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Pressing The ‘Reset’ Button

Final in a three-part series of an address by Terrence W. Farrell, Economist. to a tripartite meeting of the Barbados Social Partnership, the Barbados Private Sector Association last weekend.

Terrence W. Farrell
Terrence W. Farrell

LABOUR
What would be the role of trade unions in the investment environment I have described? Truthfully, they would have no significant role. The enterprises we are talking about are small and mediumnized, with a high proportion of professional and/or skilled employees who may also be shareholders. Worker representation is not needed in such situations. Occupational health and safety issues will not be prominent. But trade unions might reinvent or reemphasize their roles in sponsoring cooperative endeavours among employees in areas such as health care and housing.

Government
I have already suggested that governments should operate with a high degree of fiscal conservatism and focus on essential public services. They will have to find innovative ways of supporting the investments I have described, but I am clear that the traditional public service would be quite unable to provide the support required, neither can our traditional industrial development corporations. We need, inter alia, cadres of highly educated and globally connected nationals, here and in the diaspora, who can provide critical support to entrepreneurs and businessmen in law relevant to particular markets, intellectual property, deal negotiation, and networking. This is something that can be funded by governments. Regional Governments, through diplomacy and trade agreements, can collectively assist regional enterprises in gaining a strong foothold in the Cuban economy, as well as in Africa, India and Brazil. The same is true for the opening up and development of Haiti and Suriname, and indeed even Guyana for infrastructure and agriculture aimed at regional food security. Governments in the region need to be more business friendly. Not enough persons with experience in business get involved in government policy-making. The regional private sector organizations operate more like pressure groups on recalcitrant or deaf government officials, rather than forging institutional partnerships in which receptive government officials relate with trust and openness to the private sector leaders. (The Barbados tripartite mechanism may be different, and I stand to be corrected.)

Private Sector
If we can get governments to refocus on essential services and doing those really well, can we be confident that the private sector will step up? First, while regionalism has faint support in the official sector, it has been the private sector which has kept the regional agenda alive. The regional expansion of Trinidadian and to a lesser extent, Jamaican firms may have produced resentment in some instances but has helped to develop the regional market for goods and professional services. Second, we have 6 regional private sector enterprises which either now do compete globally or potentially can compete. These would include Sandals, Grace, NCB Jamaica, Goddards, Sagicor, Republic Bank, Guardian Group, Massy, AnsaMcAl, Associated Brands, Bermudez, and S M Jaleel. CL Financial and CLICO ought to have been in that list, but over-reached itself. These companies have some capital, but more important, they have built a cadre of professionals, some with export marketing capability, and several have taken painful knocks trying to expand regionally and globally, and have learned a great deal from those experiences.

What is noteworthy about the companies in that list is that many of them are in the business of Food and Beverage manufacturing which has perhaps been the only industry that has been able to transition successfully from import substitution to manufacturing for export. What I would like to see is these established conglomerates and regional enterprises taking a greater interest in incubating or farming small and medium enterprises seeking access to markets in the areas where they have expertise, and perhaps even funding initiatives which might appeal to them. There is no question they would do a better job than any government agency.

Conclusion
We need to press the reset button on our growth strategies in the region. We need to:

1. Maintain fiscal conservatism and create space for the private sector to assert itself

2. Encourage private sector support for SME innovation and market penetration

3. Support innovation with scientific research at the universities on a collaborative regional basis on products such as our local herbs and spices and their health and medicinal properties;

4. Support global market penetration with commercial diplomacy in key markets and with government-funded ‘Ivy League’ support teams for those entrepreneurs

5. Bring talented economists back into the policy analysis and the policy conversation so that resource use and externalities are always central to the decisions

Governments will need to redirect their efforts, wean people off dependency and support business venturing.

The Private Sector will need to step up and be prepared to work more closely with governments in idea generation and in supporting enterprise and innovation.

We also need to press the ‘Play’ button on the CSME and accession to the CCJ by all West Indian territories. There are tough issues to be worked through such as the movement of labour and policy coordination. But it may be a helpful strategy to work these issues through sequentially and to link the sequencing with specific policy imperatives such as agriculture and regional food security.

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