World Investment News (WI): What have been the measures taken to impressively turn around the country's economic and financial sector in only four years?
Prime Minister Gaston Browne (GB): We inherited a country that was mired in debt, a crumbling infrastructure, high unemployment and a number of social ills. Within this space of about three and a half years, we have been able to literally reverse that environment and to restore the country to good fate, to the extent that Antigua and Barbuda has consistently been the best-performing economy in this region and it reported a growth rate in excess of 6% in 2016.
Unfortunately, in 2017 we had a hurricane and that resulted in a reduction in GDP, because of the damages caused by Hurricane Irma. Last year, we grew 3,5% as a result of the effects of the hurricane. In 2017 and 2018 we saw some restoration of the high level of growth, up to 5% which incidentally was the highest in this hemisphere. This year, we are projected to increase growth to 6%, so our economy has consistently been top performing. We are anxious to continue attracting more responsive partners in order to sustain our growth level. Therefore, we see China as a great market. We think that Antigua and Barbuda can provide Chinese investors with the stability they need, especially when looking at the real estate sector.
Nowadays, the value of real estate exceeds the sale price, to the extent that there is a premium that investors could gain if they purchased real estate in Antigua and Barbuda. Therefore, it is a form of capital gain that can be made immediately upon purchase. Moreover, the prices in the real estate sector have been stable over the years. This means that we have never seen a decline in real estate property. Even though there is a constant increase in availability, properties can still be purchased for around 35% less than their market value, so many opportunities exist. This represents a capital gain opportunity for investors, and properties can also provide a sustainable income. In brief, real estate is certainly a good investment in the Caribbean. In Antigua, we have the Citizenship by Investment Program, which means that if someone buys real estate for more than USD $400,000, the buyer can become a citizen. In Antigua and Barbuda, we have very good infrastructures because we have focused on building and improving the airport and the seaport, amongst others.
We are about to invest almost 100 million XCD to further improve the telecommunications infrastructure, because our intention is to diversify aggressively into block chain and crypto currencies. Our industries are estimated to grow around 25 billion XCD within the next few years and we want to make sure that we are well positioned to capitalize on that space. In fact, we have the intention to make Antigua and Barbuda the crypto currency block chain hub for the Caribbean region. We are putting legislative and administrative frameworks in place, which will be completed within 60 days and we may be able to take applications from around the world for individuals to start operating.
Moreover, we have legalized the use of cannabis for medicinal purposes and have received a lot of interest from international firms in this area, given the timing and the great investment opportunity the medicinal cannabis market represents.
Furthermore, we are about to pass the Real Estate Investment Trust legislation to provide opportunities for both locals and foreign investments and the adequate policy climate to ensure optimal returns on investment and low taxes (taxation will be no more than 10%), which will satisfy the requirements of the OECD and the EU. This in itself has been a problem within the investment space globally, as countries now are moving towards eliminating profit shifting and evasion of taxes. We are now developing a stable investment framework in which investors can predict a return without violating any international rules. I consider that our government has created a very healthy and legislatively safe investment climate; and In terms of physical safety, we literally enjoy one of the lowest crime and violence levels worldwide.
Additionally, we do not have personal income tax, since we believe in strong disposable incomes. What we want is to make sure that individuals have strong disposable incomes and, in that way, they can increase their spending, which in turn helps to support robust economic growth and development. We ensure that when companies invest, they get the support and concessions they need to reduce their risk. For example, whenever there is a large investment, companies will get a duty tax concession to all their capital purchases, building materials, etc. The whole idea is to reduce the costs of the investment to make sure that investors can enjoy a good return on investment. Furthermore, we give tax concessions on corporate taxes, no withholding tax restrictions, where profits can be easily repatriated.
In conclusion, Antigua and Barbuda has one of the most attractive investment regimes in the world, in fact we give up to 20 years of tax free concessions. Moreover, we are making sure that the investment climate is healthy so we can continue to attract investments and have consistent robust economic growth and development.
(WI): What are the key differentiators between your Citizenship by Investment Program (CIP) and other CIP's offered in the region?
(GB): When it comes to transparency, accountability, and integrity, our CIP is superior to all others. We look to attract the best investors in the world. We do not cut corners, we are very thorough in our due diligence. A prospective CIP citizen can understand that when he or she acquires Antiguan citizenship, it is a citizenship of integrity, which will continue into perpetuity. Our CIP is not one that will be subject to changes because of weaknesses in the operation of the program.
