Barbados, a groundbreaker in international agenda proposals and energy transition goals

Prime Minister Mia Mottley is behind the recent rise of the island to international notoriety.

Barbados, the world’s newest republic, is playing a visible, bold, and effective role in setting themes in the global agenda. This is a welcome rarity in Latin America and the Caribbean, a region that is, in general, absent at international debates, and that does not have an influential voice on this stage.

The 280,000-inhabitant nation made the headlines on November 30, as Dame Sandra Mason replaced Queen Elizabeth as head of State, marking the end of a period that started on November 30, 1966. On this date, Barbados declared its independence from Britain but kept the Queen as its ceremonial head of State. The change fully consolidated the country as an independent parliamentary republic.

The transformation did not have a major practical effect. “Prince Charles attended and even spoke at the celebration of independence,” Barbados’ Ambassador to the United States, Noel Lynch said. “This is demonstrative of the fact that the political arrangements between the countries are pretty much the same.” It was, nonetheless, a strong symbolic bond break with the colonial past.

The jump to independence was a very notorious international achievement, but not the only one. At the U.N.’s climate summit in Egypt, Barbados promoted the Bridgetown Initiative, which calls for the introduction of a clause that automatically suspends payments on development-bank loans, in the event of a natural disaster or a pandemic. This would instantly free up resources for reconstruction.

It also calls for an ambitious Climate Mitigation Trust at the IMF, backed by $650 billion worth of Special Drawing Rights (SDR), or other long-term instruments, and by $650 billion from the private sector. SDRs are funds that can be used by member countries in times of balance of payments crises.

Behind these propositions is the figure of Prime Minister Mia Mottley, Caribbean Economist, and advisor, Marla Dukharan explained.

Mia Mottley adopted a critical and forceful environmental stance that earned her global recognition and respect. “We were the ones whose blood, sweat, and tears financed the Industrial Revolution,” Mottley said at the COP27. “Are we now to face double jeopardy by having to pay the cost as a result of those greenhouse gases from the Industrial Revolution? That’s fundamentally unfair.”

Under Mottley, Barbados became very good at punching above its weight, Marla Dukharan stated. On investment, for instance, Barbados led in September the first AfriCaribbean Trade, an Investment Forum that drew close to one thousand delegates and showcased investment opportunities in Africa and the islands. Her country had already convinced hotel chain Marriott to launch a new-to-the-world, all-inclusive business on the island.

Barbados also became a reference in reparation for victims of slavery. The government started, for example, a process to make British Conservative politician Richard Drax pay compensation for his family’s role in the slave trade.

An able hand

The Island’s remarkable energy transition plan is something worth emulating, Marla Dukhatan stated. The country pledged to run 100% on renewable energy and to be carbon neutral by 2030.

The speed with which the nation must act will soon place it way ahead of the pack in the hemisphere. At the same time, renewables will put an end to its vulnerability to international oil prices. Fossil fuels currently cover 90% of the nation’s energy needs.

This implies that 635 MW of renewable energy capacity will have to be installed in the next 10 years. The ball is in play now: The IFC and IDB Invest lead Renewstable Barbados, a project to install a 50 MW solar generation facility that will also host the largest sheep farm on the island, contributing to both energy and food security.

To reach the target, the government also set a 24-month tax holiday and cut import tariffs for electric vehicles, and offered interest-free loans for the purchase of electric or hybrid cars by public officers. The government will also facilitate the purchase and operation of photovoltaic systems for household use.

 Implementing the plan requires a dexterous leader because the plan does not come without costs. The government will lose tax and tariff revenues that amount to 1% of GDP annually, an IDB report estimates. To close the fiscal gap, a reform should probably increase taxes on gasoline, and tax electricity generation. Prime Minister Mottley’s skill and her huge political capital will probably be the key ingredient to getting the reform approved.

It is not that every move that the Barbadian government makes becomes an instantly-acclaimed international success. Barbados pioneered the operation of Central Bank Digital Currencies (CBDC) but did not develop it in full. It set up a hybrid model where the Central Bank regulates but does not issue the currency. “Perhaps the pressure from commercial banks may have influenced the Central Bank’s decision not to issue its own CBDC,” Marla Dukharan stated.

The Ministry of Foreign Affairs announced in April that it would open an embassy in the Metaverse. The opening in the 3D virtual-world platform Decentraland got the attention and spurred relevant conversations among stern international diplomats and free-thinking cyberenthusiasts alike, but it was not formalized.

Nevertheless, Mia Mottley and her Cabinet have built an extraordinary international standing, that has placed Barbados head and shoulders above most in Latin America and the Caribbean. This speaks to the strength of Barbadians that make up the land extension with thoughtful, bold, courageous, and orderly action.

Photo credit: David Berkowitz/Flickr (Creative Commons license)

www.marketersstudio.com / www.twitter.com/dberkowitz

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