Bonds A Safe Way to Save More
For decades, Barbadians have used savings bonds to help them achieve their financial goals. They know that savings bonds are a safe investment that offers attractive returns (5.5% when held to maturity). They also know that purchasing savings bonds is an investment in both themselves and in Barbados. Thatâ€™s because the money Barbadians invest in savings bonds is used to finance national projects that help grow our economy. So whether your goal is to buy a home, plan ahead for your childrenâ€™s education, or save for retirement, savings bonds can help you get thereâ€Ś all while helping Barbados thrive. To learn why savings bonds are right for you, visit www.centralbank.org.bb, email email@example.com or call 436-6870.
12 Street Food
14 Dr. Ariana Marshall
16 DIGITAL ECONOMY Beyond Cash, Rasheed Griffith examines the emergence of Digital Currency
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Former Governor, Sir Courtney Blackman (1972 - 1987)
Former Governor, Winston Cox (1997 - 1999)
We used to think that the greatest windfall that a country could experience was to find oil in commercial quantities, and we all envied Trinidad’s status as CARICOM’s only oil exporter. However, technology has now evolved to the point where the entire Caribbean, and sunny countries everywhere, have much better prospects than oil producers do: we can produce all the power we need from renewable energy sources, and unlike oil, supplies will never run out. In Barbados’ case we can generate all the electricity the country could possibly need from solar and wind energy. This second issue of EI.bb examines the state of Barbados’ renewable energy sources and
Governor Dr. DeLisle Worrell
our standing in this sector, as we move headlong into our 21st year. For example, we explore the solar and wind generation on the island and find that had both those forms of energy been fully in place in 2015, Barbados would have saved $209 million in fuel imports. If, in addition, all cars, buses, trucks, construction machinery, etc. were powered exclusively by electricity, we would have saved another $182 million and in all, we would have reduced our import bill by 15 percent. (In 2014, with higher oil prices, fuels were 20 percent of all imports.) The money we would have saved could have been used to invest in new hotels or infrastructure. It would have increased investment by over 50 percent and might have created hundreds of new jobs. The overall impact on the economy would have been to raise our economic growth rate from about one percent (Central Bank’s revised estimate), to more than five percent. In the Caribbean growth league tables, Barbados would have been number one in 2015. What stands between us and this beckoning future is the investment that must be
made in solar photovoltaics, wind generators, storage facilities and power distribution. In addition, all gasoline and diesel powered vehicles would need to be phased out in favour of electric vehicles. Our Prime Minister has committed Government to the 100 percent renewable energy strategy, and what remains is to provide the additional incentives and support needed to accelerate the required investment. We have already made a promising start in the direction of energy independence. Individuals and businesses have taken advantage of fiscal incentives to install solar PV systems in increasing numbers, and the Barbados Light & Power Co. Ltd. has inaugurated a solar farm in St Lucy. In this issue you will read more about our wind capacity, and about the purely electric cars which are now on Barbados’ roads, thanks to the remarkable enterprise of Megapower. Permission is awaited for the installation of wind generators by private companies and options are being actively considered for storage of energy sufficient to drive the grid at night and when there is no wind. All this can be done with systems that are tried and proven, and we have studies available which demonstrate how these systems can be combined in a way to satisfy 100 percent of our country’s needs, with fuel that is in abundance, free of cost and that will never run out. Meteorologists tell us that Barbados enjoys eight to nine hours of sunshine daily, all year round; that
sunlight provides every home in the country with more energy than it could ever use for all our needs for electric power, cooking and transportation. Unfortunately, most of that energy comes in the form of heat, which cannot be easily converted to a form that is useable for any purpose other than heating water. As recently as five years ago, it was so expensive to convert sunshine to electricity that the average middle income household could not seriously contemplate doing so. This edition will show how that has changed dramatically in the last few years, with the introduction locally of affordable photovoltaic systems for households. Barbadians can now buy a system that will supply the entire electricity needs of one household, reducing the average monthly payment to BL&P to little or nothing, for less than half the price of a new standard-sized four door family sedan. Barbados now has the attractive prospect of doubling its economic growth potential over the longer term, by working towards the goal of supplying 100 percent of its energy needs from renewable energy sources. The technology is proven, Government and the power company are committed to the development of renewables and a very encouraging start has been made, with solar photovoltaics and plug-in electric vehicles. After reading this issue, we hope you see the light – the sunlight – the same way that we do.
Welcome to our second edition of EI.bb, which should leave you in no doubt that there is a very bright future for our island Barbados. What informs this bold assertion in the midst of doubt and gloom that so often blinds us to possibilities and blocks initiative? The answer is summed up in two gifts we have taken for granted for too long – constant sunshine and the balmy breezes off the Atlantic Ocean. The two have been good for tourism and have patiently waited for us to confidently accept that they can provide all the energy we need to power our engines of growth. And energy, we all know, has not been cheap for Barbados! Our historic dependence on oil has been a major impediment to the kind of growth we have dreamed of and continue to dream about. But now, with the world accelerating towards renewable energy, we should be more convinced than ever that this island made the right step some 44 years ago, when we started developing the solar water heating industry. We now have an 80% penetration rate of solar water heating – an amazing percentage for such a small island. An American journalist, Richard Schiffman, who visited the island over the past two years, was taken aback by all that was being done in that sector and on his return to the United States was moved to write in the Huffington Post, on America’s own progress in this area: “Are we to believe that a country which sent a man to the moon and created the Internet can’t figure out how to integrate alternative power sources into the power grid? “Germany has already done so; Italy, Belgium, the Czech Republic and other European nations are all well on their way toward doing so. Even tiny Barbados is ahead of us on the road toward green energy independence.” If we are ahead, then we need to stay ahead and do so for our economic survival. Do you know that in 2015, for example, if Barbados had all the
necessary solar and wind generation facilities in place, Barbados would have saved $209 million in fuel imports? We have already embraced solar water heating and have begun to lay a firm foundation for wind power and photovoltaics and despite the fact University that we have slowed the pace, of the West Indies. we are in step with the rest of the Professor Warde, an inventor of world, including rich industrialised high-tech systems, is often described as a nations. potential Nobel Prize winner in science. Once we continue to reduce Our chosen Institution of Excellence is our reliance on fossil fuel, Goddard Enterprise Limited, (GEL), whose we can slash our energy origins can be traced to a tiny grocery shop import bill and illuminate the almost a century ago, but which today is a economic and environmental sprawling multi-million dollar conglomerate. way forward in the 21st century. And in an era when Millennials are rising to Hence the Central Bank’s decision to draw the occasion, we have chosen to involve a national, regional and international attention number of them – one such example is our to the possibilities of renewable energy in young Barbadian Olympic medal-hopeful Barbados by devoting the second edition of Akela Jones and another is Dr. Ariana EI.bb to this sector. Marshall, a passionate renewable energy In this edition, Central Bank Governor Dr. advocate, who returned home from abroad DeLisle Worrell and his team continue their to play her part in moving Barbados forward quest to inform Barbadians and others that in this area. despite our economic challenges, we can It gives us an opportunity to hear from Millennials excel in areas that many of us take for about E-Commerce, the growing food industry granted, or don’t talk about enough. and the changing attitudes to marijuana. We also look back at a legacy that still Working on this edition, has indeed been shines – that of the late Professor Oliver an eye-opener – I have learnt so much about Headley whose accomplishments a sector I had taken for granted, but have made him a scientific luminary in the come to realize is an emerging and financially region and who left a rich legacy of viable industry pillar of our economy. exploration into solar technologies Once again I would like to thank you the that are associated with his name. readers, for your enthusiastic response to But there is more to this publication. the first edition and look forward to your As in the first, people and institutions comments and suggestions on the second one. of excellence are highlighted and My thanks to the editorial and creative teams, we also introduce our inaugural the contributors, photographers and all those Conversation With Luminaries, a new who helped in anyway with this edition. series that shines an illuminating light on an Enjoy - be informed and be inspired! outstanding Barbadian who chats with another accomplished and distinguished person of the soil. Our first such interview features Dr. Chelston Brathwaite, Barbados’ Ambassador to China, who interviews his long-time friend Dr. Cardinal Warde, a Barbadian professor at the prestigious Roxanne Brancker Massachusetts Institute of Technology, who is President of the Caribbean Science Foundation based at the Cave Hill Campus of the
Central Bank of Barbados
Media Support International
EDITOR IN CHIEF
CREATIVE DIRECTOR Jonathan Reid
DESIGN & ILLUSTRATION Jody Forte
Dr. DeLisle Worrell Novaline Brewster Sherri Bishop Laurie Blackman Professor Winston Moore Michelle Doyle-Lowe Renice Bostic
EDITORIAL ASSISTANTS Tessa Ottley Harry Mayers
PRODUCTION ASSISTANT Dale Christie-Bourne
Dr. DeLisle Worrell Professor Winston Moore Dr. Chelston Brathwaite Novaline Brewster Sherri Bishop Laurie Blackman Renice Bostic Hallam Hope Dr. Thomas Rogers Sherie Holder-Olutayo Rasheed Griffith Tyson Henry Shakirah Bourne Jamila Beckles Charles Marville Jewel Brathwaite
Special thank you to Fusion Rooftop restaurant, Limegrove, Barbados
EI.bb is produced by the Central Bank of Barbados. Every care has been made to ensure that the information contained within this magazine is accurate, however the Central Bank cannot be held responsible for any consequences that may arise from any errors or omissions. Reproduction in whole, or in part, without written permission, is strictly prohibited without explicit permission from the Publisher. Telephone: 246-436-6870 | email: firstname.lastname@example.org or email@example.com DISTRIBUTION: Central Bank of Barbados, P.O BOX 1016, SPRY STREET, BRIDGETOWN | On-line: www.centralbank.org.bb
Prof. Sir Roy Marshall The Role of the Law in the Process of Change Sir Winston Scott Memorial Lecture - 1984
By Tyson Henry T” D EA E ST M IT A UH RU O R ELL DF A “Y RE H B ES FR LSA SA
MEL L MA O KRE RGA E RIN M E
Pickled Pigtail Breadfruit Bowl by Strong Foods
few years ago I had an idea to turn my love for gourmet Aburgers and unique food experiences into a business.
I had some crazy ideas for this business and I was skeptical about how well it would be received by Barbadians. I wasn’t sure about the level of appreciation Bajans had for imaginative cuisine, especially because the food experience is personal and the food stimulates emotions. Ignoring my doubts, I forged ahead. From lamb burgers topped with feta cheese and sweet potato hash browns, to pudding and souse burgers and lasagna burgers, I literally deconstructed and often “Bajanised” the burger in ways unprecedented. Gradually, I grew more daring over a two-year period, and by the time I unveiled the “Bajan Christmas” burger – layered with great cake, ham, macaroni pie and the half-pound patty (ultimately the star of the show) – the overwhelmingly positive feedback made it clear to me that Bajans were indeed receptive to new creations, once they remained affordable ($25 and under) and made to order with the freshest ingredients. While my a c a d e m i c background equipped me with the skills to analyse markets, plan and execute strategies and assess the results, the experience of TyBurger (my adopted brand name), taught me way more about the burgeoning casual food scene in Barbados and Barbadians’ literal hunger for creative and international cuisine, without the stuffiness of fine dining. This local demand for innovative, casual food options is perhaps best
demonstrated by the craze for breadfruit bowls. Popularized by Strong Foods Inc., breadfruit bowls are now being served up by other vendors as well - roasted breadfruit carved like bowls and paired with everything from buljol to pulled-pork and has become an instant hit everywhere they are sold. From Crop Over all-inclusive events to food stalls and rum shops scattered throughout the island, breadfruit bowls have become one of the hottest food items around town and country. In sharing the story about the birth of Strong Foods, Kim Hamblin, one of the founders, recalled: “We saw there was a big gap in the market, because no one was preparing and selling the kind of traditional Bajan foods that would’ve nourished our forefathers back in the day. Ultimately, we wanted to showcase our culture as more than just macaroni pie and baked chicken.” In a clear example of demand increasing supply, the rise of local “foodies” has coincided with the increased local popularity of trucks, farmer’s markets, beverage immersion tours and many other unique local culinary events that are testament to the expanding interest in not only innovative local food, but also in regional and
international cuisine. Indeed, it appears that the new generation of food entrepreneurs is capitalising on this interest, with popular international cuisine street food spots such as Lemongrass Express, Sushi Express, BrickOven Pizza and Curbside Café emerging in recent years. According to Francina Bascombe, Deputy Chief Environmental Health Officer (Ag.), Bajan street food is categorised under “food businesses” and at last count (2015), there were at least 3,100 such businesses across Barbados. Bascombe said it was difficult to have an exact figure, since some may have closed down while others have popped up. Street food is defined as: “ready-to-eat food or drink sold by a vendor on the street, or food van, or temporary food booth. It is meant for immediate consumption.” The significance of the street food industry is sometimes underestimated, because a large part of it is considered part of the informal sector, but this industry plays a vital role in the economy. Although each street food enterprise is generally small in size and requires simple skills, basic facilities and small amounts of capital, they have considerable potential for generating income and employment. The Ministry of Health and the Environment keeps a close eye on such vendors. Street
food vending is regulated by Health Services (Food Hygiene) Regulations, 1969. But who or what has catalysed this foodie revolution in Barbados and beyond? Two big components of this are TV and social media. Through their television shows, celebrity chefs such as Anthony Bourdain (CNN), Guy Fieri (Food Network) and Ainsley Harriott (BBC) emerged as major influencers because of their ability to document unique food spots and destinations worldwide. Added to these influencers, every traveller today has the ability to digitally share their culinary experiences with friends and strangers around the world, creating a web of content filled with unique food and beverage (F&B) experiences. Rising exponentially is the number of consumers sharing F&B-themed media content across every imaginable digital platform to promote their travel encounters. Instagram, for example, displayed 194 million photos for the #food and 103 million for #foodporn in October 2016, up from 176 and 90 million photos only four months earlier in June. Avid foodies today are as a result more compelled to explore neighbourhoods beyond the typically advertised restaurants. Likewise, contemporary tourists are now likely to travel farther away from their hotels for a memorable meal, just
like they’re more interested and willing to inquire about the process behind the meal’s production from farm to table. For them, the more unique the culinary experience, the more memorable the travel and destination experience. Across the globe, some of the best and most authentic local dishes have long been cooked right on the street, and now these offerings have diversified to offer fusions and cosmopolitan dishes. Our own Cuz’s Fish Shack, for instance, tucked in the Pebbles Beach car park and flanked by the Hilton Resort and Radisson Blu hotels, was listed by Newsweek magazine in 2012 as one of the 101 “best places” in which to eat around the world. Yet Cuz, like many of our other dining treasures on the island, doesn’t get the same level of integration with the Barbados Food and Rum Festival (formerly Food, Wine and Rum) when compared to Barbados’ formal chefs and establishments. Over the last decade, travel destinations around the world have increasingly included their unique casual cuisine offerings as part of an overall campaign to attract visitors. This strategy is primarily because of food’s ability to connect travellers directly with the local, social pulse and cultural setting. Skift, the world’s largest global travel industry intelligence platform, conducted a survey among over 2,000 Americans who were asked: “You’re
going on vacation, which ‘foodie tourist’ experience MOST reflects your identity when travelling?” Thirty-two percent of the respondents identified with gastropub cuisine (bar food, usually consisting of local ingredients), followed by food markets (21%) and “Trendy, Creative and Experimental” (14%). “Vegetarian and Vegan” (9%) was the only category ranked lower than traditional segments, such as fine dining (13%) and wine tours (12%). In its 2012 Global Report on Food Tourism, the World Tourism Organization (WTO) outlined that the relationship between food and tourism can help to brand and market destinations, as well as support the local culture that is appealing to tourists. The report said in part: “Food experiences can also stimulate local development, because food tourism is high yield tourism that can extend the tourist season and diversify rural economies. “Food can contribute to regional attractiveness, sustain the local environment and cultural heritage and strengthen local identities and sense of community.” More commonly than before, destinations are facilitating new culinary experiences for a more diverse and discernible audience of food and beverage tourists to meet the growing demand for more authentic, unique and memorable travel experiences around food. Here in Barbados, there are unique dining experiences to be had at
any of our popular food places such as Granny’s, Mapp’s, Chicken Rita’s, Souse Factory, Pinkstar, Hot Legendary Fishcakes, Lemon Arbor, Martin’s Bay, The Golden Anchor, Hammies and many, many others. There are a number of highly-rated casual street food options that Bajans and visitors alike floc`k to, especially on weekends, that appear on Trip Advisor, the independent, usergenerated review website, with comments such as “imaginative”, “unique” and “diverse”. The weekly Martin’s Bay lime on Thursdays, the Oistins Friday night lime, Baxters Road are just a few which have been featured on Trip Advisor. The number of travellers who pass through Pug’s, which is conveniently located right across from the airport’s entrance, shows just how many tourists want that one last bite of Bajan street cuisine before they leave our shores. Bajan street food vendors give the world a taste of authentic Bajan cooking – and as these liming spots and dishes continue to grow and remain popular not only with Bajans, but also with tourists, perhaps the tourism authorities may want to take a look at how they too could be included in the Food & Rum Festival, or maybe even consider introducing an annual “Street Food Festival”.
Marshall is a naturalist Dandr Ariana you can tell by looking! As a black woman in her late 20s, she unabashedly shows off her natural hair and her complexion boasts her skin’s radiance, which she proudly sports free of any make-up. Everything she does, including her vegan lifestyle, is all about staying “true
By Sherie Holder-Olutayo
to herself”, while promoting the earth and nature in all its bounty. As a quintessential naturalist, you can easily understand why she’s so passionate about environmental preservation and making Barbados and the wider region bastions of renewable energy and sustainability. In fact, getting Barbados to be
a hub of renewable energy and energy independence has been a goal of this young scientist and university lecturer since returning to the island three years ago. For Ariana, this push for energy sustainability isn’t some quest that she just blithely attached herself to. It is the embodiment of everything she is and believes in and because of that, she is determined to get the wider Barbadian populace and those in the region to understand the importance of this quest. “When I was in college at the University of Kentucky (Louisville) and I would come home (to Barbados) and go to the beach, I would see the changes,” she said of the beach erosion. “Then I would listen to people on the beach say this is something different from what we normally see, and just seeing the landscape
with (Barbadian) governmental organisations whenever she came home, in an effort to find out what was going on with the environment and how she could lend assistance. “After I finished my undergraduate studies, I wanted to come back home to continue my studies, but there were no scholarships here,” she said. “Then I heard of Florida Agricultural and Mechanical University (FAMU) and they had a lot of scholarships. In particular they had received a grant from the National Oceanic and Atmospheric Administration, to bring more African-American scientists
change, I thought it was something I would want to study so I could help reverse the trend.” And study she did. All during her years in academia where she majored in chemistry, the seeds were being planted in Ariana and cultivated by some of her university professors. Along with her academic work, she maintained contacts
through the pipeline to work for the federal government. “I applied there and received a full scholarship. It was in that environment
Dr. Ariana Marshall
where I started to understand how important science was to communities.” That increased understanding and awareness on environmental issues would dictate the direction that Adriana would ultimately take in her postgraduate studies and eventually her course in life. That, coupled with some teaching stints which further deepened her love for imparting knowledge to students, would become a future career option for her. “I had an advisor who knew that I was from the Caribbean and I was concerned about what was going on, so he helped me to develop a research project that could be applicable to Barbados, but was focused on a rural county in Florida, studying how they adjusted to hurricanes and
climate change,” she recalls. “It was basically looking at how their construction trends changed after hurricanes and whether people became more conservative in their building procedures.
“I was doing everything to eventually contribute to Barbados,” she said. “My research project made me see that I could contribute to changing the construction standards for Barbados. But having that focus on Barbados doesn’t mean what I’m doing is just for Barbados. All small islands are dealing with the same issue. It’s applicable to the region andit’s also applicable to rural counties in Florida.” The research project also made her aware that she didn’t have to make a locational choice to work in the US or Barbados, but that her work could serve dual purposes. Which is what she ultimately did. After completing her PhD in 2012 in Environmental Science, Ariana got a job teaching as an on-line adjunct faculty for the American Public University in West Virginia, which gave her the flexibility to return to Barbados to explore opportunities in the alternative energy sector. “The on-line teaching opportunity came first before I decided to move home. I knew it would allow me to have a job that I could explore what’s happening in Barbados; even if I didn’t get an opportunity to work in Barbados, I could still be here and see what’s going on. That’s basically why I made the move back in 2013.” As an on-line faculty member, she teaches Introduction to Environmental Science, Ocean Science, Green Tech and Green Infrastructure and Energy Resources. Upon her return to Barbados, Ariana reached out to the Future Centre Trust and was able to work with them for two years directing their Green Business Barbados initiative which certified 20 businesses. It was through her work with that project that she noticed a distant gap between people who could afford renewable energy and those who couldn’t. In 2014, she and four partners, Jerome Wood, Michael Gittens, Dr. Maya Trotz and
Jason Green, formed a non-profit company called the Caribbean Sustainability Collective. It is her hope that through greater awareness using social media, education and other creative forms of engagement, she can help to make people aware of the benefits of sustainability. Ariana hopes this approach will help people make economic decisions about alternative energy sources, causing it to blossom into the mass movement that she feels it needs to be. “I hear people say it’s about education, but it’s about literacy,” she says emphatically. “People can have all the information in the world, but if people don’t know how to use it, or look at their light bill and evaluate whether it’s the light bulb, or their electricity habits causing it, all of that is literacy.” To bring that awareness to the public, both young and old, she has launched a campaign called the Better Caribbean programme. It’s a learning lab and it’s her goal to raise enough funds to develop a mobile classroom where they can do competitions and challenges, while educating the public on affordable options in alternative energy. “That to me is where we can empower people with making decisions in the future. You might not have the money to spend, but you could possibly look at investing the money you spend on other things into alternative energy,” she adds. “That comes when people value these changes and they don’t see it as an environmental thing, or a conservation thing and also where we break down the barrier of thinking that environmental actions are not affordable.” Since Barbados is an island subject to the vagaries of climate change each year, Ariana says it’s imperative that businesses and consumers be equipped with the resources to make the necessary investments in alternative energy.
