Antigua and Barbuda: Interview with Mr. Brian Stuart-Young

Mr. Brian Stuart-Young

CEO (Global Bank of Commerce)

Mr. Brian Stuart-Young

World Investment News (WI): What can you tell us about Antigua and Barbuda's paradigm shift when it comes to looking at new investors and partners for a sustainable growth?

Stuart-Young (SY):I think Antigua is at a stage where it realizes that it must make a paradigm shift, relative to how it seeks its economic expansion. Traditionally, we have always looked north for economic relationships and, under this north-south relationship umbrella we have heavily depended on northern countries, particularly the United States, the United Kingdom and European countries, with whom we have excellent relationships. They sell us probably 90 percent of our imports, even though some of them are now coming from China, and we sell them basically 100 percent of our services, largely represented by tourism products. Therefore, in the current world economic circumstances, organic growth with our traditional partners will probably not exceed between five and ten percent per year. If we are looking for a shift to expand and grow our economy, we need to turn our attention to non-traditional partners. This means that we now need to look more closely at south-south relations. In this regard, we have found that over the last ten years, economic cooperation has heavily come from south-south relations, especially from China.

In 2018, we have received approximately USD $100 million under economic cooperation initiatives from China, in a combination of concessional loans and grants. No other friendly nation has provided such a level of economic cooperation and commitment to the development of our country, mainly in regards to infrastructure development. This cooperation has resulted in Antigua and Barbuda having what is considered to be one of the prime airports in the region andthe relationship with China has more recently allowed us to receive a concessional loan for the restructuring of our commercial seaport. Both facilities (the airport and the seaport) have been qualified to receive financing from China's Export and Import Bank at very competitive pricing and beneficial arrangements. This will enable us to also make our seaport a transshipment hub, supported by a world class airport.

With this, we will have achieved essential transportation channels that any country needs to be competitive. We believe that it is important to open up new doors with our southern partners. Hence, linkages for connectivity and air routes have become very critical for us. We are actively seeking to have a closer relationship with China as well as the UAE. We certainly anticipate that in 2019 there will be steps taken to make this closer connectivity between Antigua and Barbuda and China, as well as the Middle East hub of Dubai, a reality.

(WI): The role of the banking sector and financial services in the PM's economic powerhouse vision plays a key role as the country's economic backbone. The Bank has been involved in some of the country's flagship projects, providing banking and escrow services to Public-Private-Partnerhips (PPP) and real estate projects. How would you define the Bank's role in the country's socioeconomic development as a key financial institution?

(SY): We provide wholesale banking services to the government as well as banking services for large projects, such as hotel development projects. We believe that a bank, particularly an indigenous one, must look fairly at both retail services as well as development services. Without such a collaborative approach, essential development services will not be able to fully develop and can flounder.

As a wholesale bank, we have worked with the government in some of their PPP initiatives. We worked with them in the acquisition process of the West Indies Oil Company for example. Global Bank of Commerce (GBC) provided the critical financing bridge necessary for the purchase, and has continued to work with the government in a variety of different ways.

We have also worked in some of the major hotel projects on the island. Through our escrow banking services, we facilitate the drawdowns of loans acquired for development projects such as the Deep Water Port Expansion. We also manage and ensure proper revenue gathering, to provide the required debt servicing of facilities.

We believe that innovative financial services are critical for a country to be able to achieve its full growth potential. For example, if we want to attract the Chinese tourism market into Antigua and Barbuda, we need to have the financial infrastructure necessary to facilitate Chinese tourists who will come with their own payment cards from China, and not exclusively focus only on VISA and MasterCard as credit platforms. We have to be able to recognize that China, like a growing number of other countries in the world, are using alternative payment systems. When you go to China, you find that they use platforms such as WeChat Pay and Alipay. So, in order to properly attend the needs of new tourism markets, we must have a financial system that can support a broader spectrum of payment platforms. We must position ourselves beyond the curve at all times and be able to anticipate how to prepare our future financial needs, and be ready to provide the CAPEX required for it.

(WI): GCB has positioned itself as a pioneer in electronic financial services; what can you tell us about the Bank's role boosting fintech, and how is it impacting commerce and small and medium businesses?

(SY): Even though it is currently not going as fast as we would like it to, we are committed to moving in the direction of the digital application of financial services. A bank must serve the lifestyles of the community and the clients it serves. If the community is moving towards increased use of digital services, we have to accommodate this service. Therefore, it is very important for us to be able to balance fintech requirements. In today's world, digital services have to take into consideration the world of compliance as well. As we grow, we have to recognize all the broadened requirements that flow from international governmental organizations such as the Organization for Economic Co-operation and Development (OECD) or the European Union (EU), which have a tremendous influence over the financial world.

As a country, we also need to develop a broader range of correspondent banking services. We must be able to develop correspondent banking services with countries besides the United States and the UK, such as China or the Middle Eastern region. There are excellent institutions that we could work with in Africa as well. We need to broaden the scope of the financial services we offer. You will always find that tourism and the movement of people that comes with it, results in a number of those tourists exploring opportunities for investment in the country. Moreover, as they explore opportunities for investment, if the local financial institutions do not have banking relationships with their counterparts in their countries of origin, the next step of accepting investment flows and beginning trade between the two parties becomes more difficult. Therefore, the building of financial relationships with these new markets is essential.

