Changing Caribbean Energy Geo-Politics-By Sir Ronald Sanders

At TRINIDAD AND TOBAGO ENERGY CONFERENCE 2015
Powering Development and Ensuring Stability
0n 26 January 2015
at the Hyatt Regency Hotel
Commodity prices have never been free of the influence of politics; and of none more so than oil.
But, the world has now entered a phase where politics play a quite different role in the price of oil than it has played previously.
This situation has led to volatility and unpredictability in the prices of oil and gas.
There are currently as many views on how long the present lower price of oil will last as there are experts who are asked to venture an opinion.
The only single certainty seems to be that, in the short-term, the price of oil will not return to figures of US$100 a barrel or more.
The world – and in the context of this Conference – the Caribbean now enjoys a respite from high costs of petroleum products.
It may not last long.
The United States Energy Information Administration) forecasts that West Texas Intermediate crude oil prices will average around US$ 55 per barrel in 2015 and US$ 71 per barrel in 2016.
So, there is a small window of opportunity.
Throughout the Caribbean, there is now significant interest in the adoption and use of clean energy, renewable energy, and energy efficiency technologies.
What is more, almost every Caribbean country has vast renewable energy resources with only 1% of the existing potential harnessed.i
Therein lies opportunities for better energy security for the region, but not before many challenges are overcome, principally access to capital on affordable terms.
Factors impacting price on the International Stage
On the international stage, it seems that two factors have impacted the current oil and gas scenario.
The first is economic and the other political.
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On the economic point, in October last year, the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia and with the exception of Venezuela principally, decided not to increase the production of oil even in the face of declining revenues from falling prices.
This decision was confirmed at an OPEC meeting on November 27th.ii
Economic politics were at play.
The government of Saudi Arabia decided that, in its own interest, it wants to keep oil prices low so as to maintain its share of the global market.
Therefore, it led the argument in OPEC to hold production levels at 30 million barrels per day.
Simply stated the Saudi government feels threatened by the booming shale oil and gas sector being led by the US whose oil production has increased by 65% since 2008.
Authoritative studies say the US “shale production has reached 8.7 million barrels a day, about a million barrels a day more than just a year ago and the highest level in nearly a quarter century”.
This has caused a significant reduction in imports from OPEC since 2008, forcing many of their members to compete with one another for markets.
In deciding to keep prices low, the Saudi calculation appears to be that if returns from oil sales decline, the fracking companies in the US (that produce shale oil and gas) will be pushed into uneconomic situations forcing them either to cut back or suspend production.
Should this gambit work, conventional oil producers such as Saudi Arabia would continue to receive significant revenues over a longer period of time, and they would retain the reins of oil’s power.
How this will work out in the future is anybody’s guess.
But not all OPEC members are happy.
Particularly unhappy is Venezuela, which according to the IMF, needs oil prices at about US$115 a barrel to keep its economy afloat, pay back its considerable debt and maintain an expensive social welfare programme.
The Venezuelans put that figure much lower, claiming that “the current budget was estimated with the cost of a barrel of oil at US$60”.iii
But they admit that the revenue earned above US$60 a barrel “supports the activities outside of the budget framework”.iv
Last week Brent crude oil dropped to $48 a barrel, and US crude fell to $47 a barrel.
At US$40 a barrel and below, the Venezuelans know that meeting all their obligations, including servicing their debts, is extremely difficult and can only be addressed by massive cuts in spending.
In all this China is a wild card.
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However, it is uncertain how much of a wild card China can afford to be since it is now owed US$50 billion by Venezuela and the recent announcement in Caracas that it has agreed to lend another US$20 billion has not yet been confirmed.v
I will return to Venezuela’s situation in the context of implications for the Caribbean later.
The International Political imperatives
For now, I draw attention to the political aspects of the price for oil and gas.
The countries of the West and NATO – even though at least two of them, the United Kingdom and Canada, are suffering setbacks to their economies because their own oil and gas earnings have declined – are relieved by the effect on two adversaries: Russia and Iran.
To balance its budget, the Russian government should be selling oil at US$98 a barrel this year and US$105 next year.
Apart from the dent in the Russian budget and its effect on domestic programmes, the fall in revenue from lower oil prices will also force the country’s leader, Vladimir Putin, to make a choice between spending on domestic projects or involvement in theatres of conflict with the West such as Ukraine.
In the case of Iran, declining oil revenues will, the West believes, constrain its activities, including its efforts to develop a nuclear capacity for peaceful or any other purposes.
Undoubtedly, the weakening of the Russian and Iranian economies are unspoken imperatives of the foreign policy ambitions of many countries in the West, particularly the United States which now finds itself in a powerfully influential position in oil and gas production.
The world would be foolhardy not to expect the US to take full advantage of the enormous political, economic and strategic leverage of its current position to reassert its weight if not its dominance.
All of this has implications for the Caribbean region.
Opportunities for the Caribbean
For many Caribbean countries – the exception being the host-state of this Conference, Trinidad and Tobago – the lower price of oil is a god-send that should ease the strain on their populations for transportation and electricity – and in the case of Guyana and Suriname particularly, facilitate resource development.
Lower oil prices should also help to boost tourism and manufacturing by bringing down costs and making products and services more competitive globally, provided that owners are sensible enough to share the windfall with their customers and not try to gobble-up the benefits only to their bottom line.
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Further, if the benefitting Caribbean countries – both governments and private sector – take advantage of this period of lower cost oil, they should be investing in green technology such as solar, wind, hydro and geothermal sources, to be better placed to cope if and when oil prices rise again.
The production of solar and geothermal energy appear both possible and capable of attracting financing and there is evidence of this in St Vincent, St Lucia and Dominica.
Another aspect of future planning for the region should be the feasibility of converting electricity generating systems from diesel to natural gas which, in time, may prove to be more beneficial to Caribbean economies.
I lay down the marker, however, that in the current situation of lower oil prices, encouraging investment in – and securing capital for – the conversion of systems for natural gas, particularly in the OECS countries, may not be attractive to governments in the region that are already highly-indebted and cash-strapped.
