chair from 2020-2024 to set the agenda for issues on trade and development.”

The ten-day conference in Barbados will not only host around 3500 persons, which as alluded to above is a huge boost for our tourism sector but a number of parallel events will also make up the proceedings.  These “side events” will be the Global Commodities Forum, Global Cultural Industries Forum, the UNCTAD Ministerial on Trade and Development, World Civil Societies Forum and the World Youth Forum.

In February this year, Secretary General of UNCTAD, Dr. Mukhisa Kituyi, visited Barbados and was the featured speaker at a lecture co-hosted by the Shridath Ramphal Centre for International Trade Law, Policy and Services and the Ministry of Foreign Affairs and Foreign Trade.  Dr. Kituyi spoke on “The Role of UNCTAD in Trade and Development in the Caribbean.”

Following the Secretary General’s presentation which covered, among other things, obstacles faced by small island developing states and the state of the multilateral system, attendees engaged him on a number of topics.  The common threads of discussion ranged from how small states could use UNCTAD to highlight challenges such as climate change, trade and health and how to make our individual small voices resonate as a collective at the negotiating table, particularly with the seemingly imminent collapse of the multilateral system as we know it.

We have a little over a year to formulate our strategy not only as Barbados but as CARICOM States in our approach to the opportunities that this conference is hoped to afford.  October is the beginning of four years in which we can make the difference of which we have been speaking for so long.

Let us use this positioning as a way to educate and involve our private sector at a level which will allow them to not only understand why creating trade policy for us is so important but to show them the possible benefits for their bottom lines as well.  Let us use this opportunity as governments to engage in meaningful macroeconomic policy formation which drives growth not only in traditional but in newly emerging sectors. Let us take advantage of this upcoming occasion and being global Chair to create the economic prosperity we aspire to achieve.

 

 

 

BREXIT, Economic Partnership Agreements and the Barbados Private Sector

Caribbean businesses, including those in Barbados which operate in the manufacturing and retail sectors rely heavily on both imports from and exports to both regional and extra-regional markets.  The United Kingdom (“UK”) and the European Union (“EU”) are our trading partners whose relationship to the CARICOM and subsequently CARIFORUM region were improved (at least on paper) for the betterment of our region with the signing of the CARIFORUM-EU Economic Partnership Agreement in 2008 (“EU-UK EPA”).

As of the time of writing this article, the UK is desperately trying to finalise an acceptable deal which would allow for an exit from the European Union which is beneficial to the UK.  Attempts to reach such an agreement has thrown the UK government into turmoil.  The recent third attempt at a withdrawal plan piloted by Prime Minister Mrs. Theresa May, suffered yet another defeat by MPs and the UK Parliament is now expected to vote on BREXIT alternatives on April 1.

Where does this leave private sector-led businesses in CARIFORUM? How are they likely to be affected by the UK no longer being a part of the EU?  Certainly in Barbados, an import-reliant economy, it is a question which needs to be considered seriously by the business community.  However, is BREXIT and its potential impact on “bottom-line” on their collective radar?  Has there been a private sector-led initiative to understand BREXIT and its effects? Have companies put together post-BREXIT strategies? What of the EPA when the UK is no longer a part of the EU?

On March 22, 2019, CARIFORUM countries (inclusive of Barbados), signed the CARIFORUM-UK Economic Partnership Agreement (“UK EPA”) with the UK to preserve its current trade relations after Brexit becomes a reality.  The agreement mirrors the preferential trade arrangements currently in force under the EU-UK EPA in addition to repeating the UK’s EPA commitments regarding development cooperation.  This agreement would certainly invoke a collective sigh of relief among members of the business community.  In fact, it has been reported that the agreement “…has been welcomed by the West Indies Rum and Spirits Producers Association…”.

Should private sector companies in Barbados be comfortable and rest assured that trading relations are indeed “safe”?  In the short-term, CARIFORUM countries having signed the UK EPA is indeed a consolation of sorts.  While there are large entities in Barbados such as supermarkets or pharmacies which may have felt unease with the pending exit of the UK and what this might mean for their business with the UK, others such as those which import fast-moving consumer goods whose businesses traded more within CARICOM and with EU countries did not feel the need to implement a BREXIT strategy.

In terms of long-term strategy, is there evidence that the private sector in Barbados is thinking of ways in which to extend their use of the EU-UK EPA and the UK-EPA beyond what has applied for the past 11 years?  Lamentations abound from persons who were intimately involved in the negotiations of the EU-UK EPA that trade agreements of this kind tend not to be private sector driven in this country.  Especially in light of the fact that the bulk of our trade remains in commodities such as sugar and rum, do we wish to go beyond such?