“When there is a hurricane, or strong storm and you have some type of issue with infrastructure, what is the cost of not doing business because we don’t have enough renewable energy systems?”, she asked. “Then there’s the panic which will ensue that has to be managed, and how do we make our communities function in a more resilient way so that people wouldn’t be in desperation mode like we are cut off from the rest of the world and we can’t survive. This is a reality for islands when we face climate change, because it has been proven that these storms will become more intense. So we have more at stake in getting alternative energy right.” While Ariana is of the view that the country is moving in the right direction, she says it’s not moving fast enough to get systems in place because everyone is not engaged in the discussion. “Renewable energy is not new to Barbados,” she adds. “We have small models of sustainability in our history. But it’s important that Barbados maintains the lead in alternative energy that it has had in the region over the years.” With the issue of climate change and more powerful storms becoming a reality each year, Ariana says the island and the wider Caribbean region can no longer be complacent in their approach to adapting to alternative energy. “You can argue all day about what causes sea levels to rise, but the fact that you have the Inter-American Development Bank, the World Bank and these major financial institutions seeing that there’s enough science that places like Barbados and other islands need to have money invested in their infrastructure because of sea level rise, that’s enough evidence,” she said. “We need to look at our resilience as an island. We’re not going to have control about where world wars happen, but we do have control about decisions we make within our borders. That’s why it’s important that we stick to and maintain this green economy course.”
Beyond Cash, Rasheed Griffith exAMINES the emergence of Digital Currency
t’s the final day of a conference about productivity and the Barbadian economy, sponsored by the Central Bank and everyone is worn out from days of economic presentations. The penultimate presenter just finished her explanation of the models she has been mulling over for months. The moderator briskly announces: “Are there any questions from the audience?” There is a stretched pause, accenting the aroma of the coffee that the conference participants had grabbed at the last break to help them make it through the day. And then a question comes from the front of the room - where Dr DeLisle Worrell, Governor of the Central Bank, typically sits at these conferences: “Why can’t I pay my barber with my smartphone?” A curious question from a man who has been bald for over a decade. On the surface, Dr. Worrell’s intervention might have seemed like a throw away, even amusing comment about the lack of payment options, but he was subtly raising a much broader macroeconomic issue…. how Barbados’ cash-focused approach to business has negative implications for the development of the business/commercial sector.
THE NEGATIVE TRAITS A hot topic in Barbados in recent years has been entrepreneurship and one of the main reasons for the stagnation of growth of micro and small businesses (in Barbados) is the cash-centric nature of consumption. Airbnb, Etsy and Uber are three standout examples of highly successful modern business ventures where cash is not passed. On the surface, these are dramatically different businesses. Airbnb offers an innovative solution to booking accommodation and Uber offers a new solution to private transport logistics. Etsy offers craftsmen of unique products, a place to sell them. But economically speaking, these companies do the exact same thing: they reduce transaction costs. Founded in 2009, Uber now has a valuation of $66 billion (USD); Airbnb, founded in 2008, has a valuation of around $30 billion (USD). The reality is, though, that it would be anomalous, near impossible, for such a company to start and grow effectively in this region. While Airbnb is available in Barbados, the business is done on an individual-toindividual basis, but no such company exists. One of the fundamental problems which prevent the serious consideration of digital currency is the misconception in the Caribbean that physical cash is the ultimate safe asset - cheap to produce and handle. In actuality, cash is one of the most expensive assets that economies are forced to maintain. Currency notes and coins have to be printed and minted. Small countries typically outsource this function to companies in North America and/or the United Kingdom. Small countries do this because, among other reasons, it is not cost effective to maintain and secure an infrequently used local mint. Barbados pays an outside currency producer to fashion the country’s currency. And of course, this has a cost attached. Once the currency is printed and minted it then has to be shipped to Barbados. This means that shipment logistics have to factor into the cost of the currency. When the currency arrives in the country it has to be transported to its nesting location, and then has to be continually secured in this location. Next comes local distribution to banks. The currency notes and coins have to be delivered with security officers (always more than one) to commercial banks, which then have to employ persons. Banks then have to employ persons (always more than one) to account for the currency delivery. Some of the currency has to be delivered to the ATMs of said banks (again more security officers). All of these processes have costs attached. Transaction Cost Economics (TCE) is surprisingly undervalued in business and economics discussions. TCE is primarily based on the work of two Nobel honorees — Ronald Cease and Oliver Williamson. In TCE, the starting point of economic analysis is the
individual transaction. The main question that TCE attempts to answer is: Why are some transactions performed within firms, rather than in the open market? Standard economic theory suggests that the market is the most efficient mode of economic exchange. So why the inherent disconnect? The answer, not surprisingly, is that sometimes markets are not efficient and the costs associated with exchanging goods are sometimes too high on the open market. It cannot be stressed enough that economic costs are not as narrow as accounting costs that deal specifically with money. So then, if someone wanted to stay at another person’s home on a trip to Kenya, that person would need to solve several transaction cost problems: triangulation (find a person to approve such a stay at their home), transfer (find a way to get money to that person securely and efficiently) and trust (why would someone trust you to pay them, or why would you trust someone to actually open their home to you upon payment.) Airbnb, Uber and Etsy solve these problems and so does Amazon for most of its products. Indeed, there have been some notable shifts in the landscape of e-commerce in Barbados. Banks offer some of their services on-line - account management, limited transfers, bill payments. Many hotels on the island can be booked via websites such as booking. com (although this money typically stays outside of the economy). And it is also the case that you can purchase regional airline travel on-line. These small shifts, however, are merely marginal and do not represent any material change for Caribbean small businesses. Credit card penetration in Barbados is only around 33%, with lower numbers in other Caribbean countries. The payment services mentioned above all require credit card (or Visa/Mastercard enabled debit cards). So it would seem that Barbadians still need a way to actually consume e-commerce. And equally important, Barbadian small businesses need a way to receive payment on-line. In emerging markets, such as Barbados, these two problems are intertwined. Micro and Small business need bank accounts for e-commerce/m-commerce, but for banks there is too much cash flowing in the economy which increases risk. Banks cannot easily reduce cash use because most people cannot qualify for a chequing account. This is the marketdependence dilemma of cash. There is currently no solution to the electronic transfer of payments problem. That is why for countries that have cash-centric economies, it is not possible for e-commerce/ m-commerce businesses to function effectively. When the entire distribution process is dissected, the inner world of cash currency management is antithetical to any notions of ‘cheapness’. We have been groomed into an understanding of cash as ‘King’ - how shocking to discover that the emperor, in fact, wears no clothes.
Central Bank and Digital Currency But back to the Governor’s question. “Why can’t I pay my barber with my smartphone?” This question then becomes synonymous with another question: “Why have banks not offered more payment options to micro business and individuals?”. Perhaps the way to fundamentally solve this dilemma is for the Central Bank of Barbados to issue its own digital cash. As radical as this may sound, it is not that different from the digital system already employed by the Central Bank. In fact, Dr Simon Johnson, a Professor of Entrepreneurship at the MIT Sloan School of Management, is a vocal proponent of this potential solution. In a 2016 lecture delivered in Barbados, Johnson suggested that central banks should move more decisively into the business of issuing digital cash. “A central bank-issued digital currency would provide the essential safe harbor for transactions balances – money that is not subject to runs”, he said. He also introduced another suggestion for discussion the bitcoin technology, which is a fully encrypted private currency. “I am convinced that payment systems are changing. ….. The existing systems run by commercial banks primarily with a way through the central bank is under a lot of competitive pressure from alternative ways of making payments, including from bitcoin commodity-like currencies and similar characteristics”. The closest that Barbados has come to the bitcoin technology is through Bitt Inc. Bitt Inc, is a startup business in Barbados which claims to have a solution to the cash dilemma. In 2009 a new technology was launched by an anonymous group of people collectively known as Satoshi Nakamoto. This technology was called Bitcoin by its creators and is touted as a new method for making payments on the Internet without the need for banks to act as third parties to the transactions. The Bitcoin technology allows people to make payments on-line, without needing a bank account or credit card. The potential of bitcoin inspired many small entrepreneurs to build businesses around it. Thus in 2013 Bitt Inc. was formed in Barbados, cleverly, but confusing to many, who took a name that was very close to the technology bitcoin and confused the two. It is important to know that Bitt Inc. did not create bitcoin. The company uses the technology of bitcoin to solve e-commerce payment problems in Barbados and the Caribbean. Bitt Inc. the local company, is growing locally and regionally and several businesses have joined on, but for now, the bitcoin technology is unlikely to solve the payments dilemma. Bit coin based companies still have to rely on commercial banks in order to provide
customers with a way to deposit money in exchange for bitcoin, or money tokens built with bitcoin. Secondly, bitcoin companies would need to collect cash themselves from customers and exchange it for an equivalent amount of bitcoin, or money tokens. In the first instance such companies are merely adding a layer of abstraction - with limited reach - onto the banking system. People without bank accounts still cannot use it. And in the second instance cash is still being used, as each money token has to correspond to an existing value of physical cash, perpetuating risk still further. Commercial banks do not give accounts to every person or business that asks to open an account. These banks have to perform know-your-customer checks on applicants. There have been some strides made where more and more Barbadians are shopping on-line, banking on-line, paying utility bills on-line, buying airline tickets and booking hotel rooms on-line. More local businesses however need to be bolder and get in the e-commerce zone. Entrepreneurship and e-commerce can be powerful, but not without a solution to the payments dilemma discussed. Digital payments is a key component in unlocking the future of e-commerce in Barbados and without it, a successful future may never be realised. It is a vicious cycle - a consuming ouroboros. More cash transactions, retail or otherwise, means more risk liabilities for the commercial banks, which means more stringent requirements for account openings. We find ourselves with a causality dilemma regarding cash. To commercial banks, cash represents transactions that cannot be assessed for criminal activity. One way to counter this problem is to make it more conducive for more companies and individuals to use electronic payment methods (debit card, for example) for their everyday retail transactions. However, commercial banks cannot readily open accounts for unbanked persons because there is little guarantee that these persons will not use the banking service for illicit activity. Cash provides no ‘paper trail’ and as such, no proof of financial trustworthiness. Digital cash issued by the Central Bank would allow Barbadians to have digital cash without (necessarily) needing a commercial bank account: money can be deposited to the Central Bank (through facilitators). And for those who have accounts at commercial banks, the digital cash accounts could be linked to them. Instead of withdrawing physical cash from an ATM, we should be able to withdraw digital cash to a smartphone wallet. It is at this point that Dr. Worrell would finally be able to pay for his “haircut” via smartphone.
Professor The Hon. Edward Kamau Brathwaite The Poet and His Place in Barbadian Culture Sir Winston Scott Memorial Lecture - 1987
By Dr. DeLisle Worrell
It has to be admitted that for a long time Barbados underestimated the enormous value of its salubrious climate. We figured that the constant sunshine and balmy breezes combined with warm seas and golden sands were perfect just for tourism. We were right. Tourism quickly dethroned “King Sugar”, as the cane sugar industry was called, and very significantly fuelled the island’s development. But we are coming to realise that along with tourism, our abundant sunshine and wind constitute a resource that promises far more prosperity for this island and its people. Just as swift, affordable, long distance travel in the 1960s favoured the growth and development of the tourist industry, very reliable and detailed (scientific) studies are reassuring us that with the right combination of solar and wind power, the country can supply 100 percent of its electricity needs. All that is needed to compensate for the variable nature of these power sources is a suitable storage facility. Professor Olav Hohmeyer has simulated a suitable combination of solar, wind and storage backed up by a small amount of locally produced biofuels in a paper which he delivered in Barbados in November 2014. Achieving 100 percent of electricity generation through renewables would save all the foreign exchange that is used to buy fuel to generate electricity. If in addition, all transport were converted to run on electricity that would completely eliminate Barbados’ import fuel bill, a saving of 15 to 20 percent of all expenditure on imports. A very promising start has been made in this direction by Megapower, a company which markets electric vehicles. Their efforts have put close to 200 purely electric vehicles on our roads and provide conveniently located charging stations and services for electric cars. So far, there have been no similar inroads with respect to public transport. All the technologies needed for the implementation of the 100 percent strategy are well established and in common use, with the sole exception of public transport, which is growing rapidly in China, but not elsewhere. With the right incentives, rapid progress may be made in the direction of energy
independence, given the impressive start that has been made thanks to Barbadian pioneers in the field of solar energy, the full commitment of the Barbados Light & Power Company, and the leadership and coordination of the Barbados Renewable Energy Association (BREA), whose membership includes the power company, Government agencies, service providers and private individuals. The impact of the foreign exchange savings on the economy would add several percentage points to the country’s rate of growth. Because fossil fuels are so ubiquitous in domestic production and consumption, the multiplier effects of savings would be especially powerful. In addition, there is already a nascent industry in the installation and servicing of renewable energy systems and Barbados’ efforts are attracting interest that could lead to locally grown innovations in adapting and improving the efficiency of the technologies. This all creates jobs and adds to the national output and income. Moreover, there is intense international interest in the implementation of renewable energy strategies and Barbados has already attracted funding from the InterAmerican Development Bank and other official sources, in support of energy efficiency and renewable energy strategies. Further capital inflows, both public and private, can be expected as the renewable energy strategy gains momentum. When these possibilities are taken all together, the transformative potential of the renewable energy sector becomes apparent. The long term potential growth rate of the economy could double, from about 2-3 percent per year, to 5-6 percent per year. At that rate, the real GDP of
the country could double in little more than a decade, and our future prosperity would be assured. Renewable energy offers Barbadians the best of all worlds: we would substitute for imports and save foreign exchange which could be diverted to other uses; renewables would be a major foreign exchange sector, along with tourism and international business (and rum and other exports), helping to diversify our foreign exchange activities; renewables offer the prospect of creating new jobs and developing new skills; and by showing leadership in this area, Barbados stands to attract foreign investment, bringing with it the transfer of knowledge about the industry. Thanks to the march of technology, we have uncovered a latent natural resource of immense promise, whose realisation is now within our reach. It is interesting to note that at one time wind power provided most of the energy to grind our sugar cane and later on windmills pumped water for irrigation in many parts of the island. The switch to electricity as the main source of power for agriculture, industry and household uses saw the end of windmill usage in Barbados.
The development of modern, cost effective wind turbines now means that Barbados can once again tap into its abundant wind resource. BREA, Government, the University of the West Indies (UWI) and the private sector are collaborating in the alternative energy strategy, and there is support for the strategy from the international community. The sun is certainly set to shine brightly as we move further along into the 21st century.
ILLUSTRATION OF AVERAGE WIND SPEED IN BARBADOS
Barbados has an exceptional wind resource, especially on its more rural, exposed east coast. In fact it has a wind resource that is better than many wind farm locations in Europe, even offshore locations. This has led to the whole island being described by some as effectively ‘an offshore wind platform’ sitting in the Atlantic Ocean being cooled by the constant trade winds. Utility-scale wind turbines, the large threebladed multi-megawatt wind turbines, are the workhorse of the wind energy industry. Just one of these wind turbines is able to power well over 1000 homes. They are, without doubt, the cheapest way of generating electricity in Barbados and installing them would have the biggest impact on reducing our energy costs. Wind energy would also help to improve the island’s energy security, reduce our impact on the environment and, if the investment/ regulatory environment is well structured, help keep hard-earned foreign exchange in the country, thereby strengthening our economy for future generations. Levelised Cost of Energy (LCOE) is a way of comparing the economic value of different generation technologies. It is calculated by dividing the total cost involved with a project by the total amount of energy it produces in its lifetime. LCOE units are dollars per kilowatthour ($/kWh) – the same as is found on our Barbados Light & Power (BL&P) bills. (Figure 1 compares the ranges of LCOE for different technologies in Barbados. Wind is cheaper than the Fuel Clause Adjustment price has ever been.) Barbados will soon boast its first wind farm. A 10 megawatt (MW) wind farm,
comprising five to seven wind turbines, is planned for Lamberts East in St Lucy. This wind farm will generate over 30 million kWh of clean, cheap and indigenous energy each year, enough energy to power over 10 000 homes – or to put it another way, all the homes in St Lucy, St Peter, St Andrew and St Joseph combined. It will mean that the island will no longer emit over 25 000 tonnes of greenhouse gases each year, thereby helping to combat the ever more apparent implications of climate change. This is the same wind farm that was planned since 2007. It is estimated that if the Lamberts wind farm had been built as planned in 2007, it would have generated around 300 gigawatt hours (GWh) of electricity by now, thus preventing the emission of over 260 000 tonnes of carbon dioxide equivalent (CO2e), into the atmosphere and paying for itself in avoided costs after less than seven years, thereby effectively producing electricity for free since 2014, until well into the next decade. Some say that we should wait to see what other technologies come along. Whilst we’re waiting for this to happen, however, onshore wind could be saving Barbados huge amounts of foreign exchange each year. And if/when a cheaper alternative does come along, then the wind turbines can be phased out.
EXCEPTIONAL LOCATIONS When talking about wind turbines, it’s important to recognise that a small increase in a site’s average wind speed, equates to a much larger increase in the energy yield at that site. The higher wind speed locations in Barbados are the farming areas in St. Lucy, extending down above the boundary between St. Andrew and St. Peter, the area around Cattlewash and Barclay’s Park in St. Andrew, and farmland above Hackleton’s Cliff in St. John and St. Joseph, stretching down and round into St. Philip and Christ Church. These are the exceptional wind locations, and if they were anywhere else in the world, there would most likely be wind developers scrambling to develop these sites. Contrary to popular belief, there is ample room
for wind turbines to be installed in Barbados. Considering the internationally recognised limits for the recommended distances of wind turbines from residential dwellings, there is room available for generating around 400MW of wind on the island. However, the results of energy system modelling suggest that the island needs less than 200MW of wind in its energy mix, in order to reach a 100% renewable powered electricity system. Around the globe, wind energy has its detractors, with a whole range of myths and misconceptions being promulgated. Putting these myths to one side, there is no escaping the fact that wind turbines do have social, technical and environmental concerns such as shadow flicker, noise, grid stability and impact on local wildlife. However, ensuring the selection of quality wind turbines and using modern wind farm design principles, developed and fine-tuned over the last three decades. Engineers all over the world regularly overcome these issues common to the installation of wind turbines.
THE COMMUNITY KEY This leaves just one barrier to installing wind turbines, and that is the visual impact that they have on our landscape. One way to counteract this issue is to encourage local community involvement in a wind project from the very beginning, and give local people the opportunity to benefit from projects. A community wind farm is when one or more wind turbines are owned and operated by the local community. These are normally large-scale wind turbines owned by residents, schools, churches, businesses and farmers from the surrounding area. The significant characteristic of these projects is that local residents have a direct financial stake in the project, which goes beyond land lease payments and tax revenues. The operations of community wind projects are managed by its members and therefore tend to result in enhanced social, environmental and economic benefits to the community. Community wind projects mean that the general public end up not only accepting wind turbines, but endorsing them as well.
PIECES OF JIGSAW
For Barbados to truly take advantage of its wind resource there is a need for an overarching wind energy strategy that brings together all the pieces of the jigsaw, including: • A detailed measurement of the island’s wind resource, using high quality equipment that can convince banks of a site’s expected energy yield. • Zones/areas of farmland that are specifically set aside for wind turbine deployment. • An investment environment that is attractive, supports local investment and passes on savings to the consumer. • Benefits of some form to those living close to wind turbines. • Awareness of the importance that the utility plays in distributing and balancing electricity generated from wind energy, and rewarding key players for their involvement. Finally, there is a need to create a detailed wind strategy whereby selected wind sites are developed as one, thereby reducing duplication of resources and enabling optimum cost savings for the island. The creation of a wind energy stakeholder group, involving local communities, will help ensure the success of such a strategy and provide support at every level for the development of the island’s wind resource, which is plentiful.
