Tag Archives: Offshore Investment

Wall Street Journal: Caribbean vacation properties risky because deposits finance construction

Left unsaid in the WSJ review is that after a project collapses there is a tendency for Caribbean governments to buy into failed projects with public funds in the hope of kick-starting the local economy. Bleached concrete bones dot coastlines throughout the Caribbean and in Barbados too, and once construction is stopped the salt and plants start to deteriorate the unprotected and unfinished structures. At a certain point it becomes uneconomical to continue to build on the old structures and they half to be torn down and started anew. Not a hope in hell of doing that in this economy.

Every time I hear our illustrious leaders talking about using our public money to ‘invest’ in failed projects like the Four Seasons Resort I make a mental note to save more for my retirement – because the government won’t be able to buy me a sticky-plaster let alone provide adequate health care for older Bajans when my time comes.

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Filed under Barbados, Consumer Issues, Economy, Real Estate

BLP & DLP Governments’ stupid refusal to pay Al Barrack cost Bajans $35 million dollars

Government’s motto: “Delay, delay – never pay.”

by Nevermind Kurt

We read in today’s Nation that “Minister of Housing and Lands Michael Lashley says his ministry is working feverishly to have contractor Al Barrack paid the more than $70 million owed to him.”

If memory serves, the truth is that Barbados once owed Al Barrack ‘only’ about $34 million dollars for the Warrens office building debacle. The Owen Arthur BLP government refused to pay, went to arbitration and lost large – ending up owing about $50 million dollars after a 2006 judgment.

“For the next two years the BLP government refused to pay, deciding instead to beat Al Barrack through the simple Bajan tactic of lawyering him to death and waiting for him to die.”

The BLP government’s story was that the country couldn’t afford to pay the lump sum and Mr. Barrack was unreasonable for refusing to take a ‘very fair offer’. Mr. Barrack described the ‘very fair offer’ as a dollar now and a dollar a day for the rest of his life. For the record, Mr. Barrack’s version is probably closer to the truth than the government’s.

The clock kept ticking and the interest compounded frightfully as interest does when it’s not being paid. Ask any Bajan fool who has missed a credit card payment – it’s not a pretty sight.

Enter the DLP

The Thompson DLP government inherited the mess when they won the election in 2008, but they too decided that the answer was to keep Al Barrack at bay with years of false negotiations punctuated with court battles to keep him from selling the assets of the National Housing Corporation. Minister Lashley says the government tried to ‘give’ the Warren’s office complex to settle with Barrack, but the truth is the government fought for years to prevent that happening and then changed its mind when the economy tanked and took the building’s value with it.

What’s changed now? Why is the government suddenly appearing so contrite and anxious to keep Al Barrack hopeful? I’m not sure if this is another delaying tactic, or the government has heard the rumours that Barrack is about to go ‘nuclear’ on the international legal scene and that he has found the financial backers to do it.

The times, they are a’changin

As we recently saw with a legal conflict involving the Grenada Airports Authority (GAA), ‘globalism’ is a many-edged sword that sometimes allows people to seek justice internationally when they cannot find justice in their own countries. In Grenada’s case, a Taiwan bank obtained a US Court order that allowed them to seize all the fees normally paid to the the Grenada Airports Authority by airlines flying to Grenada from the USA.

BFP said in a previous post

“Can you imagine what would happen if some court in New York or London ordered airlines to pay all Grantley Adams airport fees to the court over the Al Barrack debt? How about port fees for cruise ships too?

Wuhloss! That would put the mongoose in with the chickens! If that happened you can bet the government would settle with Al Barrack right away – and that just shows how bankrupt our government is: both financially and morally.”

Maybe our master Bajan economist Owen $ Arthur can chip in some money from one of his offshore bank accounts. After all, it’s only fair that he assist to pay off a financial mess that he and his government initially created.

Nevermind Kurt

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Filed under Barbados, Corruption, Ethics, Offshore Investments, Political Corruption, Politics, Politics & Corruption

Canada probing Barbados Offshore Investment tax losses

Largest Canadian Labour Union calls Barbados “Tax Haven” a “problem”

An article at the Toronto Sun news agency says that a Canadian House of Commons committee recently began probing offshore accounts and tax evasion. Some Canadians are concerned that Canada’s government is “missing out on billions in potential revenue” because of low tax countries. The article names Barbados, Bahamas and the Cayman Islands.

“I was really struck to the extent to which this trend seems to be increasing when we were assured it was less of a problem… This money is not going into investing in real activities and in growing the (Canadian) economy.”

…Toby Sanger, Canadian Union of Public Employees CUPE senior economist. CUPE has almost 600,000 members and is Canada’s largest workers’ union.

