The Barbados government says plans by the Jamaica-based Sandals Resorts International (SRI) to bring its Beaches investment project to the island, could be either “stalled or pulled” after it said the company was seeking much more concessions than had been granted by the previous administration.
Prime Minister Mia Mottley, delivering her administration’s 2019-20 national budget to Parliament on Wednesday night, told legislators that while she had promised Barbadians that she would never negotiate in public, it was important however for them to be made aware of the developments surrounding the project.
“We have reached a difficult moment in the negotiations that may result in the project being stalled or pulled,” she said, adding that her administration had been working hard to make this project a reality, despite the fact that it was not in agreement with the “extent of the excessively generous concessions granted” by the former administration.
But she told legislators that Barbados’s reputation as a place to do business would have been severely affected if she had decided on pulling the plug on projects negotiated by a former administration since the fundamental principles of government and of the separation of powers doctrine, is that there is always a government.
“The political administration may change, but obligations entered into by a government with arms length third parties, will continue to bind an incoming government.”
She said it is that approach her new government followed when it came to office following the general elections last May but noted that “Sandals however wants and continues to want an even greater level of assurances and guarantees than they have already received”.
She said these assurances and guarantees include the Barbados government would indemnify them if any future Parliament were ever to tax them or the industry for any goods or services. Noting essentially to make total the range of protection the group will enjoy against any possibility of future taxation from a local government in the next 40 years.
“We are running a country – not a company,” she said to loud applause from the Parliament, adding “thus we cannot play fast and loose with the future of this country”.
She reminded legislators that when her Barbados Labour Party (BLP) won the last general election, it had promised the electorate that “we would not make decisions that would compromise the stability of this country nor would we act in a manner that was capricious with respect to the stability of future generations.
“And in our judgment, a sovereign country cannot abandon its right to tax because we simply do not know what events lay in our future.”
She said that the Sandals issue gives her no comfort, since “we worked hard to make this Beaches project a reality, but this we cannot give in to Sandal request.
“We cannot agree to this incursion into the powers of our Parliament that would be circumscribed unless the government of Barbados compensates and makes them whole. This would be unfair to the government and people of Barbados. I do not negotiate in public. I never have and I never will.”
Mottley said that she hopes Sandals would come to view Barbados as an excellent partner with which to make further investments in the future.
“We welcome Sandals here. We are certainly open for business; but not at any price. And in our current predicament in an IMF (International Monetary Fund) Programme Mr. Speaker there is a limit even to what we can accept.
“And you know Sir, when you are at the beginning of an IMF programme and you have this type of gun to your head being pout, I must confess …that I now know what it means or what inspired the “me too” movement across the world.
“It is an unfortunate moment. I learned as a child, Sir, that if you don’t say no to something it means you will say yes to everything. As having to say yes to everything is what inspired the oldest profession known to mankind and I haven’t come to this office to belong to that oldest profession known to mankind,” she told legislators.
She said her government “strongly supports foreign investments in the tourism sector, but it has still to help us carry some of the weight even if not all”.
She told legislators that in the light of this development, her administration will establish a Commission to review ”once and for all the investment code and the policies with respect to taxation and incentives”.
Motrley said Jamaica had to pass a new Fiscal Incentives act because “they found too they were going down that road with massive, massive, massive tax concessions and we will have within the social partnership, the leadership of the private sector, government and the unions to come up with a new framework”.
She said that the new framework must also remove the element of discretion that is too often the engine of corruption, noting that the degree of discretion the Minister of Finance now enjoys under chapter 67B makes the Minister the most powerful person with absolute discretion for the award of incentives.