The purpose of going into business is to make money and particularly if the company is public, directors must answer to shareholders.  In the case of Barbados, which is currently in the throes of the Barbados Economic Recovery and Transformation (“BERT”) Programme, the private sector has had, within the years prior to BERT, to manage the implementation and removal of taxes such as the National Social Responsibility Levy, high corporation taxes which have since been lowered significantly, government retrenchment of workers which further impacted the ease of doing business and the effects of the suspension of payment government debt.

Perhaps it can be argued that businesses had “bigger fish to fry” at the domestic level than to concern themselves with trade policy issues which are typically seen as more of an abstract concept than the day-to-day reality.  At its most basic level, while the business person is aware of the occurrence of BREXIT and may look at it from the point of view of its current business model, it is important for him to take the time to really understand how these current major agreements can drive growth.

It is recommended that a private-sector focused refresher on the EU-UK EPA and the UK EPA is carried out by government which would bring current opportunities into view for companies.  It is acknowledged that there are companies in Barbados which have already heavily explored options and established businesses either on their own or with joint venture partners in Central and South America and North America.  However, considering that we have current, extremely forward-looking agreements already with both the UK and the EU, our businesses should look seriously into how to take our exports into these markets beyond traditional commodities.  The space has been there for 11 years, it is time to make serious use of it.

 

The Caribbean Community (Amendment) Bill, 2019 and the human element of doing business in Member States

On the heels of an unfortunate but expected “release” of information on social media this past week about the purported effects of Barbados’ plans to implement CARICOM’s “Protocol on Contingent rights” (“the Protocol”) via the Caribbean Community (Amendment) Bill, 2019, it is imperative that the Barbados Government educate its citizens and residents about this new law.

Barbados along with Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines and Suriname, signed on to the Protocol at the recently concluded 30th Inter-sessional Meeting of the Conference of Heads of Government of CARICOM in Basseterre, St. Kitts.  Barbados has moved to immediately adopt the Protocol into its domestic law, which is currently at the Senate reading stage.

Currently the following persons fall into the category of skilled nationals who may move freely (without the requirement of a work permit) throughout Member States: graduates who have obtained at least a Bachelor’s Degree from a recognised university, media persons, artists, musicians, sports persons, nurses, teachers, artisans with a Caribbean Vocational Qualification (“CVQ”), holders of Associate Degrees and household domestics with a CVQ or equivalent qualification.  Coming out of the Special Meeting on the CARICOM Single Market and Economy held in Trinidad on December 3 and 4, 2018, Member countries agreed to include the following categories of persons to the list of  freely moving skilled nationals in the near future:  agricultural workers, beauty service practitioners, barbers and security guards.

Some of the rights granted are for the spouse (inclusive of common law unions) of the primary beneficiary (the skilled person) to work in the host country without the need for a work permit, that dependent children would have access to education on a non-discriminatory basis, that the primary beneficiary, spouse and dependent children would have access to primary health care in addition to the right to leave and re-enter the host country.

With regard to businesses which operate regionally, this new law adds a level of comfort to employees with families who are transferred to branches or subsidiaries in other islands.

An employee is likely to feel more inclined to accept a transfer or to apply for a position in another country without feeling stressed about leaving his or her family behind.  Once implemented correctly, concerns about the separation of families would be reduced significantly and in an ideal situation, eliminated.  In fact, Prime Minister of Barbados, Mia Amor Mottley, stated at the St. Kitts meeting, “So the notion that only a spouse is to get the benefits of the rights, but dependents are not, is nonsense that carries us back to the separation of families to a time that we would want to forget rather than remember.”

Given the thrust toward health and wellness in the workplace throughout the region, it must be acknowledged that an important element of a well functioning business is to have a workforce whose mental health is considered by management.  An employee is less likely to function at his or her best if there is a worry about a spouse or children whose lives are negatively affected by their absence or there is the additional financial burden of constant expensive intraregional travel on weekends or for special occasions.

The Protocol and its corresponding domestic laws are also expected to address complaints from CARICOM nationals who currently live and work outside of their home countries and in spite of the fact that they are paying taxes in their country of work are unable to access basic services similar to their counterparts who are tax-paying citizens of that particular country.

While the Protocol is indeed welcomed, it would be irresponsible to dismiss the fact that each CARICOM Member State suffers from myriad internal and external threats which, when coupled with their status as small open economies, must be balanced with the new rights granted.  Rising or high levels of crime, varying levels of economic success and in some cases, yawning divides between rich and poor, are all high on the agenda at the domestic level for our governments.

The need for education at all levels of society via various forms of media about what our countries have agreed to at a regional level must not be underestimated.  Barbadians are currently grappling with high levels of gun crime and an economy which is clawing its way back from the brink of certain death.  Those who live here are more concerned about the rudiments of every day life, the high cost of living, a broken public transportation service, over-populated classrooms and a burdened public health system.  Our leaders must work to bring our social services to a level commensurate to the taxes paid.

