Letters to the Editor: Harold Lovell seeks to add context to claims of economic growth
Dear Editor,
My friend Professor Justin Robinson, Pro Vice-Chancellor and Campus Principal at the UWI Five Islands, appeared on a local radio programme last Saturday and made several interesting comments.
Let me state from the outset that I agree with most of what he said. The purpose of this letter is not to respond in the way of rebuttal, but rather for expansion and addition.
First, I agree with Professor Robinson that for any economy, growth must be a priority. However, I wish to add that inflation must also be treated as a priority.
We can all agree that much of our inflation is imported, and the policy options in this regard are limited. One that the government would, however, be the ways in which the consumption tax is levied.
The administration did the exact opposite by increasing the ABST from 15% to 17%. It was brutal and uncaring. It was a bad decision. What the ABLP government has done is to reduce the purchasing power of working-class people in particular. That is why so many people are crying out about the cost of living whereas, so few are celebrating the nominal economic growth.
I agree with Professor Robinson when he said that the government should be broadening the taxes that are on the books.
The Prime Minister acknowledged in his 2024 Budget Statement that the ABST compliance rate is a low 50%. Put another way, the government is collecting only 50 cents for every $1.00 that it should be collecting.
In 2022, the amount of ABST that the government collected is approximately $300 million which means that someone was due to have another $300 million uncollected.
Tax waivers are not random when they are not guided. It is “who you know” as the saying goes, but that is a huge problem.
Another important point raised by Professor Robinson is the resilience of Antigua and Barbuda’s economy which is based on tourism. He noted that for 38 out of 46 years from 1978 to 2023 we experienced positive economic growth.
This is a factual statement with one minor error. He said that we experienced recession in 2005 when in fact, we achieved growth of 6.47%. Also, he did not mention the decline in 2001 of -4.55%.
It is important to note that the highest growth figure between 1978 and 2023 is 12.71% recorded in 2006, followed by growth of 9.32% in 2007. This was a period of unprecedented hotel construction and expansion in Antigua.
We saw the construction of Sandals Grande, Verandah, Hermitage, Sugar Ridge, and the partial construction of the Hodges Bay Club.
Expansion took place at Galley Bay, Jumba Bay, Blue Waters, St James Club and others. In addition, 41 new guest houses and small hotel properties were opened during this period. Our hotel room stock grew by approximately 40% from 3000 rooms to 4154 rooms.
The Sir Vivian Richards Stadium was also constructed during this period and there was a boom in private home construction.
By 2009, the situation changed dramatically. Wall Street was in crisis as the effect of the financial meltdown led to a lack of confidence globally and investment in tourism worldwide declined by 9.0%.
Not only did we have to cope with the global economic crisis like everyone else, but we also had to face the crash of our largest private sector investor in Stanford or Allen Stanford.
On February 17th 2009, federal agents raided the offices of Stanford Financial in Houston, Texas. The impact on Antigua and Barbuda was instant. All of Stanford’s assets were frozen, and in Antigua alone over 2,500 jobs were lost. The effect on the economy was unprecedented and unparalleled.
A team of international and local economists did an assessment of the impact on the economy and found that we suffered a loss in value of approximately EC$400 million. That was a massive blow to our economy which at the time had a GDP of just under 4 billion dollars.
In addition to the global economic crisis, and the sudden demise of the Stanford empire, we also saw the crash of The Trinidad-based CLICO/British American group of companies which caused local depositors and investors in Antigua and Barbuda to lose EC$288 million.
The resilience within our economy was again evident as the economy rebounded in 2012 followed by a minor dip of 0.6% in 2013.
Our biggest single decline in one year occurred in 2020, when the economy fell by 17% due to the Covid pandemic.
The moral of the story is that we have an open economy which is highly vulnerable to external shocks. The pattern is clear. For example, 1995 (Hurricane Luis), 2001 (9/11 terrorist attack in New York), 2007-2011 (Global crisis, plus Stanford, plus CLICO), 2020 (Covid).
In conclusion, the points made by Professor Robinson are all valid. However, there are persons who, as a result of ignorance or with malicious intent, have sought to twist the unvarnished points for cheap political gain.
In this letter I have sought to add some context and to set the record straight.
Yours truly,
Harold Lovell
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Why did Prof Robinson feel the need to write the article on Antigua’s economy? Was it that he felt he had to show how knowledgeable he was about our business, and how up in it he could get, or was it to just to impress his new friend the Bow-Wow?
Mr Lovell, it is clear to see why you would not have made a good prime minister. You are too handsy-pansy. Couldn’t see why the need for you to be telling us so much that he is your friend. This guy is doing anything to please Mr Brown. If you can’t see that, well it’s best you are where you are. If he’s your friend, he would have been checking with you to get his facts straight, before writing all that ‘gonk’ and leaving out (deliberately) the good stuff UPP did.
You are not clarifying this issue with the right amount of outrage. All the good things that the UPP did, especially you during the World Cup period, and you say “This is a factual statement with one minor error. He said that we experienced recession in 2005 when in fact, we achieved growth of 6.47%. Also, he did not mention the decline in 2001 of – 4.55%.
According to Joe Biden, this was a ‘big f—king deal’, and you talk about ‘one minor error’?
One minor error?
Come on, Cap’n. You had a mountain of facts to show-off with here, but instead you chose to play stiff-upper lip gentleman manners with him on them?
