An Invitation to Bush's Whitehouse

The new Prime Minister of Barbados David Thompson and Dean Barrow of Belize along with more of an old stager Hubert Ingraham of the Bhamas paid a visit to the Whitehouse. Clearly the Whitehouse considered it important to meet with the CARICOM leaders that they had not had the opportunity to meet with previousy. It is a fact that over the last decade or so the region has become less important to the United States. In a speech delivered recently by Fmr Prime Minister Arthur concerning the Economic Partnership Agreement, he hinted that the developed countries were now more interested in security and drug interdiction and less about development.

CARICOM is fresh from negotiating that EPA with the European Union. This would not have escaped the attention of the United States, especially within the context of a stalled if not failed Free Trade Area of the Americas. This is a Whitehouse that is on its way out, but it does count for something that President Bush issued the invitation to these recently elected Caribbean leaders. It clearly signals that dialogue is opening and continuing.

In a previous article we highlighted presedential hopeful Barack Obama focusing on tax havens. This should not be a worry for Barbados since Barbados is not a tax haven, although it will take the Americans some time to figure this out. At least from this meeting it would be clear that Barbados, the Bahamas and Belize are distinct countries.

In 2001 it was a Bush Administration that took the impetus out of the OECD Initiative on Harmful Tax Competion. It seemed then that the Americans understood then that the Europeans were going a bit overboard. Although Secretary of the Treasury Paul O'Neill subsequently left that position.

We can look forward to interesting times with the rich neighbour in our neighbourhood.

Should Barbados be worried?

Barbados had made a conscious decision that it did not wish to be a tax haven but wanted to integrate international business into its economy to strengthen its overall stability. As a result Barbados has pursued the more difficult route of negotiating double taxation agreements and meeting the highest regulatory standards in its oversight of financial services. Barbados has never had secrecy laws and its international business sector remains largely regulated in the same manner as the domestic sector.

Should Barbados then be worried by a renewed interest in Tax Havens that was addressed back in 2001 through the OECD Initiative on Harmful Tax Competition? Senator Barack Obama, the Democratic Presidential Candidate from Illinois has made this one of his campaign themes. Building on his bi-partisan work in the Senate, Barack Obama has stated that he will give Treasury the tools it needs to stop the abuse of tax shelters and offshore tax havens and help close the $350 billion tax gap between taxes owed and taxes paid.

Senator Obama is co-sponsor of a Bill called Stop Tax Haven Abuse in association with Senator Carl Levin and Senator Norm Coleman. Senator Levin is the main driver behind the Bill. The premise of the Bill is that Tax Havens collude with wealth Americans to ensure that they do not pay their fair share of taxes, whilst honest, hard working Americans pay theirs. The Bill presupposes that it is the secrecy laws that ensure that US Law Enforcement does not have the effect that it should.

This theme will have resonance with the American public since few people understand the complexities of wealth or tax planning. Why should they be bothered to make the distinction between abuse and tax planning? The debate comes at a time too when Americans are going through pretty rough economic times. Senators argue that money is needed to protect American troops and to address education and health care concerns.

Barbados is not a tax haven, does not have secrecy laws and has had a double taxation agreement with a comprehensive exchange of information agreement with the USA for many years now. It is however very likely that Barbados will get caught up in the melee. From where the Americans sit why should they go through the tedious job of distinguishing Barbados from other jurisdictions? Back in 2001 it was clear that members of the OECD were unclear as to the differences between Bermuda, Barbados and the Bahamas. It is unlikely that this would have changed much between then and now and all three countries would argue that there are significant differences.

In 2001 Barbados lead by Former Prime Minister Owen Arthur utilised all of its resources to ensure that it got a fair break. Barbados must use its diplomatic skills again in order to address these issues and must do so sooner rather than later.

A Nation of Infinite Possibilities

In Barbados the Democratic Labour Party won the Barbados January 2008 General Election on a party slogan of change. Although as we move forward it seems as though it was a call to change people and not policies - not fundamentally. Barack Obama and Hillary Clinton to a lesser extent are also talking about change. Apparently John McCain has never been the typical conservative and thus change must be inherent in this man. Change is something that tends to resonate with the electorate even though on a personal level people don't seem to like change much.

