Small Businesses of Barbados advised by Fiscal Guru to buckle down for another tight six months

If things have been tough since March, then apparently things will be even tougher by the time March 2010 rolls around.

Professor Avinash Persaud made this stark projection recently at the Errol Barrow Centre for Creative Imagination, Dr Persaud is also Chairman of Intelligence Capital Limited which offers an array of financial services for discerning investors.

In his view, part of the hard times Barbados experienced and will continue to endure stems from the challenges associated with establishing a business here – he drew reference that in a specialised test it was discovered that establishing a company in Singapore took $30 US and about half an hour whereas in Croatia one could spend $1,450 US and wait over 350 days and you’re still not sure if you have successfully created a company!

Obviously, the Singapore model is ideal – but Barbados falls in the middle. When a Franchise entity sets up shop they can delegate a staff member to wade through queues and acquire licenses, they continue to set up shop.

The same advantage doesn’t apply to a small business, time wasted in a queue for complicated procedures means loss of manpower and thus less time making a profit.

Ironically, in the Financial Expert’s view, small business is the very entity which can drag Barbados from the fiscal doldrums it is currently enduring. By lightening restrictions to forge new entities, you reduce the chance of Bajan children leaving the island to create companies abroad, which means Barbados loses, since failure is the cost of not changing.

When asked about the feasibility of e-commerce here, Dr Persaud stated the Caribbean is most consulted area now and actually best place to establish an e-commerce, yet people of the region fear for their jobs over the very thing which can save them. He urges Barbados and the rest of the region to stop hiding in the sand and get the job done {NB BR’s phraseology}!

The Chair of Intelligence Capital also says while Barbados may have its money tied to the US dollar at the moment, when things may pick up down the road in the next 5 years or so, Barbados needs to look at diversifying its portfolio. Perhaps including Euros and even Rupees.

If Governemnt here were to revise Credit Monitoring Costs [CMC’s], then Micro-Finance would assist small businesses the way it should be done. As it is right now, many entrepreneurs feel the Central Bank should be their rescue in creating a company…

By its very nature, Central Banks are meant to hoard and guard all currency received. Nevertheless commercial banks in Barbados which really should be the mainstay for entrepreneurs more often are likely to refuse loans due to CMC’s.

Dr Persaud constantly referred to inviting entities to set up shop here, being aware of Barbados’ land constraints, I tagged him afterwards and asked how he would correlate the two situations?

He said that Singapore has five million people on an area similar to Barbados, he does not see an inundation of foreign capital, merely the creation of 1,000 or 2,000 entities to boost Barbados’ foreign exchange.

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