This is serious business for Barbados because our national economy and well being are highly dependent upon that offshore investment from Canada. Not only that, our tourism industry is also closely linked with the offshore banking and investment sector. Many Canadians and other tourists who head for Barbados in the winter are coming for their “annual shareholders meeting” that just happens to be scheduled every year in the middle of the coldest winter months.

And don’t kid yourself that it’s about all offshore jurisdictions: Barbados is a big big player in Canadians’ offshore tax strategies. I once heard it said that Barbados is the #1 Caribbean country for Canadian offshore banking and companies. I don’t know if that is still true, but Barbados is big enough that we are squarely in the sights of those who want to curtail the ability of Canadians to pay lower tax rates.

All Hands on Deck!

The Toronto Sun article seems to be a balanced piece that gives both sides of the Canadian debate. There is a side that says offshore banking and corporate centres like Barbados actually benefit the Canadian economy by allowing Canadian companies to be competitive in the world markets.

The danger for Barbados is that in bad times governments can get focused only upon revenues and lose sight of the big picture.

As we’ve seen occasionally in Barbados, governments can raise taxes too much and ‘kill the goose’. Some Canadians want their government to restrict access to offshore banking centres like Barbados, and don’t realize this would harm Canadian industry in the long run.

Let’s hope that our government acts decisively and swiftly to convince the Canadian Government, tax authorities and Canadians in general that both countries greatly benefit from our long standing relationship and the agreements that allow both Canada and Barbados to prosper in the world economy. We are both lesser without each other.

Further Reading

Please read the article at the Toronto Sun, but we’ll reprint it here because sometimes articles go missing in cyberspace and then we have nothing to support our fair commentary. Continue reading

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Filed under Barbados, Barbados Tourism, Canada, Economy, Offshore Investments

Government has no business running business

The opposite of “entrepreneur” is “government employee”

The Barbados Investment & Development Corporation has no problem blowing its own horn about the industrial estates under its care. The BIDC website brags, and not unreasonably so…

“The Property and Estate Management Department oversees the ongoing maintenance of the industrial estates owned and managed by the Corporation. The estates are strategically located across the island, and since the first one was established in Grazettes in 1961, have served as a low-cost base of operations for thousands of locally-owned and foreign-owned manufacturing companies. The BIDC’s industrial estates are a significant feature of the Barbadian physical landscape, encompassing over 90 acres of land. Their contribution to the economic and social transformation of the island over the years has been significant.”

There is truth in that statement, but left unsaid and unknown is the massive cost to the taxpayer due to unpaid rents, loans and the natural inefficiency of government employees pretending they know what business is all about. There’s also the not so little matter of the run down condition of some of the properties that might as well be abandoned. They sure look that way, and no real business person would let those assets deteriorate.

But remember… the opposite of “entrepreneur” is “government employee” – and you don’t need to be a brilliant scholar to work that one out.

Our old friend Afra Raymond just published an article about Trinidad & Tobago government employees pretending to be entrepreneurs while holding on to the public purse in case a bailout is needed. See? Barbados and T&T have a whole lot in common!

Property Matters – The Business of Government

by Afra Raymond

Once again, I am using this edition of Property Matters to consider the ever-controversial State Enterprises, against the wider question of the role of the State.  This is no small area for examination and I start by using what seems to be the favourite quote of Trade and Industry Minister, Stephen Cadiz, “Government has no business running business“.

Given the politics practiced here, it should be no surprise that all our political parties give emphasis to the important role of the private sector in the economy and society and so on.

The line of reasoning goes like this – “The State is only here to facilitate and clear the way for Private Enterprise.  The State does not intend to stand in the way of or compete with Private Enterprise” Those are not actual quotes, but they are just a paraphrasing of the sentiments expressed by various politicians over the years, whatever the party in power.

But the actual scale of the State’s involvement in the economy is in stark contrast to the political speeches.  It is my view that the State is in direct competition with the Private Sector in significant areas of the economy.  The large numbers of State Enterprises are inescapable examples of that.

We have to remember that it wasn’t always so…

Continue reading this article at Afra Raymond’s blog: Property Matters: The business of Government

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

No money to fund Barbados Investment Development Corporation, so shut it down!

A suggestion to save taxpayers’ money

by BFP reader “C” in St. James

As a small business owner over the last nine months I have found it increasingly difficult to contact a Business Development Officer (BDO) at the Barbados Investment Development Corporation (BIDC). It would appear that as the financial situation of the country has declined, monies form the BIDC has been diverted to other Government bodies, accordingly BDOs aware that there is no monies to undertake programs have taken to not answering their telephones or emails in the hope of avoiding having to break the news to their client companies.

My money saving idea is that until the BIDC is fully re-financed at least 90% of the BIDC personnel, including directors and the CEO, should be sent home without pay until such time as there is something for them to do.

I see no reason why we the tax payers should pay for these civil servants to sit and twiddle their thumbs when it is self evident that there are no funds available for them to undertake any meaningful programs to assist local companies. As soon as the funds become available they would of course be re-hired.

