“To lay, with one hand, the power of the government on the property of the citizen and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes is none the less a robbery…” ~ Samuel Miller

 

In an act screaming of blunderbuss and willful myopia, last weekend, the Government of Grenada saw it fit to award a multi-million dollar private enterprise (Sandals Resort International) a multiple tax break.  A tax break embodied as a sweetener of almost coma-inducing diabetic proportions in the name of development and job creation.

It was with a total suspension of belief that we both witnessed the Minister of Finance, a self professed economist; proudly boast of the “economic incentives” that would continue to line the pockets of Sandals for the next three decades.  Sandals’ own CEO confirmed the agreement between Sandals Resort International (SRI) and the government of Grenada by which the government of Grenada waives corporate taxes for 29 years, property taxes for 25 years, customs duties on all capital inputs for 25 years and an extension of the duty waiver on alcohol from the usual 15 to 25 years.  Cue series of exclamation marks. These waivers are return for the purported $100 million dollar investment SRI would be making in Grenada, which is a fallacy as would be explained.

In layman’s terms (because taxation jargon is notoriously opaque) this means that Sandals pays zero taxes on all profits it makes in Grenada. For thirty years. Corporate tax stands at 30% so Grenada will lose 30% taxes on hundreds of millions of dollars. Further, the press release issued by Sandals also states that this alleged $100 million “investment” into La Source covers the cost of lands and additional property acquired from the Taylor family. This means the real “investment” figures are therefore much lower than the 100 million dollars advertised. So although the purchase of property comprises a significant part of the deal, Sandals will not even pay the 0.3% tax on the land it acquires or the 0.02% tax on its buildings; and it will not do so for any other land it acquires for 25 years. In addition, any equipment or structures that Sandals chooses to import will be duty-free for 25 years and it will be free to import as much alcohol as it wishes to for its all-inclusive guests, without duty, for 25 years. Even to those of us who do not profess to be economics graduates, this deal reeks of the word “mistake”.

It certainly isn’t our intention to belittle an investment of $100 million US dollars (or rather far less, as earlier explained) in these tight economic times. Even with the promise of an additional 200 jobs raising rising to a headcount of 400 based on Sandals’ press release. Still the forbearance on the revenues given a waiver in this deal strikes as way too much given for way too little. Must we always genuflect before these gods of “foreign investment”? Without a doubt, with some ingenuity, creativity and imagination, our own local manufacturing and agro industries could be supported in a similar fashion to create much more than 200 jobs, and without requiring such deep tax cuts.

For a nation as indebted as Grenada, the implications of these terms are profound.  With an ever increasing unemployment rate, glaring social issues requiring governmental funding, an inability on multiple occasions in recent months to cover the payroll needs of public servants including teachers, doctors and nurses, potential default on its debt obligations, and a health care system on the verge of collapse, Grenada is already in an emaciated financial position. Its coffers are too malnourished to withstand this gluttonous forbearance on essential revenue for the next thirty years. Can we afford to postpone much-needed deposits into our national Treasury? How will the employment of an additional two hundred locals, most, in low-paying roles, stimulate economic growth? This deal smacks of a hastily contrived opportunity to woo public confidence. Even accepting that tax breaks were necessary to close the deal, reduced corporation tax in a staged and contingent manner possibly on the first year of profit or for a limited number of years, would have been a sensible option. It may be that the negotiators are not familiar with more nuanced form of taxation policies such as reinvestment credits, tax abatement by specific percentages for specified periods, or reduced sector rates, all of which would have been much more suited to the project than a flat rate tax holiday.

All of the above is without even referencing the solid economic theories underpinning economic development and international trade studies by the World Bank, the United Nations and academic institutions. Research from these institutions find that tax incentives do not increase the aggregate amount of foreign investment available to developing countries. In addition, they have found these incentives do not create a net transfer of taxation from taxpayers to investors. In other words, our Grenadian vendors, teachers, policemen and nurses are subsidizing and financing Butch Stewart.

We preface the above to say that we are not opposed to Sandals’ presence per se in spite of our personal objections.  Grenadians reliant on jobs related to this industry will be more than grateful.  However, we must note Sandals’ very ethos is reliant on the “all-inclusive” sale, where the local environs inevitably suffer because all accommodation, meals, soft drinks, tips, recreational activities, entertainment and drinks are included in a flat rate cost, disincentivising local expenditure. Sandals’ guests will not be encouraged to get out of their infinity pools sipping their tax free Mai Tais to patronise and support our local economy. Most of our tourist and spice market vendors in the market will not benefit. Most of our local restaurants will not benefit.  Only a few selected tour operators will benefit, if at all. Instead, land prices will increase, there will be a drain on our water resources (these infinity pools do not come cheap) and our local suppliers will be priced out of the market. Not to mention the thousands of well educated underemployed or unemployed young adults who will remain so under this acclaimed deal.

This decision is also a foolish one because it belies our naïve and amateur approach to marketing and foreign investment and our inability to recognise that our country is a partner, not a charity. With frequent plugs on Wheel of Fortune and countless tourist magazines, Sandals is a well known and highly publicized luxury brand.  But so is our country. It is significant that the chain boasts of world class locations in Jamaica, St. Lucia, Antigua and the Bahamas.  Yet, we note that Butch Stewart stated during his press conference, announcing Sandals’ arrival to Grenada that this was a dream realized after twelve years of pursuit. Grenada is in a unique position; it boasts unparalleled beauty, has a very low crime rate and a highly educated work force.  In our view, packaged right, this should be incentive enough.

