The views expressed herein are those of the writer and do not represent the opinions or editorial position of I-Witness News. Opinion pieces can be submitted to [email protected].
Ormiston “Ken” Boyea’s economic difficulties are a stark and painful reminder of the empty promises made by the Unity Labour Party (ULP) and its leader, the Honourable Dr. Ralph E. Gonsalves, Prime Minister of St. Vincent and the Grenadines (SVG), regarding Argyle International Airport (AIA) and the proposed new “city” at Arnos Vale to be built on the grave of a buried E. T. Joshua International Airport.
First, a little background information is needed to contextualise the emptiness of the Arnos Vale “city” promise.
The creation and expansion of specialised economic zones — which is really what the “city” of Arnos Vale represents rather than a typical Caribbean city like Kingstown with lots of private dwellings, business places, government offices, schools, churches, etc., all mixed together — is a product of several factors, the most important of which are population growth and economic expansion, whether internal or external.
SVG has had barely any population growth for the past 25 years and negative or only modest economic growth for several years.
Our population has remained static for many years because of a declining birth rate (due to various family planning techniques and the HIV/AIDS scare which encouraged the widespread us of condoms) and mass emigration, a phenomenon that has been going on almost uninterrupted since the abolition of slavery in 1838. This government, like others before it, encourages both fewer birth numbers and the exodus of our “surplus” (some would say “disposable”) people. The assumptions are that fewer people means fewer mouths to feed, fewer schools to build, and fewer social services to provide and that when our people go overseas they tend to send money home to support their family and friends while helping to counter our enormous foreign balance of payment deficits. These policies are partly counter-intuitive and partly subject to intense public-policy debate. All developed countries want their populations to keep growing via births and immigration, based on the argument that more people means more consumers, which means more producers, which both mean more wealth production, which also means more tax revenue and more economic growth. At least that is what standard economic theory and actual experience usually say about rising population numbers in rich countries.
In developing countries like our own, the sheer lack of developmental opportunities, regardless of population size or growth, justifies a low birth rate and high emigration rate policy. For example, a population explosion in SVG resulting from lower rates of infant mortality and a longer life expectancy, both a product of improved medical care and enhanced disease treatment but in the absence of birth control efforts would put pressure on local resources, especially getting enough to eat from small plots of arable land, to support the burgeoning population. As in other countries, the result would be mass rural-urban migration to an already crowded Kingstown where most new arrivals would barely eke out a hand-to-mouth living. Of course, all this presupposes the absence of endogenous natural resource, industrial, commercial, or service potential that could readily absorb a fast growing population.
With this demographic and developmental background in mind, who is going to support commercial activity by buying all the goods and services available at the new city at Arnos Vale? Certainly not the existing citizens of the country who have trouble enough paying for the goods and services offered by established businesses in Kingstown and elsewhere. A different demographic from the one living on our mainland will have to come into play, namely foreign visitors. According to the Prime Minister:
“… the [63 acres of] lands at Arnos Vale, if properly planned and supported, could be used for a cruise line boarding point or a tourism ferry port and perhaps a seafront boardwalk and a marina.
The options also include high-quality shopping mall facilities — similar to Rodney Bay, St. Lucia — and other retail development concepts and multiplex cinemas.
The lands could also be used for good quality government offices and/or a modern new hospital, high-value apartments and condominium, a major quality hotel, and parking facilities.
“What I am talking about here is not farfetched … ”
Read also: PM details approach to Arnos Vale development
If the proposed “city” at Arnos Vale is meant to be our version of St. Lucia’s delightful Rodney Bay marina, hotel, condominium, resort, indoor luxury mall, and restaurant area, it is the wrong sized-development at the wrong place — the barren and rough sea area at Greathead Bay. The site is simply too small, at about one-tenth the size of the Rodney Bay area, to contain more than a few of the facilities the Prime Minister has listed, unless all the adjoining land is expropriated — the area alongside the runway occupied by squatters, the homes of hundreds of residents on the west side of the airport, the Arnos Vale Ground, and a lot of other nearby property — adding tens of millions more to the huge and growing government debts we keep piling up month after month. Building a Vincentian version of the privately-financed, built, owned, and operated Rodney Bay facilities at Arnos Vale would never even get off the ground, given our poor record of attracting private capital for even small mainland projects.
Everything that I have said so far should have been known to a shrewd, experienced, and well-travelled businessman like Ken Boyea. So how did he go wrong?
