In a recent address to the people who elected him to office approximately 100 days ago, the new Prime Minister of Antigua & Barbuda, the Honourable Gaston Browne, indicated that it is his intention of leading his country into becoming "an economic powerhouse" in the Caribbean.
Many will wish him well, but he is facing an uphill battle that no rhetoric can win.
The latest IMF mission to Antigua & Barbuda, this one led by Trevor Alleyne, found that
"Commercial banks continue to suffer from weak financial soundness indicators and ABI Bank, which was taken over the Eastern Caribbean Central Bank (ECCB) in 2011, is still awaiting resolution."
Mr. Alleyne also reported that "The fiscal position deteriorated under the expansionary stance in the run-up to the elections", adding that "scheduled external amortization has risen significantly this year to close to 3 percent of GDP from 1.2 percent in 2013, mainly due to repayment obligations to the Fund and Paris Club creditors. With few sources of financing on account of Antigua & Barbuda's already elevated debt levels, external arrears accumulated, growing by almost 1 percent of GDP in the first half of 2014."
His solution was to point out that "strong inflows from the Citizens Investment Program (CIP) could improve prospects for economic growth and fiscal performance to the medium term."
However, he cautioned that CIP revenues were inherently very volatile and the increased international scrutiny of such programs require the highest standards of governance and transparency, include publishing names of new citizens, a requirement that has been specifically excluded from the terms and conditions of Antigua's CIP.
Giving applicants to the CIP the benefit of the doubt, how is Antigua & Barbuda effectively going to attract sound and genuine Foreign Direct Investment to revive its battered economy and its unfortunate people?
Expropriation of foreign-owned property and business is certainly not the answer!
Expropriation, for any purpose other than a clear case of the public good, is and will remain the single largest barrier to FDI. The expropriation of the Half Moon Bay Resort from its American owners and developers, undertaken by the ALP government in the interest of satisfying R. Allen Stanford, Antigua's great benefactor of the late 1990s, has been perpetuated through ten subsequent years of UPP rule, under the personal direction of the ex-Attorney General, Justin Simon Q.C.
"Half Moon Bay" has become synonymous with greed, malice and corruption. It is the longest-running financial scandal in the Caribbean recognised by the international media.
Repeated warnings to potential investors have been issued in government brochures and reports, the most recent one appearing in the U.S. Department of State Investment Climate Statement for Antigua & Barbuda, dated June 2014, which states:
The second hurdle to FDI is the newly achieved absence of a free press.
With Caribarena.com now successfully destroyed, and members of the local media either
gone or subjected to high personal risk, the new Administration is free to issue mandates
and make promises without any accountability or confirmation.
For that reason, as they perform their own due diligence, potential investors will pay greater attention to any warnings that will be found in international publications.
A third barrier to FDI is the disregard for the rule of law by the Government in Antigua & Barbuda.
Expropriation of private property, followed by non-payment of compensation, is the moral and actual equivalent of theft by a government. The evidence of such an event, stretched out over almost two decades and still ongoing, does not inspire the confidence required for investment of funds, time and effort in a foreign country.
Furthermore, when the Laws of a country are ignored, the Constitutional rights of citizens are breached and an Order of the highest court of the jurisdiction is set aside to be followed at the discretion of that Government, warning signals to foreign investors reach a high level.
The concept that any legitimate investor, or even merely a prudent one, will commit to the purchase of the Half Moon Bay property before the dispossessed foreign investors have received full compensation, as established by the Privy Council and the Laws and Constitution of Antigua & Barbuda, is hopelessly flawed.
It has not happened in 2003, in spite of Lester Bird's Budget Speech to Parliament, in which he proposed to balance the deficit by the sale of Half Moon Bay.
It did not happen since, in spite of all the subsequent promises made by the UPP Ministers, the addition of adjacent land to the package being offered for sale, and the added sweetener of the CIP.
It did not happen, and it will not happen.... because it cannot happen. This horse is squarely behind the cart.
Unless the new administration in Antigua & Barbuda acts decisively to settle the matter in full and without further delay, the window of opportunity it possesses, to distance itself from what came before it, will close. No distance = no difference = the same unfulfilled promises, all over again.
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