REDjet provides tough lessons for foreign investors in the Caribbean

“REDjet might still have been flying if the Barbados Government had honoured financial commitments to the collapsed airline.”

Former Prime Minister Owen Arthur talks to The Nation about the DLP’s failure to honour its promises.

Owen Arthur chides DLP for breaking REDjet promises – conveniently forgets he did the same thing with other foreign investors

Submitted by One Who Knows

For a man who himself made false promises to major foreign investors just to entice them to Barbados, Owen Arthur has some nerve criticizing the DLP for their handling of REDjet.

Not that the DLP government is undeserving of criticism over the REDjet matter. The point is that both DLP and BLP governments have shown they will say and promise anything to a foreign investor: at least until the cash arrives. The promises aren’t always about money or tax breaks, sometimes they are about changing the laws to facilitate business or protection of the environment, or putting in roads and sewerage treatment to encourage development.

Unfortunately that long-established history of promising anything to potential investors but then failing to keep up the agreement is starting to cost Barbados credibility in the eyes of the world.

A sense of immunity and impunity

It wasn’t so long ago that Barbados and other Caribbean governments could get away with anything. International news agencies were loath to report some of the investor horror stories in Caribbean nations because every year these same countries cumulatively spend hundreds of millions of dollars in tourism advertising.

These advertising revenues are like a gun to the head of the foreign newspapers and broadcasters. If they issue too many reports on island crime against tourists, or about real estate or business investment horror stories, the editors are likely to find their advertising share cut for a few months.

In the current economic situation the withholding or reduction of advertising by a major client is serious business. Usually nothing need be said – the editors and publishers get the message. And if they don’t get the hint when a client makes an offhand comment “You’re giving a lot of coverage to that one isolated incident, aren’t you?” they will get the message when their rival newspaper receives 100% of the advertising for the next three months. I have seen it happen more than once.

When Ottawa tourist Terry Schwarzfeld was murdered in Barbados, the internet editions of all the Canadian papers featured dozens of major stories for about a month. Then the coverage suddenly stopped and the majority of the original stories disappeared from the internet. Check it out yourself on Google; it’s almost like it never happened. Other stories published at the same time remain, but most of the Terry Schwarzfeld stories are gone.

“The internet destroyed the ability of Caribbean governments to entirely kill negative stories in the mass media through withholding tourism advertising expenditures, but the governments can still impact much of what is published in the mainstream.”

Investors will discover the truth somehow…

What the Caribbean governments can’t control are the specialized forums and websites dealing with offshore investments, real estate and travel. These websites have such a strong impact because they attract a highly interested and intensely focused audience.

A story that the Barbados Government promised but didn’t deliver financial support to REDjet is likely to be read and then forgotten in the general news media, but not on the airline and business investment forums. Combine the current headlines that LIAT will now use government money to buy seven new aircraft while Owen Arthur says REDjet investors were deceived, and you can predict it is likely to be big news on aviation and investment forums.

Barbados can’t control those revelations or discussions – and you can be assured that the next group of foreign investors suckers contemplating starting an airline in Barbados will think twice.

In addition to REDjet, other stories where the government made various promises and then abandoned investors come to mind off the top of my head, including John Desanti and the failed condo real estate laws, Peter Allard of the Graeme Hall Nature Sanctuary, the Dog Shelter investor who pulled out after spending $1 million  and the American investor Mathew Kerins who lost $2 million to ‘consulting services’ in Barbados.

Successive Barbados governments continue teaching foreign investors a lesson: you cannot depend upon the politicians to keep their word, even if they put it in writing.

Let-down – The Nation

REDjet might still have been flying if the Barbados Government had honoured financial commitments to the collapsed airline.

That’s according to Opposition Leader Owen Arthur, who told the MIDWEEK NATION it appears that the failed low-cost carrier had been given monetary assurances by top Government officials, including Minister of Finance Chris Sinckler and Minister of Tourism Richard Sealy.