In two senses he did not actually “go wrong” at all, because many shrewder capitalists in high-income countries, where it is much easier to make money than in lower middle-income countries like our own, go bust every day. Love it or hate it, capitalism produces many winners and many more losers. Like democracy, it is a terrible system, except for all the alternatives. Mr. Boyea is just another statistic.
Second, in order to succeed as an entrepreneur it is necessary to be willing to take risks (which is why most people avoid self-employment) and to think big. Ken Boyea was willing to do both based on the popular business axiom “grow or die”. But grow or die also has to be carefully qualified by many other considerations: it certainly does not mean “build it and they will rent”. Still, without curious, inventive, visionary, and risk-tolerant people like Ken Boyea, we would still be living in caves.
If he actually went wrong, it was not because he was “ahead of the curve” in investing at Arnos Vale, as he first claimed, and which the Prime Minister rightly disputes.
Real also: Boyea shouldn’t blame delayed new city for ‘yanking of the KFC franchise’ – PM Gonsalves
If he did anything wrong, it was to fall for the “sucker pitch” thrown at him by his cousin, the politician. The first rule of business is — or should be — don’t trust anything politicians say about big projects, especially their completion date. Everyone knows, or should know, that nothing governments do in these 2×4 countries is ever done on time. Second, Mr. Boyea, like most Vincentians, probably wanted to see an international airport built, whether the country needed one or not, and let pride and a false sense of nationalism get the better of him. Third, for reasons unknown, he may actually have believed that a new “city” would be build at the burying ground of the existing Arnos Vale Airport, on the one hand, and that this “city” and the spin-offs from the tens of thousands of additional arrivals at AIA would fill his elegant building with high value tenants and his restaurants with lots of hungry customers, on the other. Fourth, he likely allowed family affection and loyalty, plus a good dose of wishful thinking about the new “city” and AIA, to cloud his good business sense.
The least likely explanation is the one he has most recently given: businesspeople were unwilling to relocate their offices to Arnos Vale because most schools are in Kingstown. After all, Kingstown and Arnos Vale are only separated by a ten-minute drive in the opposite direction of weekday rush-hour traffic. More likely, prospective renters were put off by the high rents needed to finance Mr. Boyea’s mortgage or were perfectly happy to stay in their “rusty” quarters in the dilapidated city of Kingstown. In short, the issue was not enough demand rather than too much supply — which goes right back to the contentious issue that our population is growing too slowly to support economic development in the form of business expansion and upgrading.
Whatever his missteps, SVG needs lots more businessmen like Ken Boyea and lots fewer politicians like Ralph Gonsalves. Hopefully, Mr. Boyea will rise again, bigger, better, and wiser.
This is the eighth in a series of 13 essays on the folly of the proposed Argyle International Airport.
The others may be found at:
- Get ready for a November election!
- Lessons for Argyle Airport from Canada’s Montreal–Mirabel Int’l
- Lessons for Argyle Int’l Airport from the cruise industry
- Lessons from Target Canada for Argyle Int’l Airport
- Lessons from Trinidad & Tobago for Argyle Int’l Airport
- The Dark Side of Tourism: Lessons for Argyle Airport
- Why Argyle Won’t Fly: Lessons from Dominica
The views expressed herein are those of the writer and do not necessarily represent the opinions or editorial position of iWitness News. Opinion pieces can be submitted to [email protected].
Wonderful, incisive, and well-argued commentary. I have been following your posts with great interest. Would love to meet and know you. I can be reached at [email protected]
well written and thoughtful as always. But I still think your conclusions are too dismissive of the tourist industry and of SVG’s potential. A Rodney Bay type development is EXACTLY what SVG needs.
I am no admirer of Gonsalves, but it is an error to believe that ‘new cities’ cannot be built, with success, in the Caribbean. What about Caymana Bay in Cayman, or Freeport, Grand Bahama? As late as 1964, there was not a single motor vehicle in Providenciales, Turks and Caicos. Today it is an urbanized tourist/commercial centre of probably 40,000 inhabitants and dozens of resorts.
With the Grenadines as a backdrop, there is simply no reason a new city (whether at Arnos Vale or elsewhere near the population centre) cannot become the hub of a vibrant tourist industry, drawing millions of visitors.
Again, intelligently written and well thought-out, but I believe the real future of the new city at Arnos Vale lies somewhere between Gonsalves’ hyperbolic optimism and your pessimism about its prospects.
