With a population of just 89,000 and a total area of about 442.6 square kilometres, Antigua and Barbuda is dwarfed by some of its Caribbean neighbours. But that has not stopped it becoming one of the region's biggest tourist destinations, thanks in large part to its 365 sandy beaches and numerous resorts.

Antigua and Barbuda’s tourism industry began with the transformation of a former US Air Force Base into a civilian airport in 1949. Following this, in the 1960s, heavy investment was made in the country's telephone, road, electricity and water systems. By 2011, tourism contributed 74% of the country's GDP and was responsible for 68% of employment, making Antigua and Barbuda the most tourism-dependent country in the Caribbean, a concerning position to be in when the global economic crisis struck, given that tourism was one of the sectors that first felt the crunch.

New types of tourism

To reduce the exposure of the country to the decline in the leisure tourism industry, Antigua and Barbuda's government implemented an economic development plan focusing on attracting investments in new sectors. “Since 2009 the government has taken steps to expand medical tourism, offshore learning and outsourcing. Trade in health service and offshore education are two areas that can stimulate and grow our economy,” the country’s prime minister, Baldwin Spencer, said on a recent visit to the US. According to Mr Spencer, demand for these types of services will be fuelled by the ageing baby boomer generation in North America and their rising expenditure on healthcare.

The country seems to be well placed to develop its capabilities in offshore healthcare and remote education. It hosts the American University of Antigua, an educational institution that offers medical doctor degrees to its graduates, the majority of which are from the US. It has a modern hospital, Mount St John Medical Centre (MSJMC), which employs a 200-strong team of medical staff, and a rehabilitation centre founded by legendary Eric Clapton. Soon, the country’s capital city will also be home to a $13.5m regional cancer treatment facility, Cancer Centre Eastern Caribbean, which is currently being constructed next to the MSJMC.

“It is not only due to our facilities that we might hold an appeal for people seeking medical and wellness treatments," says John Maginley, Antigua and Barbuda’s minister of tourism, civil aviation and culture. "It is also a lovely place to recover."

But Mr Maginley realises that a key breakthrough in the development of Antigua and Barbuda’s medical tourism sector depends on the country obtaining an accreditation from Joint Commission International, an organisation that verifies healthcare standards in facilities around the world. Mr Maginley predicts that such accreditation should be granted by 2014.

The rich and the famous

In the meantime, there are still projects in Antigua and Barbuda's tourism sector that should deliver healthy returns on investments. One such project is Jumby Bay Resort, which is operated by Rosewood Hotels & Resorts, a Dallas-based hospitality company. The company took over a troubled venture in 2001, turning a 1.2-square-kilometre private island into an up-market getaway with 18 private villas and 40 hotel suites. It now counts among its clients celebrities such as Robert De Niro, Paul McCartney and Piers Morgan.

“Our idea is to keep it small and exclusive, and there is a demand for that,” says Andrew Hedley, general manager of Jumby Bay Resort and chairman of the Antigua Hotel and Tourist Association.

Tamarind Hills, a freehold property development with about 90 housing units, is another exclusive complex attracting affluent clientele from around the world. The development was initially scheduled to launch in 2008 but, due to the economic crisis, its completion was delayed by about two years. So far, Island Heights, the resort's developer, has sold 15 units, and according to Rufus Gobat, the company's director, “things started coming around, we started picking up steam”.

Citizenship drive

As well as these two exclusive resorts, there is something else on the horizon attracting high-net-worth individuals to Antigua and Barbuda. The government has outlined an Economic Citizenship programme, which grants a passport to any individual willing to spend a minimum of $400,000 on a property in a resort area, and donate $250,000 to the National Development Fund or a charity, or invest $1.5m in a business venture.

The programme is currently undergoing public consultations, but the owners of the country's most expensive resorts are keen for it to be put into law. “We would benefit greatly from the Economic Citizenship programme,” says Jumby Bay's Mr Hedley. While Mr Gobat says that he expects the demand for his properties to rise once the programme is implemented.

When it launches the Economic Citizenship scheme, Antigua and Barbuda will become the third country in the Caribbean – behind Dominica and St Kitts and Nevis – to offer citizenship in exchange for investment. According to Harold Lovell, the country’s minister of finance, the way in which the country implements the programme will be based on the experiences of other countries in the region and will be more complex than just handing out passports to anybody willing pay.

“We are designing it properly from the start. The process will be extremely rigorous and we intend to use external consultants for the bidding. We look at all our options and we believe that, if properly structured and managed, economic citizenship can bring a lot of benefits to the economy,” he says.

Harsh lesson

Screening potential applicants will be essential if the programme is to be a success and help boost the country's economy. Antigua and Barbuda knows only too well how even just one fraudulent investor can damage the economy and the country's international reputation.

In 2009, Texan banker Allen Stanford, whose investments in the country's tourist facilities, a bank and international cricket tournament earned him a knighthood, was investigated for fraud by the US authorities. In 2012, he was sentenced to 110 years in prison for running a Ponzi scheme estimated to be worth upwards of $17bn. Mr Stanford pleaded guilty to running the scheme from offshore bank accounts registered in Antigua.

Mr Lovell, talking openly about the storm that Mr Stanford’s imprisonment has caused, says that as a consequence, the country has worked closely with the Financial Action Task Force and its regional equivalent to correct any deficiencies in the country’s financial system.

“We have modified several pieces of legislation in order to ensure that we bring the jurisdiction into full compliance with international practices. We are now more advanced in our legislative framework and it places us in a very competitive position given the global reality today,” he says.

Feeling at home

The Economic Citizenship programme is not the only way that the country is targeting investors. Antigua and Barbuda Investment Authority (ABIA), the country's business promotion entity, offers marketing and aftercare services, and also consults with foreign and local investors on ways in which to improve the country's business climate. Mr Lovell says that he is in a permanent contact with ABIA representatives and their recommendations are taken into account.

The fact that the government is so open to discourse with the business sector is often quoted as one of the main reasons why investors choose Antigua and Barbuda over other countries in the region. Roger Horner, managing director of E3 Systems, a Spain-based marine electronics provider, says that Antigua and Barbuda was not his first investment choice, until he met the country’s officials.

“When I was thinking about our new base in the Caribbean, Sint Maarten in the Netherlands Antilles seemed to be the best option thanks to its reputation as red-tape-free island. But Mr Lovell, who was at that time the minister of tourism, asked me to point out the main drawbacks to investing in Antigua. I did and he pledged that these problems would be solved. Six years on and I must say, he stayed true to his word,” says Mr Horner.

Indeed, the country scores highly in the World Bank’s 'Doing Business 2013' report, ranking 63th out of 185 countries for ease of doing business. It scores especially high when it comes to protecting investors, providing electricity and obtaining construction permits, but one factor that the World Bank ranking does not take into consideration is quality of life, something that many of the investors that have relocated to the country themselves value. 

“I left London in 1990s," says Mr Hedley. "I worked in Africa, I worked in other places in the Caribbean, but Antigua is the place where my children go to school and I bought my property. In all my travels, I have never felt as welcomed anywhere as I do here.”