SKY GOLD By Hallam Hope
BARBADOS is positioned to become a centre of excellence for sustainable energy development in the Caribbean. Geographically, the island is well-placed to generate energy from the sun and wind, given the available wind speeds and the more than adequate extent of hours of sun. Havng a regulator that has been willing to understand the need to provide investment opportunities, based on its legislation and a perception of Governmentâ€™s objectives is another plus. Added to that, the island possesses the engineering, legal and policy experience which could be applied to catapult the sector to a point
where ordinary citizens benefit either as investors or from reduced electricity bills and to where cheaper electricity could drive the economy, while making a substantial dent in its foreign exchange seepages for crude oil imports. Barbadians are keen to understand how they can reduce their electricity bills, and this remains the case even with low oil prices which have been dancing up and down between $43 (USD) a barrel and $52 (USD) a barrel since April. One system that Barbadian householders seem to be embracing is the photovoltaic system. A photovoltaic system, or solar PV power system, or PV system, covers the conversion of light into electricity, using semiconducting materials that exhibit the photovoltaic effect. A typical photovoltaic system employs solar panels, each comprising a number of solar cells, which generate electrical power. Over the last few years, affordable photovoltaic systems have been introduced to Barbadian households and it is possible to buy a system that can supply the entire electricity needs of a household, reducing average monthly payments to the Barbados Light & Power (BL&P) and in some cases eliminating them. A basic system with batteries, a few panels, a decent inverter and a battery charge controller which could provide back-up in times of electricity outages, keep communications up and running and provide lighting, is sold for around $10,000. Medium-size systems could be $40,000 and higher, depending on the daily electricity usage of the household. Larger systems for businesses could go up to $100,000 or more,
depending on the size of the business. The latter refers to a small business whose monthly bill would be about $500, or residences where the monthly bill is around $300 per month. While the upfront costs might seem prohibitive, Barbadians can obtain financing on terms that are affordable, from banks, credit unions and other financial institutions for the purchase of a system and can claim a rebate on their income tax for the money they paid. A photovoltaic system can come with a guarantee of as much as 20 years, but it will require periodic upgrades and sometimes even replacement of parts. There will also be maintenance costs and the cost of additional property insurance to ensure the system is covered in the event of disaster. Still, the expense of installing and maintaining a PV system and the benefits of having one net out. From the time a system becomes operational, the householder will have very little to pay for his monthly electricity bill, a few dollars or even zero and once the loan is fully repaid, the householder will be supplying his own electricity from the abundant sunshine. There is a caveat, however. The systems that middle income households can afford are linked into the BL&P grid. In the daylight hours they produce more electricity than they need and they sell the surplus to the BL&P. At night and on cloudy days, BL&P sells that surplus back to the household. There are more than a dozen commercial suppliers who can design systems so that, on average, those two amounts balance out. However, for the overall system to remain viable as more and more consumers install their own systems, each customer will have to pay BL&P some amount for providing this storage
capacity. But the power company is happy to receive this payment in kind, so households can aim to supply more than they buy back to break even. On a national level, interest and investment in photovoltaics is also on the rise. Eighteen months ago, bearish crude oil markets led to a sharp downturn in investment and an almost flat line in installations, but the Fair Trading Commission’s (FTC) decision to, among other rulings, de-link energy payments from the volatility of crude oil prices, has led to renewed investor confidence and investor demand for installations. The decision by the Fair Trading Commission, which became effective on June 20, 2016, provided fixed rates for solar and wind investments and removed the volatility of higher or lower oil prices. Consumers were also presented with a new opportunity to invest as selfgenerators of energy which they would sell back to the utility company, Barbados Light & Power, Co. at a fixed rate. The bedrock for potentially new investment was the decision by the Fair Trading Commission. Once the amended regulatory regime took effect , there were 300 new residential and business customers for Barbados Light & Power Co., bringing the total number to 1,500. Six years ago Dr Dean Springer, owner of Eastern Veterinary Clinic, St Phillip, would have a monthly electricity bill of $800. Today that bill has been slashed by $500 after he invested in a $35,000 system. According to Springer: “$500 a month in savings is a lot of money. I would now like to expand to a bigger system.” His five kilowatt system just off Six Roads, St. Phillip, has 20 panels to serve his home and clinic. “In the long term it will be a tremendous investment,” he said. Barbados Light and Power recently commissioned a 10- megawatt solar PV farm in Trents, St. Lucy that now provides electricity to residents of that parish and parts of St. Peter – some 7,700 households in total. The potential benefits to consumers
and the economy are lower electricity costs, a redudced need for crude oil imports and a healthier environment. All this would appear to be sweet news to the ears of a government faced with a basically single economic driver in the form of tourism and citizens concerned about what their wages and income can buy. In 2012, Government data indicated that crude oil imports accounted for 9.6 percent of Gross Domestic Product (GDP). This was a staggering figure with negative implications for the portion of the annual budget which could be injected into health, education and other services. There was good news from the Right Honourable Prime Minister Freundel Stuart when he addressed the Caribbean Sustainable Energy Independence conference, organised by BREA and the Central Bank of Barbados: “The Government’s vision is now one of Barbados becoming a 100 percent renewable energy island within the next 50 years, based on the use of indigenous local renewable energy sources,” he said. If the island can get its regulation, pricing, investment and policy on point , it could very well achieve Government’s goals faster than projected. While wind and energy are championed in the immediate term, the storage of energy generated by these technologies is absolutely critical given their intermittent nature. It is understood that Barbados Light & Power Co. Ltd., is considering the storage capacity for
intermittent energy generation. Other technology considerations are biomass and bio-fuels which are dependent on reliable feedstock. Natural gas is needed for cooking, but local production is on the decline while the cost of imported natural gas may be prohibitive. There is a strong case, therefore, to pursue alternative energy and the creation of a renewable energy island as an urgent economic and social policy consideration. While the reflection of crude oil prices on electricity bills, as well as the changes in gasoline prices and diesel for persons with cars and motor cycles have caught the ordinary citizen’s attention, there also appears to be an increasing appreciation of the new investment climate and what it means for every Barbadian. Outgoing President of the Barbados Renewable Energy Association, Aidan Rogers, in an interview with this publication, argued the new paradigm shift is for Barbadians to become investors in renewable energy. He has been undertaking research which leads him to the conclusion that there are opportunities for citizens to earn income monthly from investments, whereby financiers provide 100 percent loans. If Barbados can get it right, this services-based economy would have a more competitive product based on substantially lower energy costs. Wealth for the so-called ordinary citizen. A further attraction to investors. A shot in the arm for economic growth. A giant leap towards becoming energy independent and a centre of excellence for the world in renewable energy achievement.
Seychelles, officially known as the Republic of Seychelles is an archipelago and country in the Indian Ocean. The 115-island country, whose capital is Victoria, lies 1,500 kilometres (932 mi) east of mainland East Africa. With a population of roughly 92,000, it has the smallest population of any independent African state. Other nearby island countries and territories include Comoros, Mayotte, Madagascar, Reunion and Mauritius to the South.
IRATES, along with the high price of oil, have led the Republic of Seychelles to set a new trajectory towards 100 percent renewable energy. It is not an easy task, especially for a small island developing state, but while several countries are investing in renewable energy as a means of sustainable development, for Seychelles it is a whole lot more - it is a means of survival! In an interview with EI.bb while on a visit to Barbados, Seychelles’ Minister of Environment, Energy and Climate Change, the Honourable Didier Dogley, spoke candidly about his country’s plan to reach its goal. “Somali pirates were hijacking the large oil tankers in the Indian Ocean so the oil was not getting to us. Then, of course ship insurance went up and we had to pay for
protection for the ships to make the trip into our waters, and then oil prices jumped from 5 percent to 10 percent of our national budget in 2008. Suddenly we didn’t have money for education, healthcare and other important things,” he said. It was a situation so serious that the Seychelles Government, recognising the interlinkages of the environment, energy and climate change, assigned all three ministries to Dogley’s portfolio. The minister, in Barbados to attend the Barbados Renewable Energy Association and Central Bank of Barbados Conference, explained that the serious implications of climate change and the high cost of importing fossil fuels hit home in 2008 with former president James Michel, who began to prepare for a whirlwind transition from 100 percent fossil fuel consumption to 100 percent renewable energy. The Seychelles Energy Policy for 2010 - 2030 was developed and outlines a multi-pronged approach to achieving this goal with a range of several types of clean energy sources including wind, solar and wave energy. It is
intended to guide the archipelago of 115 islands towards reducing its consumption of fossil fuels by 15 percent by 2030. However, Seychelles is well on the way to meeting that target, as much as a decade early, says Dogley. “Seychelles has invested in eight wind turbines in the capital port-city of Victoria, which have resulted in at least $1 million (USD) in savings per year since 2012. “These eight turbines produce around 2.5 percent of our energy requirements, which translates to providing enough electricity to power 2,000 homes.” With an abundance of sunshine on the islands, solar energy is also a viable option. The government has invested in solar energy farms, and has encouraged others to do the same. Yet, Seychelles is not stopping there. The country is also in the process of investigating the harvesting of energy from ocean waves as another viable option. Power generated from the submerged buoys will be delivered to the shore through cables, and can be exported to the grid or used for desalination plants. Dogley explained that before the country started construction for the Port Victoria Wind Farm Project, they measured wind speed for an entire year and the same will be done
with wave energy. “We have a rough road map on hoble, but we still need to work on it. There are many other components that you have to look at when you’re trying to make your transformation to renewable energy successful.” In order to propel the country towards 100 percent renewable energy, acceptance and interest from the community is paramount, the minister said, so the government has introduced a renewable energy rebate scheme to encourage their citizens to invest in solar photovoltaic panels for residential and commercial use. These investments have become increasingly more attractive in the last two years since the Government introduced a tax-free policy on any renewable energy materials. For lower income families, a programme entitled the Democratisation of Renewable Energy has been implemented, which allows them to purchase photovoltaic
systems at a reduced cost through government subsidies. Government will also give underprivileged households 300 units of electricity per month through the solar farm, which will be free of charge instead of giving them tokens for electricity. The photovoltaic systems will be placed on roofs and where this is not possible, the solar farms will be used. Seychelles has implemented several fiscal and marketing initiatives to assist in the renewable energy transition, but although the country has come a considerable way, more still needs to be accomplished. Obstacles such as the inability of critical infrastructure, including the national electricity power grid, to cope with the upsurge of renewable energy still have to be addressed. At the 22nd Conference of the Parties in Marrakesh, Morocco, the United Nations Framework Convention on Climate Change (UNFCCC) advised Seychelles that it needed a more ambitious climate action plan. The Government recognises that additional studies to determine the ratio of the types of
renewable energy to be used are needed to feed into a more concrete action plan, as well as capacity building among the local population. According to Dogley, “If we get the money from NAMA (Nationally Appropriate Mitigation Action) we can do more studies. We are looking to become 100 percent renewable energy dependent by 2035, if not by 2040 and that’s still 10 years ahead of when the UNFCCC has asked countries to try to transition by.” The Paris Agreement, signed in 2015, has marked the end of the fossil fuel era. Several countries are beginning to recognise the shift and are putting measures in place. However, the Seychelles’ minister warns that while countries should be excited for foreign companies to come and develop the renewable energy industry, they should be mindful that under these scenarios the profits and expertise will be exported. For him, there must be a balance between foreign and local companies. He advised
countries interested in following the Seychelles model on the road to 100 percent renewable energy, to empower their people and build capacity, thereby reducing the leakage of foreign exchange. “Renewable energy is one of the greatest investments a country can have. To ignore the transition to a green economy is doing a disservice to your country. Technologically it is possible and funds exist to help. For us, it was not even a question about if to do it, it was simply a matter of deciding how to,” said Dogley.
N a tour with visitors around the 166 square miles that is Barbados, there are looks of amazement on their faces as they note with disbelief the number of houses with solar water heaters on their roofs. “This is simply unbelieveable!” “How is it that solar water heating here has been so successful?” “How can we replicate this at home?” Yes! Barbados can be proud – it is quite a showpiece when it comes to solar water heating. Comments and questions are fired rapidly as the guests on the bus marvel at the physical representation of the solar water heating industry on the island. For many of them, it is a means of developing a green economy, but for Barbados, there is much more to the story which has enthralled many globally. One writer from the Huffington Post, Richard Schiffman, who visited Barbados in 2014 was so impressed that he wrote in an article about Barbados’ solar environment upon his return to the US. He said in part: “…the US remains far from achieving energy
independence. Because energy independence is not just temporarily producing enough of our own fossil fuels to get by. Real energy independence is freeing ourselves from the addiction to the fossil fuels which are destroying our environment and leaving our economy a hostage to events beyond our borders. “This is the message that I was hearing when I visited Barbados last month. I was surprised to see solar panels and water heaters sprouting from government buildings, hospitals, police stations, bus shelters as well as thousands of gaily colored private homes throughout the Caribbean island. I should not have been surprised. Conventional electricity prices in the Caribbean are more than four times what we pay in the US, due in part to high shipping costs for the Venezuelan crude that fuels the region’s power plants. “For Barbadians, the cost savings from solar are becoming too obvious to miss. A thermal water heater, which retails for $2,300, pays for itself in lower electricity bills in under two years.” At the time, the American author summed up Barbados’ position very well! Long before climate change became the buzz phrase that it is today, Barbados sought to pursue alternative energy to reduce a high fuel importation bill. Other Caribbean countries followed suit and have recognised the need to move towards low-carbon, climate-resilient economies, as set out in the Caribbean Community (CARICOM) implementation plan for climate change-resilient development. Along with air conditioning, refrigeration and transportation, water heating is one of the most energy-intensive domestic activities, using roughly two (2) megawatt-hours (MWh) of energy per household per year. And as the Huffington Post writer described: “the island has capitalised on this by developing a solar water heating industry that has become a global model.”
Barbados so successful?” That answer boils down to three main factors. First, the dedication and passion of the What started as a means of cutting high fuel early pioneers led to the implementation import bills in the 1970s has developed into an admirable industry. At that time, Barbados of effective marketing strategies. The emergence of a champion in James relied heavily on imported fossil fuels, which Husbands translated passion into provided up to 95 percent of the island’s marketing, thereby making the product energy needs. When oil prices increased attractive to average Barbadians. three-fold within a year, the stage was set for The second factor was financial and Barbados to take an alternative route. regulatory support. The Government of It began with the ingenuity of a few, Barbados offered a series of incentives to including Canon Andrew Hatch who support the fledgling industry, and Barbados’ developed a solar water heater from an old oil drum and affixed it to the roof of his success can largely be attributed to these measures. The 1974 Fiscal Incentives Act church. This simple yet creative innovation introduced a tax exemption for the materials changed minds and the physical and economic landscape in Barbados. With this used to produce solar water heaters thereby indigenous knowledge and the abundance saving 20 percent of their costs. of sunshine on the island, James Husbands Government also levied a 30 percent tax on electric water heaters, significantly paired his business sense, founded Solar increasing their price to make solar water Dynamics and imported the now familiar heaters more attractive. At this time, the first model from Israel. oil crisis was taking place and this measure It was the first solar water heating company was a clear indication of Barbados’ path in Barbados and it was the motivation the moving forward. Government needed. The late J.M.G.M In 1977, The Errol Barrow Administration “Tom” Adams, who was Prime Minister mandated the installation of solar water at the time, was interested in the new heaters for new government housing technology and was very impressed after developments. By the 1980s, the industry Solar Dynamics installed one on his home. Adams’ annual gas consumption dropped by peaked when the 1980 Homeowner Tax Benefit was introduced, which resulted in a staggering 70% and from there, the solar solar water heater installations, increasing water heating industry in Barbados took off. from around 900 per year in 1980 to The industry, however, did not grow 2800 per year in 1989. overnight. Even with circumstances being favourable due to the high costs attached to In this incentive, the full cost of a solar water heater installation was tax-deductible imported fossil fuels and the abundance of sunshine available, there was no guarantee up to a maximum of $3,500. The that the solar water heating industry would incentive was stopped in 1992 which caused the industry to shrink, but was be successful. reinstated in 1996. A significant barrier to There were several challenges and various market penetration was the high upfront policies and programmes that needed to cost, which was combatted through the be implemented in order to drive success. offering of support by financial institutions. Initially, there was difficulty accessing startFurthermore, Government incentives, up capital, building consumer awareness, opened the market for competition and sustaining regulatory support and the emergence of new companies such as combatting the high upfront costs. Aquasol and SunPower Ltd. With these challenges, and similar Finally, there was widespread commercial circumstances in other Caribbean islands, acceptance, as solar water heating a question frequently asked is: “how was
The Birth of an Industry
companies removed consumer risk by offering an unprecedented guarantee on temperature. Companies placed the onus on themselves to ensure that the technology was appropriate for the size of the household and ensured a high level of accountability to their water temperature guarantee. Where are we now and where can we go? Since the reinstatement of the Home Owners Tax Benefit in 1996, manufacturers have been able to maintain market growth. There are now well over 50,000 installations island-wide accounting for an 80% penetration rate. Solar water heating penetration into the local market is the highest in the Western Hemisphere and the fourth highest in the world per 1,000 population, behind Cyprus, Austria and Israel. No other Caribbean territory falls within the top 60. By almost any measure, the Barbados model has been a success. By all accounts the market is now quite saturated. However, there is still room for growth in this industry and within the broader renewable energy sector in Barbados. The Right Honourable Prime Minister Freundel Stuart at the 2016 Barbados Renewable Energy Association and Central Bank of Barbados Conference, reassured that opportunities still existed to encourage those living in low-income houses to invest in this technology. Since upfront costs can be a challenge, a specific type of financial support for those who cannot afford should be considered. A specific financial support programme, as well as a fiscal programme to lower the costs of these systems, can encourage further market penetration. Additionally, the introduction of an education and sensitisation marketing campaign would help to encourage this investment. An educational programme is needed, so that Barbadians can be made more aware of the importance of
green energy to Barbados and the benefit to them financially and otherwise. There has been some progress in the City of Bridgetown, but there is still room for much more. Solar energy can be incorporated into the City by way of free solar-powered mobile charging stations, solar-powered traffic lights, solar-powered bus schedules and public transport buses, as well as solar-powered street lights. The success of the solar water heating industry in Barbados delivers a strong measure of hope for greater renewable energy use. Since the Caribbean is at the forefront of unsubsidized solar markets, and records some of the world’s highest electricity prices, this is an attractive region for solar development. Barbados has led in the solar water heating sector, and is poised to lead in solar-powered electricity through the use of photovoltaic technology. This “small island” is transitioning its expertise as a solar thermal leader into a total solar power industry.
by Charles Marville
The persons most affected lived at the highest points of the island â€“ St. Joseph and St. Thomas. The routine of their lives was severely affected and some farmers also lost livestock during this period. The BWA had a reliable supply of potable water, 32 million gallons per day, but there was still a shortfall of 600 000 gallons, which meant there was not enough to supply the affected areas, so it started the process of developing additional sources of water to meet the demand. At first the BWA considered the traditional sources of water from the islandâ€™s aquifers, but soon realized that those resources had for the most part been allocated and further development was risky given the knowledge and data of the geological formation and rainfall patterns which were being experienced. Therefore, the BWA commissioned a study which among other things, conducted an assessment of the various other options available and ranked them based on their cost and reliability. (Please see Figure 1 for the results of that study).
THERE was a drought in Barbados and the Barbados Water Authority (BWA) was unable to supply about 3000 households with water. That was 1993-94.
Worldwide, desalination technologies have developed along two main streams, the thermal stream and the membrane stream. With the thermal stream, heat is applied to the body of water until the water molecules evaporate. These molecules are then collected and cooled to form desalinated water. This process requires refineries where there are abundant sources of thermal energy and since these conditions only existed in a limited manner on the island, it was thought best to consider the membrane options instead.
In the membrane family, there are two types of desalination: one where the separation of salt from water is done by applying pressure to drive the water across a membrane, (Reverse Osmosis) and the other where electrical charges are used to achieve the same result, (Electrodialysis). As very limited research has been done on large scale electrodialysis plants, the BWA chose the Reverse Osmosis (RO) approach to desalination. RO can be likened to a molecular sieve where the small water molecules can pass
through the holes of the membrane, but the larger salt molecules, viruses and the like, are restricted and therefore a separation of the components of the brackish or sea water is achieved. Having settled on the RO option as the means of augmenting the islandâ€™s water resources, there was still another option to consider - brackish water or seawater.
