If any modern democratic nation is to run smoothly there must be a symbiotic relationship between the policymakers of the state and those in the private sector.
That relationship will be essential at all times but more so when the economy is in trouble, because no matter what some may say, the government cannot provide jobs, although it is their responsibility to establish the right circumstances and business environment upon which the private sector can be induced to risk their hard-earned capital.
On this basis, fiscal incentives are given to companies to encourage them to establish their businesses here.
It was all part of the industrialization by invitation concept so well-known to those of us who followed the ideas of Sir Arthur Lewis. We have used the concept time and again to invite and induce the owners of capital to invest from within our shores.
The incentives given to our offshore financial companies are born of the same parentage; but like those incentives offered to the tourism industry they are designed to produce a two-fold benefit and that is to encourage employment and to earn vital foreign exchange.
The incentives just announced for the operators of the Casuarina and Almond properties fall into that category, and in addition the country needs to fire on all cylinders to get the economy growing.
The wide scope and range of the incentives have raised some eyebrows and some people have been wondering if everything including the proverbial kitchen sink was being thrown at or to the investors to get the two properties back into production so to speak.
If what has been reported is correct, every input into the operation of the properties is now to be exempted from taxes or other imposts. Government will hardly pull in any revenue benefits from such operations except for the fact of employment, the benefits of marketing muscle and the national goodwill which flows from keeping the country’s tourism plan working for the national benefit.
We may not have offered such a platter of benefits before and there will obviously be a clamour for the extension of these rights to other properties; but that will be a problem for the policymakers whose duty it is to decide how far they must go to secure investment.
It is their judgement which matters in the end; but it is our patrimony which is on the table. There is always an ultimate public interest in understanding why the decision has been made and in properly and legitimately enquiring about the lengths to which the policymakers went in sealing the deal.
We were informed that the property was not generating any corporation taxes but will now be more useful to the local economy. But part of the framework for the good governance of our country is that in addition to other collateral benefits, such as employment and foreign currency earnings and so on; is that we do not throw in the baby with the bath water when offering incentives to inward investment.
But the question remains, even as we all welcome the investment: How sweet is too sweet?
