Economic Transformation in the Islands
The Caribbean island nations of Barbados and Jamaica are in the midst of transitioning their economies to rely on higher-value activities.
The Caribbean basin is dotted with island nations small in size, but generous in benefits bestowed upon companies doing business there. Two of them, Barbados (population 274,000) and Jamaica (population 2.8 million), offer unique legal, tax, logistics, and human capital advantages for expanding companies. Most people know these countries for the quality of life they offer; while this is a selling point, itâ€™s also just one of many factors that has led some of these countries to success in attracting foreign investment. Lately, Barbados and Jamaica have become more ambitious in their efforts to let the world know what they have to offer growing companies.
Barbadosâ€™ literacy rate of 99.7% underscores its potential for success in industries beyond tourism. Western companies, particularly those from the United States and the UK, will recognize the legal environment derived from English common law and statutes. Health care in Barbados, according to Barbadian economic developers, benefits from the most modern medical facilities in the Eastern Caribbean (giving rise, incidentally, to a growing â€śhealthcare tourismâ€ť trade). Although agriculture (mainly sugar) and tourism continue to be critical pillars of the local economy, Barbados is relying on growth in international business, financial services, and light manufacturing (including cement blocks, clay tiles, garments and textiles, electronic components, and chemicals) to increase its economic diversity.
Barbados spends more on education (both as a share of GDP and as a share of total government expenditures) than either the U.S. or Canada. That helps account for its high literacy rate as well as its ranking of 31st (out of 177 countries) in the United Nations Human Development Index 2006. In the World Economic Forumâ€™s Global Competitiveness Index 2006-2007, Barbados also ranked 31st (out of 125 countries measured), and was ranked fourth in the western hemisphere. (Its rank fell to 50th in the 2007-2008 edition, but it seems clear that Barbados has successfully begun the transition from an â€śefficiency economyâ€ť to an â€śinnovation economy.â€ť)
Another statistic that reassures investors is that Barbados ranked 24thâ€”only two places behind the United Statesâ€”out of 163 countries in the Transparency International Corruption Perception Index 2006. Also, out of all the potential problem areas measured for each country in the Global Competitiveness Index 2007-2008, Barbadosâ€™ two least problematic areas were government instability and corruption, scoring better in both than the United States.
â€śThe world is, indeed, at a crossroads and if Barbados is to become a genuine player in a complex world economy, it must adopt innovative strategies that ensure its continued global competitiveness,â€ť says Annalee C. Babb, CEO of Invest Barbados, a state-sponsored investment promotion corporation.
Jamaicaâ€™s Inflection Point
Jamaica is also at an exciting point in the transformation of its economy. The island is searching for innovative ways to leverage its cultural and creative assets across its efforts to promote foreign inward investment. â€śThe [current] global currency of trade and business is not gold, dollars, or real estate, but intellectual capital,â€ť says Robert Gregory, president of Jamaica Trade and Invest (JTI), a government controlled company that promotes economic development in Jamaica. â€śThe industrial age has long given way to the information knowledge economy, and the defining value of the [present] time is the deployment and exchange of intellectual products and services. That is the truth that Jamaica has to come to grips with in this era of the 21st century.â€ť
The way forward, according to Gregory, is to continue reforming the islandâ€™s education system, which will spur a cycle of inward investment and retention of talented native Jamaicans.
Despite room for improvement, companies donâ€™t have to wait for opportunities in Jamaica. Among the industries most likely to develop rapidly are agriculture, mining, manufacturing, tourism, and information communication technology. The 1990s saw sweeping economic reforms in Jamaica that removed exchange controls, reduced tariffs, stabilized the currency, reduced inflation, and removed restrictions on foreign investment. The economy responded, creating a prime opportunity for companies seeking to get into a high-growth economy at an early stage. In 2006, Jamaicaâ€™s GDP grew by 2.6% overall with the highest growth in mining (3.6%), tourism (4.8%), and agriculture (5.6%). Goods-producing and related non-service industries grew by 3.4%.
One example of a U.S. company doing business in Jamaica is Affiliated Computer Services, Inc. (ACS), headquartered in Dallas, TX. With nearly 55,000 employees in close to 100 countries, this Fortune 500 firm provides business process outsourcing (BPO) and information technology services to commercial and government clients. ACS entered the Jamaican market in 2001 through a strategic acquisition; today it operates a 45,000-square-foot document processing (up to 25,000 documents per day) and call center (about 6,000 calls per day) facility in Montego Bay. ACS in Jamaica has gone from offering only data entry services to offering finance, administration, and payroll benefits processing. The company has increased its workforce in Montego Bay from 750 to 1,400, and is building a new 65,000-square-foot facility to accommodate future growth.
ACS cites the countryâ€™s political stability, large pool of skilled local workers, and good infrastructure as the key factors in its long term investment decision.
Contrary to the popular perception of Jamaica as an island best suited for relaxation, Langford says that â€śthe dedication and work ethic of Jamaicans far surpasses that of workers in any other country.â€ť