(WI): You have become the first bank in the region to be a card issuer and acquirer for China's UnionPay, expanding financial services from China into the region. What can you tell our readers about this milestone?

(SY): It certainly heralds the way that we want to be seen. We are opening our doors to China. In the same way that China has opened itself, we are also putting ourselves in order, to be able to accommodate Chinese visitors and to be able to serve them in the most convenient and efficient way.

We also have to take the next step and open up ourselves to multiple currencies so that we eventually reach the stage where we can do trading in other currencies. We recognize the strength of the Chinese renminbi (RMB), which serves now as our reserve currency, and we believe that the latter will give us the opportunity to provide RMB related services, not only in Antigua and Barbuda but in the Caribbean region as a whole. We expect that using the RMB as a reserve currency will enable us to establish relations with Chinese banks that will help us to broaden our scope.

(WI): Do you think trading in RMB is something that the financial services system, and the region as a whole, is going to start paying closer attention to?

(SY): There are a number of Caribbean nations that are working with China. Antigua and Barbuda established relations with China 35 years ago. All concessional financing from China in the region is conducted in the Chinese currency, the RMB. Therefore, it would bear well for us to be able to repay this financing in RMB as well as being able to establish financial services relations with Chinese banking entities. Through a bank account, our Chinese counterparts would collect RMB from several operations, and then, as our government needs to servicee its debts in RMB, it can make use of its available resources in such institutions.

There are other aspects necessary for us building an economic powerhouse, in addition to critical financial infrastructure. One aspect that must be addressed is that we must have a world class internet connection. To this end, we are aware that the government is poroposing the undertaking of an undersea direct connection to provide much faster access to serve a national broadband network. This will greatly assist the development of technology driven services.


I recently visited Shenzhen, and toured the corporate facilities of two extraordinary companies, Huawei and BYD. Both of them provide services very necessary for our national development in telecommunications and in green energy. We are exploring business opportunities with these corporations.

(WI): Going back to the country's partnership with new strategic markets, Antigua and Barbuda has been the first country in the region to become part of the iconic Belt and Road initiative which will improve the country's infrastructure and competitiveness. What role is China to play in the country's economic development, and what are some of the areas that present the most opportunities for international investors and PPP schemes?

(SY): I think that China will continue to be a major part of our development. We need to attract Chinese investors, and by improving air connectivity between China and Antigua and Barbuda, investors will have every reason to come here and engage in investment projects, such as hotels and infrastructure eprojects. If we have the necessary traffic for visitors l, then there are good reasons for Chinese investors to consider investments that would facilitate the home porting of cruise ships here to serve Chinese visitors wishing to explore various islands and getting a full vision of the history and beauty of the Caribbean..

There are still several areas of cooperation and, as you have mentioned, being a member of the Belt and Road Initiative will further support the development of our infrastructure. At the same time, infrastructure projects will have a spill over effect into other areas of the economy, therefore supporting and enhancing socio-economic growth and development. One area in which we would like to see development is to improve our waste treatment and we need to be able to convert black waters into secondary waters. Presently, water in Antigua is mainly derived from reverse osmosis, a fossil fuel driven process. This enormously elevates water prices. Therefore, we are using the most expensive drinking water for household and land irrigation.. At this time of the year we have two or three cruise ships arriving every day. As they come in, we have to refuel them, take out the black water and we need to be able to put on new water for cleaning. We consume about eight million gallons of water a day, out of which, basically 100%, is coming from reverse osmosis.

(WI): With over 35 years of experience in financial services, the Bank has managed family investments for generations and is recognized for its superior wealth management and banking services. When talking about wealth management and international asset management, what sets the Bank apart?

(SY): I think we have been able to be innovative and offer ground-breaking products and services to our customers. We have also been able to turn the government's attention to the need for these services. One of the areas that we are promoting to government at the present moment, is in regards to the creation of real estate investment trusts to support infrastructure and tourism developments. Currently, there are several other countries that are successfully operating REITs, but none in the Caribbean region. We hope to introduce this as a meaningful financial service.

We need to build greater substance into our international business services. A real estate investment trust is one in which both the foreign as well as the domestic market can participate. Such investments provide higher returns, compared to those offered by banks, and also act as an engine of growth for new developments. Therefore, real estate development and infrastructure development can all be done in one package through a real estate investment trust. I hope that in the near future, we will have the proper legislation for Antigua to become a leading real estate investment trust jurisdiction.

(WI): I would like to finish the conversation with a message to the 14.6 million readers of the South China Morning Post. What message would you like to convey to them?

(SY): I would simply say what the father of their nation, General Mao, said: "A journey of ten thousand miles begins with a single step". I want them to know that Antigua and Barbuda took that first step in 1983, when our nations first established diplomatic relations. Our current administration is fully committed to building a strong friendship and partnership that will be a win-win opportunity for both the people of China and the people of Antigua and Barbuda.