COST AND SECURITY The consideration here fell between two main factors, cost and security of the feed water. Whereas the seawater option has an unlimited supply of source water, it was three to four times as expensive as the brackish water option. Although the
brackish water option was less expensive than seawater, research showed that the major cause of failure of brackish water RO plants was the unsustainability of the source. The search for areas which were known to have large quantities of brackish water was started and was narrowed to three principal ones: Chancery Lane in Christ Church and Brittons Hill and Spring Garden in St Michael. There was no historical data associated with the first two sites, but there was considerable data for the Spring Garden site because the Barbados Light and Power (BL&P) had been extracting large quantities of brackish water, 20 million gallons per day, which, along with other large quantities of seawater, were used to cool their large generators. In addition, a number of boreholes were
drilled so that the profile of the brackish water lens in the area could be determined. Once the profile appeared to be suitable for sustainable extraction, a test hole was constructed and the aquifer test-pumped so the BWA could determine the characteristics of the aquifer and estimate the yield. All of these tests indicated that there was a substantial quantity of brackish water in the Spring Garden/Fresh Water Bay area and that the aquifer was being replenished by streams of fresh water which flowed into the area from the Cave Hill/Wanstead escarpment. This fresh water mixed with the seawater in the area, forming a very large brackish water aquifer. Once the issue of the hydrogeology had been settled, the BWA purchased a nine-acre plot of land at Spring Garden from the West India Rum Refinery.
This plot was determined to be big enough to house the desalination plant, as well as feed water wells from which the brackish water would be extracted. The preliminary conceptual design for the system indicated that the feed wells would be constructed on the eastern boundary of the plot, while the reject water (brine) would be injected into the aquifer on the western side of the compound.
GREEN LIGHT FOR PLANT Armed with the information received from the hydrogeological tests as well as the reports from BL&P, the BWA presented its findings to the Cabinet and received approval for the establishment of a desalination facility at Spring Garden. Immediately following this approval in May 1998, the BWA issued an Expression of Interest (EOI) for the establishment of a 4.0 million gallon per day (mgd) brackish water desalination plant at Spring Garden. Seven contractors were short listed and issued
with tender documents for the project. In the end the Board of Directors accepted the recommendation that Ionics of Boston, Massachusetts be awarded the contract for the erection of a brackish water desalination plant and the supply of desalinated water to the BWA at a price of $0.80 per cubic meter. The Board of the BWA in recognising that there was a need to maintain a reserve equivalent to at least 10% of the total production capacity, as well as meet the water demand of other potential developers, accepted the offer and the contract for the larger 6.0 mgd plant was entered into with a joint venture company,
Ionics Freshwater Ltd. (IFL). The contract between the BWA and IFL stated that the contractor would build, own and operate the 6.0 mgd facility over a 15-year period after which all the capital components of the facility would become the property of the BWA. The BWA would purchase all of the water produced by IFL at the facility at a rate per cubic meter which was made up of a number of factors; capital cost of the facility - $24M, labour costs, spare parts and equipment consumables, chemicals and cost of electricity. Should the BWA not take all of the plant production, then the rate on the portion not taken would only include the capital cost and labour components. In this method, the BWA was able to bear the costs of the new desalination facility through monthly purchases of the desalinated water from the contractor. The costs of development of the distribution system to accommodate the new desalinated water were borne directly by the BWA.
HOW DESALINATED WATER STANDS OUT Desalinated water generally has slightly different physical properties from the water which is pumped from the island’s aquifers. Foremost is its hardness which is a crude measure of the quantity of dissolved salts. Whereas the water from our aquifers is termed moderately hard, (this as a result of the passage of water through our limestone cap), desalinated water is considered soft.
With desalinated water, less soap is needed to create suds and there is less buildup of lime in heating elements like kettles and water heaters. Its taste is also slightly different from that of well water, but drinkers usually get used to the taste quickly. After a construction period of approximately one year, the new desalination plant completed its commissioning phase and was put into production in February 2000. Because of a number of alterations to the original project design, necessitated primarily by the need to pump the reject stream off site, the original bid price was increased by $0.20 to $1.00 per cubic meter. Running in parallel with the effort to establish the desalination plant was a network upgrade project which was designed to support the advent of this new source into the distribution system and make a positive impact on those customers in the central high sections of the island who were without service during the drought years of 1993-94. This project established a completely new distribution system out of two older ones and built new pumping stations, reservoirs and
installed large diameter mains so that this new water could be lifted in stages from sea level to the highest point of the island. This work was informed by the 1966 and 1978 studies which were conducted to guide the development and distribution of the island’s water supplies. As a result of this additional work, areas on the outskirts of the capital, Waterford, Station Hill, Grazettes and St Stephens Hill, all benefitted from an improvement in their level of service once the new distribution systems had been put into operation. Further away from the new source, areas around Redmans Village, St Thomas and Orange Hill, St James, realised improvements in their water supply and areas in the higher elevations of the island - Gregg Farm, Hillaby and Welchman Hall all saw significant improvements in service. During the drought period of 2003-04, Ionics Freshwater Ltd. was asked to install and operate a package brackish water desalination plant at the Hope, St Lucy in order to augment the supplies of water to the parish. They installed a plant which had a capacity of 100,000 gallons per day and operated it until the situation in the area had been stabilised. As a result of the drought conditions which have visited the island since 2009, but which have now become extremely severe, the BWA has started the process of acquiring a number of desalination plants. One containerized package plant for brackish water has been installed at the Hope, St Lucy, while another package plant is under construction at Trents, St James. These package plants are temporary. The BWA is also looking at establishing two permanent 6.0 mdg seawater desalination facilities, one in the south of the island
and the other in the north, in order to make the island’s water supply less dependent on rainfall. Desalination by itself however, is not the answer to Barbados’ water problems. The solution is multi-dimensional given the prediction from experts in Climate Change Adaptation who advise that in the future, we should expect longer periods of drought and shorter periods of rainfall. Desalination only addresses the issue of water availability, but does not address the very pressing issue of Non-Revenue Water (NRW), the difference between the amount of water that goes into the distribution system and the amount of water that is registered by customers’ meters. It is critical that the BWA continue its efforts at reducing the NRW figure, which is currently estimated to be in the region of 45%, to the level of 15% to 20%. One of the ways in which this can be accomplished is the continuing strategy of replacing sections of the mains network which are recording frequent bursts along with the real time measurements of the quantity of water which is delivered to each of the distribution sectors. The BWA has secured funding from international funding institutions for the continuation of its mains replacement efforts and has also established a separate NRW Unit. While these two efforts do not immediately bear fruit, their collective impact on the availability of water will be seen in the medium term and the savings extended in perpetuity.
A tribute to a Barbadian pioneer, Professor Oliver Headley By Laurie Blackman
ny discussion of the development of the renewable energy sector in Barbados is not complete without mention of the late Professor Oliver St. Clair Headley and his over three decades of visionary efforts prior to his death on April 9, 2002. While he was not directly involved in the solar water heater industry, his fervent lobbying on its behalf and his critical work on other solar-related projects earned him a reputation as a solar energy pioneer. Those close to him offer a glimpse into this phenomenal scientist and innovator who passionately maintained that the introduction of solar energy technologies into the lifestyles, households and industries of Caribbean countries was not only economically prudent, but just plain necessary in light of the region’s increasing dependence on oil – a trend spotted by Professor Headley as far back as the early 1970s. An academic standout from an early age, it seems that Headley’s scientific breakthroughs were never solely driven by homework assignments, nor limited to the confines of the laboratory at his alma mater, Harrison College.
HOMEMADE ROCKET An astonishing story is told of a 15-year old Oliver launching a homemade rocket in 1957 which blasted 300 feet – more
than twice as high as the Central Bank of Barbados building - into the atmosphere over St. Peter. Sharing the story with its readers, a 1998 issue of Caribbean Beat magazine says that young Oliver’s imagination had been fuelled by the Soviets’ October 1957 launch of Sputnik, inspiring him and classmate Peter Whitehead to enlist the help of a chemistry teacher to design solid fuel rockets using potassium chlorate, sugar and sulphur. Even at that age, Headley was already inquisitive, already consumed with building and dismantling objects and already tinkering with sophisticated scientific applications. The article goes on to say that his mother Daphne, “when driven almost to distraction by her son’s burgeoning activities”, had by this time put her foot down -- essentially confining Headley’s new scientific forays to a single room in the family house! By 1961, Headley had put in an outstanding performance on the Cambridge Matriculation Examination and received the Barbados Scholarship. Having his pick of colleges worldwide, he nonetheless chose to study at The University of the West Indies (UWI), Mona. While at Mona, he met Hortense, a Tobagonian-born descendant of Barbados, who was studying biology. Hortense found Headley to be a great conversationalist and easy to talk to. Their attraction being mutual, the couple soon married and began a life’s journey together. On the Mona campus, Headley had started off in Physics before switching to Chemistry and going on to earn a BSc (in Special Chemistry) with honours. Ever the academic standout, he received a Commonwealth Scholarship in 1964 and selected the University College of London
where he earned a PhD in Inorganic Chemistry. While in London, his passion for research continued unabated. In the mid-1960s, a major laboratory fire resulted in a hospital stay and permanent burns to his arms, but regular visits during the recuperation period by one of his Barbadian compatriots in London, Basil G.F. Springer, led eventually to a professional partnership between the two young scientists -- one which evolved into a lasting friendship - made even stronger by the coincidence that their birthdays were only one day apart. Upon returning to the Caribbean as PhDs, both became faculty members at The UWI, St. Augustine and interacted frequently as members of a small Barbadian community on that campus.
SETTING A NEW PATH It was during a visit to Springer’s home in Santa Margarita, St. Augustine, in 1969, that a casual bank holiday conversation put Headley’s professional interests on a new track, setting him on course to becoming one of the region’s most iconic solar energy developers. While relaxing over lunch, Headley related his growing interest in solar energy and expressed a desire for collaboration with other researchers on the
topic. But seemingly there were none. This disclosure piqued Springer’s interest and the two began to discuss the possibilities for combining Headley’s expertise in chemistry, with Springer’s expertise in biometrics. As the discussion continued, Springer, who was by now in the Faculty of Agriculture, remembers telling Headley of the perennial shortage of water which the agriculturalists faced. Their attention then turned to the Gulf of Paria sparkling picturesquely below, and Springer remembers asking, almost rhetorically, whether there wasn’t some way to convert that vast body of water and remove the salt, therefore solving a problem. “That is easy: desalination.” was Headley’s reply. “How would you do that?” was Springer’s follow-up question. Known for drawing diagrams in the palm of his hand, Headley immediately put pen to palm and sketched a detailed plan for the design of a solar still to desalinate the water. The very next day, the pair set out to purchase materials, including galvanise,
perspex and silicone sealant and that is where it all started, Springer recalls. They were able to access a fully-equipped workshop on the campus’ agricultural farm, and in short order developed a solar still, christened Mark 1, to produce distilled water. The two scientists doggedly continued testing and changing materials to produce new versions– each version being more efficient than the one before - until they reached their final product - the Mark 12 version - some two years later. By this time they had increased the amount of distilled water being produced, and had removed most impurities to yield the double distilled water required for many processes in a chemical laboratory. The St. Augustine campus chemistry lab eventually got all of its distilled water from their stills, with a Mark 12 model conveniently situated on the roof. A similar model was also installed at a secondary school in Trinidad, thanks to a grant from the Trinidad government. As they were both full-time faculty members, the solar energy experiments were done as a sideline – little more than a hobby for both men it seemed – even as they continued to conduct several experiments focused on finding optimum combination of characteristics. “How else can we use the sun’s energy?” was the burning question and they moved on from distillation to solar drying. They first concentrated on sorrel which they would dry down to 2% moisture, making it easy to convert to a powder, and later worked with ripened bananas because of
their high sugar content. The next area of focus would be to look at solar electricity, or photovoltaics. But as fate would have it, in 1974 Springer returned to Barbados, and subsequently established a management consulting firm, Systems Caribbean Limited. Headley remained in Trinidad and continued his work with solar applications. He continued exploring solar dryers for wood, aiming to harness the sun’s power to dry large planks. The approach was to heat up bricks during the day, so that during the night, residual heat would continue to dry the wood. His tireless pursuits led the St. Augustine campus to confer him with the title, Reader of Solar Energy, in acknowledgement of his extensive research and more than 100 papers on the topic. Such was Headley’s conviction that the inclusion of solar technology should be the first resort to solving practical problems, that by this time he had built and installed a basic solar water heater for his family’s home in Trinidad, despite the low cost of electricity in Trinidad. Headley was a believer in “walking the walk”. When after many years his unit began to
leak, Headley purchased a replacement from Solar Dynamics in Barbados, which led to him reconnecting with the company’s owner, James Husbands, whom he had met previously. The two went on to form a lasting professional relationship. On one of their first meetings in Barbados, Headley took Husbands to see a solar crop dryer which he (Headley) had built years earlier at the Ministry of Agriculture in the Pine. Before Headley’s return to Barbados, he and Husbands met most often at solar energy conferences. Headley had founded a regional group, the Caribbean Solar Energy Society (CSES), a regional group that held conferences in various islands to discuss developments in renewable energy and attracted members and associates from across the Caribbean. Husbands served on its committee. These conferences and gatherings are part of Husband’s fondest memories of Headley. “He was a good person with whom you could have a spirited discussion,” reflected Husbands. “You can have divergent views and at the end of the day, there would be a joke session. Anyone who knows Oliver would know that Oliver loved to tell jokes, and he always had more in store; these were some of the best times”, he added. He also recalled how remarkable it was to witness Headley writing in his hand.
“Let’s say he was calculating the energy a solar dryer would provide. He would actually write out, or calculate the amount of sunlight coming in, the absorption rate and work out the dimensions required - what size dryer it would take, depending on the type of materials. He would actually use his hand in place of paper, but the thing about that was his ability to do the calculation mentally. That was kind of exciting.” He remembers seeing Headley in action at conferences where people were dumbfounded at the way he could calculate things - either writing in his hands or mentally and he would come up with the same result as those in the room using a calculator. Husbands considers Headley to be a mathematical genius, phenomenal and unique, quite in line with his international reputation. “I have had the honour of doing presentations at conferences where he presented as well, and Oliver was always a ‘must-see’ presenter. Whenever Oliver was presenting, people gravitated towards that session. He was an enigmatic character and the enthusiasm that he exuded was overwhelming; he captivated audiences.”
RETURN TO CAVE HILL After rising up the ranks to Senior Lecturer, and then to Reader in Chemistry at St. Augustine, Headley’s work eventually led him back to the Cave Hill campus in Barbados, where he was appointed Professor of Chemistry in 1992. He is credited with merging the departments of Biology and Chemistry to form the Centre for Resource Management Environmental Studies (CERMES), and became its first
director on January 1, 1997. He continued his primary focus on solar electricity and photovoltaics, continuing work in the area of solar crop drying and eventually developing a solar dryer for drying onions on Patrick Bethell’s farm in Hothersal Turning, St. Michael. Trinidad’s National Institute of Higher Education, Research and Technology (NIHERST) which was established in 1984, labels Headley as a ‘Caribbean Icon in Science, Technology and Innovation’, crediting him with a number of other solar applications in his homeland Barbados. It accredits Headley with developing solar icemakers for the fishing complex in Skeete’s Bay, dryers for preserving excess seeds, more stills for distilling water and the impressive design of the country’s first large (17.5kV) grid-connect system at Harrison’s Cave, a leading tourist attraction. He was also instrumental in developing the system for supplying electricity to the science and computer labs at the Combermere School; photovoltaic (PV) panels for powering the National Sports Council pavilion at the Montgomery Pasture in Cave Hill; PV panels for operating lights and providing emergency power at Government Headquarters; dryers for produce (mainly peppers and seeds), timber and sugar cane and designing a generation system for the Barbados Light & Power Company. NIHERST also paints a glowing
picture of Headley’s contributions across the region: a spice dryer was built for the Grenada Government, small-scale grain dryers for Guatemala and El Salvador and a banana dryer built for a Belizean farmer. As a consultant, he provided technical advice and guidance on a variety of subjects including climate change, science and technology, renewable energy alternatives and environmental education. Apart from his vision for solar energy, he had also explored ocean thermal energy, which taps into the extreme water temperature differences in the deep ocean. Hortense Headley recalls that her late husband’s approach to work on regional projects, was not to charge consultancy fees, but only accept payment for expenses.
LECTURE SHOWS THE LIGHT In 1997, the Central Bank invited Headley to deliver its 22nd Sir Winston Scott Memorial Lecture, where he attracted a capacity crowd of 500 that evening, discussing solar technology in ways that few had yet to consider at that time. Provocatively entitled, The Sun Will Still Shine When The Oil Runs Out, his lecture presented a detailed look at solar energy and its desirability as an alternative energy source for
countries in sunny climates – especially for Barbados, whose per capita consumption of energy was described on that occasion, as being among the highest in the developing world. Headley started his lecture that Thursday evening by reviewing rapidly growing oil consumption levels, which explained why he was sure that the oil would run out, before walking the audience through calculations measuring the vast amount of power made available to us by the sun. He spoke of several types of solar energy devices already in use, such as crop dryers, cookers and distillers and heralded the success of the two leading solar water manufacturers in Barbados at the time, James Husbands of Solar Dynamics and Peter Hoyos of SunPower, noting that almost 30,000 of the 80,000 households in Barbados had solar water heaters installed. Headley’s lecture was very well received that night. “He blew them away,” Springer recalls. Headley’s lecture afforded many Barbadians their first glimpse into a future fuelled predominately by solar energy and posited the only logical conclusion - a dramatic reduction of carbon emissions was necessary and renewable energy was the only practical solution to a myriad of ills, linked to the consumption of energy derived from oil and other fossil fuels.
HIS LEGACY Throughout his decades-spanning career, Headley received many accolades and awards for his passionate research and dedication to the field of solar energy: In 1982, he received the Guinness Award for Scientific Achievement and in 1985
was commended by the OAS for his work in Solar Drying. In 1996, Headley was presented with a Pioneer award by the World Renewable Energy Network and that same year, he was made a Companion of Honour of Barbados, in the island’s 30th anniversary of Independence honours list. Also, in 1996, he received a prize from his Highness the Amir of Bahrain for his work on solar thermal energy technology in that country and in 1997, the UWI Vice Chancellor’s Award for Public Service. Even now, 15 years after his sudden death, Headley continues to be recognised as a visionary. His passion for finding solutions to practical problems and harnessing the sun’s power to do it, was indeed his hallmark and we can only hope that new visionaries will rise from among us and take up the mantle of pursuing solar solutions where they are most needed. And like the bright Caribbean sunshine, we can only hope that the work of Oliver Headley’s successors will touch every corner of Barbados, the region and beyond – bringing light into those dark corners of our lifestyles where fossil-based energies still prevail.
Ms. Edie Weiner A View From the Future Sir Winston Scott Memorial Lecture - 2001
“It has nothing to do with your (Barbados’) size, it has nothing to do with your stage of development, it has nothing to do with being a “have” or “have not”; it has everything to do with your vision and your will and your desire to be number one in something or everything – it’s up to you.”
G E N H T AKI M A P ION OFHAM C
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By Novaline Brewster and Sherri Bishop
It was never Professor Andrew Downes’ ambition to be an economist. As a student at the Combermere School (1966 to 1974) – the “University of Waterford” as he cheekily refers to it – he was good at Mathematics and was interested in a career that would allow him to utilise this expertise. He decided on Accounting, and in 1974, he was awarded the Mobil Independence scholarship to the University of the West Indies (UWI). During the first year at The UWI, Cave Hill Campus, he taught at his alma mater. While pursuing his degree, he took a course in Economics and did very well. His lecturer, the late Wendell McClean, saw the potential in him and set about persuading him to choose that as a career. “I always remember what he said to me,” recalls
Downes. “He said to me, ‘Andrew, why do you want to do Accounting? The President of the Caribbean Development Bank (CDB) is an economist, so therefore if you want to be President of the CDB, you have to do Economics’.” McClean’s pitch was convincing, so instead of going off to St. Augustine as he had planned, Downes remained at Cave Hill and became one of the first students in the campus’ new Faculty of Social Sciences. He graduated with a first class honours degree in Economics in 1977. Thus began a career trajectory that saw Downes becoming one of the most talented and knowledgeable in the
profession, an influencer in both academia and public policy. He completed his post-graduate training in economics at the Universities of Toronto (Canada) and Manchester (UK) and later did professional development courses in management, accounting and strategic planning. Education, though not his initial passion, became his forte and love. As an educator at The UWI, he rose from Assistant Lecturer in 1979 all the way to Professor in 1995, the highest teaching rank at UWI. His teaching style, he says, was patterned after McClean’s, who Downes reveals could give a lecture without notes and still bring the concepts together in a way that made them come alive for his students. Downes adopted this approach and also strove to explain theory in a way a neophyte could understand.
“I explained the concepts and relationships in economic theory as I would to a five year old, and left the jargon to my interaction with peers,” he said. After all, economics is about everyday living, Downes says. According to him: “Meaningful economics is glorified commonsense.”
MAN OF MANY TALENTS His colleague, Professor Winston Moore attested to his depth of knowledge of the subject and his facility to explain it. “I have always been impressed by Professor Downes’ knowledge in a range of areas. I have been in conferences where he has been commenting on papers in the area of political science and sociology on one day and the following day, giving advice to young economists on econometric issues,” says fellow UWI Professor, Winston Moore.
