The revival of the demand for a relatively unknown entertainment licence has frustrated the efforts of many promoters to host Crop Over fetes resulting in losses for this sector. It is a reflection of the regard with which small businesses are held by government. This economic crisis has taken a toll on the small business sector that now reels from diminished spending power of its customers, and rising costs to do business, compliments of the international environment and government taxation policy. Hundreds of small shops, professional services, contractors, fisherfolk, retail shops, cosmetologists, IT service providers, general services providers are now operating on a third of the income they commanded in better years or in some cases closing. Loss of private sector jobs have come primarily in this sector as small business employers have been forced to cut hours, lay off, reduce purchases of goods and services. Many are unable to meet payments and statutory obligations such as rent, wages, loans, utilities, suppliers, increased licensing fees, NIS, PAYE, and VAT. The international environment and questionable government policy squeeze from both sides robbing these businesses of necessary oxygen to survive. Their demise affects significant investment capital, and the employment opportunities for the young graduates and school leavers, now some 12,000 strong. The growing number of empty commercial spaces is testimony to closures in this sector.
Taking government at its word that it is committed to the small business sector, in 2008, the request to government was as a strategy to aid the small business sector to survive the unfolding crisis was to ensure that 40% of government contracts worth 200m be distributed to this sector which would support close to 1000 small businesses. This would have protected more than 4000 jobs thus stabilising the unemployment figures without gov’t swelling the civil service. This money would flow through the economic system benefitting a wider network of persons into the retail and services sectors, banking system, large businesses etc, thus sustaining government revenues through VAT receipts, duties, income tax and corporation tax. Instead we witnessed a contraction in the use of small businesses in the tenders for government contracts, which have become concentrated into fewer hands.
Currently we hear the frequent call by government for entrepreneurship but we see a contradiction in policy and actions that make it difficult to entertain with seriousness any such call. The Small Business portfolio has been shifted in every reshuffle to more than four Ministers. No enunciation of a policy initiative to stabilize and protect the sector, by any Minister to date. The factoring programme was placed with commercial banks instead of the Barbados SBA which could have earned the commission, to further advance the development of the small business sector.
In terms of treatment, on the positive side, we see the encouragement of environmental services and recycling; and the recent policy to reduce penalties on interest for VAT. On the negative side miniscule participation from close to 2b dollars in government construction contracts and denigrating remarks painting with a wide brush participants in this industry. The slowdown on CSME which is the natural growth place for assertive small businesses which will retard the further expansion of our professional services groups such as architects, medical professionals, lawyers, consultants etc into the space. There are no new initiatives to move against praedial larceny that impoverishes the small farmers. A five hour presentation on the human development strategy said little about what allocations would be made for small business formation to convert education into economic growth. Yet we hear the constant call for entrepreneurship.