Money is not enough
“All the workers are judged. The one judged most sternly is, surprise, not the one who did something wild or profligate but the one who, out of fear, did nothing.God will hold us accountable for what we do with our talents, our abilities, our opportunities, our lives” – An interpretation of the ‘Parable of the Pounds’ – Luke 19: 11-27 www.preachingtodaysermons.com
Last week Barbados’ Prime Minister and Minister of Finance announced consumer taxation measures ‘to halt runaway spending’ by Barbadians. This action is in response to declining foreign reserves and there is a theoretical expectation that these measures will inhibit spending to an extent that the decline will be arrested. The PM admits that Barbadians are living above their means and I believe that, if these measures are to succeed, Barbadians will have to deliberately curb their expenditure and go against the momentum that has evolved. This is a difficult challenge, especially in the face of aggressive advertising by financial and hire purchase institutions with slogans like ‘loans to go’ and ‘no deposit required’, respectively.
The PM also observed that Barbadians have racked up over 400 million dollars in land, income and value-added tax arrears and has made an appeal to Barbadians that ‘this has to stop’. I do not know whether a study has been done as to why Barbadians have not remitted funds to the government coffers, but I would hypothesise that it has much to do with the demands from private and government sector institutions on their disposable income and there is not enough to go around. The government sector then becomes a creditor by default.
The solution to my mind, therefore, is to create opportunities to increase the level of economic activity, focused on the foreign exchange earning and saving sectors. This could increase the size of the economic pie and the flow of money, provided that individuals take advantage of opportunities presented to them. The PM is indeed prompting such a solution by creating the new Export Promotion and Marketing Fund to drive the tourism, international business and finance, manufacturing and agricultural sectors. The questions are ‘how much money will be raised by these new tax measures?’ and ‘how will it be spent?’. But alas, money is not enough. We need the entrepreneur and the management to go with it. The entrepreneur will define the enterprise, which may extend beyond the traditional productive sectors mentioned above, and the management (marketing, operations, people and finance) will provide the security required to foster the sustainable success of these enterprises. Hence the concept ‘management as collateral’ for money invested.
A month ago, I wrote an article entitled ‘Human Capital’. Dr. Jules Ferdinand from St. Vincent was very complimentary in his response to it. He commented ‘I trust that this is just part one of a series of articles on the topic. You really held me captive throughout the article and provided a lot of food for thought. Foremost among my thoughts were these: (1) How can we get our people to embrace the can do attitude? Many of our people appear to have developed the mindset that wealth generation and entrepreneurial activities are for others (e.g. the Syrians, Chinese and East Indians). We need to realise that if they can do it then we can do it too.
(2) How do we get the financial institutions to embrace the up-and-coming entrepreneur? They are not prepared to take risks at all. If they give a loan for a few thousand dollars they want all my grandmother’s real estate as a guarantee. (3) How do we get our people to become more proactive? Too many of us have great ideas and just let them hibernate, sometimes through to our grave’.
We must be accountable for what we do with our talents, our abilities, our opportunities, our lives. CBET helps us to do this. CBET recognises the importance of sustainable business success to stimulate economic growth for Small State economies such as the Caribbean and hence promotes The CBET Model as necessary and sufficient for sustainable business success.
The CBET model speaks of business facilitation and partnership with the entrepreneur. It shepherds the entrepreneur or institution on the journey from ‘business concept’ to ‘sustainable business success’ ensuring that the companions of Management and Money are optimal at every step of the entrepreneur’s journey.
CBET has started to implement its shepherding model: in Barbados working with the Barbados Investment and Development Corporation where great interest in being shown by entrepreneurs; in Grenada working with the Barbadian company Calidad Investment and Financial Services Ltd. with excellent response to date; with Counterpart International, a sustainable development organization operating in 60 countries, where the model has been included in their enterprise development proposals; and in the Dominican Republic where follow up activity is taking place.
One international commercial bank is leading the way by expressing interest in investment in CBET’s subsidiary, Caribbean Venture and Integrated Services Inc, which is a for-profit company designed to facilitate venture capital funding for business plan development, business start-up, business implementation and advanced business implementation. Other strategic alliance partners have expressed interest in coming aboard.
The Barbados Export Promotion and Marketing Fund combined with the CBET shepherding model can make a significant change in increasing the economic pie and boosting the foreign reserves.