Is It Prudent To Sell Namco?

IS IT PRUDENT TO SELL NAMCO?

By Alvette E Jeffers

The Antigua Observer newspaper of October 15^th, 2022 reported that the United Progressive Party (UPP) intends to “dissolve” the National Asset Management Corporation (NAMCO). The UPP, it says, will then sell to Antiguans and Barbudans, “the shares owned by NAMCO.” This latest announcement is consistent with UPP’s past endorsement, in 2021, of the Antigua and Barbuda Labour Party (A&BLP) government’s decision to privatize some of the assets the nation state holds in the WIOC. The question, therefore, begs itself. Will it be prudent policy to sell NAMCO’s shares? There are indeed reasons to be dissatisfied with the operation of this entity. One of the major complaints is that its operation is shrouded in secrecy.

The coterie of government ministers who manage NAMCO, do not offer any account of their stewardship to the public. Therefore, not much is known about its investment portfolio or how and if it benefits the people. What is generally known is that the government has invested public funds in privately run institutions. But beyond that, everything else remains murky because of the lack of transparency and the absence of democratic accountability. But we do have an idea of the ideological premise on which NAMCO was constructed which is essential to determine, to an extent, its reason for being.

Prior to the establishment of NAMCO, Gaston Brown attempted to define something he introduced to Antiguans and Barbudans called “entrepreneurial socialism.” It seemed then and still appears to be a derivative of “market socialism.” Market socialism combines State planning thinking and free market ideas in the use and allocation of economic resources. Yugoslavia adapted this practice after the second world war.

The Chinese did the same in 1992. At the time that PM Gaston Brown adopted “entrepreneurial socialism,” Antigua and Barbuda was already an economy operating on some capitalist principles and a concept of the market existed. Economic “planning” in Antigua and Barbuda, remains restricted to the enactment of laws that govern local business relations which jibe with imperialist stipulations or to a degree, the granting of subsidies to investors as a means of influencing the rate of employment.

The State of Antigua and Barbuda is not, itself, engaged in commodity production as was the case in the 50s and 60s when the Antigua Trades and Labour Union (AT&LU) government committed itself to developing an industrial sector under the direction of the Industrial Development Board, established in 1952. As Paget Henry notes in his book, ‘Peripheral Capitalism,’ “manufacturing in Antigua came largely as a result of state initiative.” (p.109) There is now no direct State planning of commodity manufacturing occurring in Antigua or Barbuda as is the case in present day China and was the norm in Yugoslavia under Tito.

Gaston Brown’s “entrepreneurial socialism” is thus reduced to the investment of public funds in private corporations as a way to boost public wealth, and with it, the possibility to influence these companies’ investment strategies. The idea that government ownership of parts of the economy or a private/public cooperation constitutes socialism has long been debunked. To Gaston Brown, it imitates some aspect of “socialism.” For me, it is just plain state capitalism.

I am not ideologically committed to State capitalism nor do I think the counter to it is the privatization of, especially, a profitable public asset that was designed to create public wealth. From a nationalist point of view, and in the absence of local advocacy for the transformation of society and its political and economic relationships, NAMCO makes sense as a strategic instrument for wealth accumulation and a generator of funds for future capital projects.

It is saving something today so you can have something to spend tomorrow. When it occurs, those public investments in capital expansion and cultural life in general, should have an impact on the economy that should be positive and measurable. The underlying principle of NAMCO is credible as long as it, in actual fact, reproduces capital accumulation so essential for the renewing of the productive capacities of society and those other things that are its ancillary. States, all over, invest capital in bonds and other financial instruments. China owns an estimated $1.1 trillion in USA treasuries. In this regard, NAMCO is not a novel idea.

 

NAMCO’s investment should not be expected to pay for recurring expenditures. Revenues from taxes, license fees, customs duties etc. take care of those things. These revenue sources, if enhanced, may curb a natural inclination to depend on debt financing, which is now at the phenomenal amount of $3,334,175,407. But Gaston Brown and the A&BLP regularly undermine their own financial enhancement strategy when they deliberately lessen the intake of revenue by giving generous and unnecessary tax breaks to the business elites whose cupidity is unlimited.

At the same time, there seems to be no clear counter measure to mitigate the negative consequences such transfer of wealth can have on Antigua and Barbuda’s most vulnerable and exploited class.

What makes such transfer of wealth to investors appear so ill advised, is that there are no guarantees that the transfer will enhance economic growth, now or in the future. What the investors do with the additional capital, is beyond the government’s control or influence. A reversal of such errant policies and a NAMCO that is true to its declared objectives would help to increase the island’s wealth. Taxes and fees, of whatever type, have not been able to do that.

NAMCO must be assessed on the basis of its usefulness to economic investment and the collective wellbeing of the working class, whose existence is often affected by the ups and downs of the economy. When public wealth gets transferred to private individuals, there are no reasons to expect that these individuals will make a conscious decision to spur economic growth.

In fact, they would be just another group, added to those already in existence, who will feast on the profits that the working class creates, in the form of dividends. On the contrary, if and when the State uses such dividends to fix the roads, repair or reinvent the water system, invest in education, and perfect the operation of the hospital, more lives, individually and collectively, are positively impacted and those investments, will at the same time, increase levels of employment that will have a direct impact on the economy.

When we sacrifice the good of the many for that of the few, we are deliberately destroying what remains of a communal idea and in its place, we are promoting naked individualism, an egocentrism that has no empathy with working class aspirations, but sees itself in relation to foreign capital, its taste, its market driven ideology and its end product, self-aggrandizement. The attempt to destroy both the idea and practice of communal land ownership in Barbuda, by the Brown administration, has the same objective.

Finally. No one has asserted that NAMCO is not gaining returns on its investment. It is not known if it is a bane to the society. They simply do not know. Apparently, that is not germane. Its financial status will not determine its existence. MAMCO’s fate has already been predetermined. The bell has begun to toll. A UPP government will dissolve NAMCO because the party, I presume, believes, as a matter of ideology, that the State should not hold such valuable shares. By the way, if they are not valuable, no one will purchase them. I sincerely agree with those who say that NAMCO exist in secrecy. I concur that a public enterprise should be under the direct gaze of the public. I even go further to say, Cabinet should not be managing NAMCO.

All Cabinet is required to do is to establish the legal norms under which it operates and then turn it over to the appropriate authority to administer in the interest of the community. Correspondingly, similar indictments are made against the general way is which politics is conducted but no one calls for the end of parliamentary democracy or the overthrow of the system. The comrades who once advocated for the revolutionary transformation of Antigua and Barbuda in the 70s and 80s, are now the pretorian guards of either of the conventional parties. So why the call to end NAMCO?

My feelings are implicit in my reasoning. NAMCO as a concept is important. The way it functions, however, should be reevaluated and reinvigorated to achieve the same strategic objectives it was implemented to achieve. All the criticism against NAMCO should be noted and corrected in order to restore public confidence in its mission.

Antigua is in dire straits, financially. NAMCO cannot cure the problems that economic dependency and the principal reliance on foreign capital to stimulate growth produce. Even if those things are tackled, we will still have to find ways to save something today, so we can have something to spend tomorrow. That is common sense economics. So, the obvious? It is imprudent to suggest the dissolution of NAMCO.

 

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