Sutherland says Bankruptcy and Insolvency reform crucial to country
Minister of Small Business, Entrepreneurship and Commerce, Dwight Sutherland believes Barbados must have strong insolvency legislation and sound insolvency procedures as it seeks become globally competitive.
Addressing a meeting on the country’s Bankruptcy and Insolvency Act, hosted in conjunction with IMPACT Justice and the Government of Canada, he noted that the Mia Mottley-led Government was committed to implementing relevant reforms to improve business on the island.
“While the topic of bankruptcy and insolvency is often considered taboo, given the stigma that is usually attached to business and financial failure, we recognize that we can no longer ignore its importance to economic growth and financial stability,” the Minister assured the gathering of attorneys and accountants at the Accra Beach Resort.
Sutherland added as Barbados battled with these issues on the domestic front, it continued to be assessed on a global scale in the World Bank’s Ease of Doing Business Report.
This report, he stressed, was now a standard tool by which potential investors seeking to assess the efficiency of a country’s regulations surrounding commerce, as they seek to do business across borders.
“In the 2019 Ease of Doing Business Report, Barbados would have ranked 129th out of 190 countries. While we have been able to maintain a relatively strong ranking in the area of resolving insolvency, we were ranked 144th in the area of getting credit, 132nd in trading across borders and 168th in the area of protecting minority investors,” he noted.
The Minister also stressed that the International Monetary Fund (IMF) report on Orderly and Effective Insolvency Procedures, said the absence of orderly insolvency procedures can exacerbate economic and financial crises, while in contrast, the consistent application of orderly and effective insolvency procedures play a critical role in fostering growth and competitiveness.
Such procedures it stated induced greater confidence in creditors when extending credit.
Back in July this year, the Cabinet approved the recommendation for the amendment of the Bankruptcy and Insolvency Act so that it fully aligns with international standards.
Sutherland said, recognizing the time-sensitive nature of insolvency matters and the integral role of the Court as a facilitator of efficient business, Parliament passed the Supreme Court of Judicature (Amendment) Act, 2019 to establish a commercial court division which now has responsibility for adjudicating bankruptcy and insolvency cases.
He added that this, coupled with the recent installation of several new judges, signals Government’s intent to address issues of court backlog and delay.
Sutherland further hailed the initiative to strengthen our insolvency regime through legislative reform as important, given Government’s agenda to build out the Micro, Small and Medium Enterprise (MSME) sector and promote entrepreneurship and small business development as a means of driving growth within the economy.