by Reynold Benjamin
This series was first published on Spiceislander.com over 13 years ago
Last week, in part three of this series of articles on the failed Levera Beach Resort Project, I asked the question; can we do better? I expressed the conviction that we, as a resourceful people, can do better. I promised to place before you my own views on how to deal with the problem of government guarantee of millions of dollars for foreign adventurers to undertake development projects in our country.
I also encouraged you to contribute ideas on dealing with this gravely troublesome matter. You would recall the countless questions left unanswered as the result of the hasty departure of the so-called investors/developers who operated in Grenada under the name GCDI. I invited the Honourable Prime Minister to demonstrate the transparency and accountability of which he so often glibly speaks by giving us some answers to those pertinent questions. And, I wagered, boldly, that no answer would be forthcoming from the Man.
Well, fellow Grenadian, I have news for you. As fate willed it last Friday evening, I had a personal encounter with the Man. He attended the cocktail held in celebration of the first anniversary of the Spice Isle Review (SIR). The Man confessed to being a regular reader of SIR. It means, therefore, that he would have read these articles. I am still holding you to the bet. I will even double the odds. How about 1000 to 1 that he can’t answer those questions? But, guess what happened at the cocktail. The **** Hand held my hand and the **** Eye looked me in the eye. If by chance, I can’t write parts five and six of these series of articles, you would know why. Pray for me!
The two major examples of the NNP guaranteeing loans for investments undertaken by foreign adventurers are the so called Ritz Carlton Hotel and Golf Course Project at Mt. Hartman-Hog Island and the Levera Beach Resort Project. In the Ritz Carlton project, the government guaranteed some US$20 million for one E. J. Miller the promoter of the project. The recorded history is that the money disappeared; no hotel was built, the bank providing the loan sued the government of Grenada and obtained judgment. Today, the Grenadian taxpayer has to repay the bank, with absolutely nothing to show for it. With Levera, the same government guaranteed $29 million. The project has crashed; the developer has drawn down $24 million of the money, packed up hurriedly, and left us holding an empty bag. Now, the people have to repay the Bank of Miami.
Let us ask ourselves these questions. What are the essentials for developing a hotel and golf course? Can such a project be handled competently by Grenadians?
The most important input for such a project is the land. Next in priority is the expertise; architects, engineers (civil, structural, electrical, plumbing, air conditioning), management and skilled construction workers. Then last, but not the least, we need the money with which to finance the project.
Let us look at the two failed projects to which I referred. In Mt. Hartman, all the land belonged to the people. In Levera the people owned the most important area being utilized for the project. In Mt. Hartman, the land was given to E. J. Miller in return for shares in his company. Not a penny reached the Treasury. In Levera, the state land was given as a contribution to the project and private land paid for so far, was paid for with loan money guaranteed by the government.
So far so bad with regards to land. Next, the expertise. I am more than convinced and satisfied that we are equipped locally with all the essential expertise, in the areas set out above, to undertake these projects. We are left to consider the money with which to finance these projects.
Both Mt. Hartman and Levera were financed by way of government guarantees of loans on behalf of the so called developers. The record shows that in the case of Mt. Hartman very little, if any, money was brought into Grenada. With respect to Levera, the developers made no monetary contribution, not even to pay lawyer fees. Where, I ask you, are the benefits to Grenada of this approach to development? You tell me.
I was motivated to write on Levera because it is part of me. It is home to me. But, it is part of Grenada, as well. While it is unreal to expect every Grenadian to feel as strongly as I feel about the Levera issue it is equally unreal if, as a Grenadian, you are unconcerned because you are not personally touched by what is happening at Levera. Furthermore, what is happening at Levera is only one example of what is going on with the country as a whole. And, in determining whether what is happening is good or bad it is not acceptable for one to make a totally subjective assessment based on how one is personally affected.
This is a major problem in society and in politics. It is a fact that the Human Being is motivated, at any one point in time, by what affects him (her) personally. Whether it is a dictatorship or a democracy people are prone to make an assessment based on personal benefit or detriment. The dictator Saddam is still a god for those who benefited from his regime. One can call it the “I am all right jack” syndrome. And in our democracy, one is disposed to vote for an individual or party for personal reasons. So a government is seen as good or bad depending on which side you are, mainly for personal reasons. I urge you to put aside personal sympathies and antipathies and look to a neutral guideline in assessing the conduct of this government and in making a determination whether it has done us well or whether it has done us bad.
The neutral guideline I urge you to employ is that laid down by the World Bank. In the old days, we spoke of good government and bad government. Today, the buzz words are “governance”, and “transparency” and “accountability”. What is the meaning of the word “governance”? The word is defined by the World Bank as, “the way power is exercised in the management of a country’s economic and social resources with a view to development”. Put in non-academic and simple terms, governance has to do with arranging (organizing it) and utilizing (making use of it) a country’s resources.
Those resources are economic. Those resources are social. And the management i.e. arrangement and utilization must be done so as to develop, that is improved, the way of life and living conditions of the people. Not some of the people but all of the people. In a democracy, it is the elected government that has the “power” to manage the country’s economic and social resources. Given the tools you, the people, applying commonsense can determine whether the government is doing good or bad. We are not all statisticians and economists. We don’t have to confuse ourselves with data or figures and economic theories. We have plenty of commonsense and that is all it takes. My job is to help with the tools. Let me try.
By economic resources the World Bank is referring to the things which we have in the country to live by or simply our means of living. What do we have to live by in Grenada?
To begin with, we have land which is among the most fertile in the world. We have an abundance of fresh water, a resource that we take for granted. Because of our rich soil, our climate, and the many rivers, Grenada is one of the few countries in the world where everywhere you look you can see food hanging from trees. The amazing array of edible fruits and vegetables found here, some growing in the wild, includes breadfruit, breadnut, bananas, papaw, sugar apple, soursop, sapodilla, golden apple, citrus of all varieties, mangoes, and coconuts, to name just a few. It means we have the ability to feed ourselves from the land and to grow valuable crops for export. As part of our land resource, we can name our many beautiful beaches, lakes, and waterfalls which when wedded to our climate has made us a much sought after holiday destination and enabled us to develop as a tourist destination. Add to that the availability of an extensive stock of fish in the waters around our islands. As a natural resource, we have a huge potential in Hydrocarbon in our offshore waters, yet to be explored. Our social resources are our people, our history, and our culture. It is recognized that we have a highly literate population with a high percentage of professional, technical, and managerial skills.
In part five, let us, together, put under the microscope this government’s management of our economic and social resources, according to World Bank standards. We will look at “transparency” and “accountability” as factors promoting sound management.
