1.You are well into your second term and as you mentioned real GDP growth is projected to be 7% in 2019. You have the fastest growing economy in the CARICOM region. How do you see Antigua and Barbuda evolving for the rest of your mandate and what are the main objectives you still want to achieve?
Economy: The economy grew by 7.4% in 2018 and this year, we are expecting to repeat a
similar performance which means Antigua and Barbuda has the fastest growing economy in
this hemisphere at this present time and I believe it has to do with the strategies that we have pursued. My government is an entrepreneurial government which uses its know-how to enhance the economic growth and development of the country, we are also considered to be innovative and creative in our way of governing. So far it has resulted in expansion, employment as well as improvement in the living standards of the people of Antigua and Barbuda. For instance, in five years, we have reduced unemployment from over 20% to 8%-9% and as a result people are doing well, building more homes and purchasing more cars. We had about 5732 units of vehicles both used and new imported on the island which is record breaking; by comparison in 2013, only 1100 units were imported when the prior administration was in place. More people are working, more people have homes, the government itself has invested in the construction of several hundred properties and have subsidized those to the tune of about $100,000.00 a piece to make them affordable and to lift the lower classes into the middle class. Therefore, we have been instrumental in improving the living standards of the people through the provision of housing, vehicles, jobs and even businesses. My government recently established an Entrepreneur Development Fund to provide seed capital for entrepreneurs and we have capitalized this fund to the tune of about $27 Million. We introduced a telecoms tax of 5 cents on each incoming call, it will help us raise a couple of hundred thousands dollars monthly in order to ensure that the fund is replenished. We are doing all we can to build on the socio economic structure of country.
Education: We have been successful in establishing a university; this government provided the funds for the Five Island’s Campus, which is the fourth landed campus of the University of West Indies, the only such university within the Organization of Eastern Caribbean States (OECS) sub region. We are not just doing this for the people of Antigua and Barbuda but for the wider OECS sub region. The data shows that this area is an underserved region where we have the lowest level of enrollment and graduations, so we thought we had an obligation to address that issue. This university is now operational and we continue to enhance our facility to make it one of the finest campuses.
Health: We have also expanded our healthcare services; we have improved services at the
Mount St. John’s Hospital, we are now offering acute health services, including kidney transplants and shortly we will be introducing a cardiac unit to perform complex heart surgeries. We have a cancer center in which we are providing services to the people of Antigua and Barbuda as well as people from abroad. Recently, we also established a Stem Cell treatment facility; it is the first within the OECS sub region where people will be able to get good quality innovative stem cell therapy for various ailments. Between the education and healthcare infrastructure, we have spent a significant amount of money and we have attracted private investments, as well as to develop what is clearly a globally competitive healthcare and educational system.
Infrastructure: In terms of physical infrastructure, we continue to repair and build new roads. We are presently spending $250 Million to construct a new cargo port which will be involved in the trans-shipment of goods within the region and we are also partnering with two private sector entities Global Ports and Royal Caribbean Cruise LTD to invest another $270 Million to build what will be the finest cruise facility within the Caribbean. Royal Caribbean will also invest $270 Million at Fort James for the establishment of a beach club.
Crime and Violence: Another area where we have made a significant amount of progress is the area of crime and violence. Today Antigua and Barbuda is one of the most peaceful and safest countries in the world. We have had about 2 homicides this year. Incidences of home invasions and burglary which were common 6 years ago, are now very rare. Our police and defense forces have been working collectively and proactively to address this issue and have been very successful in reducing crime and violence.
