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Opinion Pieces
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Friday, 31 January 2014 04:00
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Kwame Nkosi Romeo
Both major political parties, the Antigua Labour Party (ALP) and the United Progressive Party (UPP) governments have ignored democratic accountability and public opinion to the benefit of entrenched elitist business corporations.
In terms of economic disempowerment of the masses, nothing much has changed since UPP victory on March 23, 2004, the political spectrum only changed color. Consider The Royal Antiguan Hotel sale on Wednesday September 1, 2004 to Issa Nicholas, Chairman of Crown Plaza Trinidad as one such example. [Antigua & Barbuda Government Newsletter ISSUE NO.91 August 2004]
Why did the UPP Government privatize the Royal Antiguan Hotel? Basically from the beginning of the Royal Antiguan Hotel development, and commencement of operation in 1988 everything seems to be shrouded in secrecy. No one was able to find answers to the many elusive questions, thus increasing distrust in the political system. The government-owned tourism flagship later became mired in controversy ranging from conflict-of-interest to accusation of financial fraud. According to The Organisation for Economic Co-operation and Development (OECD) Integrity in Public Procurement Good Practice from A to Z , public procurement is one activity most prone to corruption since it provides "...multiple opportunities for both public and private actors to divert public funds for private gains"
The case of the Royal Antiguan Hotel development provided "multiple opportunities" for private gains. The genesis of this State-Owned Enterprise (SOE) was riddled with the prevalence of corruption scandals, with unprecedented wealth and power concentrated in the hands of a few. Of particular interest was the setting up of a politically connected business, Deep Bay Development Company [DBDC] for special payments and bribes and to plunder public funds. The major role of DBDC was to act as a clandestine broker between the Antigua & Barbuda government and SACE, Italy's government-backed Export Credit Agency financiers of the Royal Antiguan Hotel, Heritage Quay, Electricity Transmission Network, and Crabbe's Power Plant. Between 1983 and 1987 these four infrastructural development was funded by SACE: "Between 1983 and 1987, SACE, then Public Body, assured 4 loans made by banks for a total amount of € 84.5 million for the construction of infrastructure at the hands of Italian companies, in particular" [
SACE-trade receivables Government of Antigua and Barbuda]
Additionally, on September 17, 1996 Antigua & Barbuda Finance Minister was authorized to borrow more than EC$160,148,296 million from local Financial Institutions for various business "ventures" . Two of these business ventures clearly represents a Conflict of Interest: the Royal Antiguan Hotel and DBDC were businesses connected to the Patrimonial Regime. These two private businesses , secured government funding for over $EC$20.4 million from paying salaries to "......pay accrued interest to Deep Bay Development Co. Ltd..." [
Loans (Financial Institutions) Act 1996: 9 Antigua Commercial Bank]
Although the Antigua & Barbuda government were the primary guarantor of the loan, DBDC was the principal organizer, and collector of the funds. In June 1995 an IMF review assessed the political developer owed SACE more than 40% of the external arrears. Less than a decade previously, a former Diplomat fingered Lester Bird, Leader Emeritus as the "owner" of the Royal Antiguan Hotel. As a consequence of political kickback, bribe and theft , the masses were carrying more than US$200 million of debt burden.
[IMF Report No. 95/45 June 1995]
Therefore, tax payers were burdened by debt belonging to the principal "owner" of the Royal Antiguan Hotel, and Director of DBDC former PM Lester Bird! One such local debt owed by DBDC was documented on April 28, 2000 by Devcon International Corp was viewed as Antigua and Barbuda Government responsibility. [
Amendment No. 9 to St. John's Dredging and Deep Water Pier Construction Agreement April 28, 2000 Exhibit 10.33]
Debt Forgiveness and Privatization: Decades later, the Italian government of PM Silvio Berlusconi authorized debt forgiveness totaling US$196 million ( 26% of Antigua's GDP). One can argue that Berlusconi saved Antigua & Barbuda from the precipice of economic collapse, the Italian debt was settled for only US$ 14.2 million. However, another dubious manifestation was progressing, this time the sell-off of The Royal Antiguan Hotel. Absent is a recourse systems for stakeholders to challenge such disfavored divestiture!
