It is significant that during his recent visit to Antigua, Mr. Augustin Carstens, Deputy Director, International Monetary Fund stressed, "Clearing longstanding arrears would go a long way toward normalising - and facilitating access to - regular financing. This will also help private investment and spur growth".
Mr. Carstens went on to remark that the prospect of growth looked promising with the advent of 2007 Cricket World Cup, which is expected to stimulate tourism and a construction boom.
In November 2005, Antigua & Barbuda took the vital step of completing full membership of the Multilateral Investment Guarantee Agency, which provides access to legitimate investors and political risk insurance.
During the first two years of UPP Government in Antigua & Barbuda, the new administration has signalled its intention to establish and adhere to international principles of transparency and good governance. It has passed new legislation, requiring integrity in public office; it has followed recommendations by the IMF, which had been previously ignored; it has made promises to right individual instances of wrongs perpetrated by the ALP government. All in all, it has succeeded in creating badly needed capital of international goodwill, based on promises and expectations.
While all these preparations are being made for potential foreign investment, reality is somewhat different and, therein, lie serious barriers to success.
The banking, investment and development landscape continues to be dominated by the Texas-based R. Allen Stanford and his group of companies. Prime Minister Spencer has caused a backlash from UPP supporters by announcing his "alliance" with Mr. Stanford and publicly expressing his willingness to join his political career to this decision.
While political alliances are strengthened by financial and technical support extended to Antigua & Barbuda by China, Venezuela, and Cuba, the Island's infrastructure is collapsing under the in-fighting and back-biting of the new government elite, appointed to positions of power.
It is difficult to conceive realisation of the numerous and massive proposed developments presented in Parliament by members of the new Cabinet, given the multiple daily power failures which frustrate existing businesses and demoralize households. Ironically, the Parliamentary sitting itself was interrupted by one such power failure, and had to be adjourned.
Another very significant barrier to foreign direct investment is Antigua & Barbuda’s listing as a country that illegally expropriates private property owned by foreign investors.
Since its election to office two years ago, the new Government of Antigua & Barbuda has repeatedly promised to abandon what it itself has termed an improper and ill-advised attempt at expropriation of Half Moon Bay Resort initiated by its predecessor and to release the Government's unlawful hold over the prestigious resort property, allowing its owners to redevelop it and to return it to service.
Legitimate expectations of these intentions have been established through correspondence and in numerous meetings with the owners, their legal counsel and directly to national and international observers.
Instead of the promised reversal or abandonment, a Cabinet decision was taken to Parliament for ratification late in the summer. This justified the reasons for the actions taken by the previous administration against the owners of the property, but which, nevertheless, agreed to "revest" the property to its lawful owners, subject to certain pre-conditions.
In the opinion of legal counsel, one of these conditions would expose the owners to future capricious action by the Government of Antigua & Barbuda. Another condition required the Company to provide a blanket indemnity for all consequences past, present and yet to be discovered: an unusual, enigmatic prerequisite for an honourable Government to insist be made by a private entity in advance of overturning improper circumstances.
As the public debate of these issues took centre stage in the media, it was also discovered by a conscientious journalist that while discussions were taking place in good faith between the owners and the Government, title records to the property were altered at the Land Registry without anyone's knowledge, in favour of the Government.
This act of extreme bad faith also breached the official undertaking given to the Court by the Government to take no further action with respect to its attempted acquisition of the property, until the resolution of legal action currently pending before Privy Council.
The Company's Directors, mystified by such a turn of events, made a final effort to resolve the matter by offering mediation. Sir Louis Blom-Cooper, Q. C. made himself available to deal with the matter and his willingness to act as mediator was communicated to the Government of Antigua & Barbuda.
This offer was rejected by the Government, in a letter signed by the Attorney General, which also stated that there were no differences between the Government and the owners that required mediation or resolution.
Government representatives responding to questions asked of them by U. S. Embassy officials and the media has been "We have lived up to our promise: it is now up to the Company and its US investors to agree to our proposal."
With no alternative left and much of the original goodwill expended, the owners’ attorneys served formal notice on the Government of Antigua & Barbuda of the Company's intention to proceed with its Appeal to Privy Council to clear the way for a Judicial Review of the Government's actions.
Separate legal action was initiated in December 2005 to rectify the improper Land Registry entries and formal notice was also served on the Cabinet and the Attorney General declaring the Company's intention to file contempt proceedings against them, unless such contempt is purged. An early hearing before Privy Council is now anticipated in view of the abuse of power further uncovered in the process followed for the transfer of title.
In an increasingly competitive global market for legitimate foreign direct investment, Antigua & Barbuda remains very unattractive. The stain of expropriation continues to spread. Other than on the Statute Book, there is no real evidence of good governance being practised.
Crucially, the current Antigua & Barbuda position as a practitioner of the illegal expropriation of private property and the existence of a case before the highest court will impede responsible agencies such as MIGA from assuring and insuring legitimate international investors.
Of course, those with private agendas and conflicts of interest, committed to ensuring that the political and financial landscape continues to provide an impregnable barrier to regular financing and legitimate private investment must be delighted that the new Government has shown such a remarkable reluctance to release its hold over this private property.
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