Economy: The country was decimated in 2014 when we came into power. It had lost about 25% of its GDP, unemployment had risen to about 20% and government could not pay salaries, wages or pensions. We had a significant increase in debt and we defaulted on the IMF loan. Our debt to GDP at the time was 104% and this figure did not account for the fact that a number of debts were not booked. In fact, when we took into consideration the un-booked debts, the debt to GDP was more accurately reflected at about 160%. When we started governing, we not only brought the IMF loan up to date but also paid off the debt ahead of time. In addition to that, we were able to reduce our debt to GDP from 104% to 67%. One of the most important successes of my government is that we were not only able to stabilize the country’s economy but also restored the country to growth. We have moved from being the worst economy in this hemisphere to the fastest growing economy. Let me give you an analysis of how bad things were in the past. The government at the time could not even pay for fuel and water. They had arrears without any credit; most of the water supply was privatized at the time and we owed the company Sembcorp, approximately $25 Million in arrears. When we came into power in 2014, there was an extreme water shortage and they were threatening to discontinue water supply. We cleared off the $25 Million arrears and also invested $20 Million in two new water suppliers as well as parts to repair old existing plants and as a result we were able to double the water supply. The energy company Antigua Power Company (APC) that provided almost all our energy means we owed them about $45 Million, we have since reduced that to $20 Million. Furthermore at the time we owed West Indies Oil Company about Eastern Caribbean Dollars (ECD) 89 Million which is over US$30 Million and could not pay. It got to a stage where they were threatening to discontinue the supply of petrol to the APUA. West Indies Oil Company is the only petrol distribution facility on the island. We were able to move quickly and reduced the debt from ECD 89 Million to ECD 40 Million. Within the next few months we purchased the West Indies Oil Company and then subsequently sold 49% of it. The economic wisdom states that government should not get involved in commerce but when you are running a small island state with very limited resources and very small, unsophisticated private sector which cannot compete even regionally, much less globally; government has to get involved and form public-private partnerships to exploit economic opportunities that could not otherwise be exploited by the local private sector. When I say we are an entrepreneurial government that is not a cliché, the evidence is there to show. For instance, about 2 years ago we acquired a small bank called Caribbean Union Bank, that had operated for 10 years but never made profit, we invested $30 Million in the bank and today, it is making a profit of almost $5 Million a year as a result of our intervention, now we own 80% of the bank. The profits we get from the companies we own, go to the treasury and this money is used to improve education, health and infrastructure. Our model is a little different to the one of an average country; we call it empowerment capitalism. We think that one of our successes is spreading the wealth among the masses. We believe that entrepreneurial efforts should be supported, respected and rewarded. We have one of the best investment regimes anywhere in the world where we give up to 25 years tax free concessions for certain projects. We do not have any capital gains tax; we waive withholding tax and provide land on concessional rates for development, as low as $3.00 per square foot.
Citizenship by Investment Program: We have incentivized investments with citizenship
because it provides constitutional protection for investments and investors. It also gives them access to other benefits such as visa free travel to 150 countries. We do not encourage individuals becoming citizens just to avoid paying taxes; we want to know the motive behind their thinking. We need to see that they have the need to have a passport that is well respected globally and one with which they have a constitutional protection for their investments and ease of travel. We have established a type of legal framework taking into account international laws. The reporting standard is such that, if they bring in illicit funds here then it will be reported under the Common Reporting Standard (CRS) and to the Foreign Account Tax Compliance Act (FATCA). We try to run a country that is transparent, accountable, and that respects its international obligations.
Technology and Innovation: We are now establishing the administrative and legal framework to transition into block chain technology as well as crypto currencies. We are very careful because we recognize that this is a potentially dangerous space however, we are providing this space for technology to flourish within a well-organized legal framework. We are now transitioning towards the medicinal marijuana space and we have established a legal and administrative frameworks. We have given a couple of licenses, so we expect Antigua and Barbuda to have a vibrant medical marijuana industry in the upcoming years. This is currently a multi-billion dollar industry and we suspect that in the coming years, it will become a trillion dollar industry. Our primary interest here is to manufacture a number of downstream products that can treat ailments and to create a vibrant manufacturing industry of Cannabidiol (CBD) products. We could also have cannabis branded products, we have a proposal to establish a cannabis hotel but for medical purposes only. We want to make sure that we do not violate any of our international obligations. On the issue of waste, we now see waste as a resource, all products can be recycled. Yesterday we imported a machine into the island that will be able to grind waste so that it can be reused. We are doing an initiative with Parley in which we will now utilize plastics to create more sustaining, high quality products, for instance, we will turn water bottles into shoes.
