Barbados must find ways to increase foreign exchange earnings – Worrell

BRIDGETOWN, Barbados, Thursday March 28, 2013 – Central Bank Governor Dr. DeLisle Worrell Wednesday urged Barbados to seek ways of increasing foreign exchange earnings and called also on the government and the private sector to invest in “creating new high quality productive capacity, improving productivity, and maintaining and upgrading infrastructure”.

Addressing the luncheon meeting of the Barbados Chamber of Commerce and Industry (BCCI), Worrel said that while there is every reason to be confident of the economic future, “the adverse impact of the prolonged global recession is a reality we cannot escape, and because we depend so heavily on foreign exchange we do not have the option of bettering our lives by depending on our own resources. 

“We must therefore seek ways of increasing foreign earnings from the activities we are renowned for, tourism, international business and rum, and of economising on oil imports by generating green energy.  “We know what this entails: increasing government efficiency, de developing more appropriate financial strategies, and transforming work attitudes.”

The Central Bank Governor acknowledged that “it is a tall order, but we are in the big leagues now, and we need to benchmark our performance on the gold standard, in order to keep moving up the ranks.

“We may be confident in our ability to meet the challenge, when we reflect on how far the country has come in the lifetimes of many of us, on the basis of slow, sustained and equitable growth.”

Worrell said that Barbadians can and must grow the local economy, in order to continue the improvement in the quality of life for its citizens, provide job opportunities for young people and to enrich the culture and society.

“Growth must be sustainable, by which I mean that it must yield lasting benefit.  The jobs we create should be permanent, the additional income we earn must enable us to buy more goods and services this year, and the next, and the year following.  That means we must fuel the growth of our economy by increasing the amount of foreign exchange we earn each year.”

But he told the business leaders that the point of departure for strategising about growth is the question,  “how may we earn more foreign exchange from tourism, international business services and agro processing and how may we economise on the use of the foreign exchange we earn?”

Worrell said Barbados must become more competitive, not by selling services cheaply, but by reducing bureaucratic inefficiency, improving access to finance, and upgrading the national work ethic.

“Significant gains in these areas will come with commitment to excellence, attention to detail, persistence, and intolerance of substandard service.  The institutions are in place to assist us in reaching the goal,” he said, noting however “we must find ways to make them work effectively”.

Worrell said there is also a need to refine tourism marketing strategies and that the Central Bank is assisting this effort by researching local tourism markets within the island’s major source countries, among other studies.

“As befits the country’s leading foreign exchange earner, there is a wealth of institutional arrangements for collaboration in the sector, and government agencies and tourism providers should seek ways to make this cooperation more fruitful,” he said, noting that among other strategies for tourism, is the need to  continue to enrich the menu of choices open to the visitor. 

The Central Bank Governor said there should also be a “big push” to bring alternative energy to the take-off, via a mix of photovoltaics, wind, waste-to-energy, and possibly ethanol production. 

“These are all by now well established technologies, and teething problems will have been ironed out.  I believe households and firms should focus especially on generating their own power using photovoltaics.  Barbados is among the sunniest countries in the Caribbean and the world. “

Worrell said photovoltaic systems are now eminently affordable, “about half the price of the typical family car” and that there is the potential for employment generation in retailing systems, installation, servicing and maintenance. 

“There is scope for innovation in adapting systems to optimise performance for local conditions, and developing intelligent control systems.  Financial institutions are allowing what should be a profitable avenue for growing business to go abegging,” he said, telling the private sector leaders they were not covering themselves “with glory on this one”.

The rum industry as well as successes in agriculture and manufacturing should be used to boost the country’s foreign exchange and Worrell said  “our agriculturalists and manufacturers need to follow the example of the rum producers: move up the value chain, produce a distinctive product, and sell it at a premium price, to a discriminating clientele”.

Worrell reminded the private sector that sustainable growth is a marathon and not a sprint.

“If you rush out of the starting gate, boosting domestic consumption, you will run out of foreign exchange, with the risk of losing the gains you have made in the short run. In a race with experienced marathoners, only the hopelessly naive will rush to the front of the field.

“For Barbados, the proper comparison is not with the growth of countries like Guyana and the Dominican Republic whose GDP (gross domestic product) is less than a third of our own, but with The Bahamas and Bermuda where GDP is much higher.  If you compare Barbados’ performance since the 2008 crisis with that of The Bahamas and Bermuda, we see no great difference,” he added. (CMC) Click here to receive free news bulletins via email from Caribbean360. (View sample)