It is not only tourists (whose numbers will grow) but locals who will support such a new development. Islands, let us remember, are a captive market for the smart businessmen. When last I visited, there were no large malls or commercial venues in SVG when compared to Barbados or St. Lucia. Do you not suppose that in itself represents an opportunity to attract the local consumer? Just think how many leave to go shopping on other islands or Miami. Caribbean shoppers in South Florida represent a HUGE market to businesses there. Why not at home?
I also cannot accept the basic premise that rapid population growth is necessary for economic development. Though it cannot be any government’s policy to encourage migration, I accept that up until now there has been minimal population growth in some of our Caribbean islands. But this has not been a CAUSE of economic underdevelopment. The other way around.
It certainly is the case that growing investments (both Foreign Direct Investment and by the likes of Mr. Boyea) will lead directly to population increases, as net migration turns into net immigration as a result of the opportunities brought by investment. We need to celebrate and encourage people like Boyea and I agree with you that it is to be hoped he emerges from this trial stronger and more eager to invest in his homeland.
Thanks for your comments. As usual, I strongly disagree with them and reply with a series rhetorical questions.
If the two elegant and upscale shopping malls at tourist-rich Rodney Bay are half empty most of time (based on my personal observations on a nearly daily basis over a 14-day period last year during the height of the tourist season in February), how can you expect anything but failure from a similar venture at Arnos Vale?
How can we expect any private developers — local, regional, or international — to invest in any of the proposed developments at Arnos Vale when comparable (but much smaller enterprises) are barely hanging on and with no expectation of mass tourism numbers for all the reasons I have given so far and will continue to give in future essays?
How can you call The Grenadines a backdrop when the tourism industries on the mainland and the Grenadines only overlap in a very minor way (e.g., small tourist boat excursions from the mainland)?
How can you call Arnos Vale a potential hub when the hub has no spokes and never will?
How can locals support a new development when they hardly support — and can afford to support — existing upscale mainland enterprises?
How can you support a large mall when all the small malls are virtually empty and contain many shuttered shops (including the cruise ship terminal mall which I visited today)?
How can you ask people — locals and tourists — to buy goods that are twice or three times the price of the same goods overseas because of huge import duties and high VAT rates?
How can you expect the government to lower import duties and other sales taxes when they can’t or won’t collect income tax from rich, middle, and working class people to make up the difference in the revenue lost?
How can you expect Vincentians to shop at home instead of Miami because prices are so high and wages so low at home, for the the reasons given above?
Why do you keep insisting that every single square foot of the Caribbean has lots of tourism and developmental potential when economic theory and practice suggest that tourist and other development is differentially distributed across the world because of differences in climate, geography, natural resources, technology, history, culture, religion, politics, and many other factors?
Thanks for your reply.
Firstly, it is hoped that my comments do not come across as presumptuous or as knowing the facts relative to SVG as well as yourself. If they do, then that is not my intention and I duly apologize. There are, perhaps, regional differences that some of my comments may have seemed to glaze over.
I confess that I have had limited actual exposure to the Eastern Caribbean, although one comes to see the whole Bahamas/Caribbean region in close terms for emotional and cultural reasons. It is hard to accept, for instance, that I am (in Nassau) actually closer to New York or even Toronto than I am to Bridgetown or Kingstown. In this regard, perhaps I sometimes apply too broad a stroke to the region when it comes to my ideas of development. We are, alas, very different in some ways, as you rightly point out.
BUT, I long ago became convinced (when visiting SVG) that its developmental potential is higher than most of its peers. That St. Lucia can have a Rodney Bay or Barbados a St. Lawrence Gap while SVG mainland has no comparative level of touristic development has always struck me as odd for one important reason: neither Bim nor St. Lucia has a chain of islands already on the yachtman’s radar like you have in the Grenadines.
In fact, the Grenadines remind me of the Exuma Cays, only more lush, exotic and topographically interesting. It is amazing to me that successive SVG governments neglected to do what Gonsalves is at least TALKING ABOUT doing: developing the mainland as a hub of a potentially huge tourist industry.
As for the comments about local wages, costs and spending patterns, I acknowledge I am no expert. But it would surprise me if the local economy really featured suppressed wages to the extent that you say, given that it is one part of a currency union that is stable and relatively strong and prosperous. I would suggest cautious optimism about locals supporting any new development. Caribbean nationals are high spenders abroad, as I said, and you have to factor the cost of getting to Miami into the comparative analysis of whether they can be encouraged to shop at home by investment in more local retailing and commercial activities.
Again, I enjoy this kind of lively disagreement and find your analysis interesting. At the end of the day, we will see what will ultimately result in Arnos Vale. I hope for something amazing.
Very insightful article. Thanks for posting.
Comments are closed.