He later became Deputy Dean and Dean of the Faculty of Social Sciences and Head of the Department of Economics, adding an administrative role to his responsibilities and allowing him to shape not only minds, but policy. He became Director of the Institute of Social and Economic Studies (now The Sir Arthur Lewis Institute of Social and Economic Studies- SALISES) in 1994 until 2011 and managed a number of important research projects. It was a position in which he was successful and was awarded the Vice Chancellor’s Award for Excellence for his combined contributions to teaching, administration, research, university service and public service in 1999/2000 and the Principal’s Award for Excellence in 2008/9. Indeed in the public sphere, Downes has made a significant contribution, doing so while eschewing media attention unless he felt it was absolutely necessary. His first major paper – the first published in an international journal in 1985 – was on inflation. During the 1970s and 1980s, oil price shocks had made this a major issue in Barbados, but at the time there was no serious statistical analysis on it, so Downes set about investigating the factors that contributed to inflation. He found that import prices were a major source, as was to be expected in an economy like Barbados’, and so too were interest costs. What was somewhat surprising, however, was that wages were not a factor, but rather that it was inflation that tended to drive wage increases. Downes’ research grew from there, eventually leading to what he and others deem as his most important work: Productivity and Labour Market Behaviour.
PRODUCTIVITY IS KEY Downes argues that we underestimate how important productivity is in small open economies like Barbados. It drives the profitability of the firm; serves as a key determinant to wage increases; enhances competitiveness; and underpins economic growth. Speaking specifically of the relationship between productivity and competitiveness in an economy like ours, the now retired professor states that in a country such as Barbados which maintains a fixed exchange rate peg with its main trading partner, the only way to stay competitive is to increase outturn. “When you cannot change the exchange rate to change prices, then the competitiveness of your products in the international market has a lot to do with how productive you are, because such
increases in productivity lower your real unit labour costs,” he says. This issue was very much on the radar during the economic crisis of the early 1990s. This focus culminated with the establishment of the National Productivity Council of which Downes was the first Chairman (1993-1995). Under his chairmanship, the Council led the public education campaign, developed gain sharing schemes and ensured that the much revered Social Partnership adhered to the provisions of the protocols. Efforts to measure productivity hit early snags. The biggest challenge pertained to measurements in the services industry, including the public sector. Productivity is the ratio of output to inputs used in the production process, i.e. how much is completed by each worker, factoring in the tools he or she needs for the job and therefore is much simpler to quantify in manufacturing and agriculture, industries with tangible outputs. The outputs in service jobs are less tangible. To circumvent this challenge, the Council introduced performance-based pay instead, where wage increases were linked to the various performance indicators. He reminds us that back in the early 1990s wages were frozen and increases were based exclusively on productivity, or performance gains. And so Barbados recorded early achievements in productivity during the 1990s. However having recovered from that crisis, the successes were reversed. As the country emerged from the crisis “enhancement efforts went into remission,” Downes summarizes. Nearly three decades after the initial push, the issue has reemerged to national prominence, not only here but also in the region. Professor Downes, whose pioneering research years ago led to significant productivity gains in Barbados in the 90s, is once again championing the cause, albeit at the regional level. The Caribbean Development Bank has engaged him to help the region determine how best to improve productivity and economic growth. Returning his attention to Barbados, Professor Downes suggests that greater advocacy is required to focus the island on the significance of productivity. He says such education must target individuals, companies and the country. Everyone must see “what’s in it for me.” Two other suggestions include identifying champions and standard bearers to demonstrate that improvements are possible. As he puts it, “we have got to create the herding effect on
the issue.” Furthermore, he wants the unions to be activists, encouraging their members to give a fair day’s work for a fair day’s pay.
MENTORS AND INFLUENCERS As he looks back on his long and distinguished career, Downes reflects on the people, both forerunners and contemporaries, who have inspired him. He identifies McClean as his mentor and the person who influenced him most, but also speaks of others, and the names constitute a who’s who of Barbadian economic luminaries: Sir Frank Alleyne, Professor Michael Howard, Bernard Codrington, and the late Lindsay Holder, as well as Central Bank of Barbados (CBB) Governors, Dr. DeLisle Worrell and Dr Marion Williams and former CBB Deputy Governors Harold Codrington and the late Carlos Holder. In addition, Dr Hyginus Leon, now with the International Monetary Fund, was an important collaborator on several important issues relating to productivity and the labour market. He also reminisces about the early years of the Barbados Economic Society (BES), when he considers the organisation to have been at its most robust. He says the membership, which comprised professionals from the university, the Central Bank and central government, was able to debate matters internally and then contribute as a body to the national discourse on a range of issues, including the budget and economic policy. He argues that the BES needs to get back to those early days of serious discussion on critical economic issues. Commenting on Barbados’ current fiscal challenges, Downes believes that the island needs to move away from its current welfare model. He says that we must identify and focus on the priority areas when it comes to social services and not expect everything to be financed by Government. “We can’t be too dependent on Government. When we say ‘Government should…’, we’re saying that we collectively have agreed to do because Government gets its revenue to do all the things we say we want from taxation.” He believes the public needs to be educated about this in the same way that it needs to be educated about the importance of productivity. Downes was also instrumental in the establishment and operation of the Barbados Fair Trading Commission (FTC) in 2001 being one of the first Commissioners. The FTC is responsible for utility regulation, fair competition and consumer protection in Barbados. He resigned as Deputy Chairman in August 2016 to take up the position of Commissioner with the Caribbean Competition Commission (CCC).
As Professor Downes retires from an illustrious career in education, research and public service, the country remains in his debt for his outstanding work in economics and his contribution to molding young economists. He has published over 100 articles and monographs, prepared several technical reports for various organisations and made numerous presentations at seminars, conferences and workshops. “I think that the takeaways from his illustrious career are his guiding principles - thoroughness and preparation. When he speaks or writes, one is always struck, not only by his mastery of the subject matter, but by the thoroughness of his thesis, his ability, and the quality of his preparedness,” says former Deputy Governor of the Central Bank of Barbados, Harold Codrington. Professor Downes credits any success he has achieved over the years to excellent family support: mother, aunts, wife, sons and the productive interaction with several colleagues at UWI and elsewhere. He did not become the president of the Caribbean Development Bank, but his contribution to regional economic matters is unequalled and deserving of celebration. Even as he retires from UWI at the level of Pro Vice Chancellor ( Planning and Development), he continues to unravel serious issues that are derailing our economic development and prosperity: economic growth and productivity. Professor Andrew Downes, thank you for responding to the late Wendell McClean’s call. The region is the richer for it.
By Marva Cossy
A History of goddard enterprises
GODDARD’S Enterprises Limited (GEL) started in 1921 as a tiny family-owned meat and grocery shop in Bridgetown. Now 96 years later, it is a business giant both locally and further afield. The once tiny company is today a trans-national conglomerate, operating 71 companies in 23 Caribbean, Central and South American countries and stretching over a broad range of industries. It has long moved from its “more traditional areas of retailing and wholesaling, to the relatively new areas of airline catering, export manufacturing and financial services”. Several writers have theorised about business excellence, but a practical and on-going template emerges when analysing the journey of GEL. According to its 2015 annual report, GEL’s operations reported a “recordbreaking performance” during the year ending September 2015. Group revenue and net income was BDS$924.5 million and $61.9 million, respectively, resulting in earnings per share of 83 cents, the largest ever and surpassing the previous high of 73.7 cents, which was reported for 2008. Certainly, an out-turn which demonstrates excellence in financial performance! But then, “excellence” is the company’s watchword. GEL is all about continually producing improved performance and always delivering on set goals. A performance that requires “vision, creativity, expertise, tenacity and (choosing the right) location,” elements the company’s officials link to the enterprise’s success. GEL’s rise puts it squarely into the ‘rags to riches’ category. The company was started with practically no money by Joseph Nathaniel Goddard (J.N.), a descendent of poor white indentured servants, and his son, Victor; in a rigid class conscious Barbados during the turbulent 1920s. It survived an infancy marked by the Great Depression of the 1930s, but J. N. Goddard & Sons, as the company was known then, didn’t merely survive during those days, it flourished.
When the company was only three years old, J.N. Goddard made a bold and critical move, buying the island’s main grocery emporium, the Ice House located on Broad Street- which included a hotel and restaurant. This gave the fledgling business a competitive edge as it become the first one in the bustling capital city to have cold storage facilities for meat, as well as imported fresh fruits and vegetables; the latter was especially welcomed by the island’s ‘new’ tourism sector. The company also had the wherewithal to sell ice in those days when refrigerators were not commonplace. Consequently, so early in its life, J.N. Goddard & Sons became one of the leading grocery businesses and was also making its mark in the restaurant sector. This early success did not quench the company owners’ thirst for expansion, but rather seemed to fuel their appetite for routine acquisitions as part of their developmental strategy.
SPREADING ITS WINGS In 1926, the company bought the 14-acre Kensington Estate on Fontabelle, St. Michael. Given that property’s proximity to the seaport, the estate was an ideal business location and became the hub for the firm’s operations, providing space for both its retail arm, as well as its rum blending business. It also secured adequate land for producing vegetables and herbs, a plus during the war years when the rationing of
supplies was the order of the day. When the family patriarch J.N. Goddard died in 1959, the company’s portfolio was somewhat diversified, containing businesses that were bought outright, as well as others in which Goddard’s held a significant shareholding. Its retail arm included C.F. Harrison, one of Bridgetown’s major department stores; Johnson & Redman, a grocery provision dealer and bakery; and a shareholding in W.M. Fogarty. The company’s tactic of buying top quality businesses also extended into the tourism industry, resulting in the purchases of the Windsor Hotel, the Crane Hotel and the Marine House, then the island’s largest hotel. J.N. Goddard & Sons had also ventured outside of Barbados and into the Eastern Caribbean with interests in Pembroke and Camden Park Estates in St. Vincent. Consequently, by the time its founder died, the business was commercially strong enough to continue beyond the first generation. In early 2006, Martin Pritchard succeeded Joseph Goddard as Managing Director, becoming the first non-family member to lead the group in its 85 year old history. Seven years later, another significant leadership change occurred when
Charles Herbert, another non-family member, took over from the retiring Joseph N Goddard (grandson of J.N Goddard), as the group’s chairman. Thus by 2013, some 92 years after its birth, both its managing director and chairman were non-family members. In other words, even though the company had gone public in 1979 and became known as Goddard Enterprises Limited (GEL) for decades, its top leaders were all relatives, either by blood or by marriage, a factor worthy of examination. This accomplishment underlines the unity within that family group, a critical characteristic to a family business’ longevity. Succession planning, rudimentary or not, seemed to have been a key feature within the company. For several generations of Goddards, good business practices were part of the family culture and were instilled from an early age. For example, the Goddard children were taught the importance of reinvesting, rather than using profits for living a high lifestyle. In addition, during their school holidays, first and second generation Goddards worked in the business, learning its intricacies from their elders. Perhaps due to this nurturing, seven of the patriarch’s nine sons chose to be involved after leaving secondary
school and while several Barbadian families were encouraging their offspring to choose professions such as medicine and law, second generation Goddards went abroad to pursue academic disciplines at the tertiary level that were critical to the firm’s development. Those Goddards returned not only with theoretical knowledge, but with helpful practical experiences and skills which helped the company to keep abreast through modern business methods and techniques, such as those in accounting. Therefore from its infancy, the company’s officials were concerned with recruiting the most suitable employees, using the best management techniques and applying up-to-date technologies to its operations as a means of keeping the business in step with global trends, while out-pacing its local competitors.
A CREATIVE CULTURE This paid big dividends in the grocery business, where the company’s culture of being innovative and creative was evident. For example, the company directors introduced self-service grocery shopping in 1956, a novelty in
Barbados at that time, but one profitable enough to lead to the expansion of its supermarket business outside of Bridgetown and Fontabelle, where the company had constructed Barbados’ first modern supermarket - Goddard’s Food Fair. Given their emphasis on strategic locations, it was not surprising that the company set up supermarkets on the South Coast to meet the demand of the growing middle class and visitors in the emerging tourist belt. In the 1990s, GEL shed its supermarket business, as well as a few trading concerns amid declining profits in a now fiercely competitive and saturated retail sector, where Barbados’ economic climate was weak. These operations were negatively affecting the overall business profitability. GEL’s exit from the supermarket industry represented a major shift given its origins, however, it demonstrated the leaders’ ability to read trends, the market environment and objectively weigh these against the company’s strengths and weaknesses. By then, airline catering was becoming a core competency of GEL, while its manufacturing arm and expansion outside of Barbados suggested a redirection of the business. Today, these sectors remain as
key elements in GEL’s portfolio. Its manufacturing operations include companies producing bread, meat products, plastic bags, printing and flexible packaging, specialty top end labels mainly for liquor, rum distilling, water and liquor bottling, aerosol products and liquid household cleaners. Several of these are located outside Barbados, the home country allowing GEL to benefit from resources and opportunities in these host territories. Directors who expected a challenging 2016 with little growth in Barbados and slow growth in the wider Caribbean, have been focusing on increased market share in this sector, through innovation with new products. Naturally they are seeking to expand outside of the region as well. Perhaps, in hindsight, one could say a key acquisition of the early era was the Crane Hotel. Not because of the hotel’s financial impact, but simply because in 1954 the service there prompted officials of TransCanada Airways (now Air Canada) to approach managers, Fred and Florence Goddard, with the offer to provide in-flight meals prepared at the hotel, as it was less than half an hour away from the Seawell (now GAIA) airport.
FLYING HIGH That arrangement became the springboard for the establishment of an in-flight catering unit, the Barbados Flight Kitchen at the airport in 1968; a year after Goddards sold the Crane, which had become unprofitable. The Barbados Flight Kitchen
emphasised timely delivery and good food and so gained several airlines as its customers which allowed for its expansion the following year. In fact, this turned out to be one of the company’s most productive decisions, which saw the division opening up its first overseas unit in Antigua and leading to today’s catering group which services several of the leading commercial air carriers, including Caribbean, American and Continental Airlines. The group also operates airport restaurants, as well as offers industrial and event catering to several other sectors including oil and gas platforms, prisons, hospitals, service stations, colleges and schools. These operations, which have taken GEL into 23 countries in the Caribbean and Latin America, have been facilitated by the company’s use of joint ventures, starting with the Marriott Corporation and later with LSG Sky Chefs, known internationally for culinary expertise in airline catering. Indeed, this division is one of the brightest stars in the conglomerate’s crown today, which apart from its wide reach, hires 3,300 employees. To say that GEL has been able to brave turbulent waters is an understatement. It has survived the energy crises of the 1970s, recession at home in Barbados during the 1990s and several other hiccups. In an address marking GEL’s 75th anniversary, former prime minister of Barbados, Owen Arthur remarked that the company was the best example of a home grown trans-national company. It showed that Caribbean companies can be successful in an era of trade liberalisation and globalisation, the march of information technology, and the dismantling of preferences, he added. Today, GEL stands ready to manoeuvre current and future market conditions with tenacity, a sense of innovation and creativity, focused on human resource training and improvement, customer service and fair play as envisioned by its founders.
W H E N
DR. CARDINAL WARDE
S P E A K 58
DR. CHELSTON BRATHWAITE
Dr. Chelston Brathwaite is Barbadosâ€™ Ambassador and top diplomat in China. He is also an author, agricultural expert and experienced administrator. He served in several positions at the Inter-American Institute for Cooperation on Agriculture (IICA), but in November 2001, he received the highest honour when he was elected by the countries of the western hemisphere, as the ninth Director General of IICA for the period 2002 â€“ 2006 making him both the first Black and first person from the Englishspeaking Caribbean, to lead that entity. In this edition, he converses with his long-time friend, Dr. Cardinal Warde, a professor at the prestigious Massachusetts Institute of Technology (MIT), and President of the Caribbean Science Foundation, which is based at the Cave Hill Campus of the University of the West Indies. Professor Warde, an inventor of hightech systems, is often described as a potential Nobel Prize winner in science. Ambassador Brathwaite was home on holiday from Beijing, China in December (2016) as was Professor Warde. The two met at Fusion Rooftop restaurant, at the Limegrove Lifestyle Centre in St. James, where Ambassador Brathwaite engaged Professor Warde about his life and work. Following is an edited version of that conversation. (All references to CB = Ambassador Chelston Brathwaite and CW = Professor Cardinal Warde.)
I came from a very supportive family. My father started off as a carpenter, later he became a building contractor and he had a carpentry shop which we renovated and made into a Chemistry laboratory.
Clearly the orientation in those days was that a bright young man having such an interest in science would have either become a doctor - or perhaps change and become a lawyer. Were either of these professions of interest to you? How did you get into Engineering and Technology?
CW: I think those trends are still prevalent CB:
CW: I grew up in the St Christopher, Silver
Sands area and went to St Christopher’s Boys’ School. At that time the boys and girls had separate schools, and I always liked Arithmetic, Mathematics in general, that was easier for me than the English Language and History. When I left St Christopher Boys’ and went to Boys’ Foundation School, I took the normal exam that students still take and I continued my interest in Mathematics. I loved Geometry and Algebra and Trigonometry. I later got into Physics and Chemistry and fortunately for me, both my Physics teacher and my Chemistry teacher were women, so I was out to impress. I sat to the front of the class, bushy tailed and asking lots of questions.
And you absorbed [laughs].
CW: I was a sponge for knowledge, I really
actually enjoyed those two classes. I didn’t like Biology as much and I took what was called GCE in those days and then stayed at Foundation for A Levels. I did the first set of my A Levels at Foundation, then transferred to Harrison College and finished there.
today. But Biology was not my favourite subject, so medicine was out for me. The classics was not for me either, I went where my passion was - Science and Technology, Mathematics - STEM. as they call it. As my father would say “God gave every man one talent - at least one talent”.
Professor - you’re a Barbadian: Where were you born in Barbados? How did you grow up? What was your family life like? What schools did you go to? What primary school, what secondary school? And how did you get attracted to this area of Science and Technology?
You discovered your talent early!
CW: Well, I was only good at one thing, and that’s it - people like you are good at many things.
I wouldn’t say that [laughs]; I got attracted to science very early. As a matter of fact, I think I had a natural curiosity as to how things worked and so I was fascinated by the transition that I saw, for example, for taking a sugar cane plant and converting it into sugar. You take a plant full of juice and then you make a crystal sugar out of it. I saw the same thing happen in cocoa, using a cocoa pod and making a beverage and so I was always fascinated by these biological processes and was always good at Biology and that is how I got into Agricultural Science and eventually into Agriculture. But going back to the whole idea of being in Barbados, how and why did you pursue a tertiary education abroad? How did this happen?
CW: I guess I was blessed, being in the right place at the right time, with the right
mentors. (Professor attended Stevens Institue of Technology in New Jersey.) I did four years there in Physics. That was my first love, and my dad used to send me Bajan pennies.
CB: Actual pennies? [laughs] CW: I think he must have gotten dollar bills. I
don’t know [laughs]. But he was helping me to supplement the books and tuition. That was not the place I wanted to go, I wanted to go to MIT. But MIT did not get one of my letters of recommendation from one of my teachers. So I stayed at Stevens.
CB: Well let me ask you, why MIT? Of all the
institutions that you could have gone to, the Eberly Colleges, the Harvards, the Cornells, the Browns, Berkeley, why MIT?
CW: MIT is known to be the number one
school in Engineering in the world. When I left Barbados, I said I was going to do Electrical Engineering, but couldn’t give up Physics. It was so hard, and so I ended up doing a Bachelors Degree in Physics, but the school I really wanted to be at was MIT.
CB: So from what you’re saying, first of
all you’re always aiming for the top; you wanted to go to the top school in technology in the United States and probably the top school in technology in the world.
CW: Yes. CB: Secondly, you had a natural curiosity.
Tell us about that natural curiosity and how that drove you to achieve; some of the things that you have achieved as a professional.
CW: Well, I’ve now become convinced that
most kids are born with a natural curiosity and sometimes as adults, we stifle it, my parents didn’t do that. I took apart many things and wasn’t able to put them back together [laughs]. I tried to understand how this works; it was all forgiven and
forgotten hopefully [laughs]. My parents encouraged me to explore.
CB: CW: CB: CW:
of straws - drinking straws filled with the same material and you light this thing and the rocket goes off - and this was an area that was public. We used to say the Russians sent a monkey up there [laughs] now we’re going to put a mouse up there. [laughs]
To explore - to experiment To experiment, especially. I turned my father’s old carpentry shop into a lab; he put all his tools under the table and he didn’t go in there anymore. But my friends (Edward Layne and the late Esther Bentham) and I used to make things and have lots of fun. We were all taking the A Levels in Chemistry at the same time and that’s where we learned a lot of stuff. I have horrible stories, to confess. We had to get these chemicals and normally there’s a trade name, so we go down to Bridgetown, I think it was Collins Pharmacy. We had the trade names and we would go to the counter and buy as many that they would sell. There were some acids that we couldn’t buy….