This lesson in reality would perhaps also help to give the CEO, BDOs and ancillary staff empathy with the harsh financial realities that companies operate under every single day in trying to maintain a business and employment in Barbados.

Yours Faithfully,

“C”
St James

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

Why Al Barrack will never win against the Barbados Government: The Fix is In!

UPDATED: June 13, 2012

“CONTRACTOR AL BARRACK HAS declared war on Government, saying Minister of Finance Chris Sinckler’s unfulfilled promises had convinced him it was not serious about paying him.

An angry Barrack, who was awarded $34 million by the law courts six years ago after suing Government over the completion of the Warrens Office Complex, said yesterday he was tired of being turned around, and would now do whatever it takes to recover every cent he and his creditors are owed – with accrued interests, $75 million.”

… from the June 13, 2012 Nation News article Fed Up Barrack

Barbados is broke and cannot, will not, pay a court-ordered judgement to building contractor Al Barrack. Mr. Barrack is ruined because there is no real rule of law ‘pon this rock. Successive Barbados governments ignore or obey the courts as convenient and right now it’s not convenient to pay Al Barrack the 70 million dollars as the court ordered.

So Mr. Barrack is in back in the papers saying he has “declared war on the government.” Yes… THAT should teach the Barbados government a lesson! LOL!

The real lesson here is that if you do business with or on Barbados, you’d better pray that everything goes well when it comes time to pay – because the courts don’t matter. It’s all about the cartels. Mr. Barrack thought he was favoured to get a huge government contract without an open bidding process, but it was all a set-up.

Says the Barbados government to Al Barrack… “Thanks, sucker!”

Original story first published April 5, 2011…

Al Barrack says “Don’t trust the Barbados Government!”

by Nevermind Kurt (with Cliverton)

Poor Al has a message for businesses and foreign investors:

Beware when you do business with the government of Barbados, because the court is the government and the government is the court.

The Government of Barbados screwed building contractor Al Barrack $65 million dollars. That’s what the Barbados court ruled. Al built the new office complex at Warrens, but when previously unknown caves raised costs, the Barbados government didn’t live up to their side of the deal. That’s what the Barbados court found as it ruled against the Government of Barbados and determined that Barbados owed Al sixty-five big ones. That’s with an “M” for “million”.

But then…

“Oh? You want the money?” said the same court, “That’s a different matter.”

Poor Al is now reduced to writing letters to world leaders. As if they care and as if those leaders would side against an offshore banking centre like Barbados. A big chunk of the world leaders probably have funds flowing through Bridgetown ‘an their own countries don’t know.

You think they are going to side against Barbados, Al? Continue reading

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Filed under Barbados, Corruption, Ethics, Offshore Investments, Political Corruption, Politics, Politics & Corruption

Barbados insurance company under investigation: Gerova Financial

Brought to you by the same authority who made the Clico collapse possible: Barbados Supervisor of Insurance, Carlos Belgrave

What? Not another scandal involving a Barbados based insurance company? No way!

Although we have few rules for Barbados based insurance companies, we do have a $2,500 voluntary fine for multi-million dollar frauds by insurance companies. Our Supervisor of Insurance, Carlos Belgrave (in cartoon above), is the winner of an international award, so I don’t see what could be the problem.

Prior to being appointed to his regulatory position, (Barbados Supervisor of Insurance) Carlos Belgrave was the General Manager of a local company that manufactures “flour, animal and poultry feeds”

… from OffshoreAlert’s 2006 “Worst Regulator” Award

IMF Says Barbados Insurance Sector Needs “Tighter Regulation” – No Kidding!

What’s the fuss? Just don’t mention names like CLICO, Manulife, British America or a few others and there’s no problem at all.

Except that now the Gerova Financial Corporation is under investigation and most of the board resigned. Ho hum, just another day in the world of offshore finance in Barbados where the rules are a tad different from what some folks might think they are.

It makes one wonder if Barbados ever gets hit with lawsuits for failing to properly regulate the offshore sector. I’ll bet most of those settle pretty damned quickly and quietly. We never hear about them, but I’d wager we Bajans pay up much more than we know…

Statman, Harris & Eyrich, LLC Announces Investigation on Behalf of Investors of Gerova Financial Group

Gerova Financial Group Ltd

CINCINNATI, Feb 28, 2011 (GlobeNewswire)

The law firm of Statman, Harris & Eyrich, LLC, which has significant experience in class actions, announced today that it is investigating Gerova Financial Corp. (“Gerova” or the “Company”) (NYSE:GFC) for potential violations of state and federal law. Gerova operates as a property and casualty insurance and reinsurance company in Barbados, focusing primarily on life and annuity reinsurance. Continue reading

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Filed under Barbados, Consumer Issues, Corruption, Crime & Law, Offshore Investments