BRIDGETOWN, Barbados (CMC) — Industry Minister Donville Inniss believes Barbados’ economic model is outdated, although it has served the country well.

In addressing the Institute of Chartered Accountants of Barbados’ (ICAB) Student Conference here on Wednesday, Innis noted that over the past 50 years, the island’s growth and development has been based on an economic model which placed much emphasis on preferential access to markets of Barbados’ principal trading partners, incentivised tax regimes for the foreign investor designed to inject foreign exchange earnings into the economy, and high protectionist barriers implemented to give fledgling local enterprises the necessary space to become sustainable.

“This model is becoming obsolete, as evidenced by demands by international standard-setting agencies to dismantle these systems which have, up to a certain point, served our economy well.”

He added that the rapid change within the technological revolution has also impacted on the global economy, particularly the financial system.

“Conversely, the relative ease and speed with which financial transactions can now take place have resulted in phenomenal increases in cases of financial crime. It is this ease in the geographical mobility of finances which contributes to the increased complexity of the regulation of financial services. We as regulators and policymakers are therefore forced to keep pace with technology to secure our jurisdiction, as well as to improve the services we offer to investors,” he stated.

The minister also noted the collaborative efforts the International Business Division was engaged in with the Organisation for Economic Cooperation and Development (OECD) and the Caribbean Financial Action Task Force (CFATF). He said while the work with the OECD focused on tax transparency and information exchange, and base erosion and profit shifting, the work with CFATF centred primarily on Barbados’ ability to fight money laundering and combat terrorist financing.

Explaining further that the work of these two bodies examined Barbados’ regulatory and supervisory frameworks, and compliance with agreed international standards, Innis — under whose portfolio international business falls, — said “over the next year, much work will be required to strengthen regulatory frameworks through amendments to legislation, which will seek to ensure the sustainability of our sectors while adhering to those international standards to which the Government of Barbados is committed.”