Welcome

Dennis Jones is a Jamaican-born international economist, who has lived most of the time in the UK and USA, and latterly in Guinea, west Africa. He moved back to the Caribbean in 2007. This blog contains his observations on life on this small eastern Caribbean island, as well as views on life and issues on a broader landscape, especially the Caribbean and Africa.

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Sunday, August 16, 2009

What Is Holding Blacks Back In Barbados? Some Thoughts On Race And Entrepreneurship

There is no reason to see economic issues as being about black and white, but in a society that has racial divisions, they often are. In a society with deep racial divisions it might be said they always are. I find it odd that in Barbados on the one hand people talk about a kind of racial peace between the main racial/ethnic groups--the term used may differ--yet, when there are issues about the division of economic spoils racial/ethnic differences quickly surface. Foreigners can feel racial hostility in any country when it is directed toward them--and it may be more than a little tinged by the mere fact that outsiders seem to be disliked, not trusted, etc. by locals. But, it is often hard for foreigners to discern the true nature of racial/ethnic hostility between the races that make up the nationals.

I have read commentaries recently that suggest that the black entrepreneur in Barbados needs special help. Like most things I have not bought that argument straight off the shelf. I have not heard many reasons "Why?". I am wary of buying a set of arguments that is all about the black man being the victim. But it sounds mighty strange when one hears this in a country that has a black government, and has had for nearly half a century. Has the black man gained no economic power? He has gained some, but the Barbadian economy is firmly in the hands of a few white Barbadian families. Legacy and inheritance can keep in place inequalities very effectively; in the business arena that is much easier when corporations are kept private, not launched publicly. Government can legislate against what it defines as racist practices but it is hard to legislate against lineage without it also hurting those who do not have.

The racism of business often looks at that foreign investment is supposed to be about. I sometimes hear 'straw men' arguments such as if a foreign investor (often assumed to be white) wants to invest US$5 million in Barbados, then he must want to take US$50 million from the country. The argument continues by asking from where does the US$45 million gain come? The only answer given is that it is from the efforts of the nationals, who are predominantly blacks. Well, the first premise (he must want to take US$50 million)is never proved, so the speculation about the US$45 million is just that, speculation. Moreover, one does not get very far looking simply at the investor versus the country; he interacts with other foreigners too, and they may be the source of his gains.

It need not be true at all. Assume that a foreign investor wants to develop land. He brings his money and buys land from a local (+ locals: sale proceeds, government taxes; -foreigners: cash outlays; + foreigner: new asset). He develops the land with luxury homes (+ locals: jobs, income; - foreigner: cash outlays). He sells/rents homes to foreigners (+ locals: government gets revenue from sales/rent; -foreigners: cash outlays to buy/rent). In that scenario, locals are ahead by a good amount, with some explicit losses for foreigners. Finally, the investor decides that he has got what he wants from the project so sells it (+ foreign investor: sales proceed; ? local: new owner; ? foreigner: new owner). The income stream from the project will now accrue to the new owner--could be another foreigner, could be a local. The income is still being generated by targeting foreigners. The jobs retained represent mainly gains to locals. Tax revenues may have to be split between national/local government and overseas government.

If blacks are being kept down is it by whites alone? No. However, some will head for a convenient truth that ultimately it is whites who are barriers, because one cannot ever forget the losses that came from the slave beginning and the legacy gains that have flowed over time. Blacks are poorer now than they should be, therefore...

None of this was in my mind when I was talking to a foreigner--born in another former British colony--who is now retired and living in Barbados very happily. He now spends much of his time writing. He follows local economic events; he was educated at London University in the late 1950s, but never worked professionally as an economist. He was a 'manager of wealth'--other people's, not his own. He moved into various business ventures in Europe after he had done a spell of military service. Now, he is trying to use his accumulated experience to help develop businessmen in Barbados. He calls himself a 'business angel', now in the business of trying to help create wealth.

He does not focus much on whether banks will lend or not, because he seeks to mobilise capital from elsewhere. He is concerned to find young black entrepreneurs, who have desire, drive, commitment, and skills. He and his associates help to identify market niches. He has found that one of the major stumbling blocks for budding entrepreneurs is that they are not well connected and do not know how to network, and develop contacts. He tries to facilitate that by arranging the kind of social events that will put the new in touch with the old, the rich in touch with the want-to-get rich, etc. and lets the drinks, talk, and contacts flow.

We discussed how one black Bajan-owned venture seems to be doing very well; its business is developing the Barbadian market for Internet radios.

We discussed some of the 'legacy constraints' in Barbados--the cartels; cross directorships; etc.

We discussed his notion that he is not seeking the standard venture capitalist or banker's route of saying "Give me your business plan". That standard approach, he feels, is often what gets good talent scrapped. He believes that the business plan needs to be developed by the entrepreneur and potential investors together.

I can align myself with arguments such as racism becomes a problem if and when race is used to systematically deny or permit a person what is his or her rights, especially at the expense of other races. So, denying a black business a loan on racial grounds alone is a problem; that is different from denying the loan because he does not qualify under normal rules--though one may need to check that the rules are not racially biased.