Climate Change and the Protection of the Environment: We are very serious about the issue of climate change and protecting our environment. In fact, about 15% of our energy comes from renewable resources. We have invested about $150 Million in resource energy applications in the last 5 years and a number of initiatives are being implemented including a one-megawatt solar plant with battery in Barbuda. Barbuda will become the first island in the Caribbean to be powered solely by solar energy. Our government and the government of the UAE funded this project. The UAE gave us a grant of $4.1 Million and the overall total investment in the project is $6 Million. We also got a loan from the UAE of $15 Million, from which we are doing a combination of Solar and Wind energy projects. Our commitment to climate change is significant because we recognize that climate change is real. We criticize the position of the President of the United States of America and his administration on the issue of climate change and we hope that they will readjust it. The USA is the largest economy in the world and must take responsibility for its actions. We are extremely concerned as we are on the front line of climate change and the impact on the small islands of the Caribbean is disproportionately larger than in the USA as we are the poorer nations, with less climate resilient infrastructure and homes. We are not poor because of the lack of effort or lack of entrepreneurship; we are poor because of historical poverty. We do not have the resources to build climate resilient infrastructure and homes and that is why the impact of hurricane is so bad. The lower class that primarily get affected, are living in substandard housing and we have to understand that there are significant amount of global inequities that must be addressed. I just made a call for a global equity restoration tax on the wealthy. We are in a situation where 1% of the world’s population controls 50% of its wealth. With a $85 Trillion economy and if you were to tax $40 Trillion at 1% per year, that would yield about $400 Billion that could help the poorer people in developed countries including the USA. When you ask about challenges, we have challenges in terms of high debt. We are making progress but we still have a debt service ratio of over 40%. Even though a 7% growth is remarkable, it will take at least another decade to cover the deficit of expenditure over income assuming that we continue at this growth, without any shocks.
2. You entered the political arena in 1999 after a successful banking career. You were appointed Minister of Planning, Trade, Industry, Commerce and Public Service Affairs in your first term as an MP. After 10 years in opposition, you led the Antigua Labour Party to victory in the 12 June 2014 general election, and got re-elected in March 2018. What do you feel most proud of in your personal life?
I am grateful to be alive and to be given the opportunity to serve my people. I would say that the most significant achievement is the confidence given to me by the people of Antigua and Barbuda who have elected me as their Prime Minister. It is very rewarding to serve within that capacity, presiding over the transformation of the economy and the uplifting of the people. I will always honor the confidence and trust placed in me.
3. What is your final message for Miami Herald readers who consider Antigua & Barbuda as a potential investment and tourism destination?
I think Antigua and Barbuda has one of the best socio economic investment architecture within the Caribbean. We have a very responsive government in terms of executing projects. The Citizenship by Investment Program (CIP) provides investor with mobility and constitutional protection. Our economy is growing at a 7% rate and provides many opportunities for entrepreneurs. There is political stability, my government controls 15
of the 17 seats in parliament. We have only completed a year and a half of our second term meaning there is still three and a half years to go. Based on the present situation, we are unlikely to lose the next election so any investor looking to invest now can still look at another 8 to 9 years of stability. We have the lowest level of crime and violence in the Caribbean. We welcome foreign direct investments and we provide the environment for investments to flourish. Within the Caribbean, Antigua has one of the finest tourism products. We are known to have the finest beaches within the region, Antigua boast 365 beaches, one for every day of the year. We have actually branded our destination as
the “coolest nation”. The Caribbean is known has a place to relax with beautiful beaches, water-sports, fine cuisine and good entertainment. There is no other country in the Caribbean that has a superior value for money product than Antigua and Barbuda. We have a good portfolio of high-end hotels. We recently got a new investment from the UAE, which will see the construction of one of the finest hotel resorts in the Caribbean at a cost of about US$200 Million. Apart from that, Discovery Bay, a US Conglomerate which has several hotels in the USA, Mexico and Bahamas are building a resort that will end up costing anything from $400 Million to $500 Million in Barbuda. The hospitality of the people on the island is second to none; we are a multicultural with a large immigrant population.
We welcome everyone to our shores……..Paradise awaits you!!
