Financial perspectives are crucial; as such, theorists ought to be knowledgeable in thought and action, particularly when coupled with authority for public policy.
According to minister in the ministry of finance, Ubaldus Raymond’s economic theory, and most recent remarks on Bank of Saint Lucia [BOSL]: “A quarter of all loans are bad, approximately EC$300 million, the Eastern Caribbean Central Bank [ECCB] has held many discussions with BOSL, which is undercapitalized. The situation calls for urgent action and the government is exploring its options.”
Within 24 hours a refined clarification was offered. Indeed, a teachable moment that, there is very little scope for financial slip-up and superficial persuasion.
In influential circles, inadequate knowledge and ignorance illustrate what has stumped the Chastanet-led administration on policy measures, law and order, governance, and the DSH “integrated development project”, that will “change the face of this country” towards totalitarianism, at the expense of ordinary Saint Lucians.
These deeply destabilizing situations are adverse to political freedom and economic prosperity.
The problem is more acute in the co-ordination and co-operation of economic theorists that borrow money to cut taxes for the wealthy and then immediately impose VAT on vendors [rental fees] in the Castries Arcade.
This is not good fiscal policy. Who’s next? Market vendors, boat boys, street musicians, evangelists? Meanwhile, the Chastanet-led administration is doing as it pleases, morphing and signing agreements they do not grasp.
In actuality, this is suicidal for psychopaths, who haven’t stopped telling shameless and very big lies, and ministers of government who say and do things unwittingly in the pursuit of “change”, to hunt investments and attract business.
In the pretence for job creation and economic development, this is guided by the philosophy to toe the party line, permit business to exist in “joint ventures”, reward marketplace thuggery and exacerbate income inequalities.
As such, and without a thorough synopsis of the economy, the inability to accentuate legitimate authority that is capable of persuading executives’ business decisions, leave the familiar impression of an administration that is policy stricken.
It is unambiguous that political constraints reflect points of view that are deficient in positively influencing and reassuring confidence in the face of monetary policy, financial service and other external circumstances the country has falling into.
Thus, when BOSL is stuffed with approximately EC$300 million in non-performing loans, data and reports critical to economic planning and governance that is of relevance to Saint Lucia, St Vincent and the Grenadines, Barbados and Trinidad and Tobago, by virtue of shareholdings and acquisition, this calls for expert counsel to:
- Mitigate elevated anxiety that may result in a run on BOSL;
- The possibility of a buy-out by Republic Bank Ltd of Trinidad and Tobago in April of 2017;
- And the very strident concerns surrounding devaluation of the Eastern Caribbean dollar [XCD].
Actually, minister in the Office of the Prime Minister, with responsibility for commerce, industry, investment, enterprise development and consumer affairs, Bradley Felix, is well placed to at least have a conversation with Minister Raymond on aspects of BOSL’s risk management, due diligence and business model.
And, by virtue of Prime Minister Chastanet’s finance portfolio, which does not waive the inability to understand:
- If BOSL falls into foreign ownership, local authority is likely to diminish; thus, losing a controlling interest by the government of Saint Lucia and the National Insurance Corporation [NIC] pension funds;
- This may well produce another shift in Saint Lucian’s economic and cultural life and further impact, the country’s sovereignty and sense of national pride;
- And access to data, information and the ability to direct economic decisions in a timely manner may well become more challenging.
Notwithstanding, the finance minister taking refuge in twisting words on the insignificance of local, regional or extra-regional ownership may well be sending a subliminal message upon which investment capital, strategically placed, can influence expanding power.
This reminds me of previous writings on “…the fragile nature of national laws on matters of fair trade and competition, merger and acquisitions, the lack of a robust competition bureau, and consumer protection legislation” and the significance of a credit bureau via the proposed OECS Harmonised Credit Reporting Bill by the Eastern Caribbean Central Bank (ECCB) and specific credit bureau legislation for the Eastern Caribbean Currency Union (ECCU).
Nevertheless, struggling in grey bureaucracy is the underlying factor in institutional paralysis, the continual resistance to constitutional reform and, the openness to populism in retail politics that make it possible to offer pretentious posturing of “change” and “Chin Chin” [coins] in the pockets of voters, and dollar bills for the well connected and special interests.
However, the fact remains that “coins” won’t facilitate the desired recapitalization of BOSL and foster economy growth.
Meanwhile, the vision for the future seems to have fallen on Desert Star Holdings “inclusive of thoroughbred purchases”; but with innovation and driverless cars, “horseless carriages” may soon become a qualifying investment project for unlimited Saint Lucian passports.
Clearly, DSH was superior at the negotiating table and took full advantage of the citizenship by investment program, in pursuit of total return and preservation of capital.
Further as a “Tourism Project” under the Tourism Incentives Act, Cap 15.30 of the revised laws of Saint Lucia, and the Tourism Stimulus and Investment Act, No. 12 of 2014, this warrants, income tax exemption for a period of 25 years and, in the same manner, customs duty and VAT.
“The Master Developer will be the investment vehicle of a consortium of investors comprising CIP investors [who will make investments including investments in thoroughbreds and/or real estate] and investment partners of the Master Developer in respect of the Project. The Master Developer, or its Affiliates, will be the owner of the Land and all of the assets in respect of the Project and will be responsible for the procurement and sale of thoroughbreds, development of, and construction of the Land.” Recitals (c)
The future of Saint Lucia is at stake, with Prime Minister Chastanet’s trans-colonial transactional leadership handing-over approximately 700 acres of private and commercial lands, the Queen’s Chain and adjacent beach front to Desert Star Holdings – an integrated development project for horse racing, with a township with modern amenities, hotels, casino and free trade zone.
“The purchase price per acre shall be between the agreed range of US$60,000 to US$90,000 for land the Master Developer will develop and sell.” (Ref: 2.7)
“In the event the Master Developer opts for lease option, the price shall be at a discount from outright purchase price stated in 2.7 on long lease of 99 years.” (Ref: 2.8)
Notably, this means the demolition of George Odlum Stadium [a gift from China], and the conversion of a newly built meat processing plant [a gift from Taiwan].
This has the makings of a diplomatic row between Taiwan and Saint Lucia in relation to previous terms of engagement and it is perhaps both morally and strategically wrong to isolated Taiwan, even as President-elect Donald Trump is using “smart policy” to engage Taiwan.
China’s expanding influence in the Caribbean and the One-China Policy has spent billions on economies in freefall.
At this point, the DSH agreement has Saint Lucia “naked” on the way to (3.2 a) “sell thoroughbreds and develop the land and any parts thereof as it thinks appropriate in its absolute discretion, including (without prejudice) constructing residential and/or commercial properties on the land.”
In the tool box of equine veterinarians there is a pair of knee pads. It has become clear that the Chastanet-led administration has made good use of them.
By Melanius Alphonse
Melanius Alphonse is a management and development consultant, a long-standing senior correspondent and a contributing columnist to Caribbean News Now. His areas of focus include political, economic and global security developments, and on the latest news and opinion. His philanthropic interests include advocating for community development, social justice, economic freedom and equality. He contributes to special programming on Radio Free Iyanola, RFI 102.1FM and NewsNow Global affairs and economic analysis. He can be reached at: email@example.com