Archive for September 29th, 2010

Caribbean Tourism: A House of Cards Part I (EXCLUSIVE !!!)

A GFBC Exclusive!!!!

Caribbean Tourism: A House of Cards

Caribbean Tourism: A House of cards

Due to the global economic crises many airlines including American Airlines plan to cut dozens of flights to the Caribbean. In addition, American Eagle will cease service to six international destinations including Haiti, Trinidad and several cities in the Dominican Republic. Consequently, decreasing foot traffic on Caribbean islands that rely on tourism for the lifeblood of their economies. It now seems as though the “house of cards” is beginning to tumble. Who will keep the promises to all of the people who invested their money in the development of “high end tourist services” ?

Caribbean Tourism as we know it can be compared to a “House of Cards”, many Caribbean nations have abandoned their agricultural economies and “drank the Kool-Aid”. A mixture of promises by the local politicians combined with a dangerous concoction of promises of Foreign Tourism to be supplied by the so called “International Real Estate Investor”. It was once said that “if you build it they will come”; however now it is built and now no one remembers knows where “they” are.

As the global economy continues to stagnate it becomes more evident that Caribbean Tourism is a house of cards that will cripple Caribbean economies for years to come. We ask the question WHY?

Political leaders have failed in their efforts to equip and diversify the portfolio of the future of our Caribbean Nations. One may equate Caribbean Tourism to a Ponzi Scheme conjured up by the “Real Estate Developers and the Caribbean Heads of State. All of the money just disappeared and now the people of these bamboozled Caribbean nations are left to foot the bill. All of a sudden there are VAT’s being introduced to some islands and it is being raised in some islands.

What about collecting taxes from the tax exempt foreign entities that invade our beachfront and coastlines with their gargantuan architectural specimens?

A brief synopsis of how the Caribbean Tourism Ponzi Scheme operates, this just a brief version I will give in dept details in Part Two.

Developer A contacts island nation with the “Business Proposal” of bringing “Jobs to the people of a specific island nation. The politicians lobby the idea to the locals or natives that “high paying jobs are coming to the island”. The natives are hard-working decent people so they applaud the efforts of the local politicians. Meanwhile, backroom deals are being cut by the same politicians that lobbied their constituents for payoff in exchange for swaying the government to discount beachfront property and grant various tax exemptions. What makes this amusing is many times the government backs these projects with the money of their constituents allowing the developers to put up minimal or in some cases no capital. Please stay with me I know this is alot to digest.

This is one of the reasons why some Caribbean islands in particular cannot fund the payrolls of their own government. All of the revenues that were to be collected have been exempted to foreign corporations, and now these nations are on a heavy borrowing spree. (IMF)

In exchange the developers asks for discounted prices on beach-front property in the Caribbean, duty-free status and brings in his own employees and employing the bare minimum “natives” for construction . After completion of the project the company brings in it’s own corporate staff and provides service jobs to the natives. Remember this is only the short version, I will go into details in part two. We will visit the off-shore banking debacle in our next discussion; another lost source of revenue.

Currently now everyone is using the IMF as an ATM. Where did all of the money go? Caribbean nations have taken in millions some billions in tourist revenue, now find it difficult to pay the salaries of their own government. I say “show me the money and where has it gone? It is impossible for small island nations to take in billions of dollars in revenue and they find themselves less than three years later in a deficit.

What have the Prime Ministers of Caribbean Nations done to give our people a fighting chance to survive? The answer is nothing national debts in Caribbean nations are on the rise because of the loss of it’s biggest import “Tourism”.

With the abandonment of the cane fields for sugar export and the “benign neglect” of the agricultural economies many Caribbean budgets so tight they can barely operate. Hence, the sunny island of Antigua once a thriving tourist economy, now more famous for being the domicile of a 7 Billion Dollar Ponzi Scheme and Allen Stanford.

Antigua’s Minister of Finance and the Economy stated recently in the Antigua Observer that the country’s economy is “still facing difficult headwinds”. As the country struggles to pay salaries of government on time, payroll is running behind almost two-weeks. Stay tuned for part 2 an in depth overview of: Caribbean Tourism: A House of Cards.

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