Attracting investment in an uncertain economic climate is not an easy task. It becomes especially difficult when a country, as is the case with Antigua and Barbuda, has a domestic market of only 82,000 people. However, Harold E Lovell, Antigua and Barbuda’s minister of finance, economy and public administration, says that such difficulties can be overcome as long as the country is well integrated with other economies.
“Being a part of the Organisation of Eastern Caribbean States’ custom union expands our market to 600,000 people, and membership of Caricom [extends it] to 15 million,” Mr Lovell tells fDi during a meeting in St John’s, the country’s capital.
According to Mr Lovell, Antigua and Barbuda's small size does have an impact in other ways. “People tend to view the Caribbean islands as... tax havens, [but] because of our size and the perception of [Antigua and Barbuda] being exotic, we are under a microscope... Because of our lack of international clout, small countries cannot get away with things that the big ones can,” says Mr Lovell, who is keen to emphasise that his country wants nothing to do with the shadier aspects of the financial world.
Some have slipped through the net, however, as was the case with Allen Stanford, the Texan financier who was recently sentenced to serve 110 years in jail for defrauding $7bn through a Ponzi scheme. Mr Stanford ran his operations using an offshore bank account in Antigua, and now the scheme’s victims are suing the country for $24bn in damages. Mr Lovell says that such cases have exposed certain weaknesses in Antigua and Barbuda’s regulatory regime, but the authorities “have moved to repair all those weaknesses and to build a well-regulated, internationally respected jurisdiction.”
To that end, the country works closely with the Organisation for Economic Co-operation and Development to address financial and tax regulation matters, and it also has a vast network of Tax Information Exchange Agreements signed with 31 countries.
A different kind of tourism
With these regulations in place, Mr Lovell believes that Antigua and Barbuda can build a strong reputation for its financial sector. “We want to develop that sector and ancillary services around that,” he says, adding that another pillar of Antigua and Barbuda’s economy – tourism – will be developed along similar lines.
The global tourism sector has been one of the hardest hit since the financial crisis started to make its presence felt, a fact that has led Antigua and Barbuda to expand beyond the high-end luxury resorts it is renowned for and into more niche markets. “Medical tourism is one of the [niche] areas,” says Mr Lovell.
The leading light so far in Antigua and Barbuda's medical tourism offering is the state-of-the-art Mount St John's Medical Centre, built at a cost of $100m. An extension to the centre, an oncology unit, is also under construction. The progress of the oncology unit can be viewed from the car park outside Mr Lovell's offices, giving him a front-row view to assess whether Antigua and Barbuda's attempts to corner the medical tourism market are proving to be a success.