Who Sold Saint Lucia First?

[dropcap]A[/dropcap]ddressing representatives of the private sector during the Saint Lucia Chamber of Commerce executive luncheon on Wednesday, Prime Minister Allen Chastanet sought to dispel certain allegations surrounding the Pearl of the Caribbean development project. Speaking directly to criticisms that his administration is “selling the country to foreigners” in return for an integrated tourism enterprise project—the largest in the history of the country—the Prime Minister seemed to render the opposition’s remarks moot after revealing that it was in fact the previous administration, captained to electoral defeat by Dr. Kenny Anthony on June 6, that had encouraged the developers to expand their original plans from a modest equestrian facility into one of Baha Mar proportions, extending over environmentally sensitive areas such as the Mankote Mangroves and Il Pirata.

Providing more back story on the genesis of the $2.6 billion Desert Star Holding deal, Chastanet stated that after protracted negotiations with an overly bureaucratic SLP administration, DSH developers grew frustrated and turned their interests toward alternative foreign markets less averse to foreign direct investment. At the eleventh hour, following the overwhelming UWP victory at the polls, the newly minted PM reassured the multinational master planning firm of his government’s eagerness to attract Far East dollars. Reaffirming his recent trip to Inner Mongolia to “verify the legitimacy” of the developers, Chastanet faced a “very difficult decision”: since 2007 Saint Lucia has maintained official diplomatic relations with the Republic of China (Taiwan), much to the chagrin of Beijing. Though he did not elaborate on the current state of affairs between the two allied nations, if China’s foreign policy maneuvers in the rest of the Caribbean are indicative of anything, Beijing will almost certainly seek to leverage its potential investments as a means to forward its broader foreign policy goals for the region.

Though the discussion focused primarily on Phase 1 of the project—the construction of a horse racing facility—the PM also touched on recent developments regarding Phase 2, the hospitality element involving the financing and construction of world-class resorts poised to position Saint Lucia as the premier destination for ultra-luxury tourism in the Caribbean. While stating that the second phase would result in a 40% increase to the island’s aggregate number of hotel rooms, the Minister for Economic Development was less forthcoming in revealing the source of the project’s prerequisite financing.

Over the past two decades, Saint Lucia has sought to position itself as a politically-stable offshore financial center (OFC) vying to compete for cross-border capital flows against established industry leaders like Bermuda and the Cayman Islands. Per the Prime Minister, Saint Lucia’s International Business Corporation (IBC) incentive regime is unrivaled in the region, and is designed to attract investors like DSH and many more. Finally, Chastanet vowed to expand IBC regulations to facilitate further strategic investment in the nation. Stopping short of confirming whether this would be accomplished through nurturing an environment of tax and regulation arbitrage, the PM remained tight-lipped, declaring only that a comprehensive action plan to re-engineer Saint Lucia’s current taxation structure would be revealed in due course.