Racism is clearly at play in maintaining the Barbadian economy--it's part of the status quo of economic power being divided along some clear racial lines. For change to happen, the status quo must go. How it passes is a matter debate, and a function of how fast one needs to see it change. If it passes depends on how the vested interests see their needs to preserve what they have and/or concede some of what they have.

I've spent the weekend with four people who run their own successful businesses; all are black Bajans. None has spoken about what has held them back. Some have legacy, because their parents were already climbing up a social, political or economic ladder, and helped pull them up.

My wife railed this weekend when the results of the Barbados Scholarships and Exhibitions came out (see Nation report). "Why do people drool over this? Where are the children of poor families? Look. Son or daughter of Dr. This. Where is the son of fishermen? Where are the children from the ordinary secondary schools, not Queen's or Harrison?" My wife is proud to be called an inveterate snob so I was stunned by this sense of outrage. She got quite heated. I pointed out that the report did not give much background: for example, where the children went to primary school, or what their parents had risen from. It made no sense to not expect to see the benefits of education paying off as generations pass; that would represent a failed system. She huffed. She would certainly not be calmed by knowing that some students who achieved results for Exhibitions did not qualify because they were non-nationals. Was that racist? I am sure she could envisage our little pearl in that sitution in 10 years' time. "Grrrr!" she howled.

I pointed out that the report looked at only 18 children, and we could not see much of them and knew nothing at all about the rest. Harrison and Queen's creamed the pack. The 11-plus system had heavily streamed the children nearly a decade ago. Now, we are seeing the validation of that process. All of that tends to play against developing a business spirit. I should have pointed out that a disproportionate number of the Scholars were headed to university to study medicine. I recalled the exodus of doctors from the region over the past 50 years. Does Barbados need so many new doctors or are these children organizing their exit strategies--"Hello America"? I recall one of my new friends from the weekend--a doctor--lamenting that only he remained in Barbados from his university class. Few (I think none) of the children appeared to be headed to university to study things that looked like they were business oriented. University is not necessarily the route to entrepreneurial success--look at Bill Gates and Richard Branson--but it's hard to escape certain messages. Study hard. Go to university. Go Abroad?

I had a book of John Betjeman's Selected Poems to hand most of the weekend. The final poem is called "The Last Laugh"

I made hay while the sun shone.
My work sold.
Now, if the harvest is over
And the world cold,
Give me the bonus of laughter
As I lose hold.

He who laughs last, laughs loudest. When will the last laugh come and whose will it be?


1 comment:

MaxTheITpro said...

"...Has the black man gained no economic power? He has gained some, but the Barbadian economy is firmly in the hands of a few white Barbadian families. Legacy and inheritance can keep in place inequalities very effectively..."
--------

If your observation is correct, this privilege of not having to lose your place (wealth) after Independence (or any Revolution) is the main reason why a few white families control the Bajan economy. Let's just say that wouldn't have happened in other societies where the colonialists, literally, get the boot. Case in point: Iran 1979 & America (after 1776). :-)

Now, assuming all other things are equal, I believe that Blacks (in Barbados and here in East Africa too) are not as successful in business -- even though they clearly have the ability -- due to a combination of cultural & religious conditioning.

Wherever I go, I see kids/students in uniforms and they're simply taught how to MEMORIZE in order to pass exams. Nothing more, nothing less. I have no doubts that Harrisons and Queens College produce phenomenal students.

I don't know...but look at guys like Apple's Steve Jobs, Bill Gates, Google's, Yahoo's & Sun Microsystem's founders. They all have the ability to think OUTSIDE the BOX. I don't see these skills being developed (or encouraged) at British curriculum schools where everyone fears the headmaster. Thank goodness it wasn't like this in Canada. Ironically, schools like Waldorf and Montessori are gaining in popularity around the world.

Just look at Britain compared to America post World War II. You'll clearly see more of an entrepreneurial mentality. Heck, just compare US companies to British companies back then: HP, DEC, IBM, Litton Industries, Cray Supercomputers, Control Data, Disney, Boeing, McDonnel Douglas, GE, Xerox, Kodak, AT&T & on & on.

And well, Barbados & Kenya are both British colonies -- with an ingrained philosophy passed down by the colonialists. In Kenya's case, the Blacks took power so now you have a Black elite who will do everything to maintain their privilege -- to the detriment of their kinsmen. Tribalism is very real here. That's why the ICC's Ocampo is hanging around. :-)

Quite frankly, the only reason the US lost its lead is because of spending too much money on war-making, which hurts taxpayers and deprives future generations of other important services.

The intelligence in the US is not at the same level as it was around the 50s, 60s and 70s when they were waaay ahead economically. The East has caught up and manufacturing has moved offshore in lure of cheap labour.

Finally, TV (the Idiot Box), lack of exercise & fast processed foods has really accelerated the decline in intelligence of the average American.

So to recap, Barbados needs to empower its students to be creative & entrepreneurial. Perhaps they could copy some ideas from "Japan Inc." where they have tons of engineers and few lawyers in contrast to the US and Britain where the only innovations seem to come in shady, toxic "financial products."