FORMULA FOR ECONOMIC RECOVERY
FORMULA FOR ECONOMIC RECOVERY – BASIL SPRINGER COLUMN WHICH WILL APPEAR IN THE BARBADOS ADVOCATE’S BUSINESS MONDAY ON MARCH 4, 2013
“David said to the Philistine, You come to me with sword and spear and javelin; but I come to you in the name of the Lord of hosts.” – 1 Samuel 17:45
The government and opposition parliamentary representatives have been elected. The Prime Minister has now selected government senators and announced his cabinet members to undertake the business of government over the next five years or until another general election is called. If the opposition and independent senators have not yet been announced, they soon will be. The country, like so many others in the world, is now faced with an uphill task in terms of economic recovery.
In the Financial Statement and Budgetary Proposals presented by the late Prime Minister and Minister of Finance Hon. David Thompson on Monday July 7, 2008 he had this to say under the heading of “Innovation”:
“A national imperative is to grow the size of Barbados’ economic cake and increase the net growth rate in order to:
(1) induce sustainable economic growth; (2) boost energy and food security; (3) increase foreign exchange earnings/savings; (4) generate employment; (5) reduce poverty; (6) enhance returns to individuals, commercial banks, private sector businesses, trade unions and Barbadians of the Diaspora. This can be achieved through a national focus on developing a family of successful high performance enterprises, one enterprise after another.”
He went on to say that “Government therefore proposes to establish the Barbados Quick Response Revolving Seed Capital Fund and the Barbados Quick Response Venture Capital Fund. These funds are designed to meet the needs of clients that have potentially profitable and sustainable high-growth business ideas but find it difficult, on a timely basis, to access all the seed and venture capital finance required to meet their needs, from traditional Venture Capital or other Private Equity financial institutions in Barbados.”
So said, so done and the Barbados Entrepreneurs’ Venture Capital Fund (BIM Ventures) was established under the aegis of Caribbean Business Enterprise Trust (Barbados).
In his address at the launch of BIM Ventures venture capital fund on Nov 13, 2009, late PM Thompson promised an incentive to the private sector to invest in this fund by stating: “I am pleased to announce that the Government will provide a guarantee on the capital amount invested in a bond issue by CBET (Barbados), as a means of capitalising this Venture Capital Fund.”
Unfortunately, the PM passed away the following year and the promised incentive was never realised and the growth of the VC fund was frustrated. This incentive should be aggressively pursued to mobilise funds for investment without which our future is in jeopardy.
This enterprise initiative is even more necessary today. If we are to accept this urgent and important challenge to address the uphill task in terms of economic recovery, a strategy for enterprise development is paramount. Enterprise development encompasses three components: the innovative idea with the “DNA of an Elephant”; shepherding (a specific business management systems process) to mitigate the risk of business failure; and a source of funds, preferably benevolent private sector venture capital funds.
It is heartening to note that Prime Minister Stuart, following the vision of the late PM, has sent the signal of the importance of enterprise development by combining the portfolios of Industry, International Business, Commerce and Small Business Development under one Ministry and has given this responsibility to the Hon. Donville Inniss.
Minister Inniss’ professional training, interest and experience are in Business Administration, General Management, Public Administration, Youth and Community Development, Corporate Law, Investment Promotion/Management, Development of Multi-national Corporations, Information Technology, Taxation and Finance. He has been in senior management positions in many private sector companies and with the Barbados Investment and Development Corporation both at home and abroad. Minister Inniss’ long business career also includes being Deputy Commissioner-General for Barbados at Daejeon, South Korea in 1993.
Young David (the late PM) faced Goliath (the challenge to grow the size of Barbados’ economic cake) wearing a simple shepherd’s shirt (CBET Shepherding Modelâ„¢) and armed with only a sling (an incentive to the private sector). Let us uphold his legacy and allow the sling to deliver that devastating blow that will take us into economic recovery.
In support of the above, there are two events that will be taking place in Barbados of specific interest to the wider business community. A lecture “Strategies for accelerating growth in the Barbadian Economy” presented by Professor Andrew Downes on Monday March 18, 2013 at 8:00 p.m. at the Lloyd Erskine Sandiford Centre. This lecture/panel discussion comes at a pivotal time as our newly elected government will be seeking to navigate the country out of economic hardship. The public is invited and it will be streamed live on a site to be announced.
The Caribbean Centre for Organizational Excellence (CCOE), in collaboration with the Caribbean Export Development Agency, will host its inaugural conference on Tuesday, March 12, 2013 at the Aquatica Beach Resort, Aquatic Gap, St Michael, Barbados from 8:00 a.m. to 5:00 p.m. – www.cbeanexcel.com
The CCOE is a non-profit organization that aims to develop and nurture Caribbean organizations to optimise resources, and to develop capacity, through the adoption of principles of excellence, while supporting a globally competitive and impactful business environment within the Caribbean.
Participation is expected from industry specialists, consumer representatives, chief executive officers and owners of large, medium-sized, and small firms operating within the region, international experts, members of the academic community from the region, representatives of international organisations, and senior public sector officials.
(Dr. Basil Springer GCM is Change-Engine Consultant, Caribbean Business Enterprise Trust Inc. – CBET – Columns are archived at www.cbetmodel.org).
March 21st, 2013 at 10:13 AM
Dear Readers,
Dr. Springer’s provides an interesting reading.
Encouraging a family of successful high performance enterprise is definitely a good practical idea to boos economic growth as it will have its own resources and has virtually no risk.
Development, which ultimately aims to improve quality of life of the inhabitants would not be achieved unless the people have income generation means. The Idea of venture capital would definitely help the local community to establish micro, small and medium enterprises. What is really required is is to develop business ideas, the cost of which can be adjusted in the future returns. The other important idea is to establish incubation center to practically demonstrate the the business process and build enough confidence.
Government can definitely generate good amount of foreign exchange through attractive long term bonds or even by offering debentures at higher interest rates than the the banks can offer. The for, foreign exchange can be used to leverage the countries borrowings and also for investment in infrastructure development which has a multiplier effect. this will also generate employment opportunities.
Government can also increase foreign reserves through remittance by asking the banks to offer higher interest rates for FE accounts and long term deposits.
I am, JLNarayan, presently in Saint Lucia, as technical Adviser National Planning, assisting the Government in Development of Vision and national Stretegic Development Plan