Arthur said that representation had been made in the public that the principals of REDjet met with Cabinet ministers and commitments were given.

“There is something called legitimate expectations and if someone is given commitments by ministers for financial support then they can be entitled to make decisions based on those commitments alone.”

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9 Comments

Filed under Aviation, Barbados, Business & Banking, Offshore Investments

9 responses to “REDjet provides tough lessons for foreign investors in the Caribbean

  1. PLANTATION DEEDS FROM 1926 UP TODAY A ND SEE MASSIVE FRAUD ,

    BARBADOS LEADERS ARE THE LEADERS IN FRAUD. THEY PULL YOU IN AND WHEN YOU SEE THEIR FACES YOU WILL TURN TO STONE , HEAD OF MANY SNAKES .ANOTHER DRUNKEN DRIVER SOON THEY WILL CRASH,

  2. nevernoway

    I would never believe government unless the cheque cleared the bank. Government look like sharks looking for their next victim.

  3. George

    Why does an opposition Party always have the answers, accuse the Government of the day, for not doing what they the Opposition should have done ?

  4. Sad it didn’t work out for them. Back to high prices to fly in our Caribbean neighbourhood.

  5. yatiniteasy

    I wonder if Froon hasd read the CLICO report yet?

  6. rastaman

    Probably not .He is too busy bad talking Owen

  7. LOOK

    Arthur and his BLP cronies seem to like spitting upon DLP and often does though it backfires. Arthur and the BLP in 2008 were forced out of office but left behind a lot of things that just can’t hide. Stuart and the DLP cannot hide the recent S&P downgrade or ClICO. Barbados BEFORE the 2008 general election was downgraded several times. Arthur and the BLP cannot hide this.

    The Al Barrack matter originated during the days of Arthur and the BLP. They know this, can’t hide it, that or the 75,000 campaign cheque that Arthur invited into his personal banking account. The Mottley family linked to Mia Mottley purchased the Arch Cot land that couldn’t be built on and got planning permission within six months. The previous owner was denied planning permission. The Mottley family was not. The Codringer family totaling five ALL died at Arch Cot, Britton Hill; their home fell into a cave beneath it. Arthur and the BLP cannot hide this. Those deaths at Arch Cot, Britton Hill could have been avoided. No building on that land should have been allowed.

    Al Barrack was awarded a government contract WITHOUT TENDER. Barrack built the complex at Warrens in St. Michaels though he had never built a project that size. The BLP exposed to Bajans their INCOMPETENCE and cannot hide it. VECO, a corrupt Corporation homebased in Alaska was awarded a government contract via Owen Arthur, Mia Mottley and Dale Marshall. The VECO Corporation built the prison at Dodds in St. Philip WITHOUT TENDER but had no record of building prisons. Owen Arthur, Mia Mottley and Dale Marshall exposed to Bajans their INCOMPETENCE and cannot hide it.

    Arthur, believe it or not said “REDjet Airlines might still be flying if the Barbados Government had honoured its financial commitment to the collapsed airline”. Okay, but the Al Barrack matter, if the government had fixed the Al Barrack problem born during the days of Arthur and the BLP, it would not have ballooned quite so large. Bajans owe REDjet Airlines nothing, absolutely nothing. They, however, owe Al Barrack millions due to INCOMPETENCE exposed by Arthur and the BLP.

    The BLP responds to all of the above saying [it] has a enviable record of keeping promises. Whatever happened in the past cannot be changed. . . . The DLP government is guilty of GREED AND INCOMPETENCE. Truth is that both parties, THE BLP and DLP exposed to Bajans their INCOMPETENCE. Both had parties with GREED AND CORRUPTION.

  8. boby

    the permanent secreraty e most corrupt of them all ….the poison dwarf!

  9. Pingback: Ralph Taylor explains the Barbados tourism disaster | Barbados Free Press