Ironically, in past discussions of the persistent and debilitating effect of the prices of oil, gas and energy in the Caribbean, Trinidad and Tobago – as an oil and gas producer – has been the exception.
It also remains the exception in the current situation since, for while the economies of other regional countries will benefit from lower oil prices, Trinidad and Tobago is suffering a loss of revenues and, perforce, has had to curtail a number of development projects.
Reportedly, the government faces a budget deficit of approximately US$1.7 billion.
Nonetheless, a statement last week from the Trinidad and Tobago government that it is talking with the Inter-American Development Bank about “a Caribbean solution in which Trinidad and Tobago is the lead player in terms of the energy challenge and crisis”vi is encouraging.
The opportunity now exists for Trinidad and Tobago to take the lead in developing a genuine pan-Caribbean owned project for the creation and implementation of energy, based on natural gas, in which all Caribbean countries – governments and the private sectors – are owners and beneficiaries.
I recognise, however, that such an initiative will only be achieved by resolute and mature regionalism on the part of all countries.
Narrow political and nationalistic ambitions would have to be overcome – never an easy task, and, so far, not one that has been decorated with success in the region.
As the former Prime Minister of Barbados, Owen Arthur, pointed out in this capital just one week ago:
“In a real sense, the region has come to this moment with the integration movement functioning virtually as the fifth wheel to a coach. It exists, but it is of very little practical value”.vii
The United States geo-political interest
Even as we meet now, the US government is holding a one-day Caribbean Energy Security Summit in Washington with Caribbean leaders and US Vice President Joe Biden.
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This meeting is being held as President Barack Obama boasted in his State of the Union address on 20 January that: “Today, America is number one in oil and gas. America is number one in wind power. Every three weeks, we bring online as much solar power as we did in all of 2008”.viii
Additionally, two days later the US Energy Information Administration (EIA) reported that U.S. commercial crude inventories increased by a whopping 10.1 million barrels, maintaining a total commercial crude inventory of 397.9 million barrels.ix The Caribbean leaders invited to the meeting are from the 14 independent member-states of the Caribbean Community (CARICOM) and the Dominican Republic.
As far as I am aware, there has been little – if any – joint regional preparation for this meeting, particularly as a “Draft Joint Statement” was not given to many Caribbean governments until last Wednesday, January 21st.
If anything, leaders might have met in Washington on the eve of today’s meeting, but in the absence of knowing precisely what the US is asking them to commit to, and any expert study of the proposals, it is difficult to see what meaningful or cohesive response the Caribbean leaders will have.
I expect the Joint Statement, pre-drafted by US officials, will be issued at the end of the meeting later today.
Hopefully, Caribbean governments will take a strong hand in amending the US draft to reflect their own concerns and priorities.
We will all have to await its issuance and careful study before any understanding of what the US has in mind, and how inclusive a process with the Caribbean it intends.
For the US – with the Venezuelan economy reeling, and the future of its signature Caribbean project, Petro Caribe, apparently on shaky ground – this is a good psychological and strategic moment at which to proffer an energy initiative.
If the US is sincerely interested in the region’s development, it should set aside a committed and declared amount of money for the implementation in the region of projects that would install renewable energy plants and help to convert electricity generating and distribution systems to natural gas on highly concessionary terms.
It should be noted, at this juncture, that with oil prices as relatively low as they are, investment in natural gas on a national basis will make little financial sense for the small countries of the Caribbean, namely the member states of the Organisation of Eastern Caribbean States (OECS) – the magnitude of their individual consumption would not be sufficient to amortise the capital investment, unless the technology for doing so improves and becomes less expensive.
Concessionary financing and grants would, therefore, be essential for them.
If these are not the elements of the initiative the US intend from today’s Washington Energy Summit, the Caribbean will be very disappointed, and little will change.
6.Venezuela and Petro Caribe
This brings me then to Venezuela and Petro Caribe.
Suggestions that Petro Caribe might collapse find strength in reports, that Venezuela is selling debt owed to it by the Dominican Republic to Goldman Sachs for 41 percent of its value in exchange for a lump-sum payment, and is pursuing plans to do the same with oil debt owed by Jamaica.
But, even in the current terms of Petro Caribe where countries pay 60% of the world price of petroleum products to PDVSA and retain 40% as a long term loan (23 years) at 1% interest, the scheme remains attractive.
Petro Caribe was a crucial life-line for the participating Caribbean countries, and it remains so today.
It should be recalled that supplies of petroleum products under Petro Caribe amount to about 5% of Venezuela’s total production which it is not giving away. PDVSA is receiving part payment in cash, and repayments of the loan component.
As for the Caribbean recipient countries, while, with prices of petroleum products below US$80, the equation has changed requiring them to make a 60% a cash payment whereas before it was 40% (when the price was between US$80 and US$100), the fact that the prices have declined also means that the sum of the cash they pay is also reduced.
Moreover, the Venezuelan President and his Ministers of Energy and Foreign Affairs have indicated quite clearly that they have no intention of reneging on Petro Caribe, and the authorities have done nothing to indicate its demise.
But if prices reach the US$40 mark or below, I suspect Petro Caribe will be suspended however much the Nicolas Maduro government might like to maintain it in its own geo-political interest.
Conclusion
The Caribbean is therefore at an interesting juncture in energy terms.
Acting together the countries of the region can take advantage of low cost oil to diversify their energy sources, improve their energy security, reduce costs and make their economies more competitive in tourism and manufacturing.
But, to do so will require governments acting in concert and cohesion – not with beggar-thy-neighbour policies.
A number of countries are now looking at the Caribbean as a market and for financing including Abu Dhabi and Germany. These efforts should be co-ordinated in the region’s interest.
While there is interest in energy in the Caribbean displayed by the World Bank, the Caribbean’s experience in the administration and disbursement of funds is not encouraging.
But, the region – both governments and the private sector – have the advantage of the Caribbean Development Bank’s commitment to Energy Security in its Strategic Plan 2015-19 and its capacity to act as
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a catalyst for concessional resources – money, therefore, could become available to reduce considerably the Caribbean’s dependence on external energy suppliers.
The fullest participation of energy companies such as the ones represented here will be required.
Indeed, it may require you not to wait for government action but to put forward a regional plan to the governments in whose countries you operate.
It is an exceptional time, requiring exceptional planning and action.
You should seize the moment.

