Notes From The Margin

August 24, 2007

Barbados and Foreign Investment

Was reading a post over on Barbados Underground today much of which centred on a Company Bacassa investments. (Going, Going And The West Coast Of Barbados Is Gone!) I have to say that I thought much of the original post made alot of sense, many of the responses however I wonder about.

The article touches on the company Bacassa investments and their four major projects.

Banyan Plantation-Black Best, St. Peter

Permission given to develop the site in 2005. A hotel, Spa, Golf Course, one hundred and twenty Villas (120) and eighty (80) Town Houses.

Battaley’s Mews – Mullins, St. Peter

Permission given to build thirty (30) Town Houses approx: 2000 square feet each. The property will be outfitted with tennis courts, plunge pool and other facilities.

Porters Development – Porters Sugar Factory, St. James

Permission given to construct twenty (20) apartments on a complex which will also have four (4) retail shops, one (1) food court, (1) supermarket/convenience store one (1) cafe and in Phase II the construction of one two storey building to accomodate thirty (30) apartments which incluse gym, tennis court and other facilities.

Turtle Nest-Mullins, St. Peter

A private beach front cottage. Rates listed on the website ranges between USD725-950 per night.

 

Let’s look at the economic impact of  one of these projects:

 

Porters Sugar factory is currently derelict it contributes effectively nothing to the economy.

Permission given to construct twenty (20) apartments on a complex which will also have four (4) retail shops, one (1) food court, (1) supermarket/convenience store one (1) cafe and in Phase II the construction of one two storey building to accomodate thirty (30) apartments which incluse gym, tennis court and other facilities.

 Yes the profits are likely to go out of the country back to foreign investors. However what stays here.

During construction money from the project flows into the Barbados economy. (We’ll assume work permit laws are followed here). On the sale of the apartments government gets Property transfer tax and property taxes will be paid annually by the purchasers. The purchasers while they are here will consume goods and services which brings money into the economy. This market offers opportunities to Barbadian entrepreneurs to tap. The shops even if they are foreign owned will generate VAT and other revenue for the government. They also will generate jobs which will cause income taxes to be paid. The Gym will also generate other  employment and other economic activities. The alternative to the above is to have a derelict sugar factory that generates NOTHING.

 

Yes this is a fairly simplistic explaination, but we feel that it needs to be said given many of the comments appearing in both major Bajan blogs Barbados Free Press, and Barbados Underground.

 

YES Barbadians need to fight against the erosion of the structure of regulations that ensure that Foreign Investment does not flow back out in it’s entirety. However in the face of 7% unemployment we will have to accept that foreign workers will become more of a reality in Barbados. Now HOW that happens is what we have to be careful about. We need to be very concerned about the policies put into place to facilitate foreign investment and we need to keep the government on it’s toes  when it deviates from those policies.

 

But let’s be clear, Barbados needs foreign investment to suggest otherwise just doesn’t make sense.

 

Marginal

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