Introduction:
The Barbados economy has enormous potential, enough to catapult the island in to a genuine global middle economy on par with Iceland and the Nordic countries, if only we were to wake-up from a mind-set buried neck high in the old professions. Our great handicap is a lack of vision, creativity, sound business leadership, and a refusal by those in power to make way for more enterprising young people and those with ideas and initiative. The price we pay as a nation for this policy and entrepreneurial inertia is an unnecessarily high unemployment rate among young people, those in middle age holding on to public sector jobs for life, and those in or approaching retirement just looking back on a life that could have been.
One problem is that, as in our social and professional lives, collectively economically we have found ourselves in a comfort zone in which tourism, and addictive national and household borrowing, bring in just enough to keep food on the table and maintain a bogus lifestyle, so everything must be right with the world. In the meantime, our neighbouring islands, especially St Lucia, are catching up with us, as we are experiencing a slow, but steady decline in our living standards and overall progress.
Barbadians do what Barbadians have always been good at: they talk. Every Barbadian has the answer, no matter what the question; collectively they are always the biggest, brightest and best. Humility does not feature very high in our cultural values and, worse, if anyone of us has the temerity to suggest a roadmap out of our national malaise they person is headed for public humiliation.
Role of Government:
One problem is that there is no understanding, by either party, of the role of government in national development. There is a misguided Victorian view held by politicians and senior civil servants that government must be involved in every development to the stage of micro-management, and, similarly, by aspiring businesspeople that taxpayers must fund every nutcase idea and bogus business plan they have.
Few, if any at all, believe that the role of government is as referee, facilitator for enterprising individuals and companies to invest in legitimate businesses, with a social enterprise sector as a back drop. They fail to realise that government is about erecting regulatory fences to protect consumers against abuse, piracy, dishonesty and charlatanism. We know that governments of all colours have failed because they have not put sustainable policies in place: for example, the lack of a national land use and planning reforms, the ring-fencing of agricultural land, a national house-building programme, lack of education reforms, proper training for public sector workers, a viable national health care programme, labour market reforms – and these are just starters. All these and more are policy issues still crying out for reforms, while the government and its advisers argue over trivia.
We need sustainable growth led by the private sector, but assisted by government acting in the best interest of this and future generations of Barbadians. We need to diversify our dependence on the badly managed tourism and hotel industry and re-focus on manufacturing, starting with our only world-class product, rum. The rum sector should be given a ten-year programme to draw level with the Scotch Whiskey industry, both in terms of job-creation and in its contribution to GDP. Overall, we need to construct a more dynamic and competitive economy and a better skilled labour force. And finally, we urgently need to see radical and widespread improvements in the structure and governance of Caricom, or stopping the much-abused free movement of labour policy, which has led to a mad rush to the bottom.
Environmental Footprint:
One of the best signs of the collapse of Barbadian society is the decay of the environment, from the slow wipe out of early morning bird song (wood doves, ground doves, sparrows, black birds) to sea life (conch, flying fish, sea eggs, the Animal Flower Cave, etc) all of which have taken place in the full watch of a government which boasts of its green credentials. Monkey and mongoose habitats have been replace with cheap housing for the rising middle class, rushing to escape from the traditional communities in which they grew up.
Business Dynamism:
Part of Barbadian entrepreneurial conservatism is that business leaders have settled in a comfort zone with no real rivals and none on the horizon.
They largely have consumers captured like prisoners and are happy keeping things that way. And the consumers are happy as long as they can get credit for the good and services they need to show off a lifestyle they cannot fund.
One industrial sector that has always made we wonder is the alcohol sector, dominated by Banks and the various cottage industry-type rum producers, with small rum shops locked in. Banks, the beer manufacturer, has been going for about fifty years now producing its lager-type beer which when drunk cold in the driving heat of the Caribbean is very popular with locals and tourists. Yet, over that period, Banks has not moved with any noticeable degree in to non-bottle offers, introducing can drinks only recently and draught to a limited distributional degree. Given this marketing and distributional inertia, there has not been any real local rival to Banks, apart from the Rachel Pringle Brewery, either with an introduction of other forms of local lager/beer or with other producers, given the low barrier to entry in the micro-brewery market.