End Notes
i Caribbean Development Bank, 264th Meeting of the Board of Directors in Barbados, December 11th 2014, Paper BD 98/14, “Draft Energy Sector Policy and Strategy”, (Typescript)
ii OPEC 166th Meeting concludes, Statement by OPEC on November 27, 2014, http://www.opec.org/opec_web/en/press_room/2938.htm (accessed on 21 January 2015)
iii Personal interviews with Venezuela officials on 19 January 2015
iv Ibid
v Shannon Tiezzi,The Diplomat, “Will China save Venezuela”, January 7, 2015 http://thediplomat.com/2015/01/will-china-save-venezuela/ (accessed on 21 January 2015)
vi Barbados Advocate, “Tewarie on falling oil prices: Gov’t wants T&T to lead regional response”, p.11, Wednesday, January 21, 2015.
vii Owen Arthur, Guest Lecture at the Institute of International Relations, St Augustine Campus of the University of the West Indies, Caribbean Regionalism in the Context of Economic Challenges”, January 19, 2015 (typescript)
viii US President Barack Obama, State of the Union Address, 20 January 2015, transcript in The Washington Post, http://www.washingtonpost.com/politics/transcript-state-of-the-union-address-2015-remarks-as-prepared-for-delivery/2015/01/20/fd803c4c-a0ef-11e4-b146-577832eafcb4_story.html?wpisrc=nl_politics&wpmm=1 (accessed 21 January 2015)
ix Paul Ausick, Crude Oil Inventory Soars by 10 Million Barrels, http://247wallst.com/energy-economy/2015/01/22/crude-oil-inventory-soars-by-10-million-barrels/ (accessed 22 January 2015)
Sir Ronald Sanders is an International Consultant, Senior Fellow at the Institute of Commonwealth Studies at London University and former Antigua and Barbuda High Commissioner to London, Ambassador to the World Trade Organisation and Ambassador to the European Union. He is the author of several publications on small sates in the International Community and on the Commonwealth. His weekly syndicated column on Caribbean and international affairs is published in major Caribbean newspapers and on several Internet News portals and is read by a worldwide audience,

PM Browne makes a case for Funding at Caribbean Energy Security Summit

PM  of Antigua and Barbuda -HON.GASTON BROWNE
PM of Antigua and Barbuda -HON.GASTON BROWNE

WASHINGTON, District of Columbia,USA 26th January, 2015..Prime Minister of Antigua and Barbuda the Hon. Gaston Browne has made a case for countries in the region to receive grant and concessionary funding to catalyze investments in renewable energy sources and to mitigate the risks involved with the development of some of the technologies, such as geothermal.
Speaking at the Caribbean Energy Security Summit in Washington, D.C. on Monday, hosted by US Vice-President Joseph Biden,Prime Minister Browne pointed out that taking renewable energy to another level will ensure energy security for the region.
Developing our renewable energy potential so that we are much better insulated from the vagaries of the hydrocarbon markets is the ultimate form of energy security our region needs. This collaboration should also address the issue of support for Research and Development: both access to R&D from the US and support for R&D conducted by our own regional institutions, PM Browne stated.
The Antiguan and Barbuda leader also made a case for wind energy and solar power.
For countries like Antigua and Barbuda and Barbados that do not have access to a renewable form of base load power like hydro or geothermal, the emphasis has to be on developing potential in wind and solar photovoltaic.
However, these sources are intermittent and cannot form the basis of a 100 percent transition away from fossil fuels, he noted.
What would bring these renewable sources into play as full diesel replacements is storage, which would allow the utility company to dispatch the power when it is needed,PM Browne concluded.

