Antigua and Barbuda: Antigua is Bankrupt

For many decades, Antigua has been ethically and morally bankrupt. This next phase follows naturally, so it is no surprise to international observers that the Ministers of Antigua and Barbuda admit that their country is also financially bankrupt.

Of course, these statements are not made outright. As with any financial alchemist, facts are spun and disguised to mask the truth. But there is no mistake in the symptoms of bankruptcy that appear clearly at every turn and in every corner.

The first warning sounded during the last decade, with the expropriation of the Half Moon Bay Resort. Although the property was internationally recognised, and its expropriation vigorously opposed by the property's legitimate American owners, this breach of international treaties went virtually unnoticed.

However, for those following the event, this removal of the cornerstone of democracy and human rights was a clear signal of impending change, an important departure from legitimate governance.

For the world at large, alarm bells began ringing when Antigua's powerful benefactor, R. Allen Stanford, was arrested and indicted for a massive Ponzi fraud.

The collapse of Stanford's empire meant more than a loss of jobs and of money easily changing hands in Antigua.

Antigua's reputation as a finance and investment centre was at stake.

The world's attention was now focused on Antigua, with greater interest than had been attracted by previous Antiguan contributions to the darker side of international concerns, such as the Boston snipers, the shoe bomber, the trans-shipment of arms, and providing a safe-haven for individuals such as Robert Vesco and Bill Cooper, wanted by authorities for criminal activity elsewhere.

An extradition warrant issued by the US authorities for Leroy King, the Island's chief financial regulator, following his indictment on charges of conspiracy and fraud.

This sealed Antigua's loss of reputation as a legitimate finance and investment centre.

Antigua's on-going delay in fulfilling the warrant is quite likely to drag on indefinitely, further tarnishing its overall reputation.

It is widely anticipated that the spotlight will soon shine on Dr Errol Cort, former Minister of Finance and current Minister of National Security, for his long-time service as legal advisor to Stanford - a matter which has only begun to play out in the public domain by virtue of a legal claim recently filed against him in the U.S. Courts.

Meanwhile, under this Minister's watch, Antigua-flagged vessels are routinely seized in the shipping channels of the Middle East, carrying illegal cargo of drugs, arms and ammunition.

E-gaming investigations by Europe and the U.S. also continue to yield indictments and arrests.

In answer, Prime Minster Baldwin Spencer announces that he is "frustrated" by the Financial Action Task Force's requirements for Antigua to improve its regulatory regimes.

A few days later, it is discovered that Antigua had never ratified its vaunted bilateral investment protection treaties with the UK and Germany which the latter had relied upon, rendering them useless. To-date, this issue is being stonewalled.

It was disclosed last year that Antigua had begged the Paris Club to forgive its massive unpaid loans and obligations - a request which was denied, except for a decrease in interest accruing on certain portions of the debt.

Shortly thereafter, the IMF, the lender of last resort, assumed oversight of the economy by tying regularly-delivered tranches of its substantial loan to payment of the Government's local debt and to cost-cutting demands.

Since most cost-cutting results in staff reductions of a bloated, politically driven public sector, the IMF is publicly vilified and unfavourably compared to unconditional loans from Venezuela, which only coincidentally followed Antigua's joining of Chavez' ALBA. Loans from the People's Republic of China also continue to flow.

Earlier this year, AON downgraded Antigua because of its increasing political risk.

The road to bankruptcy is unmistakable and the speed of travel increases with the angle of descent.

Unfortunately, the individuals at the wheel of the runaway vehicle also continue pressing on the accelerator.

In their effort to disguise the situation, they eschew any deviation from the actions that have set off the international alarm and issue proclamations that defy rational thinking.

Undeterred by the damage done to Antigua's reputation for investment by the expropriation of the Half Moon Bay Resort and by the aborted attempt at expropriating Stanford-owned property, the Government of Antigua and Barbuda has now begun "discussing" the compulsory acquisition of another foreign-owned entity, the K Club Resort.

It has been four years since the Government of Antigua had taken physical possession of the Half Moon Bay property. In spite of initiating four separate legal actions to move the process of "fair compensation within a reasonable time," guaranteed by the Laws and Constitution of Antigua, the dispossessed owners of the property are still awaiting compensation for the expropriation.

The last two court hearings dealing with compensation have been adjourned by the Attorney General, one, by letter received on the morning of the hearing, based on a "conflict of schedule;" the other, when the Attorney General personally announced to the Eastern Caribbean Court of Appeal that he was "not ready."

With no apparent recognition of the irony involved, the same individuals describe their efforts to promote the return of Foreign Direct Investment to Antigua and Barbuda, promising a new, branded resort at Half Moon Bay, as an indication of growth and development.

And how do they plan to achieve this?

The Attorney General, the Honourable Justin Simon, announced to the media last week that while the Government has no intention of defaulting on its requirement to pay compensation for the expropriated property, this does not have to take place before its redevelopment commences.

"Nothing has to be paid for work to start..." he assured the media and the public.

There is no precedent for this approach.

And then there is Antigua's Finance Minister, the Honourable Harold Lovell, who has sworn an Affidavit reinforcing his own earlier statements that his Government will not pay the dispossessed owners any compensation for the expropriation of their property from the Treasury because doing so is not permitted by the IMF.

Next, it is expected that the international community will be told that the IMF has sanctioned expropriation without compensation.

If Antigua was a corporation, it would be wound up without delay.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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