Barbados Manufacturers’ Association – stuck in the mud of bygone times
By Patrick Hoyos From Caribbean360
BRIDGETOWN, Barbados, Thursday August 21, 2014 – Fifty years on, the Barbados Manufacturers’ Association (BMA) is still asking for market protection. Sad, but true.
No, not asking. Demanding. Demanding it not with logic but vitriol, poured on those who dared leave the fold – those companies which were once in manuacturing but are now importing.
At the BMA’s 50th anniversary event, current BMA president Ms. Karlene Nicholls excoriated former members who had formerly fought the good fight but were now apparently hell-bent on destroying their erstwhile manufacturing brothers.
The charge that manufacturers are choosing not to make their products here but instead are bringing in cheaper versions from abroad is intended to play on the emotions, and it does, as there is no politician in Barbados willing to stand up to this, er, cheap appeal to emotion and put the sector in its place, for its own benefit.
The fact that they are cheaper does not mean they are of inferior quality. They are usually of equal or higher quality.
I am hoping that when the long-promised tourism incentive legislation is finally unveiled it will remove at the same time most of those bound rates on items which are not made here but nevertheless are caught up in the same net of massive import duties.
If the government – whichever party may be in power – does not address these very high input costs, we will still be at a disadvantage, because other destinations are removing their bound rates, surtaxes, luxury taxes, etc., as they are drive up the price of almost everything the tourist consumes.
Letting foreign products come in on a level playing field does not destroy local industry, unless you define that under the very narrow concept of “import substitution” – an idea which has been thoroughly rejected by consumers.
That does not mean consumers are uninterested in home-grown or home-made products. In fact, the more imports available to them, the more they also want to enjoy the tastes they have grown up with and the products which help them identify as “local” – in our case, Bajan.
Bajan products thrive in their marketplace when there is international choice available. Ever seen the crowd every night for “Mapp” chicken? How about the long lines quiety awaiting “Eddie’s” pork and chicken? What about the huge demand for local pudding and souse on Saturdays? And all the Bajan food that both tourists and locals flock to consume at Oistins, making that town our No. 1 tourist attraction?
Let us look at Banks Holdings, which for years had the only beer anybody could afford, due to import substitution and protectionist duties.
Today, Banks is not only holding its own but has a solid “Deputy” in the lower price point watching its back, not to mention a growing line of specialist home brews with animal names qualified by colourful adjectives and back stories.
That is innovation, and it came because, I repeat, because, Heineken, an interational beer, came into the market competitively-priced through its St. Lucian side door.
In furniture, despite the ridiculous 60% duties charged on any item with wood in it, how many local furniture makers are there still?
We must stop making the consumer, both local and foreign, pay more for imports that they may not even have a “substitute” for at present and probably never will.
Of course, this type of thinking will always get howls of anguish in response from the manufacturers and agriculturalists, but the simple fact is that the days of trying to ring-fence certain sectors by punishing consumers for daring to want more choice is now recognised to be counter-productive for the economy as a whole.
The reason is that our major way of earning foreign exchange, and the ancillary businesses that come with it – international business and increasingly, the cultural and food and beverage sectors – are service industries. Therefore, the people who work in these industries are service providers.
In some countries they call it ‘café society’, but here it is wider than that as coffee enthusiasts like me may still be in the minority. Instead this is a major activity centre of the economy, from the large Chefette palaces with their mega-playgrounds – which should be part of every child’s experience in Barbados – to the increasingly interesting food courts in malls springing up all over the island. In these places you can get such a variety of foods that it is challenging to try them all, yet, as I noted before, Barbadian and Caribbean fare hold their own very well against them all.
Ice cream, furniture, clothing with logos on them, signage and decor are all part of the mix of ingredients that makes up our increasingly sophisticated service industries. Not to mention wi-fi access to the Internet, free magazines both in print and online and other electronic services, like debt and credit cards and related conveniences like late banking hours and ATMs.
If you look at it like that you will see that the old idea of ring-fencing local manufacturing hurts more jobs and more potential foreign exchange earning than the jobs it may protect. Jobs which, like the thinking of the Barbados Manufacturers Association – are stuck in the mud of bygone times, bypassed by technology, new materials and know-how.
Those who provide those jobs – which account for less than ten percent of the entire workforce – have mostly not moved with the times, and instead scream bloody murder when they feel their territory is being infringed upon.
I have news for them: their days are over, and sooner rather than later the policymakers will realise that they cannot continue to provide such blanket protection for non-innovative, non-foreigh exchange earning sectors which in effect have long been holding back the competitiveness of our economy.
Besides, which country has our bound rate system helped the most? Hint: It’s in Caricom and it has an ampersand in the middle, and no, it is not St. Vincent & The Grenadines.
Don’t get me started on that one.
This article first appeared in the Barbados Business Authority of August 18, 2014.
Pat-Hoyos-150The opinions expressed in this commentary are solely those of Pat Hoyos. Pat Hoyos is a business writer and publisher of the Broad Street Journal.
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