The pandemic is a paradox; on one hand it has destroyed our major industry in Barbados, but on the other it is giving us a once in a lifetime opportunity to rebuild a much more resilient economy around services that we provide digitally to the global marketplace.
Our economic future is under a dark cloud because the COVID-19 pandemic has had a particularly devastating effect on Barbados. It has triggered an 18% annual slump in economic activity, raised unemployment to levels not seen for generations, slashed tax revenue, and ballooned the national debt. This harms all Barbadians, but it is particularly damaging to the life prospects of young people not, only because they have a disproportionately high unemployment rate but also because they will have to shoulder the burden of the expanded national debt over the coming decades.
The economic shock has been this severe because of our dependence on the tourism industry. Tourism used to earn Barbados well over a billion USD each year, much more than the offshore financial sector, rum exports, and every other export put together… but the tourism industry collapsed by more than 90% in the last three quarters of 2020.
But this threatening cloud does have a silver lining. Last year a member of the Barbados Jobs & investment Council asked me to write a memo to Cabinet outlining my proposal to create a one year visa for remote workers. They announced the 12 Month Barbados Welcome Stamp nine weeks later and it’s been the only good economic news we’ve had all year, pumping tens of millions of US dollars into the local economy.
This programme has seen strong growth because it is in alignment with emerging opportunities exposed by the ways COVID-19 is changing global economies. Many millions of people, particularly technology professionals, in Europe and North America now work remotely from home; the Welcome Stamp programme has proved to be an effective way to motivate some of them to move to Barbados and work remotely from here.
Some of these new long term visitors are experienced digital nomads who have been travelling all over the world for years and are familiar with established digital nomad hotspots like Bali, Playa del Carmen, or Chiang Mai. However, for the majority of Welcome Stamp arrivals this is the first time they have worked remotely outside of their home jurisdiction, so most of them are better described as digital expats rather than digital nomads.
The Welcome Stamp is already more important to the Barbados economy than cruise ship tourism. Caribbean economist Marla Dukharan has estimated that the median annual spend per household is well over $50k USD. At this rate, the 2,000+ Welcome Stamp visitors that have already been approved will contribute more than $100 million USD to the Barbados economy on an annual basis, which is twice as much as our entire cruise ship tourism sector ever did in its most profitable year. Given that our inventory of available accommodation among villas, Airbnb apartments, and apartment hotels can accommodate many thousands of households, the potential exists to scale this sector to many hundreds of millions of USD in annual economic impact within a short time frame.
However, our ambitions go very far beyond simply becoming another digital nomad hot spot. The major distinction between Barbados and digital nomad hotspots is the issue of who has agency... who is setting the agenda... who is calling the shots.
Traditional digital nomads style themselves ‘citizens of the world’ as they seek out new exotic locations and descend upon them en masse without any prior permission or consent of the local populations. They seek benign climatic environments and the most affordable costs of living. They often stay in one location for only two or three months before either jetting off to the next hot spot, or dashing across a nearby international border only to re-enter soon afterward as a way of getting around visa restrictions. Because the local populations are not in primary decision making roles, this can have adverse effects on local socioeconomic conditions, with digital nomads clustered in ghettos that do not optimally support local economic development or cultural integration.
In Barbados we have done things differently, with local decision makers in the driver’s seat. We have set a US$50k minimum annual income so that Welcome Stamp visitors have the capacity to contribute significantly to our local economy, we have priced the new visa at a level which discourages those who lack commitment, and we have made the visa 12 months long with the possibility of renewal so that these visitors also have the time to build meaningful relationships with Barbados and Barbadians. We are not simply attracting visitors, we are inviting potential long term neighbours.
The Welcome Stamp programme gives us the opportunity to leverage this influx of highly skilled knowledge workers and entrepreneurs by building formal structures for knowledge transfer to Barbadian society. This is knowledge that Barbadian society needs to assimilate in order to prosper in the 21st century, and the influx of Welcome Stamp visitors presents us with an unparalleled strategic opportunity for doing so.
Although the explosive growth of remote work has been catalyzed by the COVID pandemic, many large technology companies like Coinbase, Dropbox, Spotify, Twitter, and VMware have adopted it as a permanent feature of their organizations with all employees being able to work from anywhere they choose from here on.
This is the leading edge of a global economic transformation that will be parallel to the migration of blue collar manufacturing jobs from North America and Europe to places like China. China used this job migration to evolve from impoverishment to a top global power in only a few decades. Over the next few decades there will be a similar huge migration of white collar jobs (most of which use digital technologies to provide services) away from North America and Europe. Barbados can be very well positioned to be the beneficiary of this historic migration. This evolution will shift tens of millions of well paid jobs… we only need to capture tens of thousands of them, a mere 0.1%, in order to revolutionize our economy.
The overwhelming majority of Welcome Stamp visitors are either employees of businesses that use digital technologies to provide services to a global marketplace, or they are entrepreneurs who have founded such businesses themselves. In order for Barbados to prosper in the 21st century, we need to master these digital technologies that power the global economy. Both as employees and as entrepreneurs, we need to be selling our services directly into a global marketplace.
The emphasis needs to be on digitally provided services because our local market is very tiny and we are thousands of kilometres away from most people in global marketplaces; shipping any material object over these thousands of kilometres incurs transportation costs which often make the item uncompetitive. Barbadians need to imitate the Welcome Stamp visitors by working remotely, selling either skilled labour or entrepreneurial services directly to the global marketplace.
The real value for Barbados is not so much for a few thousand visitors from some global metropolis to live here each earning a minimum US$50k/year salary. The real value is for tens of thousands of Barbadians to be living here and working remotely for the same companies that these visitors do, or working for entrepreneurial ventures that sell services globally, and also be earning a minimum US$50k/year salary.
This is the strategy which will enable us to rebuild Barbados: these are the jobs that will sustain a prosperous new Bajan middle class in the coming decades.
Remote Work Barbados is collaborating with others in both the private and public sectors to make sure that Barbados is able to seize this once in a lifetime opportunity… because Bajans deserve to be earning $50k USD/year too.