MIA > Archive > Tim Hector
Fan the Flame, Outlet, 8 November 1996, online here.
Transcribed by Christian Høgsbjerg.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Antigua and Barbuda has a strange economy, weirdly run, by a gang of mismanagers. Not one of them can write 100 or 1000 meaningful words as to where Antigua and Barbuda is going. Not one. No, not one.
Let us begin with our exports. In 1994 exports of goods produced in Antigua accounted for less than 8 percent of (current account) receipts. A half of the total exports were re-exports of petroleum products from West Indies Oil Company to neighbouring islands. This re-export of petroleum products dropped from an average of US$32 million in 1990–93 to US$21 million in 1994. This decline of one-third of petroleum exports was due to a decline in demand (especially for the blending and storage of naphtha.)
Among OECS countries, Antigua and Barbuda has the lowest level of exports.
For 20 years the productive sectors of the Antigua and Barbuda economy has been in decline. And nothing, nothing has been done to arrest it. In other words, for 20 years the government of Antigua & Barbuda sat in its boots and wondered.
Perhaps it is necessary to remind that it is not for want of opportunity that this appalling state of the productive sectors of the economy were laid waste.
Antigua and Barbuda took no advantage of the tremendous opportunities offered in Europe by the Lome Conventions. Despite the provision for joint ventures under the Lome Convention with guaranteed markets in Europe for the products of such enterprises, successive Bird administrations never sought to access these investment and export opportunities. Never.
Future generations will wonder, in alarm and horror, what Bird madness must have gripped this country in this period when so many opportunities for export trade and development went a begging. One of the four things that come not back, I remind is, opportunity lost. Present and future generations will rue the day, the Birds ruled so long.
The same thing occurred with the Caribbean Basin Initiative. Antigua and Barbuda, failed, and failed utterly, to avail itself of the opportunity offered by the United States, to export certain goods into the U.S. on a duty free basis, with no need for reciprocity. Needless to say, to use those opportunities under Lomé and CBI required talent and concrete vision in government which successive Bird governments did not have, and do not have. Successive Bird administrations buried national talent under a very huge stone, in a cultural desert.
When the Lomé Convention expires in 1997 the Caribbean will not enjoy the opportunities for preferential prices and market share in Europe. That is for certain. Trade liberalisation under the new World Trade Organisation will put paid to all that! More than a decade of opportunity was pissed upon, from a great height, by all the Bird administrations.
Lester Bird cannot claim this is a legacy from his father’s time. Because for nearly all of his father’s, old and weary, 18-year second-coming, Lester Bird was Minister of the Economy. His is a glaring failure, so glaring as to be abject failure. But in Antigua and Barbuda, we have not learnt to evaluate politics and politicians, so rhetoric is substituted for performance, sham replaces substance, prattle fakes as performance. To be generous, Lester was all shadow and no act, mere bombast without substance. He sowed the wind, as Minister of the Economy, and we are now reaping the whirlwind.
In 1975, to give prose the backing of hard figures, Agriculture contributed 8.5 per cent of Gross Domestic Product (GDP). Twenty years later Agriculture is down to 3 per cent of GDP.
I have an even more stunning hard fact backed by figures. In 1975 tourism contributed directly, 11.2 per cent of GDP. (Source: Antigua Tourist Board, Department of Statistics.) In 1994, the same tourism contributed directly 12 per cent of GDP (Source: IMF Report). For all the hoopla and ballyhoo, tourism has not moved in relative terms from where Lester Bird inherited it in 1976. The evidence is incontrovertible.
Let me just add one last set of figures so as not to overburden this piece with statistics. In 1975, Construction contributed 8.2 per cent of GDP. Some twenty years later, in 1994, Construction contributed exactly 8.0 per cent of GDP. The more things changed, the more they remained the same. But the more the same thing was perceived through the regime as being different. But figures do not lie. They stare the nation in the face despite all the fake glitter that was put on the myth that 71–76 “were the dark days”. While 76 to 96 were the days of glitter and plenty. This deception, and the politics of deception, is something that Antigua and Barbuda urgently needs to go beyond. It is getting close to the final hour.
Let us take another area of the economy – Utilities. For all of the period 1990–95, APUA has carried a current account deficit of some EC$25 million a year! An incredibly bad performance. Yet, APUA has had no capital expenditure since 1990. The APUA account has been in deficit since the 80’s. This was aggravated by the desalination plant which operates at a cost that was not covered by even our high electricity and water rates! In addition to all that, said the IMF in its 1995 Report, “technical and non-technical losses have remained high amounting to 20 per cent of water and electricity production up to the end of 1994”!! Worse mismanagement is hard to imagine.
No individual would tolerate a loss of 20 per cent of his or her production for as long as ten years, and no business could survive 5 years with those kinds of losses in its production. Yet in Antigua and Barbuda this awful beat goes on, and on, and on.
Add to all this the fact that the nation, through APUA, was robbed of some $5 million in promissory notes, unlawfully signed by Minister Yearwood, and the promissory $5 million paid out for work not done by an Italian contractor, which undone work, Yearwood certified in writing was done.
