The 2014 guide to Barbados: Renewed sense of purpose

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Central bank governor DeLisle Worrell explains how Barbados has managed to emerge from the global financial crisis stronger and economically more diverse

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It’s hard to miss DeLisle Worrell when he enters a room. The governor of the Central Bank of Barbados (CBB) is a striking but calming presence – exactly what is needed in a small but stable island economy emerging with a new sense of purpose after a few relatively lean years. His chosen attire, which includes a perfectly ironed Nehru-style shirt, points to his humility; his broad, knowing grin to a charm that sets visitors immediately at ease.

His cool demeanour hides the fact that it has been a tough few years for probably the region’s most diverse and well-run island state. Barbados has been here before, knocked back several times by recessions, notably in the early 1990s. But the recent financial crisis felt different: Barbados hit its low point in 2009, as the two industries that buttress its economy, tourism and international business and financial services, both took a pounding.

That Barbados has been able to emerge from the shadows stronger and more economically diverse, while retaining the political, structural and social stability that define it in the eyes of the investing world, is testament to the resolve of the Barbadian people. It also points to the extraordinary determination and intellectual elasticity of the island’s leading financial and political figures, including Worrell, who has led the CBB since November 2009.

He previously worked as deputy governor between 1990 and 1998, before joining first the International Monetary Fund, where he served as an advisor in the Monetary and Exchange Affairs Department, then the Caribbean Centre for Money and Finance. Since rejoining the central bank as governor, he has helped stabilize the economy following the dark days of the financial crisis.

The economy has posted modest growth figures since 2009. Worrell has succeeded in keeping prices low and the debt burden manageable, while shoring up foreign exchange reserves and boosting revenues in sectors from transport and distribution to financial services to agriculture - no small feat for a small, natural resource-poor island economy.

Product sells itself
Worrell clearly enjoys his life and his job. Asked whether he is an optimist or a pessimist about the future of the Barbadian economy, he smiles and spreads his hands wide. "I’m cautiously optimistic," he says. "I’m a big believer in the product selling itself. Look around you. We’re blessed with our physical environment, with our beaches, with all the great things that make living and working here wonderful. We have a strategy that works for us – we have built on our reputation and our competitive strengths. And we have excellent physical and social infrastructure – great roads, telecoms services and utilities, along with the best education and healthcare systems in the region."

 Dr. Delisle Worrell, Governor,
Central Bank of Barbados
And rather than panic at the height of the financial crisis, the island’s political, social and business leaders did what they’ve done since independence in 1966: they sat down very calmly, took a deep collective breath and, recognizing the changing nature of the world, mapped out a new future.

At first glance and in many ways this future looks remarkably like the past. Barbados’s economy remains heavily dependent on the twin engines of tourism and international business services, two sectors that often intersect. The island is home to hundreds of global institutional investors and corporations, all looking for ways to minimize their tax spend (and finding them) thanks to the island’s double-taxation agreements with 33 nations, including the United States and stretching from Canada to China, Sweden to Switzerland, and Britain to Bahrain.

Directors of these firms and funds flock here throughout the year, but most notably in the winter months, to hold board meetings, to talk to their lawyers, accountants, auditors and business partners, to check up on their savings plans, and to channel capital parked profitably in Barbados into new local, regional and global investments and jurisdictions.

More often than not, they bring their wives, husbands and families along for the ride, to enjoy a spot of rest, recreation and respite from chilly North American and European winters. "There’s a big overlap between international business and tourism," notes Worrell. "A lot of people who come here also live here, boast a significant investment portfolio on the island and often own second homes."

And renewed moves are afoot to boost the number of business and leisure visitors, with the central bank just one of many government departments and agencies seeking to squeeze greater returns out of an industry vital to the island’s future. "The keys to boosting revenues in the tourism sector are increased productivity, improved quality of service and enrichment of the product," says Worrell.

Targeting the message
This also means marketing Barbados more efficiently, targeting its message to the right leisure and corporate traveller. Thus, rather than flooding foreign TV networks or advertising hoardings with entreaties to visit the island, authorities are focusing their attentions on wealthier areas of North America, Britain and, increasingly, East Asia and Latin America.