PM Gaston Browne's 'entrepreneurial socialism' could hurt the Caribbean

Tuesday, October 24, 2017

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Antiguan Prime Minister Gaston Browne has declared he is instituting “entrepreneurial socialism” in his tiny eastern Caribbean island, beginning with the hotel sector which he wants to partially nationalise.

We do not know where Mr Browne has been all this time since the 1970s when socialism in its various forms wreaked havoc in the region, notably in Grenada, Jamaica, Guyana, and Trinidad and Tobago. But we know he can read, and we suggest that he brings himself up to speed.

Grenada's socialist revolution, which started in 1979, imploded four years later, inviting the United States' intervention. Guyana's economy tanked and Trinidadian Muslims almost killed Prime Minister A N R Robinson.

Jamaica is probably the most teachable example for Mr Browne. Under socialism nearly all the big investors, including the hotel industry, fled with their capital, forcing the Government to buy out the hotels to save jobs and protect the tourism industry on a whole. The upshot was that Jamaica went bankrupt.

This is the road down which Mr Browne wants to take Antigua and Barbuda. In fact, if he had his way, he would take the entire Caribbean down with him. Just last week he invited other Caribbean governments to acquire ownership in hotels in their territories on grounds that they are operating “like a plantation industry”.

Under his 'entrepreneurial socialism', Mr Browne says: “…We will risk our capital. We will borrow the money, we will invest in these hotels, and we will lease them to the private sector to operate. …We don't have the expertise to run hotels, but we are creative enough to raise the funds so that we can build hotels for the benefit of the people of Antigua and Barbuda.”

The reason for that, he says, is that: “Hoteliers, they are brutal in their requirements, they ask for up to 25 years concessions on everything, they don't want to pay no taxes, when their tax (exemptions) run out they come back and they insist you must renew it, and when you decide you don't want to do it because you are trying to protect government's revenue, they hold you hostage to fortune.”

Although he did not mention Sandals Resorts by name, we hope that Mr Browne is not taking his unprovoked quarrel with the resort to this ridiculous level.

Shortly after coming to power in Antigua, Mr Browne turned viciously on Sandals — which shares ownership with this newspaper — ripping up a concession agreement signed with the previous Government, declaring it illegal but providing no evidence. The agreement was in exchange for US$100 million in additional investment by Sandals.

Over 25 years of uninterrupted operation, Sandals became the biggest contributor to the Antiguan economy and is now the largest private employer, foreign exchange earner, tax contributor and bringing in the largest number of commercial flights to the island. Sandals contributed over EC $90 million to Antigua last year alone.

The unilateral withdrawal of the concession agreement has obviously hurt Antigua, as even with a devastating hurricane which completely ravaged Barbuda, Mr Browne complained to the United Nations that it is only getting commercial debts at high interest rates and on difficult terms. No significant investor is willing to touch Antigua.

Now he wants to similarly hurt the rest of the Caribbean.




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