The financial year 2019 – 2020 commenced against the backdrop of the local economy embroiled in an austerity programme following years of little or no economic growth and a burgeoning fiscal deficit. This resulted in reduced disposal income by consumers and an increase in the cost of living of citizens. Micro, small and medium enterprises (MSMEs) were therefore challenged to maintain market share and increase revenues on account of the depressed economic conditions. This situation was further compounded by the second half of the year, due to the onslaught of the novel coronavirus, which mushroomed into a global pandemic catapulting the world’s economies into health and economic crises. The country was reeling from this COVID-19 virus, by March 2020 resulting in a national shutdown to protect citizens and visitors alike. The discontinuation of commercial flights, and the slowing of economic activity meant that MSMEs were confronted with the perfect storm of economic circumstances, which affected their ability to maintain viability. The remaining months of FY 2020 have seen the most deleterious impact on business and economic activity Barbados, in a generation.

The financial year 2018 – 2019 can be characterised as another challenging fiscal period for the micro, small and medium enterprise (MSME) sector. MSMEs continued to experience high operational costs owing to increases in key inputs such as utilities, further compounded by depressed demand for goods and services on account of reduced disposable income by consumers. During the reporting period the country experienced an administration change, with the new government coming to office, with announced policies to assist in creating an enabling business environment for the sector. Against the background of high fiscal deficits, dwindling foreign reserves, and stagnant economic growth, the new administration launched an economic adjustment programme designed to create macroeconomic stability and revitalisation of economic growth. This period of adjustment has notably influenced some austerity in the economy resulting in further strain on the traded and non-traded sectors, little or no growth in the economy, and increased cost of living for citizens. Though MSMEs welcomed the reduction in corporation taxes to 5%, refunds of Value-Added Tax payments, and efforts toward the digitisation of government services to improve business facilitation, the increase in commercial water rates, levy on petrol, the continuation of tax on foreign exchange transactions, have coalesced to slow the rebound and growth needed in the business community.

The work plan of the Small Business Association of Barbados (SBA) for fiscal year 2017 – 2018 was implemented against a background of continued recessionary conditions in the Barbados economy, declining profitability of local firms and an increased cost of living among the citizenry. The macro economic conditions featured increased taxation, growing unemployment and underemployment, and a comparably high fiscal deficit on the part of Government. These conditions were clearly not conducive to business growth and competitiveness, since the increase level of taxation on firms and individuals alike, compounded to reduce disposal income by consumers and high cost of doing business on the part of firms. The SBA therefore witnessed a decline in membership retention as firms were challenged to maintain their operations opting rather to reduce expenditure in non-critical items, as a cost saving measure. New membership enrolment was also lower than previous years and the access to Government subvention and sponsorship support declined as well. These conditions coalesced to continue the challenging business environment within which the SBA had to operate, however, compounded by the demand of members for improved representation and the provision of educational & marketing support.

The Central Bank of Barbados’ economic report at the end of June 2017 indicated that the Barbados economy underperformed in the aftermath of the global financial crisis, evidenced by low growth, and significant fiscal and external imbalances . The sluggish performance of the economy has been supported by a weakening in several sectors relative to economic value-added and overall output. The micro, small and medium enterprise (MSME) sector was by no means recused from this reality and reported severe challenges to sustaining growth and competitiveness’s throughout the year. The Performance Index on the MSME sector at the end of June 2017 revealed that firms were challenged to maintain employment levels, there was a decline in the number of firms exporting and businesses overall saw a decrease in their margins because of reduced revenues. This latter reality made it even more challenging for MSMEs to make the necessary investment in equipment and/or plant upgrades, research and product development, and overall expansion of the business. Consequently, survival was the order of the day for most firms, as they sought to navigate the implications of increased cost of business, while seeking to maintain market presence.

The annual report of the Small Business Association (SBA) for FY 2015 – 2016 represents a synopsis of the activities implemented by the company during the fiscal period and is provided to members and stakeholders as part of the association’s commitment to sound corporate governance. In this the 50th year of Barbados’ Independence, the need for a review of the nation’s development model becomes imperative. This is occasioned by weaknesses in our macro economic fundamentals exposed by exogenous shocks, and the resultant impact on our quality of life. Addressing the kinds of social and economic polices needed, must be top of mind to policymakers, academics, business owners and administrators alike. Intrinsic to this will be the role that the small business community should play in the next phase of the country’s development.