In comparison to other Caribbean countries who offer CIP's, Antigua and Barbuda has far more to offer. We are literally the largest economy in the region and we have one of the highest incomes per capita. We have the best infrastructure: the educational infrastructure, the physical infrastructure and telecommunications infrastructure; and all this gives us a competitive edge.
We are doing a couple of things, that will be completed shortly, to increase even more our competitiveness vis à vis international investors. For example, we will be accepting payments in Renminbi, which I deem will be a major selling point. The reason why we can afford to do the latter is because we do a significant amount of trade in Renminbi. There is no other country in the eastern Caribbean sub region that is more closely aligned to China than us. We have been increasing bilateral engagements between both countries, which enables us to accept payments in Renminbi without worrying about any form of adverse movement. The level of friendship and the camaraderie between Antigua and Barbuda and China has been so strong for many years now that Chinese visitors are welcomed into our country with arms wide open.
Another strength of our twin - island state is its multicultural society. There is no other country within the region that has such a diverse population as ours. Someone who acquires citizenship through CIP does not have to worry about any form of discrimination in Antigua and Barbuda. We are a multicultural society that embraces everyone. A Chinese citizen who is willing to relocate here and have their children in school has nothing to worry about. What we need though, is an increase on Chinese investments in the country to give a more tangible effect to our alliance. For example, I think there is a scope for the establishment of a Chinese themed hotel here, with Chinese architecture and a Chinese feel; this way one can enjoy a piece of China in Antigua and Barbuda.
I would like to take the opportunity to invite Chinese investors to invest in real estate properties in Antigua and Barbuda, and particularly in the hospitality sector -through the CIP-. I definitely see the hospitality sector as a great investment area yet to be explored by China. The way such investments work is that interested individuals have to come up with the initial investment capital and through the CIP they can recover their capital plus a profit. I believe this to be one of the best opportunities for any person in China who desires to diversify its risk and invest in Antigua and Barbuda, a stable market that is very closely aligned to China and where they face no possibility of expropriation.
(WI): How do you see the China-Antigua relationship developing in the medium term? What would you like to achieve, in terms of further enhancing the partnership between both countries?
(GB): We see possibilities for some level of joint ventures between both countries, and we have already sent them a proposal in which we are looking at a potential joint investment between our countries. Taking into account our closeness and friendship, we think it is important to take our relationship to the next level, and a joint investment would signify an even greater level of partnership between our countries.
We understand global geopolitics, and we recognize that China has gone the extra mile and beyond the call of duty to work with us and we will reciprocate equally. We would like to see greater people to people exchanges between the two countries; airlift is another area that should be explored. These are just some of the areas for cooperation that we are currently exploring, in order to ensure the increase of trade and people exchanges between both countries.
In fact, we would like to be in a position where we can buy more products directly from China, instead of going through intermediaries and buying them at a costlier rate. Our relationship with China is easily the most important bilateral relationship for us, and we would like China to enjoy more of our trade. For example, small as we are, we have a trade surplus with the United States of about USD $500 million per year. We would like to allocate, at least a portion of that surplus to our trade with China, because they have been closely assisting us with our development. As a matter of fact, the products that we currently purchase from the U.S. are actually manufactured in China. We are also considering increasing our physical presence in China. Presently, we have a non-resident ambassador to China, but in 2019, we will be seeking to increase our physical presence in China through a successful businessperson that can help operate the Antigua and Barbuda diplomatic mission in China.
(WI): Hon. Prime Minister, I would like to finish the interview with a message to our 14.6 million Chinese high-profile readers. Why is now the time to invest in Antigua and Barbuda and what makes the relationship between the two countries so remarkable?
(GB): We are the fastest growing economy in the western hemisphere, the most stable, with the lowest levels of crime and violence and with a great investment regime. Antigua and Barbuda is certainly the best country for investments within the Caribbean and beyond. We encourage investors not only to invest in our country but also to visit and enjoy the beauty of Antigua and Barbuda. A country with one of the finest climates in the world, with incredible natural landscapes and some of the most beautiful beaches in the world - and with 365 beaches in Antigua, one beach for every day of the year -. People here are very friendly and we are a multicultural society. Chinese businesses operating in Antigua are becoming less and less unusual, and there are countless opportunities yet to be explored; and a growing Chinese diaspora, that has been welcomed with open arms into our society. I want to say to the readers that in Antigua and Barbuda we are ready to welcome them and receive them warmly.