So you were motivated by what was going on in your environment at that time? Of course, so we had to build a bigger rocket from those cones, mice weren’t hard to find. I would imagine not. [laughs]
Seems like from early you were planning to go to the moon [laughs]
CW: I know you’re right because the rocket
went quite high. I didn’t know enough physics at the time to design a rocket to the weight of the mouse. But after I went off to Trinidad, my friends decided to pack this rocket fuel into a bottle put a fuse on it and light it and the bottle exploded and one of them got a big gash on his leg. As a safety officer I should have been more responsible and should have locked the lab up before I left, but I didn’t. [laughs]
Hydrochloric Acid and those kind of things … Couldn’t buy hydrochloric acid, we couldn’t buy sodium hydroxide, but we had some at school. Ahh that was it! [laughs] We managed to get some to our laboratory [laughs] ……Yes, yes we wouldn’t go into to the details of how it got there [laughs] It might have burnt some holes in our pockets on the way home, but we got some through first time and we tried to do all these sample experiments from the text book and that helped us to learn a lot about Chemistry. At one point I went off to Trinidad to visit some relatives and my other two colleagues [laughs] brought in a third colleague, and they decided to make some bombs. To go back a little bit, we used to make these rockets - we’d take potassium chloride, icing sugar and grind that into a cylinder and put a long stick on it and push it into the ground; a fuse was made
After we made the rockets, we had to move them, so we moved them down to the South Point Lighthouse area, because there was a big pasture down there where cows goats and sheep grazing and that’s where we started to launch this thing. At that time I didn’t know enough about fuel mechanics and all the mechanical engineering stuff to figure out the balance of the rocket. So the rocket takes off slowly and then it goes up 10, 20 feet and turns around and lands on the ground and the mouse runs away.
Barbados “monkey see monkey do” [laughs], and the same thing is true even today when I look at my colleagues who have given buildings back to MIT. We have professors who have gone on and built world class companies and some have donated buildings to MIT and it’s then I realized I could do this too. So I started two companies, one of them I sold to a Japanese company several years ago. The other one I’m now trying to sell - I’m trying to find a buyer. But it’s the environment as you pointed out - it’s the environment that made all the difference. That doesn’t mean you should abandon where you’ve come from, but you should take that - learn as much as you can and bring back some of the things that you’ve learnt to change the ‘needle’ and move the ‘needle’ to a higher level in the Caribbean.
Tell me something - in order to maintain the level of excellence that you have maintained over your career, there must have been some motivating factors, or mentors.
CW: Well, I’ve had a lot of great mentors along the way and I have to give them a lot of credit.
Where would you say your inspiration came from? Most of my inspiration came from looking at others - you know what they say in
To another level. Those of us who have done Biology, Agricultural Science especially, are fully aware of that relationship between the genetic material - the DNA that you’re made of and the environment and the critical role that mentors in the environmental system in which you’re operating, impacts your ability to excel. Let me ask you, Professor Cardinal Warde, eminent professor of MIT, a teacher, a scientist, an engineer…. now you have become the leader and founder of the Caribbean Science Foundation. Tell us how you got to this stage of your development? What motivated you to establish and to foster a foundation for science in the Caribbean that focuses on the STEM subjects, and isn’t that a very noble goal of giving back? Tell us about that story. It started with my interest in entrepreneurship and as I commented a little bit earlier I saw my colleagues because at most of the major universities probably all in the United States, professors are allowed one day a week where they can go off and do extra curricular activities at a second college. Some of my colleagues are in companies as consultants, so for their one day a week they have a desk and contribute to product development, or solve problems for that company. Some go off and start their own companies - which is what I did, and some are out there doing goodwill in the community. I had an interest in entrepreneurship and it was probably a belated interest from when I was back in Barbados and I decided to start a company which basically did a lot of work for the military in the United States. It then dawned on me at some point that when I look back at
my life and where I came from and what I’m doing today, that a lot of kids in the Caribbean weren’t as fortunate as I was to have these opportunities, so I decided that it was time I gave back and try to make similar opportunities available for people back in the Caribbean, not just in Barbados. Problems you face when you go abroad help you become less insular.
You become more Caribbean.
Yeah you become more Caribbean. So I started one of the first books about Barbados and what Barbados should be doing. I saw opportunities slipping by. In 1998, there were many jobs in software being outsourced to China and India and as I saw it happening, I asked the question: “Why aren’t some of those jobs coming to the Caribbean?” Our people can write software; we’re as smart as anyone else in the world. So I wrote a paper about Information and Communication Technology Opportunities for the Caribbean. It’s on the website of the Caribbean Science Foundation and it got some attention. I came down here (Barbados) and I met with the Minister of Finance at that time and he was interested in trying to basically implement some of the suggestions from that paper. One of the suggestions was that the Barbados Government should do what the US Government had just done, which is to basically collect a pot of money for small business innovation, research and development fund in the United States. It’s
called the SBIR program - Small Business Innovative Research and we could use that to stimulate small businesses and they hire people, and have the potential to go into large businesses. It was a risky investment for Barbados because a) we don’t have a lot of scientists on the ground here - we have them, but they go into law and medicine and stuff like that and b) our budgets are small. I tried to push that on the Government, but it didn’t work at the time. I think Barbados, however, did start investing more in small start up businesses around that time, but that never took hold. The opportunity came along where UNESCO was interested in helping the Caribbean with Science and Technology. They did a STEM study and unfortunately, they went all the way to South Africa to find a consultant for this study. The consultant recommended that there should be an over-arching body for Science and Technology in the Caribbean. CARICOM had already set up a body called Caribbean Council For Science and Technology, but it wasn’t and still is not, well-funded by the member countries. This consultant recommended that there should be another body; so that it won’t become a political football. The then Prime Minister of Trinidad was the late Patrick Manning, and he liked the idea of bringing in the diaspora to help with the economic development of the region, so we set up a committee where Harold Ramkissoon was the Chair. He called me and said let’s
set up a committee to help implement this suggestion of this overarching body, and this should be driven by the diaspora. He asked me to chair it, so I started calling up my friends and started this organization which is now called the Caribbean Diaspora for Science Technology and Innovation. The website is www.CADSTI.org and that organization, which consisted of people mostly out of the region and some inside, is the one that formed the Caribbean Science Foundation.
Many of us in the diaspora decided to help finance it and put resources into it. Since no one stepped forward to lead the Caribbean Science Foundation, I ended up becoming the interim Executive Director, and today I am still interim [laughs] because the job does not pay.
What a noble goal, what a noble initiative, what a noble contribution that you go abroad, that you are educated in an institution of eminence and excellence, but you do not forget where you came from. You see the need to give back something to the youth and to your country. I note recently that you were given the Prime Minister’s Award for Excellence in Barbados. How do you interpret the achievement of that award in the context as a motivating factor for young people?
But I think there are also motivating factors for those who come after, to understand and to believe that there are things that can be achieved by our is people because so much of what is written about other people. And I think that it is important that within the context of our own environment, we can say that there is a Professor Cardinal Warde who was born here in Barbados, who is a Professor at MIT, the Premier Institution of Technology and Engineering in the world, and he was given a national award for that achievement.
The awards I have been given in Barbados and elsewhere were not things that I was seeking. I feel indeed very honoured, blessed that Barbados has recognised what I’m trying to do, but the job is not yet done and the awards have come too early, but I appreciate them nonetheless [laughs]. The rewards should be given after the job is done, but, “Barbados thank you” and I thank the Prime Minister for doing that, but you similarly - we share the same award at the same time. We’re both Companions of Honour at the same time. It’s better to have your flowers now, than to have them on your grave [laughs] so my friend is right ,we’ll take the flowers now and we say thank you.
You’re absolutely right, role models are very, very important. They have been important to me and in the Caribbean Science Foundation, we run a programme called SPISE - Student Programme for Innovation in Science and Engineering. In addition to teaching them, we have two levels of Calculus, two levels of Physics, Biochemistry; we’ve also got Robotics, Renewable Energy and Computer Programming and we teach Mandarin, the Chinese language. Every week we bring in two role models to talk to the students about their careers in Science and Technology and we’re already seeing the students asking the right questions and considering disciplines in areas for careers that they would not have considered before.
You’re opening their eyes to a new world. Clearly your keen interest in entrepreneurship is something that is admirable, but in the context of the Caribbean we face a reality. One of our realities is lack of venture capital for investment in entrepreneurship and the small price of our traditional Caribbean market. How are you addressing these constraints within the context of the Caribbean Science Foundation, and where do you see the future of entrepreneurship in the region? This is one of the more difficult problems that the Caribbean Science Foundation is trying to tackle. On the educational front we’ve done quite well, we have about four programmes - the SPISE programme is only one of them. We have a STEM CT training workshop where we do workshops in St Vincent, Antigua, Jamaica and Barbados. We’ve got the Sagicor Visionaries Challenge. Sagicor picks up all the money, but we write the rules for the programme; we provide the mentors and the judges and we started Robotics camps in Barbados for students between 9 and 13 years old. We’ve done that for two consecutive years so on the educational front the Caribbean Science Foundation is making a big difference. Just recently, the Caribbean Science Foundation announced that it is going to make an award of 20k Euros to a Bajan company in the ICT area (Information and Communication and Technology) area and it’s a full profit company and it’s a grant, and we are not even taking any equity interest in the company. But if you read the website at the Caribbean Science Foundation (www.CaribbeanScience. org, ) you will see that we have something called Caribventure where our goal is to put together basically a venture capital fund, where we would invest only in technology companies, fully staged
companies. Nicholas Brathwaite, one of our board members, is helping to design that programme. The Caribventure doesn’t have any money in it as yet, but we are working towards solving that problem and we would venture those companies. We don’t want to finance ma-pa shops, we are looking for a company that can have $70 million and $50 million in revenues the next five (5) to ten (10) years. Which means that we have to fund a team of people not just one person and we have to mentor them and make sure that they get advice and assistance from the diaspora, because I did it to solve this problem.
CB: But it also seems to me in that context that
we need to begin to look at the wider market. We need to see the diaspora as part of our market and to begin to understand that the five or seven million people we have in the Caribbean is just the nucleus - is just the beginning of where we should be looking and to a large extent you are not going to establish these companies generating 50-70 million dollars a year unless you open your eyes to the reality that we live in a global market place
That global market place is accessible once we produce quality products at competitive prices. Exactly, what we say at the Caribbean Science Foundation is that there is no reason why the next Google, call it what ever you want, can’t start in the Caribbean, and to start a company like that, which has that kind of global impact we’ve got to think big, you’ve got to take the risk and it can’t be a one man show, and so we are willing to take the risk. We are not a government; we don’t have to get re-elected in five years. We can take this risk and invest in our people; some of the same kids that go through the SPISE programme. We have 85 skilled kids already and I am going to assume, and I hope I’m correct, that during my lifetime, one of those students is going to create something big, because one Google-like company, will give all the able-bodied people in Dominica jobs. Just one. So we can take that risk.
I will tell you that within China where I live, there is a significant amount of emphasis on enterprise funding. In other words, the Chinese government is making large sums of money available just for innovation. New ideas, innovation laboratories are being built all over the country to stimulate innovation. Last November we celebrated our 50th Anniversary of Independence as a sovereign nation. Looking to the next 50 years, what do you see as the role of Science and Technology in the development of this nation?
Well it turns out that Science and Technology has always appeared in growth of economies ever since man has been on this planet. The difference today is that advances in technology are moving very, very rapidly. Fifty years ago, if you had told me that there was going to be something called the Internet and that it was going to create all these jobs and that I could sit here and basically use my cell
phone to send messages to Australia, I probably would have asked you what you were smoking [Laughs]. So I think the Caribbean has to keep pace with technology developments that are going on around the world, because we are buying those technologies that are made elsewhere and people are very smart at using them, but we are not creating them ourselves. We have to create something other than Tourism and Financial Services, because both of those are very fragile economic pillars and we have scientists in Barbados; we have scientists in the Caribbean and this is why the CSF exists. We’re looking at people like me, who have left and gone abroad, who could be making an even larger contribution to the Caribbean. If we can harness all of that talent that’s in the diaspora, we can make things happen. So I see the next 50 years through the efforts not just as the Caribbean Science Foundation, but of Governments in the region. I think the Governments will indeed embrace this eventually, but you have to show them first what is possible and then I think they will come on board; they have to see and touch and feel to believe. But to answer your question directly, the Caribbean has to embrace science and technology and I look forward to the day when these Caribbean countries are exporters of foreign aid rather than being there for handouts which is where we are today. That revolution can happen. Our people are as bright as people are anywhere. They need to be leaders, they need to be shown what’s possible and they need to be
exposed to those environments around the world, so that our youngsters rub shoulders with others who are changing the world in Korea, China and the United States and Japan.
Global information in terms of what is going on around the world and how it is impacting the lives of people at the end of the day is to create comfort, to create opportunity, to create a better life that is driven by technology. You see what is happening now with the Internet - it is becoming one of the most common features of the technological revolution in which SMART appliances are now providing the responses that human beings need - the driverless cars, this is a new technology that’s happening and so I think it is for us as a people to become global visionaries. We have to move up the ladder to technology and innovation. Am I right?
You are absolutely right. The problem is even a little more complex than that. We have to teach and prepare our students for the jobs of tomorrow. So even though we have all the things that you are talking about now, we have to leapfrog and worry about what the new jobs of tomorrow look like, because we want our students to be creating those jobs. And to be ready - that means the way that we teach in our schools should change, we have to teach students to think analytically and critically. Not just to memorise and regurgitate, but to chant, that’s how I learnt my five times table, by chanting. Grades are important, but we focus on how much they understand, the fundamentals and how they can apply those fundamentals to solve problems and that’s how we grade them. I tell the
t I think wha a sense, in g in y a s e r you a egin to b o t e v a h is that we ns with e iz it c l a b become glo - global ion a global vis . knowledge
instructors and the staff on the SPISE programme, if the student gets the right answer, but the reason is faulty just give them zero. If you get the wrong answer, but 95% of it is using the basic principles, give them 95%. The right answer is important but the process of getting there is what is very important. You can’t memorise answers, you have to use logic.
You have to have an investigative mind.
You have to observe, correct, do the experiments, see the results, analyse the results, design the next experiment and then you will get there.
And stimulate curiosity.
That’s what we are trying to do.
Professor, you have covered a very wide range of issues in this discussion which has significance for our development going forward. You’ve also brought to the table the whole reality that we live in a global world. And in that global world we need to understand what’s happening globally and prepare for the jobs of the future. Not the jobs of today, but the jobs of the future if we are going to build a future for our country. You hit very clearly on the issue of educational reform, the need for venture capital, the need to see our market as not just the Caribbean and the diaspora. I think these are all critical issues. The challenges of the 21st century are very different from those of the 20th century, and we have to develop a new mindset, that allows us to be proactive, to be innovative and to be strategic in our actions and our direction in order to create a better world for ourselves. I have one more point I want to make before we wrap up. In Barbados in particular, I think engineering is less understood, than engineering say in Trinidad and probably in Jamaica. Engineers design things, they make things, they start more companies than doctors and lawyers and they are bigger contributors to the GDP than almost any other sector and this is in developed countries in this case. We need more engineers. I talked earlier about the Physics, the Chemistry even the Biology and in computer programming, to consider engineering professions and that’s what we are trying to do also at the Caribbean Science Foundation, we’re trying to open up the eyes of our youngsters. In Barbados, engineers probably work with architects on buildings, or they work in sanitation and I always pull out my cellphone to see what engineers work with them because you can’t just have one engineer, they are mechanical engineers because you
worry about the case the electronics sits in and it’s got to fit properly and you have to be able to disassemble it and put it back together if you have to repair it. You have chemical engineers who design the liquid crystal that makes the picture on the phone. You have the electrical engineers with all the circuits and the 4Gs and the 10Gs. All the communication protocols are done by electrical engineers. The point is that engineers build things and make things and if we really want to solve the problem you asked about what’s going to happen in the next 50 years, I want to see more engineering practised in the Caribbean. Where our people are making things and selling them to the rest of the world. Even if our people, as smart as we are in Barbados, design low powered circuits for a cellphone, the circuit draws only 50% less power than the one on my little Apple phone. Foreign companies will buy it from you. They will buy your designs. You can get a patent, you can license it right and you can have revenues coming in.
The new sources of income?
Right, so there are technology things that we can do here which - they might not be manufactured here, but can have a big global impact. Big data is big business right now. Lots of companies are paying software engineers and mathematicians to find algorithms to process huge amounts of data, and I am sure it’s happening in Barbados as well. As I drive around there are all kinds of cameras that read all kinds of licence plates. So there is so much information gathering about people out there and if you want to find one needle in a hay stack, one crook, you have to process a lot of data. The weather is another situation. They can predict the weather 10 days in advance all over the world, that’s data processing. These are jobs that can exist within the Caribbean if they have the right leader, if they have the right vision. They don’t have to go abroad to do the job. We need to breed a new class of engineers in the region. And this is not only about engineering in the context of buildings and structures, it is also about biological engineering, food engineering, environmental engineering, software engineering. There’s a lot more that we can do here in Barbados and throughout the Caribbean, so that the next 50 years are brighter and better, than the last 50.
Dr. Edward De Bono Moving from Information to Innovation Sir Winston Scott Memorial Lecture - 2005
By Sherri Bishop
ROM at least as far back as the mid-1990s, the question of whether marijuana should be decriminalised, or even legalised has arisen periodically in Barbados. Much of that discussion could been dismissed, perhaps cynically, as an attempt to distract from other national issues that were brewing at the time, but in recent years, the debate has become a legitimate one.
such as cocaine and heroin, which it has traditionally been grouped with. This thinking has gained traction in recent years and is reflected in changes to marijuana-related policies in several countries and states. Where marijuana advocates previously could look almost exclusively to the Netherlands as an example of a country that had relaxed Public opinion about marijuana has shifted its laws, they now have more options. In significantly in the past decade. According to the past five years, eight US states and a CADRES survey conducted in 2008, almost Washington DC, Uruguay, Colombia, and three quarters (73%) of Barbadians believed Jamaica have begun to allow the possession that marijuana should remain illegal. By 2014 of small quantities for personal use; and another CADRES poll revealed that the figure as recently as April 20, 2016, Canada had fallen to 37%, meaning that less than announced its plans to legalise marijuana. half the population by then actively favoured Public support for such initiatives almost retaining the status quo. certainly contributed to the decision by This change in perspective is in keeping these countries and states to legalise, either with a larger global rethink. There is partially or fully, marijuana, but there was now an emerging, though not universal, undoubtedly another factor: pragmatism. consensus that marijuana has therapeutic Maintaining laws that make even the uses for conditions including glaucoma, possession of non-trafficable quantities of multiple sclerosis, nausea in cancer patients marijuana illegal does not appear to have undergoing chemotherapy and epilepsy. been effective in reducing access and For people suffering from chronic pain curtailing its use. marijuana is considered as an alternative to, The University of Michigan’s 2015 and less addictive than the opiates that are Monitoring for the Future report revealed that usually prescribed. Based on this, countries, 80% of American 12th graders (17-18 year such as Canada, Colombia and the Czech olds) said it would be easy for them to obtain Republic have allowed it or its derivatives to marijuana, and approximately 35% admitted be used in the treatment of certain medical to having used it in the past year. conditions. Locally, a 2014 National Council on Even in the USA, where the Drug Substance Abuse (NCSA) Barbados Drug Enforcement Administration (DEA) recently Information Network report revealed that reaffirmed its status as a Schedule I drug – a 47% of secondary school students (a classification that identifies marijuana as broader age range) indicated that marijuana having “no currently accepted medical use would be “easy” for them to access. and a high potential for abuse” - marijuana The report also revealed that 31% of them has been approved for medical use in more had seen students selling or sharing drugs than half the states. at or near school and 41% had actually Beyond the increased acceptance on seen students using drugs at or near school. medical grounds, there has been a decided Twenty percent (20%) of male students and shift in the way that marijuana is being 16% of female students admitted to using perceived, with many now viewing it as marijuana in the past year, and 28% and being more comparable to legal substances 20%, respectively, have used it in their lifetimes. like alcohol and tobacco than harder drugs Clearly, the illegality of marijuana has not impeded school children’s access to it.
