The Economics of Paradise

Vega
Hugh and Annie
Wed 9 Mar 2016 14:00
16:18.4N 62:47.8W
When you first meet the Leeward Islands people they can seem unfriendly and in fact the cruising guide comments upon this. However, and as the cruising guide points out, once you break through the initial reserve these are some of the loveliest and most friendly people we have met on our journey so far. I say this because I cannot take anything at face value (pun not originally intended). When in Senegal but particularly in the Gambia there were regular references to the slave trade and to the British being former colonial masters. Here in the Caribbean is the evidence in the form of the former sugar cane plantations, the ruined sugar refineries and rum distilleries and the former estate houses, several of which are now beautiful hotels. In St Kitts you can take a circular tour of the island on the railway built to collect sugar from the refineries. The lower slopes of these islands were completely given over to cane and when you see the scale of the operation and realise the number of people that must have been involved it is truly shocking. The original populations having been wiped out by the settlers, the current local population would not be here but for colonialism and the slave trade and yet not once from any of the people we have met has there been a single negative reference or allusion to the past (although I did hear one very drunk and voluble old guy banging on about God and whites one evening). As Cicero might have said - and did according the the words put into his mouth by Robert Harris and that I am still enjoying immensely - you can only understand the present by knowing the past.
From a very superficial perspective there doesn’t seem to be the grinding poverty that we came across in Africa and the people seem much more self confident and at ease with themselves. We have seen a number of medical schools and according to a visiting medical professor we met in Port Zante (St Kitts), the number of medical facilities and students has increased markedly in recent years. There are lots of schools and education is free, other than the books and writing materials. It is therefore interesting to see the form economic development has taken, much of which is tourism, second home and leisure development. We have come across some examples that I can relate.
Barbuda, population 1300, has two open hotels, related activities such as scuba diving, a small airport, a jetty for day trippers, one or two bars and cafes, a little fishing and a tiny service industry of taxis, water taxis and so on. There is a school and small health centre. Oh, and a wonderful Frigate Bird breeding colony. Barbuda was a favoured holiday destination for Princess Diana when both she and the K Club resort were alive. The K Club is now closed (I am sure there is no connection) but is now the subject of a controversial casino and resort investment project backed by Robert De Niro and Kerry Packer (son of the Australian TV mogul). You can read about it on the ‘Barbutiful’ web site but bear in mind it is a site run by an English artist and cafe owner Claire to articulate a 'local’ perspective. At the heart of the issue is the fact that all of the land on Barbuda is owned by the islanders. They can be gifted land to build a house or graze commonly and so on. Foreign investors can lease land but not buy it and there is a suspicion that leases are taken up and then sold on at a profit as a means of money laundering. The government of Barbuda has agreed a 99 lease of the K Club and 225 acres of land to De Niro and Packer for $6m. There is a feeling that the islanders birthright has been sold too cheaply and little benefit will accrue to them from the planned development. If it goes ahead the development may generate a large flow of capital and cash but without a concerted training and investment program aimed at local people it is difficult to see how they will directly benefit other than through low paid service jobs.
Antigua and St Kitts both have terminals for cruise ships. I hadn’t appreciated quite how large these ships can be. When we were in St Kitts the Britannia - flagship of the P&O line - came in with 3600 passengers. They are the equivalent of a floating town and the logistics of running them must be awesome. There are purpose built duty free shopping malls at the end of the jetties selling spirits and cigarettes, clothes and jewellery. On our first day in St Kitts there were no cruise ships in and the mall was deserted. We wondered how all these shops could be viable and had no trouble finding somewhere to eat in town. The following day the Britannia arrived and the place was heaving, the shops were full and so were the bars and restaurants in town! There can be three cruise ships at a time and we were advised visit attractions when no cruise ships were in. Which we duly did, only to find that one of the places we wanted to visit (a craft centre making Batik fabric) had closed on the day we visited because there were no cruise ship customers! The ships only stay for a day - arriving in the early morning and leaving that evening. The tourist industry sets its clocks by the cruise ships - anticipating each burst of activity and resting in between.
The Governments of Antigua, St Kitts and Nevis offer citizenship for anyone investing more than $200,000US. As Annie has researched this seems to be something to do with exemption from income tax. By ‘investing' they mean buying property or putting money into development projects (non refundable) and there are lots of condominium developments aimed at the American market. The more expensive and exclusive the development, the more remote and “secluded” it is is likely to be. On St Kitts the whole north eastern side of the island is designated for mixed use development - housing, hotels, financial services and so-on. The only development actually taking place is a large site half way up the volcano called Kittitian Hill where a hotel, restaurants and condominiums have been built. Otherwise this part of the island remains completely undeveloped and there are the tell tale signs of unemployed people sitting around in the villages (not to be confused with “Liming” - eating, drinking, talking and chilling). Red Labour party murals and slogans are everywhere. The most beautiful and secluded part of the island is the southern part at the end of a narrow spine where there are unusual salt lagoons surrounded by hills and the best beaches on the island. The lagoons used to have a distinctive pink colour due to the unusual shrimp that lived in them and the area is protected. Or used to be. The main salt lagoon has been broken through to the sea, dredged in part, reclaimed with the dredgings in others and the first stage of the new super yacht marina has been built. The lagoon shores are being developed as part of the marina and for lakeside investment properties. Condominiums and villas are appearing on the hillsides and along the beaches.The road to the area is the best on the island and currently being improved with a tunnel. This is the South Hams of St Kitts - lovely if you can afford it but much more exclusive.
Since I started writing this we have arrived at Montserrat where, as described by Annie, the main town was destroyed by volcanic eruptions between 1995 and 2005. As a result the population has fallen from 14000 to 4000 - most of the fall due to people taking up a relocation package to the UK. A former jewel of the Caribbean popular with celebrities, ex pats, cruise ships and so-on the tourist board rather ironically now promotes the island as representing the caribbean before the arrival of cruise ships and casinos! On arrival the island looks fairly prosperous with cars, nice beach bars and new buildings. It is certainly beautiful with lovely wooded mountainsides and valleys. However, there seems to be only one industry - construction - and a small service industry of shops, banks, one or two hotels, a few hostels and not much else. There is however a full complex of government departments and services employing around 75% of working people! This island is now completely dependent upon UK overseas aid as far as we can tell and they are keen to redevelop a tourist industry. Until they build a deepwater port and get a better tourist infrastructure of hotels and so-on this looks to remain a low key holiday destination. For all that it makes a really interesting and unusual place to visit and we would love to spend some more time here. According to the Daily Mail some £400m has been invested here since the eruptions but the development has been a scandal of mis-management, nepotism and corruption and the development company has been wound up. All expenditure is now closely controlled through the Governor’s office; a three year posting here doesn’t seem a bad lot. If the UK pulls the plug on the funding and they cannot develop the infrastructure required to make a significant difference then its difficult to see how low key tourism is going to sustain things here.
So, what to make of it? What is apparent is that this part of the Caribbean is a playground for the wealthy, and not so wealthy, most of whom make their money elsewhere. Spending some of it in the Caribbean is clearly a hugely important aspect of the economy. There is a large service industry here and without it there doesn’t seem to be much of an economic alternative. However, the investment that we have come across is mainly directed at facilities that will perpetuate the current position with little going into alternative development that might lead to a more mixed economy.