Prime Minister Mia Mottley’s response to the concerns raised about the Economic Diversification and Growth Fund Bill deserves to be commended, though we submit, the criticism could not have been ignored.
By announcing an additional safeguard to strengthen transparency and accountability, the prime minister signalled that the government was listening and that public debate still mattered.
Her proposal is straightforward but important. Whenever a minister departs from the recommendations made by the fund’s Advisory Committee or the National Growth Council, that decision will now have to be formally laid in Parliament, and reasons clearly identified. This is expected to be introduced after the bill is passed in the House. It is another layer of accountability and responds directly to public concern.
As the prime minister put it, ministers should not be reduced to “rubber stamps”; however, they should not do so without explanation to the public. Mottley said she was “satisfied that we have strong and transparent guardrails” during her speech in the House of Assembly this week and made it clear that the private sector’s request for this extra oversight could be accommodated without difficulty.
At the same time, it is important to acknowledge that the criticism levelled against the Fund legislation was not without merit. When $225 million of public money is to be drawn from the Consolidated Fund over three years, Barbadians have every right to ask hard questions.
The concerns came from varied and credible voices. Attorney and consumer advocate Tricia Watson was the first to publicly express alarm at the terms, warning that the fund appeared designed to “give our money to substantial foreign companies”.
She argued that “there is no requirement for the government to disclose who will get our money” and concluded: “There will be no accountability for what happens with this fund! This is ridiculous!”
Respected academics Professor Don Marshall and Professor Troy Lorde, alongside Economist Jeremy Stephen, raised serious policy questions. They asked whether the bill, as drafted, offered sufficient clarity, governance safeguards and a development framework to justify such a big financial commitment.
The prime minister, in her televised address, rejected the claim that the fund was a giveaway to foreign firms. She stated clearly that “there would be no investment or subsidies given to any foreign company that does not significantly expand employment in Barbados by providing more than 100 jobs and earning foreign exchange for the Barbados economy”.
Addressing concerns about tax fairness, she noted that companies benefiting from the fund would pay tax at nine per cent. In her view, the bill has “clear objectives – to protect and grow jobs, enhance foreign and domestic investment, and grow the economy for all Barbadians”.
In Parliament on Tuesday, she reminded the House that the island forgoes more than $875 million each year in tax concessions and waivers across tourism, agriculture, housing and manufacturing. By comparison, she argued, the $75 million per year in targeted subsidies under the fund “is not even ten per cent of what the government of Barbados is waiving consistently in tax concessions and tax waivers on an annual basis”.
With a global shift away from profit-linked tax incentives towards cash grants and cost-based investment support, the administration cited the United Kingdom, Singapore, Vietnam and the United States. It was also becoming more common within the OECD.
“This is a matter of fundamental import,” Mottley said, cautioning that mischaracterising the legislation could undermine economic stability and household security.
The prime minister is correct, but equally important would be not ignoring legitimate concerns raised by citizens and experts.
While we support the government’s decision to “listen and feel” the concerns of citizens, the reality is that the detailed explanation of the value, purpose and safeguards of such monumental legislation should have been presented to Barbadians before it reached the floor of Parliament. Meaningful consultation cannot be reactive alone.
On matters involving hundreds of millions of dollars in public funds, the burden rests with the government to clearly explain the policy intent, governance framework and expected national benefits at the outset. Doing so would not only reduce public anxiety and misinformation but also strengthen trust from the start.
The country is better served when the government explains, critics challenge, and policy improves as a result. On the Economic Diversification and Growth Fund, that process now appears to be underway.
The post Listening, adjusting, explaining Growth Fund Bill appeared first on Barbados Today.
