A Guy's View - Manufacturing, agriculture and tourism

In the recent Budget, the Minister of Finance announced the implementation of a National Social Responsibility Levy of two per cent on all imports except for the manufacturing, agriculture and tourism sectors. As per usual, there has been mixed reaction to this initiative.

 

As is also normal, one might expect that political persuasion may have coloured the opinion of some persons to this.  However, it is useful to step back from politics at times and look at the country. Using this approach, the levy seems like a good step for the country, provided it is used to fund health care as it is proposed to do.

 

The Minister was thoughtful in developing this levy.  It was not just imposed without consideration to its impact on the economy. The exempted areas demonstrate that the Minister was alive to the need to protect certain key areas.

 

Since the 1980s, Barbados’ manufacturing sector has been struggling.  Manufactured exports are modest and import substitution is not terribly significant. Yet, this sector has the potential to transform the economy. In addition to generating foreign exchange, it could create meaningful employment for skilled Barbadians.    

 

Joinery used to be a popular occupation for many men across Barbados.  Some of the most durable and attractive furniture one can find was made by local craftsmen. Joiners are now a rare species among our artisans. This is probably the case because people no longer see this area as a good prospect for secure employment.

 

This would not have been the case when we were exporting furniture in large quantities. It does not appear a difficult link to make between the decline of furniture manufacturing and the near 

disappearance of the joinery skill which was once so prevalent.

 

It is now fashionable to buy furniture that is made with composite materials and which fall apart if subjected to minor insults.  While this may be a cheaper option, persons who value quality would be willing to pay a little more for sturdy, well-constructed furniture. We can source high class mahogany, but we must also be able to secure the services of workmen who can make the desired pieces.

 

The need to preserve highly skilled crafts makes the exemption of materials for manufacturing from the National Social Responsibility Levy an eminently sensible decision. Of course, there are other good reasons for this that may have been on the Minister’s mind because of their direct impact on the economy.  

 

Manufactured exports are not limited to furniture or items that employ such skills. We probably export more rum now than we ever did furniture.  Since sugar’s drastic decline, the country now has to import molasses for the production of our fine rums, which, I hear from the whispers of experts, makes our rum a little less fine than it used to be when our local molasses was used.           

 

This leads into the rationale for the exemption of agriculture sector items.  Although we have traditionally paid more lip service to agriculture than work for its development, it remains important to the country. Notwithstanding our small size and consequent limited land space, it is a brave country that would ignore the importance of attempting to feed itself.  

 

In trying to avoid dealing with this sometimes uncomfortable truth, some point to the importation of specialised foods to satisfy the tourism sector.  But the last time I checked, there were more Barbadians to be fed than tourists. Recognition of this has led agriculture officials to look at introducing different sweet potato varieties. They have also been working on a cassava project to make this root crop a more important staple in our diet. Work has also been done on different flours, like cassava and breadfruit.

 

The development of these foods may be of two-fold advantage. If the quantities are large enough, there may be some export ability. But even before we reach there, import substitution would be a reasonable outcome. We could save millions of dollars on our food import bill if these agricultural efforts are successful.

 

The Barbados Agricultural Development and Marketing Corporation continues to tell us of the successes of local farmers in the production of certain meats, especially chicken. According to their statistics, we now produce about three million chickens per year in this country, all for local consumption. And still we hear of chicken imports. Whatever position one takes on the issue of imports, the Minister of Finance was wise not to do anything to adversely affect our agriculture industry. We would do well to be guided by the words of Allan Savory: “Agriculture is not crop production as popular belief holds – it’s the production of food and fibre from the world’s land and waters. Without agriculture it is not possible to have a city, stock market, banks, university, church or army. Agriculture is the foundation of civilisation and any stable economy.” 

 

The Minister also stayed away from imposing the levy on the tourism industry. When all else is challenged, tourism has been the one strong leg on which our economy has stood in recent years. The argument may be made that we moved from the bad position of a monocrop culture, when only sugar sustained us, to a similar position of another single sector on which our economy stands. This argument aside, it cannot be denied that tourism has served us well.

 

One suspects, however, that the Minister is fully aware of this situation.  One must believe that it was not by coincidence that the sectors he exempted from the levy are manufacturing and agriculture, along with tourism. This speaks to a recognition that he is not willing to forget about the other economic sectors and put all of our eggs in the tourism basket.  Tourism is a fickle industry that could be impacted by many factors over which we have no control.  While we should appreciate what it provides, it should not be our place of repose.

 

In the current environment, the Minister has wisely chosen to continue to protect this important sector. It is crucial that it continues to do well, while strategies are found to reinvigorate manufacturing and agriculture. These sectors are delivering at different levels now, but they are all important to this country’s sustainability.