Caribbean Outsourcing Sector – The End Of An Era?
By Peter Polack
Peter Polack
Ohio Senator Bernie Moreno has recently introduced a bill for a 25% tax on any US company payments for outsourcing abroad called the Halting International Relocation of Employment Act or HIRE.
This is a significant blow to several countries in Asia but also Jamaica and Belize that have an extensive dependence on outsourcing also Business Process Outsourcing or BPO. They are more usually known for their call center activities.
The Caribbean BPO companies have a smaller stake in the hundreds of millions of dollars when compared to the billions of India or Vietnam the smaller.
For Belize the BPO industry has 16,000 workers and $150 million in contribution to their economy which makes for a anxious time not only for the companies involved but the newly elected government should the HIRE bill become law.
Jamaica finds itself in the same position.
That Jamaican industry sector is a giant by comparison with 70,000 workers and nearly a billion in revenue using three million square feet of space most of which is privately owned.
That many out of work,that many empty buildings,that loss of revenue and that blow to the economy can only lead to significant social discord and worse.
The tourism mule like the remittance donkey can only carry so much. It may arrive sooner rather than later.
Like many initiatives of the not so new US administration with tariffs and immigration the objective is to grow American business.
There is not much room on the good ship Kowtow to halt this imminent disaster for the region.Not ignoring or supporting missile strikes on suspected smugglers or simply deploying the head in a hole or ostrich strategy will be extremely unhelpful.
Both of the newest re-elected governments in Belize and Jamaica will have to go gospel with their respective nations that provide solutions not promises. The Belizean landslide has more political capital and thereby more time to chart a course around this new obstacle.
Jamaica has no such room to maneuver.
That government has to rely on a sliver of only four seats in parliament to exist with the angry cloud of an integrity investigation tainting every move by the prime minister,worse,if matters progress to the courts.
These are not the only countries at risk as the many tax havens of the British Caribbean colonies rely on the tenuous financial industry. This provides for over half of the Cayman Islands economy despite calls by their native son Financial Secretary to create a sovereign rainy day fund.
The primacy of politics over common sense.
There, but for the grace of God, go I.
Notes
See “Private sector dominates Jamaica’s BPO space, driving economic growth” From Caribbean National Weekly.com
Peter Polack is a former criminal lawyer in the Cayman Islands for several decades. His books are The Last Hot Battle of the Cold War: South Africa vs. Cuba in the Angolan Civil War (2013), Jamaica, The Land of Film (2017) and Guerrilla Warfare: Kings of Revolution (2019). He was a contributor to Encyclopedia of Warfare (2013). His latest book is a compendium of Russian espionage activities with almost five hundred Soviet spies expelled from nearly 100 countries worldwide 1940-88.
