Government’s Economic Diversification and Growth Fund Bill has been presented as a bold attempt to reshape Barbados’ economy in the face of an extremely uncertain global environment for small economies like ours.
Frankly, few would argue against the need for growth, diversification or even the introduction of protective measures to hold on to current gains and seek some measure of future proofing. Yet, concerns raised by respected economists suggest that the bill, as drafted, may fall short of its promise and even risk repeating old development mistakes.
Professor Don Marshall, Professor Troy Lorde, and economist Jeremy Stephen have not rejected the idea of the fund itself. In fact, Stephen has supported the creation of a sovereign wealth-style mechanism to replace what he viewed as an ad hoc system of tax concessions that has dominated public policy for years. The concern, however, is that the bill appears rushed, vague and weak on governance, while drawing a substantial $225 million from the Consolidated Fund.
Stephen’s critique, outlined in the local media, highlights drafting concerns in the legislation that raises questions about how carefully it was prepared. More importantly, he notes that the bill does not clearly explain what kind of financial support the fund will offer. Is it providing grants, loans or equity investments? Each option carries different risks and requires different safeguards. Without clarity, monitoring and accountability become difficult, and public money is left exposed.
Governance is another major worry. The proposed Growth Fund Committee would have six members, four of whom are public officers. With a quorum of four, decisions could legally be made without any private sector input.
Stephen warns that this structure opens the door to political influence and weakens the business discipline needed to assess large investment proposals.
His strongest concern is the provision that allows the minister to override the committee’s recommendations. Laws, he argued, should protect the country, including the government, from misuse of public funds.
Meanwhile, Professor Marshall questions whether the bill actually promotes economic diversification. He notes that true diversification outlines a clear industrial policy that targets innovation, value-added activity and strategic sectors. This bill, he suggests, is silent on those essentials, while focussing heavily on tax arrangements for foreign investors.
Marshall pointed out that over the past 30 years, large inflows of foreign direct investment have not transformed Barbados’ productive base. He notes that investment has centred mostly around tourism, real estate and import distribution — sectors that reinforce dependence rather than reduce it.
According to him, diversification is not driven by tax rates alone, but also depends on the State’s ability to shape investment, build local capacity and strike smart bargains that serve national goals.
Professor Lorde’s criticism goes even deeper. Writing in his newspaper column, he suggests the bill reflects continuity, not change. For a small state seeking transformation, he argues, legislation should clearly break with patterns of external dependency. Instead, the bill reads like a refined version of the same development model Barbados has followed for decades — one driven by foreign capital and external priorities.
Lorde does acknowledge Prime Minister Mia Mottley’s defence of the bill. In a recent interview, she described the public debate as “highly emotional” and urged Barbadians to “look at the facts”. Her remarks suggest the government views the fund as a practical, evidence-based solution and believes some criticisms overstate the risks or misunderstand its intent.
However, Lorde argues that reassurance alone does not fix structural flaws. He assesses the bill as imagining development as something done to Barbados by large foreign firms, rather than something built by Barbadians through broad economic participation.
The critics argue that the fund is not designed with domestic small and medium-sized businesses at its core. Instead, it appears to elevate foreign capital, thus repeating a strategy that has produced growth without resilience.
None of this means the idea behind the Economic Diversification and Growth Fund should be abandoned. Barbados needs new tools, better oversight and to move away from fluid concessions.
Economic transformation requires trust and transparency, knowing that public funds are being used to build a more inclusive and resilient economy that can withstand the vagaries of the current global space. If the government wants Barbadians to “look at the facts”, then the facts raised by economists deserve careful attention before this bill becomes law.
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