Is there an economic argument for legalising marijuana? According to a report from the Criminal Justice Research and Planning Unit (CJRPU) of the Attorney General’s office, the Government spent an estimated $35 million between 2009 and 2014 to house prisoners convicted of drug crimes. Because this category encompasses all drugs, it is difficult to determine conclusively how much of that figure relates specifically to persons serving sentences for marijuana-related offences. But based on other statistics in the report, it is possible to estimate that during that same period the government spent over $1 million housing the 55 adults that were incarcerated solely for the possession of marijuana, a minor offence. These 55 people, along with one youth who was incarcerated at the Government Industrial School, represent only 5% of the persons convicted of this offence. The vast majority, 1,083 persons, primarily received fines or were convicted, reprimanded and discharged. Had even half of the persons convicted with possession only received custodial sentences, the cost would have been substantially higher. To reiterate, this $1 million figure captures only those who were convicted exclusively of possession – the CJRPU report assumes a quantity of less than 15 grams (approximately half an ounce). It does not include persons serving time for more serious marijuana offences like trafficking, intent to supply, cultivation or importation, which tend to carry
longer sentences. Just how much money was spent on inmates with these types of convictions is not apparent in the report, but the report does reveal that it costs more than $30 000 per year to house a single inmate. None of the above figures factors in the money spent policing and prosecuting the 1,652 people convicted of marijuana related offences between 2009 and 2014. While these costs are certainly harder to quantify, they were undoubtedly substantial given that marijuana-related offences accounted for an average of 17% of all convictions during that period. Given how severely backlogged Barbados’ legal system is, is the continued focus on marijuana the best use of scant resources? This is a fair question, especially when 65% of those convicted with marijuana-related crimes are immediately released back into society. And doesn’t this sentencing policy in itself raise questions about how serious the legal system actually considers marijuana to be?
What would legalisation look like?
Opponents of legalisation believe that the relaxing of marijuana laws will have a severely negative impact on society. They fear, to quote one on-line commentator, “all these Zombies stumbling around”. They argue that not only would legalising marijuana be akin to endorsing its use, but that children would
have unimpeded access to it. However, according to the NCSA survey, almost half of secondary school children already know where they can get marijuana, and one in four boys and one in five girls have already used it. The findings of the 2014 CADRES poll echo this at a national level: 43% of Barbadians have tried marijuana and 24% use it regularly. Such statistics raise questions about the effectiveness of criminalisation as a deterrent. On the other end of the spectrum, there are supporters, those often speaking up in man-inthe-street interviews, who envisage legalisation as a continuation of what obtains today, only without the risk of arrest. That scenario is highly likely. In Amsterdam, which has long been cited as a marijuanafriendly city, there are strict rules for its use, just as there are across the states and countries that have recently decriminalised or legalised marijuana. There is no reason to think Barbados would be an outlier. There are two approaches to legalisation Barbados could take. The first is to treat marijuana as a potential revenue generator. Colorado has achieved this through heavy taxation. Jamaica, while thus far is only decriminalising the possession of small quantities, has signalled its intent to capitalise on its reputation for having high quality cannabis. Former minister Anthony Hylton in an April 2016 article in the Jamaica Observer said the country had to take a “long-term and strategic view”, at least in part due to Jamaica’s international treaty obligations, but said that Jamaica was already well-positioned because of the “Jamaican brand” where marijuana is concerned. Alternatively Barbados, which does not have such a legacy on which to build an industry, could adopt an approach more on par with what Prime Minister Justin Trudeau has indicated for Canada – one focused on wresting control of marijuana distribution from criminal organisations and regulating it in such a way that reduces the access that children have to it. But whichever approach to legalisation Barbados might take, it would undoubtedly come with rules and regulations governing both the sale and use of it. Legalised marijuana would almost invariably come with age restrictions, limits for the
quantities users can buy or possess, required licences for commercial growers and sellers, and caps on the number of plants someone could grow for personal use, if that were allowed at all. There would also be restrictions on where it could be smoked: in Colorado, marijuana, though legal, cannot be smoked in public. And there would be penalties for people who contravene the regulations. In short, legal marijuana would not be the free-for-all that many fear… or wish for. Despite the evolving global view that accepts that marijuana has legitimate medical uses and that now acknowledges it to be far less damaging than the drugs it is usually classed with, Barbados continues to spend millions of dollars policing the marijuana trade, prosecuting people charged with its possession, sale or use, and housing some of those convicted of these offences. Moreover, based on the statistics, neither the stigma of it being illegal nor the threat of arrest seems to have been successful in preventing large numbers of people from using it. Several other countries and states have gone the route of making marijuana a legal, but highly regulated product. Perhaps it is time for Barbados to explore doing the same.
efinitions Decriminalisation Decriminalisation permits the possession and use of small quantities of marijuana without arrest or prosecution. Users may still face penalties such as fines, but they do not risk having a criminal record. Legalisation With legalisation, users face no penalties at all, as long as they abide by the regulations governing the use – age restrictions, quantities permitted, where they consume the product, etc. Full legalisation would extend these liberties to the supply side as well (growers, sellers, etc.), again as long as they abide by the established regulations.
Each summer – specifically between June and August, Barbados comes alive with sweet sounds of calypso and soca, the noise of calypso tents, the great aroma of Bajan cuisine and lots and lots of partying. There is colour, there is creativity and there is merriment – it is Crop Over season! The Crop Over festival was revived in 1974 after being dormant since the 1940s and the festival which evolved from the horrendous conditions of slaves on the sugar plantations grew and developed over the years to become tightly entwined with tourism. During the days of slavery, amidst the sting of the whip, the scorching sun and just enough food to keep a slave alive, the only respite that the slaves had was the delivery of the last canes, which they turned into an event of merriment. And like a caterpillar that turns into a beautiful butterfly, it is from this history of violence that Barbadians built a tourism product , Crop Over, that is colourful, creative and merry – and now one of the island’s most significant events, contributing meaningfully to the economy. Successfully managed by the National Cultural Foundation (NCF) which itself was created by the
Government in 1983, Crop Over’s main contributions are in the areas of services, chiefly tourism and retailing. However, other areas such as the creative sectors, car rental firms, advertising, and manufacturing, also benefit.
THE TOURISM CONNECTION While we largely focus on economic factors to explain changes in tourist arrivals (e.g. growth in gross domestic product in source markets and exchange rate fluctuations), historically tourist arrivals have been fundamentally driven by climatic features in the source and destination countries. Barbados, for example, like most Caribbean countries, is characterized by year-round consistent sunshine. But residents of cities such as New York, London and other places who find their weather disagreeable during the months of November, December,
January, February and March, prefer to visit the warmer climates during these months. This link between weather and tourist arrivals can clearly be seen if one looks at historical tourist information from 1977. At the beginning of the year January to March, tourist arrivals were well above 25,000 per month. By the month of April, however, tourist arrivals plummeted to just under 15,000 per month from the United States of America and tourist arrivals remained depressed for most of the summer, before falling temperatures were then correlated with a rise in tourist arrivals in December to well above 25,000 per month. During the summer, known as the shoulder period, between April and September, some hotels and restaurants would have to reduce the hours of work for their staff and even shed labour as a means of surviving this very lean period. So how did Barbados fix this? Crop Over was definitely one answer! The revival of the Crop Over festival in 1974, proved to be quite a successful social and economic policy intervention. The start date for the festival strategically coincided with the beginning of the “slow period” in the economy when visitor arrival numbers tended to
shrink, and with the end of the sugar crop which to this day commences with the “delivery of the last canes.” The goals of the festival were three-pronged: first, boost economic activity by attracting more visitors to Barbados between July and September; second, stimulate other forms of economic activity; and third, enhance creative services. As it relates to attracting more visitors, the redevelopment of Crop Over hit the nail on the head. Long stay visitor arrivals during the month of July when Crop Over is in full swing, increase significantly and in some instances mirror similar arrivals during December and January, the key months of the winter tourism season. For example, arrivals for July 2011 were 58,000, whereas those for December that same year were 55,000, and 52,000 in January. The following year, 51,000 long stay visitors came to Barbados in July, whereas
the numbers for the December and January were 52,000 and 53,000 respectively. In 2014 and 2015, however, the numbers in the winter months outstripped those in the summer months. This can be attributed to the massive promotions undertaken in the winter months to drive those numbers. One of the successes of Crop Over therefore was that it created a reprieve from the normal lean period of summer for hotels, restaurants and transport operators that ply their trade to tourists. The contribution to music goes without saying. The festival is dominated by music. Previously, the production and sale of music CDs, videos and DVDs was a popular feature as the calypsonians, some band leaders and producers looked to market their productions. Many of these were also posted on YouTube, providing the artistes with much needed exposure. It is recognised that Crop Over has the potential to nurture more of the cultural practitioners who are seeking to promote their services
in Europe under the CARIFORUM â€“ European Union Economic Partnership Agreement (EPA). Each year the Government provides a subvention to the National Cultural Foundation (NCF) to assist with the management of festivals. Previously that subvention amounted to about $4 million. In recent times it was increased to $6 million, and for the current financial year the amount quoted in the Estimates of Revenue and Expenditure is $7.3 million. The funds are for the development of the cultural industries, creating opportunities for Barbadian artists to showcase their talents that will be competitive in the local, regional and international markets, and to maximise the sector in the tourism industry. In 2007, the NCF sponsored a study to evaluate the economic contribution of the festival to the economy. While such an estimate appears conceptually simple, in practice this is not the case. Think of all the various businesses involved in tourism: truck rentals, portable toilets, printers, seamstresses and hairdressers, just to name a few. However, the study, conducted during the season that year utilised information on surveys of suppliers (e.g. food, drink, accommodation, etc.), festival organisers (e.g. Kadooment bands, private fetes, etc.) and
consumers. In order to capture the value-added that would have occurred as a result of tourists, survey participants were asked to provide only information on extra expenditure conducted during the month - extra wages, entrance fees, cost of costumes, etc. Utilising the methodological approach, the contribution of the festival was conservatively estimated at $56 million in 2007. Unfortunately, the survey is not conducted on an annual basis. If one, however, assumes that value added would have risen by the same rate as the retail price index, then the contribution of the industry would have been between $70 million and $80 million in 2015. While many areas of activity contributed to this additional value added estimate attributed to the Crop Over festival, generally the additional expenditure by tourists and locals on various
services accounted for more than half of the value added estimate. For locals this would include things such as spending on costumes, food, drink and other related activities, while for tourists, it would also include taking the opportunity to absorb the sights and scenes of the island, while visiting to participate in the festival. Within recent times, the country has experienced an economic downturn accompanied by a prolonged period of austerity to deal with that situation. The thrust of the austerity measures has been to dampen consumption by way of increased taxation, principally the Value Added Tax, wage restraint, and expenditure cuts by Government.
Inflation, which until recently was running at six to seven percent, exacerbated the cost of producing the festival and this has led stakeholders to lobby Government for some relief. However, the 1.3 percent economic growth recorded at the end of June 2016 was sustained during the July to September (2016) period, therefore confirming the input of Crop Over to the GDP numbers. As we turn the corner toward Crop Over 2017, the NCF, is getting into even higher gear this year. Cranston Browne, Chief Executive Officer of the NCF, says the Foundation is preparing for an even bigger festival, since the festival comes just before CARIFESTA, the Caribbean Festival of Arts and they are looking forward to an increase in visitors. Browne said while he could not cite exact numbers, both visitor and economic projections were looking very good and would quite likely surpass those of 2016.
By Shakirah Bourne
is something of a quiet revolution going on in Barbados as people contemplate THERE the benefits of creating a healthier environment by switching from gasoline and diesel
vehicles to electric vehicles (EV), powered by the country’s abundant sunshine. At present there are fewer than 200 EVs sprinkled among the thousands of conventional vehicles which, at peak hours, clog the main arteries that connect urban and suburban areas with Bridgetown. As increasing exhaust fumes and lack of space become more problematic, the company that started marketing and importing EVs in 2014 is very confident that residents of this island will get used to receiving the gift of year-round sunshine to reduce imported fuel costs, as well as toxic emissions. Joanna Edghill, CEO of Megapower, says she and her husband, Simon Richards, who oversees the technical and infrastructural aspects of the operation, are encouraging other vehicle dealers to go green with EVs. the South Pacific, and the UK. In Papua New Guinea, Joanna worked on an EU-funded “Our goal at Megapower is to democratic governance project, while Simon managed a rollout programme for Digicel in roll out a network of publicly the South West Pacific Island, creating 100 telecom sites in six months. accessible charging points Together, the duo has years of experience and skills in private sector development, strategic compatible with all EV vehicles and project management, international development and rapid infrastructure rollout. – Toyota, Kia etc. The more It was their experience in Papua New Guinea, an island rich in natural resources, that companies to bring in EVs, the prompted the idea of starting such a business in Barbados, Joanna’s homeland. more choices the consumer has, The two completed a course on Solar Photovoltaic Technology in the UK, and returned and it enables even more CO2 to Barbados in 2011, where they (Carbon Dioxide) reductions for attended a Caribbean Renewable Barbados.” Energy Forum and were introduced Her latest project is a charging to the Nissan LEAF. But with recent natural disasters such as the death of the Great Barrier Reef in Australia, station where EV motorists can Two years later, that Leaf would or the shrinking ice sheets in Antarctica, global warming has transformed from a distant “fill up” at Welches, St Thomas. become Megapower’s first probability, to a reality at our doorstep. The station is able to serve up imported electric vehicle. to eight cars and covers 56 car A Megapower survey indicates that PERSONAL EXPERIENCE parking spots. on average, motorists in Barbados Joanna and her husband drive only 42 km per day. A full Christy Punnet, a yoga instructor and a proud owner of a Nissan Leaf for two years, dreamed up the idea for charge, depending on the battery believes that she has to do her part by transitioning to a sustainable environmental model. Megapower after realising that in the electric vehicle, allows a “I got an EV because I believe we all have to start making a personal, indelible mark on Barbados’ small size, relatively driving distance of approximately sustainable change. I like never having to go back to a petroleum station and I love the flat terrain and unlimited 100-180km. car: its speed, its interior and its colour.” sunshine, made it not only a great In its first year, Megapower sold 40 Another EV owner, Asokore Beckles, simply did the math. place to live, but also the ideal vehicles, then 120 in 2015 and up “The maintenance and running location to operate an electric to the time of writing, there were a costs are much cheaper vehicle business. total of 160 EVs on the road. This for an EV. I was spending They are no strangers to taking increase is attributed to a growing approximately $800 per month risks, having worked on a range interest in renewable and energyin gas and electricity, and now of projects in places such as Asia, efficient options in Barbados. I only spend around $300 per In the past, threats of climate month.” change due to global warming Along with a home charging seemed as improbable as a future station, Asokore has also outfitted with flying cars and teleportation. his home with solar panels. Joanna has been seeing a trend with solar installations for EV owners, who are green-minded and interested in cost savings and the environment.
“Sixtyfive percent of EV sales have been B2B (Business-toBusiness), not only with companies that operate in renewable energy or energy efficiency sector, but also shipping and transport, courier, printing and accounting firms – proof that the math does add up!” Since 2013, the innovative company has been spreading the EV revolution across the region, and has become the leading suppliers of EV Charging Infrastructure in the Caribbean. A new premium EV is priced between $ 90,000 - $105, 000 with VAT and duties included. In a newspaper interview, her husband, Simon, addressed the high import duties: “The cars attract about $30 000 in duties each when they come in which is about 50% more than the average gasoline car. This is the only country in the world that charges more for electric cars (in dollars and cents), than gasoline cars.” Furthermore, due to the heavy weight of the car’s battery, EVs are charged almost double the road tax of a regular lightgoods
vehicle. Unfortunately, until Government provides incentives and considers emissions when setting the tax price, these high costs may keep EVs out of the reach of the average car buyer. According to Joanna: “If Government is able to offer better incentives, it would certainly boost sales. We get tremendous interest, but the final sale is too expensive for some. It would be ideal also, if carbon emissions are considered when determining the road tax for EVs.” Despite these drawbacks, Joanna is confident that Government is moving in the right direction. “At COP 21 (Sustainable Innovation Forum) in Paris, Government signed up for emissions targets. EVs are a great opportunity to clean up air quality and reduce CO2 emissions.” Indeed, at the United Nations General Assembly in 2015,the Right Honourable Prime Minister Freundel Stuart stated: “CARICOM countries are clear that the upcoming Climate Conference in Paris in December should result in concrete commitments to curb greenhouse gas emissions and restrain the global average temperatures.” At the inaugural Barbados Renewable Energy Association (BREA) Caribbean Sustainable Energy conference held at the Lloyd Erskine Sandiford Centre, the Prime Minister announced that, “Barbados intends to achieve an economy-wide reduction in greenhouse gas emissions of 44%, compared to a business as usual scenario, by 2030.” According to Megapower statistics, every Nissan Leaf on the road saves over 4.7 tonnes of CO2 emissions per year. The company recently opened a new branch in Antigua where the government is very pro-EV. There is zero VAT and duties on imported EV vehicles. Although it is not clear when the Barbados government will implement similar incentives, Joanna believes that Government is making progress in supporting EVs through the new Energy Road Map, having recently purchased two vehicles as a pilot, through the Division of Energy – Energy Smart Fund. “Maybe
one day, the Government will change over its entire fleet to EVs, to show a vote of confidence in the vehicles – starting with the Central Bank!” she says with her trademark infectious laugh. With over 2 000 new cars imported in the first seven months in 2016, according to the Barbados Statistical Service, the demand for new cars is high and EVs are not being ruled out. Maintenance costs for an EV can be almost 50% less than those for a gas vehicle. There is no engine, no gearbox or plugs, not even the need for an oil change. A full service once a year is recommended at a cost of $600. And what about insurance? Back in 2013, when insurance and financing companies were unfamiliar with the vehicles, they charged a higher premium and interest rates. Three years later however, insurance and finance companies are so familiar with EVs, that the rates are the same as with normal gas vehicles. Due to lack of standardisation with the Automated System for Customs Data (ASYCUDA) for duty codes for EVs, Megapower at first faced frustrations, while attempting to clear vehicles at the port. Though duty codes are still not standardised, port officials have now grown accustomed to EVs and the process is now much smoother.
every year. Megapower constantly gathers data and feedback on the cost of electricity and other types of vehicles that customers enquire about. At the moment the company is looking for a 1215 seater, that could replace a ZR van.” Thanks to stricter emissions rules, consumer demand and falling technology costs, some studies suggest that by 2030, EVs could account for two-thirds of all cars in wealthy cities, such as London and Singapore. According to Reuters, Norway is now leading the world in the sale of EVs, with one in three new cars sold being electric, and though EVs are a fraction of the global vehicle stock - less than 1% - the industry is growing about 10 times faster than the traditional vehicle market. By 2018, Megapower aims to have 500 vehicles on the road and Joanna is excited about the CHARGING STATIONS future. “Imagine arriving at GAIA Prospective EV owners are sometimes (Grantley Adams International haunted by lingering thoughts of running Airport) and seeing a fleet out of charge, but there is no need to of EV buses and cars worry, says Joanna. There are actually available! I would love more charging stations around the island to see Barbados as than petrol stations. Running out of charge is a rare occurrence. a greener, goto destination Since its launch in 2013, only two motorists have run out of charge – but it’s for locals, businesses just like gas - avoidable if you plan. and Another consumer fear is the cost of a tourists.” replacement EV battery, which currently has a lifespan of six to eight years. The market price of a new battery is approximately $12 000, however, according to data on EV Volumes, battery prices are getting 20% cheaper
Mr. Maurice Strong Environmental Challenges to Developing States in the Twenty-First Century Sir Winston Scott Memorial Lecture - 1996
An explanation of the de risking phenomenon and its impact on Barbados By Dr. DeLisle Worrell
BARBADOS treasures its reputation as a country which offers international companies, banks and other financial institutions a competitive, well-regulated and transparent location for their business activities. We are able to provide accounting, financial, legal and other professional services of a quality similar to what may be obtained in major financial centres, such as New York and London, albeit on a very small scale. The principal motivation for companies to locate in Barbados is to be able to offer products and services to the world at the most competitive prices. The things that make Barbados so competitive include the strength of its institutions, its infrastructure, the widespread use of the Internet and its health and educational services. In all of these areas we outrank the rest of the Caribbean and Latin America by a significant margin, according to the World Economic Forum’s Global Competitiveness Report 2016-17. Barbados’ strength as an international business location is enhanced by the high quality of its regulatory framework, a circumstance that is attested to by the world’s foremost official bodies. The International Monetary Fund (IMF) and World Bank have conducted reviews which document the standards of financial regulation in Barbados; the Caribbean Financial Action Task Force has reviewed the island’s laws and practices to combat money laundering; and the Global Forum of the Organisation for Economic Cooperation and Development (OECD) has evaluated its framework for sharing tax information with other countries.
BARBADOS ON PAR In every case Barbados has been judged as keeping pace with international guidance and as being on par, not just with other international financial centres, but with the US, the UK and Canada as well.
