Quae cum ita sint (If these things are so); a friend told the Wild Coot that the people want him to write in simple language – and he was serious. He said that he understood the articles, but the man in the street may have a difficulty. But don’t we boast about 98 per cent literacy? Pig-headed that I am though, I shall try my best now.
What is the gain Sir, or Sir, what is the gain? Quite a lot my boy, quite a lot Wild Coot. Airlift for one thing, the volume of traffic will cause more airlines or more flights to patronise (fly to) Barbados not only bringing tourists to the high-end hotels, but people generally (those who are not coming now?).
The Sandals hotels and restaurants will purchase agricultural products and be a catalyst (buyer) encouraging and increasing the variety of local production. (Of course the price will have to be cheaper than products from over and away that will be tax and bound free.) The hotels will employ mostly Barbadian workers, more than the old hotels employed.
The salaries will accrue to the general public; that is, the Barbadian portion of workers who will pay taxes and support the economy. The hotels will most likely provide their own transportation to and from the hotels, thus a few tour operators will pick a berry. Their advertisement will highlight Barbados and justify the reduction in our marketing expenditure – perhaps.
They, or the foreign workers will pay no taxes, so we can’t benefit there. There will be no taxes on room occupancy or food consumed, so we can’t benefit there. They will use water, telephone, electricity and gas without paying tax, so we can’t benefit there.
Products imported into the island to service the taste of the high-end tourist will not attract taxes, so we can’t benefit there. Services provided in the island will not attract taxes, so we can’t benefit there. Being all-inclusive and with enhanced attractions, most facilities will be provided on the premises and outside shops may or may not enjoy patronage, so we can’t benefit there.
So as to seemingly show equality, the same benefits extended to the high-end hotels will now be soon (?) extended to the low-end hotels, if they can take advantage of them, so we can’t benefit there.
Again I say that we need an institution to come to the rescue of the hotels and restaurants in need of cash flow to resolve their ability to attract in a dwindling competitive market and to help them with the commercial banks.
While we are prepared to wait and see what Sandals really brings for us, we cannot help but speculate that the first claim on any money earned by the hotel Casuarina will go towards repayment of the US$65 million debt. This is expected. Then again, will Sandals be footing the cost to their standard of converting Almond or Sam Lord’s Castle into Beaches, I fondly ask?
For that to be a reality and not just long talk, we would need to increase our debt position by borrowing on the external market – a horror situation now when we are borrowing even to pay debt. For me, unlike other published views, the jury is out with respect to the net benefits to be attributed to the Sandals arrangement – maybe in 2037 our grandchildren will benefit.
I saw it in Jamaica, how the middle class that supported employment and taxes was destroyed, forcing the country to be an importer and user where once it was an exporter and an earner. Here in Barbados the middle class that bore the brunt of taxation is now being inundated with more taxes and situations that stifle education and “exasperate” the condition at the Queen Elizabeth Hospital.
But Wild Coot, what are we paying this amount of taxes for? Very soon more people will still have to be sent home from the Government service and its ancillaries, says a concerned citizen. It may bring us closer to an International Monetary Fund position that is preferable to borrowing at high interest rates or printing more money; printing more money is self-defeating.
• Harry Russell is a banker.
