St. John’s Antigua- A new report issued on Thursday by the Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago, Chile shows that Latin America and the Caribbean received US $153.448 billion from foreign direct investment (FDI) in 2011, which represents 10 per cent of the global total flows.
This is about the largest amount of FDI received by the region so far, as stated in the report entitled Foreign Direct Investment in Latin America and the Caribbean 2011.
Antigua & Barbuda, however, did not record the significant growth that the report reflects. In 2010, the foreign direct investment recorded for the country was US $101 million, whereas in 2011, the figure fell to $64 million.
Neighbouring St Kitts and Nevis recorded an increase in foreign direct investment from US$122 million to $142 million, and St Vincent & the Grenadines saw an increase from $103 million to $135 million.
However, both St Lucia and Grenada experienced declines in FDI similar to the results for Antigua & Barbuda.
The largest amount of FDI in the region flowed into the Dominican Republic, where the FDI increased in 2011 to US $2.37 billion from $1.89 billion in 2010.
The report also detailed that in 2011, 46 per cent of the net income deriving from FDI was due to profit re-investments, while the remaining percentage was due to capital contributions and loans among companies.
According to the ECLAC, this denotes the trust of transnational companies in the region and important business opportunities within it. As shown in the report, this tendency, which started in 2002, is a result of the amount of assets accumulated by transnational companies in the region and an increase in their profitability due to the good economic performance of the countries and to high international prices of exported raw materials.
Nevertheless, ECLAC identifies a current phenomenon that is increasingly relevant since 2004: the growing repatriation of profits by transnational corporations investing in the region, a fact that reminds that FDI is not a unidirectional flow.
Among the main investors in 2011 were the United States (18 per cent), Spain (14 per cent), the Latin American and Caribbean region itself (9 per cent) and Japan (8 per cent).
ECLAC estimates that in 2012, the FDI flows to Latin America and the Caribbean will maintain high levels. Nevertheless, the organisation warns that if the crisis in the Eurozone worsens, the flow of investments — especially those coming from Europe — could be reversed.
Due to this uncertainty and to the attractive position of Latin America and the Caribbean to transnational companies, ECLAC anticipates that inflows to the region deriving from FDI in 2012 will vary between -2 and 8 per cent compared to inflows in 2011.
Antiguaconcerned – if I may correct what I suspect is a mistype in your post, I think the development you refer to just outside Jolly Harbour is called Harbour View. I hear there’s trouble with groundwater drainage, flooding, and subsidence there, and I’m told the developer was Derek Barrett, who is an integral part of JHR – Jolly Harbour Realties.
Harbour Island is the proposed new development of around 250 townhouses in the middle of Jolly Harbour which there’s been a fuss about recently, with a news report here of disagreements between Mr Barrett and CDAL, the Jolly Harbour management company. I hear the DCA’s planning decision on that is up for judicial review soon.
In relation to knowing exactly who we’re dealing with in relation to foreign investors, this Harbour Island project is a good example of how confusing it can be to know who is investing in this island.
Every time questions are raised about it Harbour Island here or elsewhere, Mr Derek Barrett maintains strongly that he is nothing to do with the development company Stanhope Shepherd Ltd (SSL). However he appears to do all the talking on behalf of SSL, and his son Mr Adam Barrett (SSL’s official CEO) rarely figures. The land titles which are part of the Planning documents show the land as held by SSL, but as I understand it, the caution on every entry indicates nothing can be done without consent of Derek Barrett. It appears this gentleman is very keen not to be publicly associated with a company which he appears to be very actively involved in, and in practise acts as spokesperson for.
I expect there is a perfectly reasonable explanation of this, and I use this example just as an illustration of why we need more active scrutiny of foregn investors in Antigua & Barbuda – it’s not always easy to establish exactly who we are dealing with.