All businesses located in Barbados are liable to pay company tax whether they are registered as a local company, or an international company that is registered to do business exclusively with persons outside Barbados. The economy depends on foreign exchange; it provides the wherewithal for the imports that sustain all economic activity. In recognition of this, the island’s company tax is graded according to the proportion of a company’s output that is exported. International businesses benefit from Barbados’ most preferential tax rates, the rate that is enjoyed by any company that exports 100% of its output. That tax is paid on the value added in Barbados and the earnings of the company’s owners are protected from being taxed again in their home countries on that income by double taxation treaties (DTA’s). In sum, Barbados attracts international companies to its shores because they are able to service a global market from a convenient, cost-effective, high quality location which offers a highly regarded regulatory framework and enviable lifestyles for their staff. Small international financial centres like Barbados, which are regulated to international standards, play an important role in increasing the efficiency of international commerce. In the modern interconnected world, international companies can disperse elements of their business around the globe, so as to be able to address target markets most competitively. That is the logic which attracts business to Barbados: they improve their competitiveness in the target markets by virtue of their Barbados operations. In recent years, the growth of Barbados’ international business has been slowed by revisions in the application of double taxation treaties by the Canadian Revenue Authority (CRA), and new guidance and developments regarding the operations of international banks emanating from the world’s standard-setting bodies. Canada is the home country of most of Barbados’ international business companies, and the CRA’s new rules have resulted in the closure of some Canadian subsidiaries operating in Barbados, and a contraction in the business operations of others.
In the wake of the 2008 international financial crisis, the international community has undertaken major initiatives to strengthen international financial regulation, reduce the risks of bank failure, improve vigilance against money laundering and inhibit tax evasion and avoidance. In addition, courts in New York and elsewhere have imposed fines for alleged bank misconduct. This combination of strictures has resulted in many international banks closing lines of business and disposing of their operations in some countries, where the potential of the market no longer warrants the increased costs and risks. This is the phenomenon known as de-risking. International companies operating in Barbados have been affected and an unknown amount of business may have been lost because the Barbados market is so small. Banks are selective about expanding their customer base because it costs a great deal to do so and the potential revenues from the additional business are modest. What is more, the cost to do the identical business in large international financial centres is sometimes lower, because banks there are not required to meet standards comparable to what is expected of small international centres like Barbados. The slowdown in Barbados’ international business services is damaging to the island’s economic prospects, but it also harms the competitiveness of international businesses, and reduces the efficiency of global commerce. The International Business and Financial Services (IBFS) sector is a pillar of the strategy to diversify the Barbadian economy, and is the second most important source of foreign exchange for the country after tourism. The IBFS slowdown reduces the overall rate of growth of the economy. The slowdown also hurts international competitiveness of many Canadian companies, which have located in Barbados to access third markets. That means a loss of income and job potential for Canadians. Moreover, there is a loss of efficiency all around, because customers will have to pay more for services from locations that are less
competitive than Barbados. The de-risking phenomenon has become a worldwide issue, and it has attracted the attention of the Managing Director of the International Monetary Fund (IMF), the US Secretary of the Treasury, and Dr. Mark Carney, Governor of the Bank of England and Chair of the Financial Stability Board (FSB). The Central Bank of Barbados has made important contributions to this global debate. While a senior Economist at the Central Bank of Barbados, Dr. Allan Wright, now the Inter-American Development Bank’s (IADB) country director for the Bahamas, coordinated a study on the impact on the Caribbean which is published by the Caribbean Centre for Money and Finance (www.ccmf-uwi.org), and the most comprehensive study of de-risking in international financial centres, by a Central Bank team, which I headed, has been published on the Central Bank’s website (www. centralbank.org.bb). The Bank is represented on the Financial Stability Board’s Task Force on de-risking. Through its participation in the work of the FSB, the IMF, and the Regional Consultative Group for the Americas (RCGA), the Bank contributes to efforts to reverse the de-risking phenomenon. There is still reason to be confident about the future of the IBFS sector. The island’s underlying competitiveness, Barbados’ reputation as a well-regulated jurisdiction and the efforts underway to adapt to the current circumstances, while contributing documentation and analysis towards a resolution at the global level are all grounds for this. There is money to be made by global businesses that locate in Barbados, levels of profitability that cannot be achieved in alternative locations and markets that can be accessed more conveniently from Barbados than from anywhere else. This is the business that will drive the future growth of international business in Barbados.
By Novaline Brewster
The six-member delegation landed in
Beijing on a scorching Sunday morning in early June 2016. Central Bank Governor, Dr. DeLisle Worrell, and his wife Monica, distinguished Barbadian attorney-at law, Sir Trevor and his wife, Lady Carmichael, Barbados’ long-standing economic adviser in New York, Geoffrey Bell and I were the guests of the Institute of Foreign Affairs, thanks to the Embassy for the People’s Republic of China in Barbados. We spent a week in Beijing and Shanghai before the Governor, his wife and I headed to Hong Kong for a few days. While I did not expect the sweltering heat that bathed us on arrival in Beijing, I had packed dozens of masks in preparation for heavy smog. That smog never presented itself. Though most of the delegation had visited China previously, this was my first trip. Governor Worrell who was there in the 1970s, recalled the symbols of a centrally controlled society. I personally had only encountered the Asian giant vicariously through China Central Television (CCTV) of which I am a huge fan. I therefore opened my mind to whatever awaited me. Like the other delegates, I was struck by the modernity of both Beijing and later Shanghai. The humongous, first-rate airports, magnificent buildings, spectacular skyscrapers, fleets of luxurious western vehicles, excellent road networks and other infrastructure, as well as the orderliness
of the roadside kiosks from which the merchants plied a ripping trade. This infrastructure bespeaks the economic behemoth that China has become. It’s the world’s second largest economy after the United States of America and has certainly graduated from the centrally closed economy that Governor Worrell recalled from his trip in the 1970s to a manufacturing and exporting hub over the years. Between 1989 and 2016, the annual growth rate in China averaged 9.82 percent, propelling it to economic world prowess. The economy has slowed from a growth rate of 10 or 11 % at the turn of the century, but the Chinese remain optimistic about sustained moderate economic expansion. Our hosts at the Development Research Centre (DRC) of the State Council of the People’s Republic of China forecast economic growth of 6.5 percent annually between 2016 and 2020. In 2016, growth was 6.7 percent. “We are set to build a moderately prosperous economy over the five-year planning period, 2016 to 2020,” Pelin Liu, Vice-Director-General and research fellow of DRC speaking through an interpreter, informed us. He rejects concern worldwide about the current slowdown and the knock-on effect, asserting that China would indeed realise its economic growth forecast. He revealed that the country’s 13th Strategic Plan has outlined 25 targets to attain sustainable growth. Topping the list are economic growth and poverty alleviation for 50 million citizens. Underpinning these targets are five development concepts: innovation, balance, greening, open development, and sharing development. As a consequence of the economic growth and reformation, the middle class is exploding in terms of numbers and disposable income is rising. Estimated at
439 million, this segment of the population is living more affluently, and driving consumption both at home and abroad. They are travelling more, particularly to exotic locations, and investing in properties in international cities. These two trends open up great opportunities for Barbados in tourism and real estate, with the Chinese underscoring the potential for a new tourism market, in particular. Pelin cautioned, however, that proper planning is required for destinations planning to welcome Chinese visitors because the sheer volume of the traffic can overwhelm small countries, as is happening now in Fiji. Governor Worrell supported Pelin’s assessment, concurring that a slither of the Chinese market would suffice to bolster Barbados’ tourism performance. On the subject of investing in Barbadian real estate, Sir Trevor reiterated that Barbados is open to foreign direct investment. He referred Pelin and his team to our High Net Worth Individual Programme which allows foreigners over the age of 50 who purchase real estate in Barbados to obtain a special resident’s permit. Expanding on our economic fundamentals, Governor Worrell explained that Barbados was a small open, private sector led economy, heavily reliant on imports. He said our management of a fixed exchange rate regime since 1975 had underpinned our economic success.
HONG KONG’S FISCAL DISCIPLINE Like Barbados, Hong Kong, a special administrative region of China, also boasts a fixed exchange rate. While our dollar is pegged to the US at a rate of BDS$2 to US$1, the Hong Kong dollar is anchored to the US at a rate of HKD$7.80 to US$1. To defend the peg, Hong Kong has amassed a huge stock of foreign reserves primarily from commercial banks purchasing local currency and from foreign investments. The Hong Kong government has
legislated fiscal discipline, resulting in the accumulation of significant surpluses, which must be deposited with the Monetary Authority. The government avoids profligacy and resists populace pressure to finance welfarism. Surpluses are largely to support systemic activities and by law the Minister of Finance is the sole power to authorise their expenditure.
THE DERISKING PHENOMENON De-risking was a hot topic, with the Governor sharing with Dr. Yi Gang, the Vice Governor of the People’s Republic Bank of China, the debilitating impact of international financial regulatory framework on small International Financial Centres like Barbados. Dr. Worrell warned that the increasing costs associated with compliance and the dynamic international requirements, are resulting in banks discontinuing several critical services in the Caribbean. The Hong Kong Monetary Authority reported in subsequent meetings that it is also facing similar challenges because of the phenomenon. The United States’ clearing facilities and transactions by small and medium-sized businesses in Hong Kong, now considered too minute and voluminous, have been suspended, while customers, including the international consulate staff, were assessed as non-bankable. Our Governor and his Hong Kong counterpart agreed to coordinate an approach to resolving the vexing issues at the level of the Financial Stability Board (FSB), with a promise of assistance from the People’s Republic Bank of China, a member of the FSB.
TECHNOLOGY DRIVEN Upon entering the Shanghai Stock Exchange (SSE), the world’s first 100% electronic exchange, we quickly recovered from the initial shock of the absence of physical activity on the Floor. We had
all but forgotten that trading is virtually electronic, resulting in few traders actually visiting the SSE. The SSE is a members’-owned public company, managed by approximately 100 companies and regulated by the China Securities Regulatory Commission (CSRC), the equivalent to the Securities Exchange Commission (SEC) in the United States. Individual investors dominate the Exchange. They number 140 million, account for 30 percent of market capitalisation and between 80-90 percent of trading volume. These individuals conduct their own trades, rather than use brokers, creating a bit of a worry, given the growing sophistication and complexity of the markets. The SSE is embarking on a mass education programme to alter this practice. We got a close up look also at China’s technological prowess. At the Zizhu National Hi-tech Industrial Development, we witnessed mostly Chinese millennials uncover new, cutting edge and dynamic technologies in their research and development explorations; Huawei officials shared how technology is revolutionising the delivery of education; and a spin in a TESLA-manufactured electronic car was a thrilling and delightful taste of the velocity and rapid acceleration capabilities of these vehicles. Unfortunately, the very tight schedule of meetings robbed us of opportunities to sightsee. We literally whisked past Tiananmen Square, popular for the 1989 uprising, on the way to the Barbados Ambassador’s Office and sailed nearby the Oriental Pearl Tower during a riverboat cruise, but there were no visits to the Great Wall or to the Forbidden City, which we peered at from the distance. Still, the warmth and hospitality of the Chinese with whom we interacted was fair compensation. Sadly, we learnt no Chinese because most of our hosts spoke English fluently, or in one case, spoke through an interpreter. The China experience was undoubtedly rewarding and exceeded our expectations,
even for me who had landed in Beijing with an open mind. We absorbed the rapid transformation of China from a closed society and economy to an open one in just over four decades; rubbed shoulders with leading Chinese scholars and officials; networked and developed relevant and important relationships; promoted Barbados’s economic management model and explored business opportunities between the two countries.
LEAVING A LASTING IMPRESSION As a consequence of our visit, the Chinese Academy of Social Sciences has published one of the Governor’s papers, an article entitled, Policies for Stabilisation and Growth in Small Very Open Economies, in the “Journal of Latin American Studies”, and 20 Central Bankers are studying Mandarin every week at the Bank, the first employees to benefit from a language class put on by the Confucius Institute in Barbados. The many modern features of a large economy, grandiose buildings, luxury cars, cutting-edge technology, and diverse and exquisite cuisine astounded us. But our encounters with the Chinese also revealed many priceless, useful Chinese values, practices and traditions. The Chinese are slavishly punctual, hospitable, thorough, success oriented, confident, rigid people. Yes, they display several characteristics of purposefulness, like reinforcing, reiterating and repeating the logistical arrangements for our trip. Therein lies the paradox: how could such a resolute people who are so structure oriented, record such economic success and world prominence in a few decades? My conclusion after recovering from the oppressive heat: discipline.
By Jamila Beckles
Determining The Optimal Allocations of Government’s Healthcare Expenditure Budgets by Shane Lowe Workers’ health is widely known to be a strong determinant of labour productivity and, by extension, of economic growth. Over the years, the Government has heavily subsidised its healthcare services across the island which has led to a higher life expectancy due to low levels of communicable diseases and low infant mortality rates. This is borne out by the 2015 United Nations Development Programme (UNDP) Human Development Index – a well-known measure of welfare – where the country ranked 10th in the Americas. The provision of healthcare programmes has taken a toll on the government due to rising expenses across public entities, falling tax revenues and high domestic debt levels. These costs can be problematic as they tend to hamper the quality of healthcare services and the ability to fully fund these programmes. It is with this in mind that the author sought to evaluate the impact that public spending on healthcare services – looking specifically at primary healthcare, hospital services and the pharmaceutical programme - has on labour productivity and the healthcare programmes that Government should optimize its spending upon. The paper utilizes healthcare data from 1982-2013, coupled with a series of econometric techniques to evaluate the optimal allocations of healthcare expenditure. The author found that over time, spending on primary health care services, which includes immunizations and basic health services, significantly increases an individual’s labour productivity. However, there was little evidence indicating that hospital services and the pharmaceutical programme enhanced worker productivity. These results are especially noteworthy since this can be the first key to reducing inefficiencies in the public health care system. Over the years, the public hospital has been plagued with oversaturation of patients, and extended wait-times. In light of the above, the Government can divert more of its new resources to primary healthcare services to reduce the number of patients per practitioner and wait-times at the public hospital. This will ensure that individuals receive the necessary care they need in a timely manner which can then lead to a more healthy and productive nation. Nevertheless, the author notes that Government should still seek to cut its expenditure where needed, while ensuring that delivering a high standard of healthcare remains of utmost priority.
Prosperity and the Exchange Rate Regime
by Winston Moore, Jamila Beckles, DeLisle Worrell The choice of an appropriate exchange rate regime has been a popular debate among researchers for many years. Some have emphasized that exchange rate flexibility is more appropriate since it is able to cushion exchange rate shocks by automatically adjusting the exchange rate to changing economic currents. Others have argued that fixed exchange rates are ideal for ensuring economic stability and prosperity. Nevertheless, what is certain is that exchange rate stability stands as one of the most salient exchange rate regimes for small open economies that are unable to substitute imports for domestically produced goods. The paper Prosperity and the Exchange Rate Regime therefore analyses the relationship that manifests between the volatility in a country’s exchange rate and its prosperity (measured by the Human Development Index (HDI)). To do so, the authors utilised a list of small states from Moore et al. (2015), which are defined by their population, Gross Domestic Product (GDP), and export diversification. The choice of the correct international reference currency was critical to determining the level of exchange rate volatility that will emerge within a country. The authors compared the volatility of each country’s domestic currency in terms of the US dollar and their dominant neighbour. The currency denomination with the lowest volatility was assumed to be the currency that the country should anchor its own currency against. For example, the results suggested that in the case of Luxembourg, the Euro possessed a lower volatility compared to denominating the currency in the US dollar. This meant that the European currency is the appropriate exchange rate anchor for Luxembourg’s domestic currency. After identifying the correct currency of reference for each country, the exchange rate volatility of the groups were plotted against the HDI. An expected negative relationship prevailed which reinforced that increases in the countries exchange rate volatility can lead to lower levels of prosperity. A regression analysis (a regression analysis is a statistical procedure used to estimate the relationships among variables) also reinforced the preceding, since regressing the exchange rate volatility of each country and a set of control variables against the corresponding HDI indicated that stable exchange rates – denominated in the appropriate reference currency – have experienced increased levels of human development.
The Success Factors of Manufacturing Firms in Caribbean Small Island States: A Look at Barbados by Crystal Drakes and Winston Moore
The paper The Success Factors of Manufacturing Firms in Caribbean Small Island States: A Look at Barbados, is a particularly interesting study since it is one of the very few papers that analyses micro-level firm data in small states. The manufacturing sector in Barbados is one of the drivers of economic growth in the island, as it accounts for approximately 4% of Gross Domestic Product (GDP) and employs over 14% of the labour force. This sector is also a major foreign exchange earner which makes this comprehensive analysis vital to ensuring the flow of much needed foreign exchange within the island. The study sought to determine the short-run firm-level factors (economic, organizational, and innovative) that contribute to the success of manufacturing firms in small states. To do so, econometric techniques were utilised with data comprising 308 small and medium sized manufacturers from eight Caribbean countries for 2010. The limited amount of data for Barbados pressed the authors to use a number of Caribbean islands - similar to Barbados in economic and geographical aspects - to aid with the analysis. The results indicated that firm size can be a hindrance to performance, in that smaller firms tend to have lower levels of sales and growth. However, smaller firms within the market can rise above this limitation by increasing labour productivity and investment in fixed capital. The authors emphasized that firms can maximise their input potential and performance by adopting the latest in technology, and a highly skilled workforce. This will benefit firms by giving them the upperhand by producing high-quality products in a more efficient manner. Credibility, by way of an internationally recognised certification and following global international standards, is advantageous to firms in the island. It also stands as an imperative factor of productivity since companies that are credible are more likely to have a higher market share and increased competitiveness. Peculiar to the study was that firm-level innovation had no impact on performance. This may be due to the fact that firms usually realise increased returns from innovative activities in the long- run, rather than the short-run.
Size, Structure, and Devaluation
The authors went on to perform a series of analyses on each group’s concentration ratios, (in this context, concentration ratios by Winston Moore, Jamila Beckles, DeLisle Worrell represent the degree of diversification of the country’s production base. It is calculated There is a set of criteria that a country must meet in order to by summing the top five exported goods make an exchange rate devaluation successful. First, because and services divided by the total goods and exchange rate devaluations aim to competitively price local services exported by the country annually), exports and to sway individuals to consume fewer imports world market share of exports, potential and instead use more domestically produced goods, the for import substitution, and the impact of a country has to be able to replace higher priced imports, with devaluation on exports. domestically produced goods. The results indicated that small open Second, the country should have a large world market share for economies had greater concentration ratios the goods that it produces. In this instance, the country should compared to larger economies. This meant be able to influence world prices and by extension, produce a that smaller economies had little scope to diverse set of goods that are substantial in quantity. produce a large set of goods and limited And third, devaluation can be successful so long as the inflationary potential for product diversification; larger impact of higher priced imports does not affect the profitability of economies had more latitude. manufacturers in the primary stages of production. Additionally, the authors went on to further It is with this in mind that the authors sought to analyse each distinguish both large and small economies criterion by analysing peculiar characteristics in both small by the use of charts depicting quantifiable and large economies. To differentiate these economies, the thresholds (quantifiable thresholds represent authors classified each country into four thresholds based on its the magnitude of the population, land area, population, land area, and Gross Domestic Product (GDP). In and GDP that is exceeded for a country’s doing so, 33 small countries and 32 large economies were large size to be exhibited). identified within the sample. Countries with a population more than 1.2 million had a more diversified production base, while below the threshold, small size manifested with higher concentration ratios. Likewise, countries with a GDP threshold above $8 billion had smaller concentration ratios - as in the case of large economies – compared to those below the threshold. However, there was no clearly defined threshold for the land size. The study reinforced that unlike larger economies, small states had little potential for import substitution as indicated by their inability to substitute their top five domestic exports for the corresponding top five imports of each country. Given the results, it is seen that an exchange rate devaluation would do more harm than good to small open economies. Exports would not be very profitable since producers would incur increased production costs given inflationary pressures that will arise from higher priced imports. In the end, economic growth and prosperity would be jeopardised.
* Working papers are academic articles that are a work-in-progress and are submitted by the author(s) for further comments and suggestions.
The ways in which a government adjusts its spending levels, tax rates and government borrowing. It is complemented by monetary policy undertaken by a central bank.
Bonds issued by a national Government. They may be in the local currency or in a foreign currency. Debt issued by governments of developing countries is usually considered to be a riskier investment than for an industrial country.
Current Account Balance
An economic indicator, expressed as the difference between the value of exports of goods and services, and the value of imports of goods and services. A negative current account means that the country is importing more goods and services than it is exporting.
International Financial Market
A place where financial instruments are traded between individuals and/or countries. The market is a virtual one, consisting of a wide set of rules which govern market transactions and institutions which carry out the transactions.
Medium Term Fiscal Strategy
It is typically a five-year strategy which outlines the progress toward meeting the main economic objectives of the Government. The Medium Term Fiscal Strategy (MTFS) should be updated annually.
Sovereign State Sovereign Debt Crisis
Properly understood, this refers to a situation where the Government is unable to pay interest on the government debt on schedule, and/ or to repay or roll over existing debt when it matures.
A sovereign state is a juridical entity that is represented by a centralised government having sovereignty over a geographic area. A sovereign state has the capacity to enter into relations with other sovereign states and it is not accountable to any other power or state.
Welcome to our second edition of EI.bb, which should leave you in no doubt that there is a very bright future for our island Barbados. What...
Published on Apr 24, 2017
Welcome to our second edition of EI.bb, which should leave you in no doubt that there is a very bright future for our island Barbados. What...