We are pleased to present below the full text of the Prime Ministers intervention at the Energy Summit in Washington:
Statement by Hon Gaston Brown
Prime Minister of Antigua and Barbuda
on Monday 26th January 2015
Mr. Chairman,
We welcome this Conference and we thank Vice President Biden for organising it.
The peoples of the United States and the Caribbean have always enjoyed close relations.
Indeed, the links of families between the US and the Caribbean are closely intertwined.
Over the decades, the governments of the US and the Caribbean have sought to underpin the close historic relations of our people by meeting regularly at high levels of government.
Regrettably, in recent times, our governments have not been meeting with regularity, despite the enthusiasm for such meeting by Caribbean governments
Nor have we met at the level of Heads of Government despite President Obama undertaking in 2009 to do so.
But at a time when better understanding and swift responses are needed over a range of issues that pose threats to our collective well-being, such meetings remain vital.
Without them, we will not achieve the level of appreciation of the difficulties that our countries face, nor will be able to give the level of co-operation that is necessary to address them in our joint interest.
However, this Meeting provides an opportunity for a new beginning one which we hope will allow us to address a number of issues that weaken our relationship including areas of finance, trade and honouring decisions of the Dispute Settlement Body of the World Trade Organisation.
Mr Chairman, the issue of energy security is critical to Caribbean Member States.
It is quintessential to the growing of our economies, and reducing reliance on expensive and volatile petroleum products.
The majority of CARICOM countries have been unable to transition to renewable energy, not because of a lack of commitment but because of a lack of capital, especially access to concessional funding.
In this connection, while the proposed declaration from this Meeting summit outlines an architecture of cooperation to address energy challenges facing the region, it does not go far enough.
Indeed it does not go to the core of the issue which is finance.
The draft statement focuses on promoting regulatory reform in the draft declaration.
However, most, if not all of our governments have already embarked on regulatory reform.
There is also an emphasis on promoting natural gas as a better, cleaner fuel.
While natural gas does have these characteristics and we would appreciate the US liberalizing the export of natural gas to Caricom, it is not the long term solution for all of the countries of our region.
Our countries need funding, both grant and concessionary, to catalyze investments in renewable energy sources and to mitigate the risks involved with the development of some of the technologies, such as geothermal.
Developing our renewable energy potential so that we are much better insulated from the vagaries of the hydrocarbon markets is the ultimate form of energy security our region needs.
This collaboration should also address the issue of support for Research and Development: both access to R&D from the US and support for R&D conducted by our own regional institutions.
For countries like Antigua and Barbuda and Barbados that do not have access to a renewable form of base load power like hydro or geothermal, the emphasis has to be on developing potential in wind and solar photovoltaic.
However, these sources are intermittent and cannot form the basis of a 100 percent transition away from fossil fuels.
What would bring these renewable sources into play as full diesel replacements is storage, which would allow the utility company to dispatch the power when it is needed.

Mr. Chairman, we appreciate the assistance of the US in engaging OPIC, other US private sector entities and other institutions to participate in the creation of a funding mechanism for renewable energy projects in the Caricom Community.
However, what is also required is a commitment from the US government to provide Caricom countries with concessional funding for alternate energy.
Such concessional funding and the sharing of research and development findings with the region are what would truly make a difference.
Caricom would therefore welcome a commitment for funding by the US government to be enshrined in the joint statement of this Meeting.
The stability and security of our hemisphere requires each of our nations to extend a helping hand where it is needed in a spirit of genuine cooperation.
Thank you.

Prime Minister Browne Participates in Caribbean Energy Security Summit

Antigua and Barbuda’s Prime Minister, the Honorable Gaston Browne, is among Caribbean leaders who have accepted an invitation from United States Vice President Joe Biden to participate in a regional summit on Energy Security being held in Washington DC on Monday 24th January 2015. Prime Minister Browne is accompanied by the Honorable Asot Michael, Minister of Tourism, Economic Development, Investment and Energy and by Ambassador Brian Challenger, Adviser to the Minister of Energy.

The Washington Summit is a follow up to a similar meeting held in 2013 in Trinidad and is aimed at providing a forum for advancing hemispheric mechanisms in promoting clean energy development in the region at a time of volatility in regional and international energy markets. The meeting also comes against a background of increasing focus on development of the regions renewable energy supplies and attention on implementing policies and measures for meeting international climate change emission targets.

The meeting is expected to issue a broad statement of principles intended to promote a cleaner and more sustainable energy future for the Caribbean. Principal among the concerns of Antigua and Barbuda and other Caribbean countries will be advancing international cooperation to facilitate private and public sector investment in the energy sector in such areas as upgrading of electricity grids, energy efficiency, and wind and solar energy development.

Caribbean leaders are also scheduled to follow up with the US Vice President and US administration officials on a number of other areas of regional concern relating to the region’s economic competitiveness, human resource development, and citizen security.

The Washington summit is expected to be attended by a number of other bilateral and multilateral development partners including the Caribbean Development Bank and the Inter-American Development Bank, the European Union, and the OAS as well as the OECS and Caricom secretariats.

PM Hon. Gaston Browne Congratulates Acting Commissioner of Police

Asot Commissioner 2 PM Commissioner 1 PM Commissioner 2

ST. JOHN’S, Antigua and Barbuda – 25th January 2015……….Prime Minister the Hon. Gaston Browne has once a890gain articulated his government’s stance on crime in the state of Antigua and Barbuda.

During his closing presentation on the 2015 Budget, Prime Minister Browne says that with a new Acting Commissioner at the helm of the Royal Police Force of Antigua and Barbuda, his government expects to see a marked reduction in crime, particularly gun related crimes and incidences of rape.

“My government has laid out a clear and concise crime fighting plan and we expect that the police force, in collaboration with the other crime fighting agencies will utilize it fully. Antiguans and Barbudans are weary of the rise in crime and my government is determined to remedy the situation,” noted PM Browne.

Speaking to Prime Minister Browne over the weekend, Acting Commissioner of Police Wendell Robinson, advised the country’s leader that he is committed to the task and will do everything within his power to ensure that all arms of the force work to accomplish this mission.

He also thanked Prime Minister Browne for the confidence expressed in him and he is determined to make a change within the operations of the institution. He said that he is honoured to give of his service in this new capacity, having served in several other positions within the force for the past twenty years.

Prime Minister Browne in commending Acting Commissioner Robinson on his new position, said that he expects Acting Commissioner Robinson to marshall the team into one cohesive and effective unit. “We have given an opportunity to those who make crime their business to turn a new page, however those who persist will feel the full force of the law,” Prime Minister Browne outlined.

Acting Commissioner Robinson assumed the position over a week ago, following the suspension of Commissioner of Police Vere Browne.