The minds of Barbadians and daresay, citizens of other CARICOM States are not necessarily attuned to the fact that as a region, particularly in light of the new direction of the multilateral trading system, CARICOM has no choice but to combine its resources to face the challenges coming its way.   One way to face these challenges is that our people must be provided with an environment not only conducive to business but one which allows for a comfortable standard of living throughout the region, hence the Protocol.

International Risk Management: Safeguarding Intellectual Property Rights

International risk management is the mechanism by which individuals and entities  engaging in cross-border trade in goods and services assess and handle the possibilities of threats to their businesses.  As a result, the level of risk will vary depending on the entity, its trading partners and the physical commercial space in which it operates.

The possibility of loss due to external influences is a reality faced by all businesses no matter their size and the more familiar of these range from unfavourable weather conditions, unstable financial environments and disturbed political climates.  It is extremely important to understand that trading in international markets requires some long term planning.  One must truly seek to make oneself aware of the risks to be managed in the new environment by carrying out the appropriate feasibility studies and really “getting into the nitty-gritty” of not only the advantages but also what could go wrong.

The protection of intellectual property rights (‘IPRs’) is an area of business that is many times still avoided by the business community.  Some cite the cost of applying to register trademarks and industrial designs in each jurisdiction as a deterrent, as IPRs are territorial and therefore registration in one country does not necessarily mean that your rights in another country are protected.  Other concerns expressed are the time it takes to complete registration as some processes are notoriously slow and in some countries it may take as long as three years for a certificate of registration to be issued.

In spite of the foregoing reasons for apprehension, which are indeed legitimate, it is imperative in today’s world that one’s IPRs should be protected at all costs.  Imagine the potential money, brand goodwill and reputation and business opportunities which may be lost in the discovery of counterfeit goods?  While in the Caribbean we are aware of the phenomenon of fake goods being sold on the streets and in the stores of many popular areas of the United States, especially those frequented by tourists, those instances are not unique to that country.  Within the last year stories about police raids and court cases from Jamaica and Barbados made headlines, particularly in the latter country, where mega-star Rihanna’s uncle was found guilty of selling counterfeit PUMA Fenty by Rihanna slippers!

So what should a business person do, especially if cash flow is not as robust as desired.  Let us focus on trademarks and industrial designs.  It is suggested that as soon as possible following the establishment of a business, an application should be made to  register the trade or service mark(s) (design and words) in the country of origin.  This also applies to any industrial designs which are unique to your product and which you wish to safeguard. This will ensure immediate protection in the first country in which business is done.  Secondly, carefully consider the countries to which you wish to export your goods and/or services and seek legal assistance within those countries to assist with the process.  Do your homework.  Take some time researching these external countries and seek assistance if necessary in determining whether your logo or name are culturally aware and if translated, do not offend.  Also, do not hold slavishly to a particular name or logo, have a few variations ready as a registry search may reveal that the trademark or design which is dear to your heart is already in use by a well established brand.

Another consideration is that of the requirement in some jurisdictions to prove that the trademark or industrial design will be used within a specific time period.  The idea is that “empty” applications which block the flow of legitimate commerce should not be allowed to “clog” the system.  This is therefore another consideration for entities seeking protection in as many countries as possible as in the future a company may have to face the reality that another entity was able to register a similar trademark or industrial design by the time the first company’s product is finally ready to be marketed in the desired country.

The bottom line is, with the plethora of potential risks floating around the international trading space, the protection of IPRs should be paramount to the management of risk in an ever-changing and ever-hostile business world.

 

Overcoming Challenges to the Sustainability of our Tourism Model

According to the joint publication entitled, “Tourism and Trade”, a Global Agenda for Sustainable Development”, which was published in 2015, international tourism accounted for 30% of global trade in services.  Moreover, tourism is the main export of approximately one-third of developing countries, with Barbados falling into this category.  The paper goes on to state that “Tourism…has a key role to play in maximising the contribution of trade in services to development, job creation, and the achievement of the 2030 Agenda for Sustainable Development Goals (‘SDGs’)”.

The business of tourism is an important player in the sphere of international trade in services.  It is multi-sectoral and in a country such as Barbados, touches and concerns almost every aspect of society, from job creation and the maintenance thereof, to the cleanliness of the environment and the sale of goods.  What does this mean for Barbados and how do we fit into an increasingly competitive sector?  It has been written that tourism is expected to continue expanding and as stated in the World Tourism Organization’s publication, “Tourism Towards 2030”, tourism arrivals would reach 1.8 billion by 2030 (5 million per day).  Additionally, emerging economies are expected to see an increase of their share to 57% by 2030.