This is why Gaston Brown will clean UPP clock for breakfast lunch and dinner all the time. Imagine if he had all that data to mess around with like UPP has. You will hear him crowing all around the Caribbean.
Maybe it’s best you did not come out. All you did was try to ease up and clean up the dabbling of the bumptious Gaston-loving professor, and instead you end up annoying plenty people.
If you want to play diplomat and being the bigger person, please just sit down and keep quiet. Even the topic of the article, “Harold Lovell seeks to add context to claims of economic growth” is so corny and full of nothing. Commit yourself, man. Be bolder, stronger, more in your face. That is a cop out topic.
Can’t even advise you to spend your time instead by giving Pringle some coaching. You will transfer your ‘saffy, saffy’, mushy image on him.
That he does not need.
Incidentally, Gaston Brown does know how to get the brainiacs of UWI singing his songs. The man with a Dime Store degree is pulling the strings of the men with the accredited university degrees.
Who say studiation doesn’t beat education?
Lovell, stop acting like you wanna jump back into the political arena, and do just that.
Jamal Pringle. MP is still in training camp. Richard Lewis. MP is pushing the Gaston Browne Administration to come clean of several issues affecting the Economy and could use some of your expertise to bring some semblance, to the run away spending by the ABLP with little oversight and accountability with accuracy.
We must also pay keen attention to all of these [new] projects knowing that positive growth in the economy doesn’t always reach those living #hand_to_mouth soonest; as most of those profits from investments in Antigua usually don’t #trickle down where they’re supposed to!
If Antigua was doing as great, as the ABLP is contending, a large percentage of these #thuggish_crimes would not be taking place so frequently
Jumbee_Picknee aka Ras Smood
De ole Dutty Peg🦶🏿Garrat_Bastard
Vere C. Edwards
Because of these kind of impact the local economy suffers, from major negative effects, internationally or locally, I do believe strategies that could minimize/mitigate harms from these events should be implemented.
Village, parish and national emergency funds. That which the government put money into but cannot use until events as described above occurs with serious impact locally.
I believe such fund should receive at least $1 million yearly, and can be used in various ways to mitigate economic harms in villages and the entire nation. There should be two, village and national. Or 3, village, parish and national.
These funds who have set rules on how funds can be used. As employment benefits, food stamp, housing assistance, etcetera after storms or serious economic crisis.
Starting putting aside $1,000,000ecd per village, per year, could be sufficient to assist locals with financial benefits who lost their job from, as described above. It may be about 50 persons per village or less. These funds would easily cover these people and frankly, easy to set aside $1 million yearly.
After 10 years and nothing occurs, the funds can be released to the government and a restart in setting aside $1 million again begins.
I believe this would be a smart idea for events you are sure will occur but do not know when.
Crisis would then have less effect on that year’s budget and the economy. As the funds could adequately or substantially fill those gaps the crisis caused, without government scrambling to find funds.
Hon Harold Lovell, the best Prime Minister we never had
Well written piece and pellucidly clear as former Prime Minister Sir Lester would say. It contradicts the narrative that the ALP and Gaston has been peddling that during the administration of the UPP the economy was devoid of growth. In fact the highest growth experienced was during the administration of the UPP. The other important point to note is that the focus on growth only and not addressing the issue of inflation at the same time, can leave the most vulnerable in the society in a most precarious economic situation. The latter is the situation that we have seen existing under the ALP administration with minimal growth and rampant inflation thus making the lives of many intolerable.
Mr. HL;
Why though….why? What’s the purpose?
At the same token, if 15% – 17% is seen to be brutal and uncaring, what say you to 0% – 15%?
What adjectives should be used to classify the administration’s decision of that period?
I rest my case.
Happy the full story came out but any suggestion on helping the people when economic crisis occurs?
Learning from the patterns mentioned about what are the solutions? I am so interested in reading this.
Show me the party with the best solution, I may support. Delay the political talk and urgently give the practical solution.
You have 10 minutes to impress me, DNA, UPP, ABLP, independent, and just intelligent and caring people.
Why is political points always described as cheap?
Even political gains are described as cheap, why?
Seems as though the only time political points are expensive is when tax payers have to pay
The comments made by Harold is well within context. The problem we have is that we believe to make a point of value we have to cuss someone, we have to step on someone.
Maturity would dictate that the corrections made by Harold speakes to the professor ignorance more that Harold knowledge.
This is not an ordinary person he has the responsibility to guide the UWI and educate our children. If he cannot be honest with the truth this has nothing to do with Harold or Gaston. This is on him and him alone.
We should call our the professor and the nation should be appalled by his intellectual dishonesty.
For you to deliberately mislead the nation is a crying shame. You in your capacity should never be a political hack or a political prostitute.
Your deliberations should be factual and educational for the benefit of the nation not kissing Gaston ass with your words of false platitudes.1
Get it right you are educating our children!!!.
@ Dave Ray and other ABLP apologists, please get your facts straight.
The ABST was introduced TO REPLACE the Consumption Tax. Check with Customs or importers to VERIFY that the Consumption Tax was repealed at the same time the ABST was introduced.
Fact is that the Consumption Tax was levied at various rates ranging from 0% to as high as 40% if my memory serves me right. The number of zero rated goods was increased, and if you surveyed business owners, you will confirm that the cost of goods declined on average. The people who benefited most were purchasers of motor vehicles.
So you see Dave, while introduction of the ABST reduced the cost of goods, the increase in the ABST introduced by Gaston has increased cost of goods and the rate of inflation.
Have they sold WTO yet?
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