Abraham Lincoln said, “I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts.”
The US$2.6 billion investment project titled “Pearl of the Caribbean” framework agreement signed between the government of Saint Lucia and Desert Star Holdings (DSH) for a horse racing track, high end hotel and residences, a casino, free trade zone, an equine disease free zone and marina in Vieux Fort, seems to represent an authoritarian state preying on new Prime Minister Allen Chastanet’s imprudence.
It is therefore not surprising that details are sketchy.
At this crucial point, the socio-economic downturn warrants a common sense reform package, with a focus on the constitution, strengthened export commodities, particularly in agribusiness and manufacturing, boosting independent trusted institutions and the provision of transparent development strategies that define national priorities in a diverse economy. In addition to strengthening the middle class, increasing connectivity with world markets in real time to usher in a new era of modernization, development and fiscal stability with responsible democratic leadership.
However, the country consistently finds itself in a shaky situation whereby the expediency of now overrides the fundamental principles of civil liberty, sustainable economic development, contract negotiation and sensible national development policy.
The Black Bay acquisition of 469.50 acres of land by the government of Saint Lucia for Roebuck Properties, which secured a loan of approximately US$25 million from a bank, Kaupthing Singer & Friedlander Ltd, encountered difficulties and could not repay the loan they had obtained to finance the development and construction of the hotel facility.
In short, taxpayers are still on the hook in excess of EC$100 million to recover lands previously owned by Saint Lucians.
La Paradis was a proposed 500-acre project to house an expansive hotel and golf club property, marina, tennis centre, single family residential lots, condominiums and villas, which came to an abrupt end after the collapse of CLICO.
Thinking these through and, as reported in the DSH draft proposal, “government agrees to procure and designate all of the land for the future ownership of the Master Developer” and as such “payment of each parcel of land will happen only after that parcel is fully developed”, seems more of the same.
The DSH project requires extreme caution, for which firm guarantees must mandate developing the property in a reasonable period of time, since the weak Chastanet-led administration is really placing another albatross around the neck of taxpayers for land acquisition and mobilization costs, on behalf of the developer, which translates to further borrowing in this budget cycle.
Meanwhile the masses continue to struggle amidst great uncertainty.
Here are some critical concerns:
• What type of “Good Samaritan” leader burdens its people to finance the initial DSH investment via an overburdened and limited tax base and through citizenship by investment (CIP) with little to no risk to capital by the developer?
• Will the cost for land acquisition, borrowing cost and partial mobilization be billed to DSH?
• Is there a development fee, and who is it payable to?
• Will the investor deposit in escrow at least 75% of the project cost from its initial investment capital before the commencement of construction in 2017?
• What is the DSH asset portfolio and net worth; what due diligence methods were employed and who performed them?
• Who will carry the infrastructure cost and what are the provisions to benefit the immediate environs of Vieux Fort, specifically referring to measures addressing climate change adaptation, energy security, cyber-security, strategic telecommunications, food security, neighbourhood and state structures?
• How does the DSH project fit within the country’s land use policy and Vieux Fort development strategy, relative to national development policy?
• What educational preparations are ongoing for diversity and cultural integration for the influx of Asian culture?
• What is the provision for by-laws and/or amendments to the Constitution to govern this 700 acre exclusive Chinese enclave/state, within Vieux Fort, Saint Lucia?
What’s more alarming, Prime Minister Chastanet seems to have to subjected himself and country to Chinese intelligence at networking and meetings of investors in Asia and his attendance at the 2016 China Equine Cultural Festival (CECF), only to report in a very shallow manner that he is “very impressed and confident that the track record of Desert Star Holdings along with other equine investments is above board and in good standing”.
He “will also pay a courtesy visit to the Republic of China on (Taiwan). There he will have preliminary meetings with government officials to lay the groundwork for an official state visit later this year … and will pay a courtesy call on Saint Lucia’s Embassy in Taiwan.”
The absurdity and breach of protocol are astonishing, which prompts the question, again, who is advising Prime Minister Chastanet? What lesson(s) was learned, if anything, but for a systematic memory lapse from his recent controversial “courtesy call” on US Ambassador Linda Taglialatela in Bridgetown?
Black Bay and Le Paradis are vivid reminders of proposed development with improper negotiations, secret deals, inadequate financing, compounded by weak safeguards and oversight that contribute to rising national debt (EC$2.9 billion), 15% VAT, disappearing jobs (24% unemployment and 45% youth unemployment) and scared off potential investors.
What are the benefits, where is the added socio-economic value?
Besides the continuing peril of repeated episodes of bad judgment and the propensity to create landmark mistakes, shouldn’t the Chastanet-led administration summon a semblance of honesty, transparency and credibility instead of secret deals, adverse to the country’s fiscal policy flexibility and with a high risk to national security?