Queen Elizabeth II Appoints Sir Rodney Williams to the Most Venerable Order of the Hospital of Saint John of Jerusalem

GOVERNOR GENERAL

St. JOHN’S, Antigua and Barbuda – 25th January 2015…….Her Majesty The Queen has sanctioned the appointment of Sir Rodney Williams, Governor-General of Antigua and Barbuda as a Knight of the Most Venerable Order of the Hospital of St. John of Jerusalem.
“It is notified for general information that the Queen has been graciously pleased to sanction the appointment of Sir Rodney Errey Lawrence Williams GCMG to the Most Venerable Order of the Hospital of St John of Jerusalem.
Consequently, His Excellency is now a Knight of the Most Venerable Order of St. John of Jerusalem KStJ,” a notice in the London Gazette of the 22nd December 2014 reads.
The Most Venerable Order of the Hospital of Saint John of Jerusalem, also referred to as the Order of Saint John, is a royal order of chivalry established in the United Kingdom in 1831.
The worldwide mission of the Order is to “prevent and relieve sickness and injury, and to act to enhance the health and well-being of people anywhere in the world

BUDGET DEBATE CONTRIBUTION BY THE HONORABLE ASOT MICHAEL

Mr. Speaker, Members of this Honourable House, Citizens and Residents of Antigua and Barbuda… I begin by wishing each and everyone a prosperous and blessed 2015 and congratulating the Honourable Prime Minister and Minister of Finance and his team for his sterling Budget Presentation. It was indeed one of the finest ever delivered in this house for many years. It was frank and substantiated with facts.

I am again honoured to have the opportunity to represent the people of St Peters who elected me to this Honourable House, and to stand in defense of all Antiguans and Barbudans at this most challenging time.

Mr. Speaker, I want to at the very beginning of my budget contribution to re- confirm my undying love for this country, my love for my fellow Antiguans and Barbudans and my commitment to work, to make Antigua and Barbuda a country which we all can be proud of and where we can all live in peace and prosperity.

Mr. Speaker, prior to June 12th 2014 the dreams and aspirations of our people were fast fading. Opportunities for our people to live a life of hope, a life of happiness, a life of accomplishments, a life of prosperity, were fast disappearing.

Mr. Speaker, this budget must be the people’s first stand, it must be the point where we make the necessary decisions by which the future of our people and the future of this country are restored.

Unlike the UPP Government, The Gaston Browne’s Administration understands that the people did not elect us to destroy this country; the people did not elect us to make them jobless, our people did not elect us to make them poorer, to bankrupt their businesses or to sit in tears as the banks sell their homes and repossess their cars, buses and trucks.

Mr. Speaker, the ABLP Government got a mandate to make this country better, and it should be painfully obvious to us all, that under the previous UPP Government evidence shows beyond a shadow of doubt that this country did not improve, but rather life became brutish, broke, bankrupt, jobless and, hungry.

Mr. Speaker, economic conditions had deteriorated to the point where our people could not take it anymore; they had no credible and practical plans to bring back prosperity to the land. The Government was having a party with the people’s money buying buildings of friends, hiring friends at exorbitant salaries, people were left to die at Mount St. John’s as outstanding contracts or fees were paid, $ 67 million for the fences, over a $100 million for jellybean sidewalks.

Mr. Speaker, I am here to make the case that economic and social conditions over the last 10 years had reached rock bottom and disaster was fast spreading over Antigua and Barbuda, our people were suffering and that is why it was time for a new mandate, it was time for a new team. I am confident that the Prime Minister, the Honourable Gaston Browne will stand up and make the tough decisions, to forge the political, economic and social solution needed to save this country.

MARCH 2004- JUNE 2013
These were dark days in our nation’s history… dark days of hopelessness and despair visited upon us by the men and women of the United Progressive Party whose presence in Government was not the natural consequence of the rule of law but rather the corrupt result of a manipulation of the rule of law.

These were the dark days indeed Mr. Speaker… dark days of government consumed by acts of trickery and deception relentlessly engaged to frustrate and eventually bury the public desire for fair, transparent governance and the rule of law. They even fired you unfairly Mr. Speaker for adhering to the rule of law and standing for justice. They went on to strip the Supervisor of Elections of all her powers.

Mr. Speaker and Members of the House, Distinguished Ladies and Gentlemen, this is the year when the rebuilding exercise, promised to the people of Antigua and Barbuda, gallops gracefully forward. Having battled for the hearts and minds of the Antigua and Barbuda electorate, the time when the people will reasonably begin to experience the measure of excellence of our performance is quickly approaching. A term is 60 months; only seven have passed, 53 more to go. More excellence to come!

Mr. Speaker, this Budget is intended to provide a new awakening. The new administration—of which I am an integral part—is preparing to awaken the creative juices, the concealed passions, the embrace of excellence, of the Antiguan and Barbudan people. Our drive is intended to excite the passion; dredge-up the knowledge; bring forward the creativity, while relying upon the competence, the boldness, the integrity, the honesty, the strength, of the Antiguan and Barbudan people.

This Budget is intended to ignite the dynamism and the quest for dominance, displayed by our heroes; to express the ambition for excellence, inherent in our culture; to propel our leaders forward, on the journey towards solutions; and, to create an economic powerhouse, an idyllic paradise, a place of peace and tranquility that will wipe from our memories the dark decade of leadership-failure which the Antigua and Barbuda people ended seven months ago.
It is a call for action, performance, and excellence. It is a new beginning, a new chapter in the history of our country. It is a new awakening!

Mr. Speaker, we will achieve our goals despite inheriting an economy destroyed by the disaster called the UPP. The past managers left the nation’s finances in shambles; destroyed the swagger of the people by three consecutive years of negative growth; high unemployment, especially among the youth; mounting taxes, an ever-escalating high cost of living. Their shockingly poor governance included corrupt practices, a consuming sea of indebtedness and bankruptcy plaguing government, families and small businesses. What a disaster!

