Adrian Loveridge Column – Improving Our Investment Climate

I want to return to the subject of implementing a single source website for prospective investors, especially those of a smaller scale, both from overseas and locally. Frankly, even for the most determined and tenacious, investing in Barbados remains a daunting task for virtually everyone when so much could be made easier, less time consuming and completed online.

It starts with the number of Government agencies that you are forced to deal with and in many cases their indeterminate response time. Often the delays lead to some of the required information being out-of-date, before all the requested documentation can be sourced, at any one time.

Facilitation in a timely manner is always important, but during the prolonged pandemic situation, it becomes even more critical, as foreign investors who understandably have become a rarer breed, clearly have multiple destination choices, especially in tourism.

My own thoughts are that every serious investor is granted a unique application online number with defined access, where all involved Government agencies can post verification of information and any other prerequisite requirements. It would also serve as a platform to confirm that ‘duty free’ and/or exemption of import duties, levies and VAT status had been granted to the applicants. This would help expedite customs clearance, construction or renovations, rather than risk costly delays, while the administration ‘considers’ individual or separate requests.

Most investment requires borrowed capital, so the clock starts ticking with interest payable, usually from day one, so any delays negatively affects the viability of the project.

Government has to decide that if ‘we’ really wish to project an investor friendly environment, that radical reform is needed within our existing administration and during this challenging period when many of our public servants are not fully utilized there is the perfect opportunity to effectuate reform and innovation.
It is simply not enough to give the impression that as a country, we welcome with open arms, both foreign and local investment, if the many layers of bureaucracy act as a major deterrent to inspiring entrepreneurs.

Perhaps the first step would be to glean first- hand experience from the people who have already transformed their dream into a business reality and fully evaluate the current impediments.

After all, Government coffers are greatly enhanced from the very moment that an investor commits to a venture through the collection of various taxes and levies on property purchase including stamp duty, transfer tax, non-recoverable VAT on legal and advisory fees etc.
In our particular case, over $400,000 was paid to the state recently for the completion of a sale to new owners.

38 thoughts on “Adrian Loveridge Column – Improving Our Investment Climate

  1. Antigua PM accuses Barbados and St. Vincent of creating ‘artificial impediments’ for LIAT

    Article by
    Barbados Today
    Published on
    December 6, 2020×456.jpg

    SOURCE: Caribbean News Service (CNS) — Antigua and Barbuda’s Prime Minister Gaston Browne has accused fellow Caribbean Community (CARICOM) countries, Barbados and St. Vincent and the Grenadines, of deliberate attempts to block Antigua-based regional carrier LIAT.

    On Saturday LIAT said it was forced to suspend services to two of its previously announced destinations while it awaits the approval from the relevant authorities in Barbados and St Vincent and the Grenadines, two former shareholder governments of the financially-strapped airline.

    “LIAT will succeed, notwithstanding the artificial impediments that these countries are creating,” Browne said in response to the development.

    “In fact, it’s an extremely unfortunate development in which these impediments are being developed, nothwiting the fact that LIAT has valid flight approvals to fly to those countries. LIAT is not a new carrier. LIAT is a legacy carrier that has been servicing these countries for decades.”

    LIAT, which is now under Administration, had late last month announced the resumption of flights five days a week to seven destinations across its network.

    The seven destinations are: Antigua, Barbados, Dominica, Grenada, St Lucia, St Kitts, and St Vincent. LIAT said that the limited schedule of flights will return connectivity to these destinations, which were impacted by the airline’s suspension of commercial services in March due to financial problems and the COVID-19 pandemic that forced many Caribbean countries to shut down their borders.

    LIAT said prior to its suspension of services, it had been operating to Barbados and St Vincent and the Grenadines “on valid flight approvals, which have not expired,” adding “ LIAT operated a scheduled flight to Barbados on Monday, Nov. 30.

    Prime Minister Browne is adamant that LIAT is being singled out by Barbados and St. Vincent.

    “The irony is, there were no such requirements for other carriers. All of the other airlines that resumed services to those countries, they had no such requirement so the question is why are they discriminating against LIAT,” he said.

    “LIAT is a regional institution within the OECS and the broader CARICOM and it should be given national treatment; not to be treated as some stepchild, but to be embraced as a regional carrier, and if anything, should be given preference, not to be discriminated against.

    “If they were to seek to sustain this type of behaviour then clearly it will be a restraining of trade and I presume that the Administrator would want to consider maybe taking them to the Caribbean Court of Justice in its original jurisdiction. So it is a position that cannot be sustained,” Browne added.

    According to Prime Minister Browne the countries in question have also reportedly asked LIAT to make pre-payments for landing fees, but he said this is an unfair request given that other carriers have not been asked to do the same.