The War still being waged in Iraq is one of the most incriminating reasons for change according to the American electorate. President George Bush's stature has been diminished by his decision to go to war as was the case with the former Prime Minister of England Tony Blair. Hillary Clinton up until now has been able to rise above the fact that she voted in favour of the invasion of Iraq. Even in Barbados those that believed that it was an unreasonable act of aggression were not that popular back then - so great was the American propaganda machinery. There are many who felt uncomfortable too with the hanging of a Head of State ... ...

There were no weapons of mass destruction - some of us were not surprised.

In this United States election campaign we have heard some references that should cause us to sit up and pay attention like American jobs going abroad. Outsourcing has been beneficial to small economies like Barbados but it is a concept that makes sense to America as well. We have heard too that the free trade agreements were formulated with companies in mind and not with workers in mind. This sounds similar to Developing Country positions in various negotiations.

It is expected that the United States will send a Democrat to the Whitehouse, but that is far from certain. At the end of the day what makes business sense will prevail - a health care plan will not pay for itself. The effective management of the economy will become the all-important issue.

What does this all mean for us? There is always a general feeling that Democratic Governments are less favourable to the Caribbean. However there is no need to be presumptious in that regard. We must wait and see, but whichever Government comes to power Barbados must continue to be forthright in its relations with the USA.

Socially, the United States of America does not always get it right. However the one enduring quality of this country is that every American feels that he can achieve if he is prepared to work - as opposed to believing that success is a right whether he works or not. And the society is one - that even though there is a great divide between the rich and the poor, and even though "Rodney King" episodes might still occur and even though the glass ceiling still exists - that is brave enough to allow and encourage its people to realise their dreams.

The Technology Revolution in Music

For decades now, individuals have been discussing the fact that the information technology revolution brings opportunities to both small countries and small businesses in a way that was never contemplated before. It is also true that when Barbados participated in trade negotiations at the level of the World Trade Organisation and the Free Trade Areas of the Americas Services - a relatively new area - was recognised to be important to Barbados. This made sense given the emphasis that has been placed on training professionals over the years in Barbados. It was also recognised as is the case all over the Caribbean that the Caribbean has something unique to offer in the area of culture and entertainment. Rihanna's nomination for six Grammys and her ability to clench one for Barbados is a ray of hope.

It is a ray of hope and not necessarily a break through since it symbolises what those that have the appropriate assets at their disposal can make of the raw talent in our Caribbean Islands. A similar statement could be made about the Stanford 20/20Cricket Competitions. Mr. Stanford apparently has the means to make even our Legends dance!

Within the music industry there are still a number of intermediaries that stand between the talent and the world. This includes the radio, television and music press. In Barbados this has also been recognised showing that DJs in Barbados have an overwhelming capacity to make or break an artist. This is most evident at Crop Over time.

Technology has been one of the major drivining forces behind Rihanna's success-with several websites, utilisation of MySpace and On-line videos. In releasing its 2006 figures the Recording Industry Association of America indicated that shipments of physical media such as CDs,videos, vinyl albums and singles continue their decline while the number of downloads continues to climb. Digital sales which include downloads, kiosks, ringtones, subscriptions and music videos continue to do very well. In the RIAA 2005 end-of year report the recorded growth in this area was 166.2%!

Whenever there is a revolution there are winners and losers. The use of technology to deliver goods and services has been discussed in Barbados but there are certain limitations including lack of an easily accessible payments system. Already in the Barbados there is a greater awareness of the tools that can be used to make a talent a star. The launch of Got Rhythm (www.gotrhythm.com) shows that Barbados is ready and willing to step up to plate and give Caribbean artists priority in getting their music heard and downloaded acroos the world.

This is an exciting time for us in our cultural, entertainment and sporting areas. However our true success will be in seeing economic returns commensurate with local and regional talent.