Again, foreign ownership of a prized national public asset was the final insult, the Royal Antiguan Hotel was sold for $18.0 million, an illogical 29% increase. Similar views of divestment were advocated in PM Lester Bird Budget Statement on Monday 31, 2003: "The government intends to finance the deficit by actively pursuing a policy of privatization of publicly held assets. Assets that have been earmarked for sale include the Royal Antiguan Hotel, Newport Holdings and West Indies Oil Company Ltd"
A leading example of resistance against privatization was staged by the courageous people of Bolivia against the take over of the municipal water system of Cochabamba, Bolivia's third largest city. The struggle started in 1999 against Aguas del Tunari, culminating in the Water War in Bolivia. The struggles symbolizes resistance against the World Bank and the privateers interest of ownership of electricity, water, and telephone [2000 Cochabamba Protests -Wikipedia]
These major privatizations of SOE was of concern to the people of Antigua & Barbuda, since it was no different to the political sell-off in other Latin American and Caribbean countries. In Antigua there was no popular movement against privatization only remarkable silence! Why? Some have accepted the poverty of the masses and the enrichment of a few with pubic assets as politics as usual. But this is corruption to the core. Our public conscience is completely asleep. In this vein, UPP followed PM Lester Bird 2003 privatization template! During that era World Bank privatizations of SOE agenda continued in 2004-2005: "In 2004-2005 62 Developing countries carried out nearly 400 privatization transactions worth US$90 billion" The Royal Antiguan Hotel was a case in point, sold to private interest, now the 275 rooms resorts is closed indefinitely, leaving the economy far worse. Apparently, as in so many instances in the past, government is incapable of enforcing a performance clause.
Moreover, the Royal Antiguan Hotel deal was empowered in an arbitrary manner, public dialogue was absent, participatory democracy questionable, there was no recourse . The majority viewed hidden weaknesses, and the invisible hand of influence peddling, behind the covert sell-out. The World Bank alluded to the Royal Antiguan Hotel divestment as far back as 1992, indicating the ALP government intention to sell due to ALPs "..lengthy record of default" and blaming the external debt on Government's involvement in tourism: "In part, the external debt problem is linked to the Government's direct involvement in the tourism sector..." and that the Government "...is currently considering selling the Royal Antiguan" [
World Bank Report No. 10483-AB May 18, 1992 -23- 55]
The World Bank agenda is clearly to discourage public investment in the tourism sector, and promote SOE sell-off is deplorable and shamelss conduct. The underlying cause was not addressed: monies owed to SACE ended up in Government ministers personal offshore bank accounts. The Antigua and Barbuda Treasury was plundered, not for "economic development" but personal gain, plunging Antigua & Barbuda into a morass of poverty! Therein lies the difference between the country's economic failure, hardship versus self-enrichment and self-gratification of politicians!
Moreover mismanagement of public funds for private gain, and political complicity are major factors that created the Royal Antiguan Hotel chaos, nothing else. The blame for these shenanigans rest with Lester Bird, Leader Emeritus, who was Minister of Economic Development, and Prime Minister from 1994 to 2004! And since the upholder is as bad as the thief according to folkloric wisdom, PM Baldwin Spencer's continued policy practice worsen the situation.
Part 11 coming....
Kwame Nkosi Romeo
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Reporting by Caribarena news, publishing by Ofer Shaked.
16 Comments In This Article
@ Observer - civil disobedience
Skyewill
@ josephine son » 2014-01-31 11:57
Observer...
Parishman » 2014-01-31 11:52 #5
Observer...
Parishman » 2014-01-31 11:52 #4
Observer...
Parishman » 2014-01-31 11:52 #3
Observer...
Parishman » 2014-01-31 11:52 #2
Observer...
Parishman » 2014-01-31 11:52
Observer...
NO ALIASES
There is " ...ABSOLUTELY NO NEED" to hide behind " ...pseudonyms."
The author writes to " ...Bad Business and Foul Politics."
Rawlston Pompey is NOT qualified, and has no interest in writing on these issues. Besides, he " ...abhors that which he considers " ...GUTTER SNIPE POLITICS."
No associate. Only Romeo known to me, was a gentleman named " ...ROGER ROMEO." He, a former LIAT employee -I as Immigration officer V.C.B.I.A.
Thanks Observer.
RAWLSTON POMPEY
mombojumbo
josephine son
Very informative piece
Parishman
Duncy Bat » 2014-01-31 09:35
Observer...
Duncy Bat » 2014-01-31 09:35
Observer...
Sound piece #3
Observer...
Sound piece #2
Observer...
Sound piece #1
Observer...
RE: Bad Business and Foul Politics
Duncy Bat
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