In Britain, a basic £100000 (about Bds$300000) has set up an individual or group of investors in business. This is a sector crying our for competition. In 2011, Diageo, one of the world’s leading drink providers, had revenue of £10bn, with its portfolio which runs from Guinness to Veuve Clicquot Champagne, with a prediction of sales growth of about eight per cent. Diageo has now made a US$bn bid for tequila makers Jose Cuervo, to add to its Johnny Walker and Smirnoff brands. Last year Diageo had global sales of £14.6bn, £4.1bn of which were in the Americas, with Hispanics being responsible for 23 per cent of drinking age adults by 2030, an increase of 14 per cent from today’s numbers.
There is no suggestion that Banks, or any local drinks provider, could punch at that level immediately. Such a view would be preposterous. What I am suggesting is that a well thought out business plan could see a steady, if small, growing market share, leading eventually to being a significant middle market player. Banks, to take but one example, has two important marketing tricks up its sleeve: Barbadians and other Caribbean people living in Europe and North America, and the hundreds of thousands, may be millions, of tourists that have visited the island over the last fifty years. The barrier to the gin and vodka markets is also very low, also the beer market, a favourite drink with the British.
Analysis and Conclusion:
Caribbean farmers and food producers are failing to meet consumer demand, even in a global environment in which food prices are increasing by leaps and bounds, and constitute a growing percentage of households’ disposable incomes. This is partly the result of a fractured marketing strategy on the part of the marketing boards, the farmers’ organisations and governments. It is also a result of a mental state, of a ruling business and political elite that sees agriculture and food production as the preoccupation of the lower classes, the semi and unskilled, of those without professional qualifications. And, most importantly, of consumers unaware of their power to force supermarkets and stores to stock what they want at prices they can afford.
We have the ridiculous situation in Barbados where an Oistin’s supermarket can stock carrots from Canada (just think of the air miles), keeping Canadian farmers in work while a local St Lucy farmer has been finding it difficult to get rid of his produce. Yet, people continue to flock in and buy those carrots. Banks has the space and the capacity, and can make inroads on the Caribbean sales of Carib, Piton and other regional beers, but they are not the only weak and inward-looking local businesses. Even though the government and business sector recently despatched Minister Kellman to Britain as a super-salesman for Banks, he could not really tell the wood from the trees.
There is a reasonable market for these produce in the UK, alone, farless North America. Britain’s West Indian population has considerable buying power, despite the popular perceptions, and over the years have shown persistent cultural and social sustainability which makes them a dynamic market for Caribbean producers. It has its own consumption patterns, which differ remarkably from the host community. And with house prices in Britain averaging about £122000, and in London and the South East about £350000, the older West Indian population in particular, who have largely paid off their mortgages, have reasonable assets (About 25 per cent of the London population was born outside Britain).
The failure to exploit this market is on the supply side, since the demand is there and growing. The returns are also high: an ordinary lime costs 30p in a British supermarket, about Bds$1; bananas, the most popular fruit in the British shopping basket, often are products of the American-owned farms in Central and South America, (Banacol, Chiquita, JnF Fox & Sons, Hoya, and others), all remarkable for the massive size and lack of taste. But few Caribbean bananas, sweeter and smaller, are seen in the shops, produce from islands such as Grenada, Dominica, St Lucia, Jamaica, and others. Sweet potatoes, yams, eddoes, coconuts, even sugar canes are now sold in big chain supermarkets or Asian-owned stores. This is a crisis on the marketing since the big supermarkets such as Sainsbury, Morrison’s, Tesco’s, and others would not have stocked those products if the demand was not there. One way of tackling this supply problem would be through the regional auspices of Caricom, which this moribund body as presently constituted is incapable of doing.
In the meantime, we hold our heads in our hands and plead with international funding bodies to give us another loan.
Leave a Reply to EnuffCancel reply