    “I want to know who has this type of gumption. Which group of individuals has this type of gumption to take this type of policy decision in order to discriminate against LIAT, recognizing that we all have treaty obligations as enshrined in the CARICOM Treaty as well as the OECS Treaty,” Browne said.

    “It is really a position that cannot be sustained and I would recommend that they review this position soonest and to allow LIAT to fly into their destinations as it would have done for the last several decades.”

    Barbados Today

  2. I agree Adrian. Invest Barbados is the logical agency to implement this. How do we convince them to act?

  3. @ David BU

    When I read that article earlier this morning, all I could do was laugh.

    Gaston Browne is accusing the governments of SVG and BGI of creating “artificial impediments,” because LIAT has been asked to make prepayments on landing fees and was forced to suspend services to those destinations on Saturday, December 5, 2020, until approval is granted from the relevant authorities in both islands for the airline to resume service.

    He has even suggested LIAT’s Administrator should take the matter, which he described as a “restraining of trade,” before the CCJ, in its original jurisdiction.

    Has LIAT resumed operations as LIAT (1974) Ltd., LIAT (2020) Ltd. or LIAT (1974) Ltd. under Administration?

    It seems as though Browne wants to bully regional governments into supporting LIAT at all costs. SVG and BGI sold their shareholdings in the airline for EC$1, wrote off its debt and are faced with the possibility of having to pay severance to retrenched former employees.

    I’m sure you’re aware LIAT has retained the majority of its Antiguan employees. With nationals of SVG and BGI remaining unemployed, Browne has essentially told the Comrade and Mottley, “Wunnah might got to pay wunnuh nationals severance. Don’t worry ’bout Antiguans, we gine reemploy them.”

    While NUPW’s Acting General Secretary Delcia Burke has been lamenting the plight of pilots and other cabin crew, and of former Barbadian employees who were forced to sell assets, including jewellery, cars and even land in order to purchase food, service utilities and just simply get by…………. Gaston Browne complains about having to make a down payment on landing fees.

    Browne is ‘pounding his chest’ and feeling proud, bragging about resumption of flights, I understand a LIAT flight left ANU a day last week with one passenger who, by the way, was an employee. Haven’t Browne and Administrator Seaforth created “artificial impediments” when they acknowledged LIAT owes EC$80M in severance payments and benefits to former employees, but told them they won’t be receiving that money anytime soon? Could those former workers go to the CCJ?

    But, at the end of the day, I have to blame Mia Mottley. When Browne expressed an interest in purchasing BGI’s 49.4% shareholdings, she should have ‘taken his offer and ran,’ rather than holding out for an unrealistic US$44M.

    • @Artax

      Given the dire financial state of LIAT at the hit Barbados, St. Vincent had to take as shareholders we have to wonder what is Browne smoking.

    • @Artax

      What is your view regarding Browne’s position LIAT has a legacy status in the region and should not have to suffer new licensing applications in respective countries?

  4. @ David.

    Brown is not telling the whole story first of all. As Artax asked is this a new reincarnation of LIAT as a 2020 limited liability company? If that is the case then both Mia and the comrade have every right to ask for money up front! Secondly if it is a 2020 limited then has Browne washed his hands of their share of the liability under the old company and by extension it’s severance liability?

    He lucky I ain’t Mia I would of tell him not a dam plane landing here till you settle your share of the outstanding severance liability for the bajan workers. Wait he feel cause he got a moustache like Hitler dat he is Adolf! Lol

  5. PM Browne will whip this matter to his benefit. He will make it appear, to Antiguans, that Barbados & St. Vincent are “un-fairing” them so he don’t lose any votes.

    The only way Mia & Ralphie can reduce the backlash, is to come out in the open and be TRANSPARENT!!!!!!

    Forget the politics, Caricom, & the CCJ threat …. we are not dummies, we can understand the logic behind the requests for ‘money upfront’. Please tell us what is going on….. WE (the people) ‘gave’ our shares to Browne for nothing, thereby losing millions of dollars…. we deserve the truth!!!

  6. @ John A

    The questions remains who drew up the sale agreement with LIAT? Who signed it off? Was it discussed in Cabinet? The truth is it is clear Browner thinks he has the measure of Barbados and the president.
    He thinks he can get one over on them. Let us prove him wrong or put our hands up. Cut out the nationalist crap. Our national weakness is incompetence.

  7. There is also a serious liability issue that needs to be answered here. With Barbados no longer being a shareholder in LIAT, then we need to be sure those planes that have been parked for months are now recertified.

    I said here months ago we should of take his cash offer and run hard, that way we would of been free of all of it. Does anyone know if Barbados is a minority shareholder in the new LIAT?

  8. @ Hal

    The truth is none of the details about the sale of our interest in LIAT has been shared with the public. At one time there was talk of Barbados being a minority shareholder in the new venture. Did that happen?