It is then obvious that to waste, and mismanagement is added abuse of power and downright robbery of the nation. And blatant as this work undone and certified to be done by Minister Yearwood, the Lester Bird administration continued with the corrupt Utilities Minister still on the beat, indeed promoted him to unofficial deputy (c)rime Minister! Our economic woes, are not so much caused by external factors but by internal maladministration and plain robbery.
I should come to one last sector of the economy the financial sector: External credit to Antigua and Barbuda was severely limited to Antigua between 1990–94 because of the maladministration of Antigua and Barbuda’s debt.
Despite, a bilateral re-scheduling of part of Antigua and Barbuda’s debt in 1990, still the stock of external arrears reached US$337 million! of which US$157 million represented interest arrears!!!. As the IMF Report for 1995 recorded the “Total external debt of the public sector increased from about US$330 million at the end of 1990 to US$400 million in 1994!”
I had better add the next paragraph from the IMF 1995 Report on Antigua & Barbuda, which stated baldly that:
“Arrears on debt-service payments for two projects – the Royal Antiguan Hotel and a desalination and power plant – accounted for more than one half of the outstanding external arrears.”
So that not only did the Bird government’s accumulate debts on uneconomic projects, it proceeded thereafter to accumulate arrears on these same uneconomic projects. To persist with this type of government is to court economic calamity unlimited.
The full weight of Lester Bird’s gross mismanagement of the economy, combined with Robin the Hood’s malfeasance has not been fully stated. Lest someone perceive bias on my part, let me rely on the bureaucratese of the IMF which stated the following in its 1995 Confidential Report:
Said the IMF
“The St John’s Development Corporation which administers the Heritage Quay tourist complex (comprising a hotel, duty-free shops, a casino and other tourist facilities) registered annual deficits of EC$4 million in 1990–94 and has been unable to service its external debt.”
Grasp the point in all its fullness. Heritage Quay has been unable to finance its external debt of some US$28 million. Arrears on that debt are accumulating. On top of that every year from 1990–94 it has lost EC$4 million. It is a terrible story of economic misconception and mismanagement. Indeed it demonstrates the Lester Bird touch, the opposite of the Midas touch. In that, every single project he has put on the nation, turns to lead! Every single one is a national money sinker. Sinking into a bottomless pit, without prospect of profit. Meanwhile act Heritage Quay in particular, while the nation grows poorer by millions per year, Lester Bird’s blue-eyed boys – the Wexelmans, grow richer by the minute. The more this nation loses, the more the Wexelmans and silent partners gain. Round and round this macabre dance goes, when it will stop nobody knows. But stop it must.
I am not done yet with the financial sector. Direct foreign investment in Antigua and Barbuda declined from US$30 million a year in 1990–93 to US$14 million (declined by more than half!) about 3 per cent of GDP.
I want again not to colour any of this by my own political opposition so I will rely on the IMF which said that this sudden decline in foreign investment was “probably because investors were uncertain about future policies ... in particular in the tax area ... following the March 1994 election.”
In plain terms Lester Bird’s fiscal madness, which reduced demand and restricted supply at the same time shrunk and stagnated the economy, while his persistence with over-employment in the public service not only reduced productivity, but put further strain on revenue. In short Lester Bird’s policies kept investors away. While international reports of bribes sought, drugs transshipment and money-laundering made bad matters, in terms of foreign investment, disastrous.
What was the upshot of all this in the financial sector? Specifically, for I wish to be extremely concrete in this economic analysis, Commercial banks in Antigua & Barbuda contributed to the deficit in the capital account in 1993, 1994 and 1995 when they increased their foreign asset portfolio due to the slackening in demand for domestic credit.
Put simply, there was little or no local investment so the banks turned money which they should have been lending to local enterprises especially for ventures with export potential, into foreign assets. So much so that foreign assets of the banking system here, rose from EC$5 million in 1990 to about EC$140 million at the end of 1994! The local economy was starved of investment, through the absence of demand for loans, and the banks had to turn their near bursting liquidity into foreign assets.
PM Lester Bird and his entire Cabinet does not understand a single thing of the economic stagnation and recession they have wrought. And so they continue in their senseless and awful game of personal accumulation by any means necessary, be it by land deals or Rolls Royce deals, or money laundering scams, or just waste of public funds. The dance macabre continues.
Meanwhile we continue with an education system fit only for the 19th century plantation. It is far removed from the cyberspace age, as East is from West. Therefore, the skilled work force required for a new leap forward is nowhere on the horizon. Antiguans are going to be further reduced in their own country if skilled labour has to be imported and Antiguans left with only unskilled jobs. The acquisition of skills by the people of Antigua is now a matter of national emergency. In 1994 alone the Lester Bird administration wasted some $4 million in what purported to be a vocational training scheme, where the Lester Bird administration paid the wages, Social Security and Medical Benefit contribution inclusive, for a period of a year, for a number of would-be voters sent to work at various establishments. Little or no required requisite skills were acquired and the whole farcical scheme was a major contributing factor to the government wage bill increasing by 15 per cent in 1994! There was no corresponding increase in output of goods and services. Money down the drain. Lester Bird and his Cabinet, which he himself dislocated and set at variance, couldn’t care less.
Something has to be done to stop this madness. Christmas 1996 could be very blue.
Last updated on 9 February 2022