Mr. Speaker, we will succeed in changing the circumstances because of superior intellect, greater capacity, genuine concern for the betterment of people, a willingness to work hard, and by providing inspiration to the employees of the Government of Antigua and Barbuda.

Mr. Speaker, the world is what the world is, the size of our country is what the size is, our small size is not a limitation.  They are both simply realities for us to deal with, to face each and every challenge and winning each and every battle.

Small is nimble, small is manageable. Antigua and Barbuda is small and beautiful. The new, seven-month old government is ready for the rebuilding challenge. We are ready to keep Antigua and Barbuda beautiful by rebuilding this magnificent place that we all love.

Mr. Speaker, for it is not just about sun and sand and beaches Mr. Speaker its about a “New Brand” Its about Transforming and revolutionizing the Tourism Industry, and creating a niche that distinguishes us as the “Best”.

No excuses! The tougher the battle, the sweeter the victory.  For Great Leaders are made through the struggle, the conquest of facing down great odds, rising to every challenge and building a new dispensation.

Mr. Speaker, we will shock the World as Sir Viv. Richards did, as V.C Bird did, as Bob Marley and Mandela did, as Sir. Lester Bryant Bird did, by their sheer brilliance, in the face of massive adversity. This is the history of the ABLP, this is the legacy we inherited and this is the responsibility we pledge to fulfill.

With the election of the new ABLP government, the class of 2014, under Gaston Browne the New Prime Minister’s Leadership, a brilliant, visionary, and, exuberant leader with intellect has emerged as the nation’s fourth Prime Minister. I say to the people of Antigua and Barbuda, rise up, stand up, let us all together rise up in a new awakening, a new dawn is coming, a new era “The Dawn of a new day”. An Awakening that fuels the Antiguan and Barbudan pride, that fuels a call for that action, a call for performance, a call for excellence, in a mighty movement that will be transformational, that will transform The Ministry of Tourism and in particular the Tourism Product into the economic powerhouse of the Caribbean.

Mr. Speaker, gone are the days when you run the Ministry of tourism by remote from an Ipad or on an airplane. The spirit of our fore fathers and the great heights they achieved and kept, provide us with a superior platform for accomplishing our generational responsibilities of building a new Antigua and Barbuda, making ourselves and our country into a place greater than we met.

Mr. Speaker, we stand on the shoulders of giants; gigantic deeds and accomplishments that are expected from us; For my predecessors the Honourable Lester Bryant Bird the first Minister of Tourism and Economic Development and Energy Governor General Dr. Rodney Williams, Ambassador Bernard Sebastian Percival, Honourable Molwyn Montgomery Joseph I shall not fail them, I shall surely not fail Prime Minister Gaston Browne and the people of this country.   Mr. Speaker we will deliver.

TOURISM
Mr. Speaker, Tourism continues to be the driving force of our economy. Most of the Nation’s commercial activities and growth in GDP is driven by the industry. Antigua and Barbuda will be implementing a strategic plan for an action agenda based on sustainability, community, and heritage tourism all delivered with an authentic Antiguan and Barbudan experience.

Even the Ministry Headquarters was allowed to fall into such a poor state of   maintenance that the staff was working only half-day for several years with very little productivity.

There were serious health and safety issues pertaining to missing roof tiles, bathrooms with poor ventilation, and poor air quality. At times only 2 of the 6 AC units were operable. This contributed to the growth of mold and harmful bacteria that may have resulted in the many reports of building related illnesses among the staff.

We have since taken steps to address and rectify these poor working conditions at the Ministry.

STATE OF THE PRODUCT
Mr. Speaker, improved service delivery, Offering quality service and value for money will be hallmarks of the new brand. A strong focus on human resource management with having the right people in the right roles.

Mr. Speaker, safety and security will be paramount. There will be greater emphasis on the development of standards, their implementation and monitoring of hotels, tour operators and transportation. Development of new Events, Clean-up of the environment and beautification of the country Enhancement of our national heritage sites; Appropriate Signage are all on the action agenda.

Mr. Speaker, incorporating a focus on clean energy with all tourism investments with special emphasis for Barbuda. Raising national awareness; improving education, training and development for the sector.

ROOM STOCK
Mr. Speaker, at this juncture we inherited a product that has deteriorated to a level that has taken Antigua and Barbuda back significantly compared to our regional competitors; and that Mr. Speaker will be the recurring theme throughout my contribution. Currently we are given figures of 3,000 rooms which including villas. However if we were to use a strict approach based on the rooms that are sellable, we have just over 2,000 rooms for the entire destination.

Mr. Speaker, if you contrast this with destinations such as St Lucia and St Kitts who commenced their foray into the Tourism industry well after Antigua and Barbuda and now have over 6,000 and 2,000 rooms respectively you can see how far behind we have fallen. That is why my Government has been aggressively pursuing a strategy of new hotel investment since assuming office.

NEW TOURISM INVESTMENTS
Mr. Speaker, since coming to office in June of 2014 the Gaston Browne’s Government has signed a series of memoranda on new hotel projects and investments in the region of two billion dollars.  These projects will create thousands of Jobs and new hotel rooms, plus a significant contribution to Government’s revenue for further sustainable economic growth.

This means more disposable income for our citizens and taxes for the Government, which will improve the standard of living for all our people.

Mr. Speaker, the Sunny Hill Group has announced this year a $200 Million Dollar investment for Antigua and Barbuda. The 400-unit project will be located on a 100-acre site in the Falmouth and Bethesda areas of Antigua, land owned by CO Williams Property Development Company Limited.

This project will create over one thousand new jobs for Antiguans and Barbudans with five hundred in the construction sector and over five hundred in operation and management positions.

The new USD$150M Beaches Resort by Sandals Resorts International at Long Bay will provide up to 400 rooms, 1,000 construction jobs and 850 permanent hotel positions when completed.