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I’d like to see more home grown Antiguan residential investment, and more foreign investment in Antigua for the long haul. I see successful commercial investment in Antigua – two recent hypermarkets, a new shopping centre, etc. But residential investment appears to be the poor relation of property investment, where foreign money appears in the hope of making a quick killing then leaves again, taking their profit with them it was announced last year that one of the joint venture partners in the Harbour Island development at Jolly Harbour is a Caymans based hedge fund.
Dr Erhart who founded Jolly Harbour stayed there until his sadly too early death, and we see foreign born businesmen such as Aidan McCauley staying to run the visionary Sugar Ridge hotel complex with great success. However, Jolly Harbour has been languishing these last years in the hands of La Perla, a foreign based company which many (like nothingbutthetruth above) say acted solely as an asset strippers – it appears they built nothing but sold everything they could and are said to have sent much of th proceeds overseas and left CDAL with not enough cash to run Jolly Harbour.
It appears CDAL is now controlled by Albert Hartog, a European businessman with connections with La Perla, whose first step at Jolly Harbour was to make wide sweeping promises of change in homeowner relations which turned out to be worthless. His tenure so far has been marked by longstanding and hardworking CDAL staff being laid off in unprecedented numbers, the gold course is closed to non residents, the water rate has risen 40%, and relations between CDAL and homeowners are at an all time low. I’m told this is the man who wants to develop Pearns Point for residential use, next to Jolly Harbour. Let’s hope he does better with that than he’s done with CDAL so far.
We heard recent comment by the AG and others that the quality of foreign investment and investors in Antigua should be examined – never more so than at the moment!
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Like the concerned citizens above its sad to see Antigua declining so badly. I understand that Stanhope Shepherd is owned by the son of the developer of Harbour Island, just outside Jolly Harbour. This is a development worth a visit, as its a disgrace to the said developer, who has just walked away from it, who I also understand has been in prison twice in the UK for property fraud. One has little doubt that the Harbour Island development will go the same way (like father like son) and again Antigua will be left with another concrete graveyard. I hope someone stops this developer before they start digging up Barbuda and ruin that as well. What does this say for the future of Antigua. Now we hear that La Perla /CDAL are laying off Antiguan staff so that they can pay the interest charges on their debt to Global Bank. Why is this being allowed to happen, is there anyone out there in high office who cares enough about the future of this country, to try to stop this dreadful invasion of greedy developers who are instrumential in the decline of our beautiful country before its too late !!!
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I often wonder who is behind developments on our island, and whether the profits stay here or go off island. I read here about a development starting at Harbour Island in Jolly Harbour. Someone said the builder was given tax breaks on everything needed for it. I think I read the same developer (Stanford Sheperd was it?) has big plans on Barbuda, but I never hear of them building here before. Is this a local business, or one of these foreign investment companies that will up and leave with their profits when they finish? If they do that, what do we get out of it apart from some temporary construction jobs?
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To expand on Citizen’s example above, there’s also the matter of the quality of foreign investment. When the La Perla company took over CDAL seven or eight years ago, we hoped this foreign investment would lead to further development of Jolly Harbour and more local jobs. Not only did the investment in Jolly Harbour not happen, (ten more Jolly Harbour employees were laid off recently), but the general belief appears to be that La Perla effectively asset stripped Jolly Harbour by selling assets and borrowing money then taking the funds offshore.
Your article mentions ‘the growing repatriation of profits by transnational corporations’ – but if the stories are true, this was worse – they appear to have pawned the family silver then sent the proceeds offshore, leaving only the debt behind. Now it is generally believed that CDAL are trying to pay off this debt from residents Community Charge payments, and also laying off unfortunate employees to do so. Are these the benefits we expect from foreign investment?
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Well as a citizen, I am disappointed with what is happening to our country. We need the foreign investment but as an example, given the issues recently in Jolly Harbour Complex, with CDAL reducing services and laying off Antiguans, foreign investors will not invest in our country. What I can not understand is why would CDAL reduce services when there is the start of new projects within the complex. I can see it now, half started developments just sitting and when investors see the complex in this state, just like the Casino, they will say this is not a great investment, lets go somewhere else.
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