Foreign Companies In Barbados Suffering As A Result Of US Attacks

by Amanda Banks, Tax-News.com, London

19 September 2001

According to recent reports, the economic impact of the recent terrorist events in the United States has hit foreign businesses in Barbados and other Caribbean countries hard.

Airlines, hotels, and the captive insurance, or reinsurance, industry which forms a significant part of the jurisdiction's offshore financial services industry, are likely to be the worst affected, and the impact on foreign-owned and controlled businesses in these sectors is impossible to predict at this stage. Reinsurers in Barbados are anxious to reassure clients that they can meet their responsibilities, but are understandably worried.

PXRE, a reinsurance company with operations in Bermuda, which is also suffering as a result of last week's tragic events, Barbados, the United States, and Europe, has said that although it will be able to pay, this will inevitably affect its bottom line.

Meanwhile the tourist industry in Barbados is also bracing for heavy losses, with stock prices plummeting in luxury hotel groups and airlines. 'When people in an economy are in less celebratory mood, then you get quite a contraction in that business, which is usually quite high margin,' Rossa O'Reilly, an analyst for CIBC's World Markets explained to the Barbados Daily Nation earlier this week.

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