Mr. Speaker, Hodges Bay Club renamed “The Resort at Hodges Bay” will be fully open in 2015. The economic impact of this USD $50 million new 79-suite resort will have a significant impact on our local economy during construction. This new resort facility will provide meaningful employment to as many as 150 persons at any given time and upwards of 200 when all phases of the development are completed.

Mr. Speaker, The Morris Bay Project an MOA was signed last July with His Excellency Sheik Tariq Faisal Alqassemi of Dubai, for a 5 star luxury hotel project valued at US $120M This project will include a Public National Park for residents.

Mr. Speaker, we now come to the Sunwing Group but before I go into the details with Sunwing group, I want to address comments by the Honourable Member for St John’s Rural West the former Prime Minister, said that “Oh we were already in discussions with Sunwing and they already started these negotiations and it was not done under the Gaston Brown Administration” Mr. Speaker I want to provide this Honourable House with the tangible facts. I have in my hand a letter that the then Minister of Tourism the Hon. John Maginley wrote to Mr. Hunter the CEO of the Sunwing group…..

Sunwing Group- the Government has signed an agreement for $ 150 Million with the Sunwing Group out of Canada to build an additional five-star hotel on adjacent property to the Royal Antiguan. The project will be built in two phases. The $75M investment in the first phase will see the construction of a “Royalton” hotel complex with 300 rooms, multiple restaurants, a casino, disco, full service spa, tennis courts and theatres. Phase two will include the $50M construction of 200 mixed-use condominiums.

Sunwing is collaborating with the TUI Travel group, the World’s leading integrated travel company with 30 million customers. As partners in the new Dieppe Bay Project TUI flights will operate from the UK, US and Canada once the project is completed.

K-CLUB
The appointment of Robert Deniro as an Economic Envoy for Antigua and Barbuda has started the process for the sale and upgrade of the former K-Club in Barbuda.  A new $250 million resort will shortly begin in Barbuda. This announcement has been well received and publicised in the international media and has positively raised our country’s profile and reputation around the world.

GUIANA ISLAND RESORTS
Mr. Speaker, this is in addition to the $1.2 Billion project for the Guiana Island Property with Chinese investment firm Yida within days of its election victory. The group has acquired the Stanford Guiana Island property at a cost of US$70M and will break ground this year.

Mr. Speaker, these are the types of investments that the Gaston Browne Government has attracted so far.

Contrast this Mr. Speaker with an example of the dolly house budgets which were presented here, in the past 10 years in this Parliament, the former Ministers of Finance should have put up their Armani and Hugo Boss suits and put on the frills and pinks of a dolly house tea party. Mr. Speaker, do you remember the big announcement of a government farm, six million and training for young people?

Mr. Speaker back then, I searched and searched and I could not find a single dollar for that programme in the 2011 budget. It was not mentioned any where it was just something made up in the dolly house tea party. Perhaps the Minister was hallucinating or simply just high on good bush tea.

Mr. Speaker, the 20 million US dollar chicken farm that they had given out land for; The proposed investor could not pay his two bedroom house rent, could not pay to brush cut an acre of land and used to be an extension officer at extension. Mr. Speaker when cocks have teeth we would have seen this investment or maybe after donkeys turn green or when pigs take flight.

Mr. Speaker, a new Investment climate has dawned upon this beautiful country of ours.  To this end my Ministry will be working with a proven and well-qualified team of experts to create a guide to investment in Antigua and Barbuda. This manual will be a detailed document intended to create a tailor-made solution complete with brand building strategies focusing on business development, strategic alliances and global market penetration. Our team of experts will develop a comprehensive plan to advance the countries investment mission and objectives, in order to promote Antigua and Barbuda’s range of business services and investment opportunities.

Mr. Speaker, these opportunities include Tourism, CIP (including legislation for incentives and concessions), Maritime Ship Registry, Yachting, a new registry of private jets, manufacturing, the free trade zone, trademarks and patents, Intellectual Property, Cooperatives and financial services (inclusive of off shore banking, gaming and IBC’s).

Mr. Speaker, the document will serve as an in-depth guide complete with listings of Banks and Financial Services, Lawyers, Accountants, Telecommunication services, Estate Agents, Insurance Brokers, Restaurants, entertainment, Healthcare Providers just to name a few.

Mr. Speaker, to accompany the handbook will be a fully integrated website that will provide links directly to our various partners and business related services. It is important to note that a similar document existed some 25 years ago under the leadership of the Hon Lester Bryant Bird.

AIRLIFT
Mr. Speaker, due to lack of adequate and saleable room stock Antigua and Barbuda has not been able to aggressively grow the airlift as much as would have been possible had this not been the case. While the current airlift from our major source markets in the USA, UK, Europe and Canada is adequate for the number of rooms, my Ministry has undertaken a series of successful negotiations with multiple airlines to ensure that there is increased air access capacity into the destination for the anticipated increase in demand. This will lead to an increase in visitor arrivals in 2015 and will support the expansion with new hotel room stock.

Mr. Speaker, direct daily flights BA from London will continue all year round. This represents an increase from 6 flights a week in summer to daily service. 3 of these flights will be Antigua turn around only and not shared with any other destination.

Virgin Atlantic will operate 4 Flights with 3 of these dedicated as Antigua turn around flights only. The new configured Virgin Aircraft will have more premium upper class seats that are the ideal fit to the high end product that Antigua and Barbuda has to offer.

Once Weekly Condor Flight from Frankfurt will continue during the winter season.

Mr. Speaker, direct daily flights from JFK New York on American Airlines along with direct daily flights from MIA will continue on American Airlines.

Delta and US Airways: Other US gateways such as Atlanta and Charlotte will be served by once weekly direct from Delta and US Airways respectively.