These are some impressive numbers but again, what does it mean for Barbados?  What is the industry’s contribution to the country’s GDP?  The World Travel & Tourism Council reported that in 2017, the direct contribution of Travel & Tourism to GDP was US$608.3 million or 13% of total GDP, which was an increase over the previous year.  More specifically, in May 2017 former Governor of the Central Bank of Barbados, Dr. DeLisle Worrell stated that tourism was the largest earner of foreign exchange, contributing 49% of same to the economy.  These figures show that the sector remains a significant earner for Barbados.

The question is, could we improve?  Do we need to?  The simple answer is yes, there is always room for improvement, particularly in a highly competitive region.  The cries are numerous.  One hears rumblings that Barbados is an expensive destination and that the tourists are arriving in droves but are spending less.  Is there truth to these statements?  According to the Travel and Tourism Competitiveness Report 2017 of the World Economic Forum, Barbados ranks at number 58 out of 136 countries on the Travel & Tourism Competitiveness Index (Barbados was ranked at number 41 in the 2015 report).  Countries obtaining a higher listing include Greece, France, Panama, Costa Rica and Mexico, some of which have similar tropical environments.  Positively, Barbados ranks at number 8 for prioritisation of travel and tourism, with only Jamaica as an island in the Caribbean region ranking above it at number 6.

Moreover, Barbados was ranked at 134 out of 136 for price competitiveness, followed only by the United Kingdom and Switzerland, which are notoriously expensive destinations.  Also striking was that Barbados was ranked at 123rd for cultural resources and business travel.  From an international point of view, therefore, improvements can be made.  While we focus on increasing the hotel complement and maintaining our natural resources of sand and sea (not much can be done about the sun, although so far we haven’t been disappointed), some of our attractions as a “high-end” destination have floundered, save for a vibrant restaurant industry.

The majority of tourists who come to these shores originate from the United Kingdom, the United States and Canada, the United Kingdom being the region with the most historical ties to the island.  We have laid a foundation as the hideaway of persons of wealth and the properties on the west coast can attest to that fact.  However, what of the modern tourist?  The wealthy traveler still comes to Barbados and remains a repeat visitor but what of attempts to attract millenial tourists or young professionals who might otherwise travel to a less expensive and extremely popular locale such as Costa Rica, Santorini or Mykonos?

An opinion was expressed by Executive Director and Professor of Strategy at the Arthur Lok Jack Graduate School of Business that Barbados lacked attractions beyond its natural resources, which was causing it to falter badly when compared with international competitors.  On a positive note, Barbados remains known not only for its beaches and favourable tropical climate, but for Harrison’s Cave, Oistins Bay Garden, Kensington Oval, the recently opened Nikki Beach Barbados, Welchman Hall Gully, Andromeda Botanic Gardens and its palate-pleasing array of restaurants from roadside vendors and food trucks to fine dining restaurants.  However, are these ‘places of interest’ diverse enough?  Do they need to be?  Recent history will show that we have seen the demise of out-of-the-box attractions such as Ocean Park, Aerial Trek and Oughterson Zoo.  Further, a number of years ago a resounding NO was the response to whether casinos should be opened on the island and a plan for a water theme park never came to fruition.

This brings us to the question of whether our tourist attractions need to journey beyond the current offerings.  The simple answer is yes.  It is not enough to record extremely high tourist arrivals but not record a commensurate level of spending by the visitor.  The good news is that our island has started on the path of diversification, with one of the major success stories being the Barbados Fertility Center, which has brought many hopeful mothers and parents to these shores, including a celebrity or two.  However, Barbados currently lacks a vibrant nightlife in Bridgetown, the capital and UNESCO World Heritage Site, there are many derelict buildings in and about Bridgetown, including what used to be the Empire Theatre, there are no theme parks and some of our major historical buildings which could be used for tours are catching dust.

It is true that we have been promoting our festivals (Crop Over, the Vujaday Music Festival, Animekon, polo and Sandylane Gold Cup), which have been successful in bringing persons to our shores for a few days at a time but attractions which have a steady sustainability are an excellent complement to such festivals.

Some ideas: if Barbados is to make heritage tourism a major revenue earner, our sites must be well maintained (and in some instances, restored) and promoted online.  For health and wellness tourism, there may be a need for niche market hospitals, medical and rehabilitation centres to be granted government concessions for the importation of equipment and tools so as to offset already high costs of operation.  Finally, the ability to offer world-class accommodation, transport and medical services as well as superior negotiating skills for broadcast and related rights goes hand-in-hand with sports tourism.

To conclude, being a high-cost destination is not a negative for Barbados but it is extremely important that neither do we price ourselves out of the market nor do we miss opportunities to structure our tourism product around attractions which give persons an incentive to travel to the island.  The most important factor however, is to ensure that the environment is clean, services are provided as seamlessly as possible, the customer service experience is improved and that generally, there is a united focus on the country’s tourism offerings.