    Secondly why are we granting LIAT landing rights if it has outstanding severance liability here with bajan workers? This LIAT matter has been poorly handled and continues still to be. As I said we’re it me a LIAT plane would not be allowed to land here unless it’s past liabilities were settled. If it’s a matter of the Bajan employees having to be paid out by the NIS here, well then tell Brown send his cheque for the 48% share or what ever it was under the old company structure of the severance cost. Hell he think we is a registered charity!

    • The decision binds the Cabinet, collective responsibility. If any of them have a problem let then resign and speak or forever hold their peace.

  9. Another question for the PM. Have you received letters of liability release from the CDB and other banking institutions confirming that we are no longer a guarantor or liable for future liability in any form with regard to LIAT 1974 Ltd??

    As a shareholder and tax payer I would like to know.

  10. @ David

    Don’t hold you breath and wait pun it? Also why the dam opposition ain’t asking these questions? If they don’t know what to ask i will give them the questions here for free!

    If this is not done correctly with a legal dissolving of LIAT 1974 we could well face future liability mark my words here and committ them to BU Hansard

    • @John A

      Why not collect some questions and email the blogmaster, let us see if we can light a fire under Verla. She seems to have a comfort level with being reactive.

  11. @John A

    You are right about air safety, but if Barbados borrowed the money to invest in LIAT, and having sold the 49 per cent shares for $1, what about the repayments on the original loan?
    Where is the Opposition parties in Barbados? Where are the media?

  12. @John A
    I hope your question re liability release is a YES otherwise Mia ain’t the PM I think she is …… I am hoping the reason for the EC$1 sale to Browne was to release us from having to pay LIAT1974 debts, including severance! We need Caswell & Verla to open up this matter.

  13. @ David

    I will email you the questions that as tax payers and shareholders we should have answers to later today. This is being handled in a manner that is far from transparent.

  14. Two of the most daunting tasks for investors at the moment are 1) to try and determine what Covid and the resulting printing of US dollars is going to do to the value of the dollar and the resulting cost of things. 2) have clarity on the income tax regime between various countries.

  15. @ Hal

    What Browne ain’t telling you is if the $1 he paid also included a liability release to Barbados of all liability. On top of that he can’t answer that question for me either. That must come in the form of a legal liability release from the CDB and other creditors. Further more those releases should be made public and published. There is way too much secrecy on this matter and neither the opposition or dam union are asking any questions.

  16. @ John A

    That is not a question for Browne, but for the president and her top lawyers who drew up the agreement. Was this told to the voters in St George North?

  17. @ David BU

    Sometime in June, the ANU Cabinet gave approval for the registration of the new company, LIAT (2020) Ltd. Browne told the Comrade and Mottley should they decide not to consider reorganising LIAT (1974) Ltd., the Antiguan government would ask the shareholders to release the LIAT (1974) Ltd. trademark, so they could launch LIAT (2020) Ltd. as a contingency arrangement as soon as possible.

    The problem is, there isn’t any information in the public domain to let us know if LIAT has resumed operations as (1974) Ltd., or under the new company’s name, (2020) Ltd. I understand the Administrator applied to the Court to have his report sealed. If this is true, then we may be kept in the dark a bit longer.

    If LIAT is flying as (1974) Ltd., then, I believe the previous flight approvals are valid. However, if flights are being operated under the new company, then, it suggests the trademark has been released. Therefore, the airline should have to apply for the necessary approvals. And, under the circumstances, I also believe both SVG and BGI are within their right to demand a down payment on landing fees.

  18. @ John A

    That is not a question for Browne, but for the president and her top lawyers who drew up the agreement. Was this told to the voters in St George North?




  19. @ Artax

    Exactly my point and if Liat is still operating under liat 1974 LTD then we still have major liability issues both financial and legal.

    Only a formal dissolvement of LIAT 1974 LTD will solve this

  20. @David

    The problem here is details. For instance I could offer to buy your shares for 1 dollar but under what conditions? In other words the agreement may say I will remove you from all FUTURE liability as of today’s date, but only a financial institutions legal release can exempt you from guarantees you made.

  21. Gaston Browne informed PMs of the existing shareholder governments if they were not interested in investing in the reorganisation of LIAT, they should sell their shares for EC$1.

    The Comrade accepted the offer on condition ANU pays SVG the value of the debt that the Gonsalves administration guaranteed in a loan arrangement with the CDB, for the purchase of three ATR aircraft when LIAT was into a re-fleeting exercise……… and said he was prepared to write off LIAT’s EC$14M debt to SVG, including outstanding landing fees.

    Gonsalves essentially told Browne, “let’s value the planes and the amount of money which we owe the CBD on these planes, pay me that and I get out of it (LIAT) and you do what you want to do.”

    The government of SKB also wrote off LIAT’s EC$11M debt to that twin island state.

    So far, the BGI government has not given any indication as per how it will respond to the request to write off LIAT’s debt owing to it.

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