Mr. Speaker, Air Canada will be adding an additional flight for this winter season each Tuesday. This represents a total of 5 flights (4 from Toronto and 1 from Montreal)

WestJet will now be adding a larger Aircraft of 179 seats, which represents a 15% increase in seats from our second Canadian carrier.

The destination will also be concluding negotiations for additional Airlift from new carriers such as COPA Airlines, Avianca and other carriers to allow us to take advantage of the anticipated growth and demand for the destination with the New Airport terminal and the host of new tourism investment projects.

Mr. Speaker, I will be attending the Routes Americas Airline Conference in Denver next month where I will be meeting 16 airlines to attract new airlift to the destination in anticipation of the new terminal and new hotel projects that are coming on stream.

Mr. Speaker, similar to the Ships Registry the Government is looking to establish an airline Jet registry which would be separate and distinct from commercial Aircraft Operators holding an Air Operators Certificate (AOC).

This registry is similar to those established in the Cayman Islands and the Isle of Man which has generated millions of dollars in revenue for the government in those jurisdictions over the past 5 years.

This service caters to aircrafts owned by High Net Worth individuals who would also be potential CIP clients.  These aircrafts will also provide Antigua and Barbuda with immense marketing value by virtue of the flag being engraved on the tails of these carriers. This is the creative and innovative thinking of Gaston Browne and his Government in finding new ways to generate revenue for our country.

STAYOVER AIR ARRIVALS
The number of air arrivals to Antigua and Barbuda at the end of December 2014 was 249,316 a growth of just 2.5% on the previous year. The destination has not yet recovered from the arrival numbers of 265,841 stay over visitors in 2008. These figures are expected to increase significantly with the additional airlift and renewed marketing and focus on tourism for 2015.

While my Government will be aggressively pursing foreign direct investment, we will encourage the participation of local entrepreneurs in meaningful activities to support the economic development of the nation.

CRUISE TOURISM
Mr. Speaker, we inherited a situation where the destination had lost over 144,000 passengers a year with the loss of a major cruise line which called weekly following the Brooklyn six incident. This is a clear indication of the lack of management of the cruise sector as other destinations have experienced incidences, but with the right crisis management and personnel to communicate effectively the fallout could have been averted.

We have held initial meetings with our cruise line partners to get an assessment of the issues and in our subsequent follow ups were told in clear terms that the perception of us by the senior decision makers and executives is very poor. In fact we were told that we were the first officials at a senior Government level that they had seen in over 10 years. The last person that they had seen in an official capacity in their Corporate offices was the Hon member from St. Mary’s North the Honourable Molwyn Joseph.

A Senior cruise ship executive indicated that unlike Antigua and Barbuda they see the Minister of Tourism From St Kitts the Hon Ricky Skerritt every 3 months, which explains their significant growth in cruise ship calls which has now surpassed Antigua and Barbuda. Their feedback was “Antigua and Barbuda does not understand, appreciate or care about their business”. These meetings are critical to our negotiations with key decision makers to increase our cruise ship calls. This has become our top priority on our critical path to growing the cruise tourism sector.

ST JOHN’S DEVELOPMENT CORPORATION
Mr. Speaker, we inherited a Corporation, which was run as a personal fiefdom. No audited financial statements have been produced since 2007.

Over ECD$5M dollars were taken in loans from Norman Wexelman to assist in the development of the Airport, which has absolutely nothing to do with St. Johns Development Corporation. When this loan could not be serviced, Mr. Wexelman received a garnishee order on the Airport Authority, which was applied to all revenues that would normally come to SJDC from NewPort Antigua Ltd. Newport is a joint venture company between Mr. Wexelman and SJDC. There is absolutely NO documentation on this loan anywhere at SJDC.

Mr. Speaker, another example of the type of gross mismanagement of such a vital organization is the callous nature in which the corporation was allowed to enter into agreements.

In November 2010 the then Chairman of the Corporation entered into a Memorandum of Understanding with Caribinvest Holding Company Ltd. to undertake the development of specified areas in Heritage Quay, with the intention to erect more duty free shopping buildings.  The Developer would then own a whopping 75% shares in the Company and the SJDC would own 25% shares in the company.

It was such a disastrous agreement the subsequent Chairman Sylvester Brown launched and investigation and subsequently sought a legal opinion on the matter.

Mr. Speaker, I quote now from this legal opinion….“While a memorandum of understanding (MOU) is document usually intended to only express a common line of action between parties and often not used to express a legal commitment. In this instance it is the only document, apart from Downtown incorporation documents evidencing the intention of SJDC and Caribinvest to create legal relations and should clearly and definitively in the absence of such other documentation reflect that fact. It is indeed regrettable that for a transaction which holds such serious legal ramifications the terms evidencing the development have not been set out in a more substantive and acceptable fashion.” And if that wasn’t bad enough it goes on.

“I am of the considered view that this project to date has been undertaken with haste evidenced by certain errors of some import….the authorities will be well advised to re-examine this entire undertaking to ensure that the interests of the State are properly protected.

“The lease agreements purportedly executed are incomplete and therefore cannot be registered.  The payment of rent is central to a lease agreement; rent must be certain or capable of being calculated with certainty, and the provisions in the said agreements related to the payment of rent do not provide a definite figure nor do they provide a means by which a definite figure can be ascertained.”

“With a shaky MOU, two incomplete leases and the construction thus far, the bargaining position of the SJDC is greatly enhanced, and it is very unlikely that the Developer would bring an action for breach of the agreement, were SJDC to seek more favourable terms in this undertaking.  The willingness of the principal of Caribinvest to reconsider the rental terms for building #4, coupled with the foregoing circumstances as outlined seems to me a clear indicator that the present Chairman can insist on more favourable terms for SJDC, and by extension the State.”