Once again, international observers have noted that Antigua & Barbuda is no longer a destination of choice for Foreign Direct Investment.
This has now been voiced by the respected Economic Commission for Latin America (ECLA).
While FDI increased substantially during 2011 in the Latin American and Caribbean region to a record 150 billion US dollars, investors have judged Antigua & Barbuda as extremely high risk.
Overall, while the Caribbean region grew by 20%, Antigua saw its share of FDI drop 37% in the same twelve month period, from US$101 million to US$ 64 million.
This comes as no surprise to those who have followed the governance of Antigua & Barbuda.
Country risk is, after all, the first item of consideration for foreign investors.
The Antiguan Government has discarded any pretence at respecting international treaties and obligations.
When it suits the personal interests of members of a current administration to do so, its own Laws and Constitution are equally dismissed.
No investment, whatever its size, is safe from this predatory kleptocracy.
The expropriation of the Half Moon Bay Resort, the rightful private property of American investors is well-documented, as is the denial of compensation for its seizure.
The expropriation of (former Antiguan Sir) R. Allen Stanford's property and the machinations surrounding same are also emerging further into the public domain with each passing month.
Leaving aside that its version of expropriation and explanations of public use are extremely unconventional, the Antiguan Government has actively sought to increase its reputation for the severest form of investor mistreatment and disrespect. Its tried and tested formula of simply taking over foreign-owned private property has been polished into an art form.
Recently, officials of the Government of Antigua and Barbuda have applied their personal expertise and experience of expropriation to consume banks, on the pretence of public protection.
Since its seizure and transfer of Stanford's Bank of Antigua into a receivership of the Eastern Caribbean Central Bank, from which it is now emerging as an "independent" entity, largely owned by the Government of Antigua, this administration has developed an unusual financial model to prop up "ailing" banks.
It is the traditional remedy for local banks with unsustainable private or sovereign debt to be given injections of public cash by their respective nations to keep them liquid and alive.
The Government of Antigua sees this relationship quite differently.
The Antigua & Barbuda Investment Bank (ABIB) and its sister offshore bank, Antigua Overseas Bank Limited, are both members of the ABI Financial Group, a private indigenous, financial institution, with a UPP-dominated Board of Directors.
Shortly after coming to power, the new UPP Government agreed to certain financial arrangements with ABIB. These included depositing statutory collections and funds stemming from the Petro-Carib agreements, among other benefits. The Government would also borrow substantial sums from the Bank, basically using it as its overdraft source.
ABIB built itself a new building and all was well for a while. Some time ago, however, the Government began directing statutory funds elsewhere and payments on the outstanding loans were halted altogether. The Bank pleaded with the Government for payment to no avail. Concerned with meeting the Central Bank's capitalization requirement, the Bank reluctantly issued a demand for payment using this concern as its reason.
Within a week, the Minister of Finance advised the Eastern Caribbean Central Bank of ABIB's inability to meet the minimum capital requirement and negotiated its takeover by the ECCB.
To remain safely in the picture, the Government of Antigua & Barbuda, made an "infusion" of $40 million "to stabilize" the bank, less than the outstanding debt being called. This is what the Minister of Finance now calls a "loan" and offers to swap for equity in the new entity to emerge from this latest debacle.
What better way is there for a lender to solve its financial problems than to swap its debt ledger balances for its own equity? Bizarre!
Investors might be confused at this point because swapping debt for equity is standard practice.
However, conventionally, it is debt owed to you that can be swapped for the borrower's equity, not your debt being swapped for the lender's equity.
Such is the perverse financial modelling in out-of-control Antigua, where the rules of the opposite universe are applied to suit the Government's appetite.
While legitimate Foreign Investors are clearly paying attention and going elsewhere to invest, this financial alchemy attracts a different set of fellow travellers.
Opposition MP Gaston Browne, Chairman and Deputy Leader of the Antigua Labour Party (ALP), has for some time been advocating the sale of Antiguan passports as a means of increasing the flow of foreign funds into Antigua's coffers. Until this week, this proposal was rejected by both sides of the Parliamentary aisle.
However, on May 15th at a town hall meeting, Prime Minister Spencer announced that he and his administration had decided to embark on the implementation of what he referred to as "an economic citizenship programme."
The Prime Minister indicated that "a dying financial services industry" required a greater stimulus and that this new scheme would benefit Antigua in revenue and employment through the foreign investment it would attract.
Clearly, the Government of Antigua & Barbuda is fishing for the next Stanford.
Unfortunately, the wide net of its "Passports for Sale" policy is likely to bring in a number of smaller fish, such as a shoe-bomber or two.
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