This unreasonably large tax deal has done nothing more than to undercut local hoteliers and to create a precedent for investment opportunities- now that this deal is public, no other investor will be inclined to invest in Grenada for any less. Via this deal, our political leaders have essentially presented Grenada’s economically struggling rump for a very long and public ravaging.

__________________

Akima Paul

Akima Paul is a UK and US qualified lawyer. She studied Law at the University of Cambridge and the University of Paris. In her free time she enjoys reading and creative writing.

 

 

Salisha Francis

Salisha Francis is a member of Grenadian Diaspora currently residing in Germany.  She attended Saint Joseph’s Convent St. George’s before migrating to the USA. Salisha acquired her BA in Psychology from the College of Notre Dame of Maryland. Her plans are to return to Grenada to contribute in the field of social services.

Deal or No Deal: Grenada- Sandals Partnership Debunked
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  • Personally, I agree whole heartedly with the comments made.

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  • Gus Fisher

    Total lunacy Mitchell behaves as is if GRENADA is HIS property.
    In opposition the bastard criticised the NDC for the Sandals deal, now in government he goes further. Was he paid a bribe?

  • Salisha F.

    Bahamared Grenada’s current Tourism industry is does not contribute to the national wealth as you have outlined it does in Bahamas. I fact, I can assure you, with a fair amount of certainty, that the majority of the employees working at our local hotels are paid under $3000. Let us suppose they are paid $3000 a month, now subjecting them to taxation at the end of the year that is $36000 EC dollars. That converts to $13, 333.33 USD. That is beneath the poverty line for the mainland US and I am not sure that a salary of that amount would “boost the local middle class” in the Bahamas. What we have expressed in this article is not opinion – it is the no frills attached facts of the Tri Island State of Grenada, Carriacou and Petite Martinique.
    WE do not suppose that Sandals having satisfied their goals in 15-20 years will pick up the physical facility and leave. Rather, the more likely outcome could be, in a scenario such as this, our national Gov’t may have to count a loss. True this is speculation on our part. I suggest that it would behoove you to understand that our economy and that of the Bahamas are different in leaps and bounds. Its not an issue of politics its an issue of forward thinking and planning and economic leadership; it is an issue of will full ignorance to the immediate needs of an ever increasing marginalized youthful educated population.

    • Thank you for your reasoned reply. I do note certain differences in the structures of our respective economies and I will have to defer to your greater knowledge of local circumstances.

      However, there are certain universal realities that I feel this article and the responding comments either ignore or misinterpret. For instance, you speak of low wages being offered at resorts like Sandals in Grenada. I can assure you that, in line with the simple laws of economics, wages will move upward in an atmosphere of more investment, higher profits and tighter labor conditions in the industry. That is simple economics.

      I note the earlier poster replied to me pointing out that Grenadians have bills to pay while the profits will supposedly go outside. But where? Where are they going to? Aside from the obvious (WAGES) do they not buy local goods and services? Do the top executives not live in Grenada? Do they not do their grocery shopping there? Visit a local doctor? Buy goods and services every day? Do you honestly not see a positive nexus between this and the ability of Grenadians to pay their bills?? It amazes me if you do not.

      Too many in our region have a misunderstanding of and suspicion of tourist as an engine of growth and increased living standards. There is a sense that it somehow just benefits some bogey man outside. This view is utterly misplaced, yet it has helped keep much of our region underdeveloped as they look for ‘real’ industries while the realist industry on earth is staring them in the face. Will Grenada lose by giving incentives to advance its profile in this extremely beneficial industry? Of course it will not. It will only gain. .

      I was friends with the late George “Mario” Bullen when I studied for the Bar Finals in London in the mid-90’s. In fact, with Vincentians Linton Lewis and Blazer Williams, we formed a little study group (although they were all much older than I) which more often than not strayed from the law to issues of Caribbean development in General. As you may know, Mario served at an earlier point as head of Grenada’s Tourism Authority. From him I learned all I know of the attractions of Grenada as a tourist destination. I am therefore not surprised that Sandals has decided to go there.

      But I am frankly surprised that many of the old, spurious arguments once heard here about the supposed ‘giveaway’ of tax concessions are now being presented to Grenadians at a time when their country finally seems on the verge of a real breakthrough in tourist investment. Sandals may have its faults (here they initially paid less than the industry average in wages, but simply had to increase them in order to compete) but I can tell you that it is one Caribbean company that pulls its weight and delivers huge benefits for a host country. I hear today not a whisper of complaint about Sandals being here, as they are a large employer and help to market the country. In fact, as they have their own large loyal customer base, just having them here guarantees a certain (impressive) number of room nights.

      • I’ve VAT enough…

        “benefits some bogey man outside”. Perhaps you have not researched where the 15% VAT tax money goes??? It’s certainly not being spent in Grenada my friend!

  • I simply find it hard to believe that anyone can take the view advanced in this article. The more a country does to encourage branded and high profile tourism development, the more it benefits economically and then is in a position to negotiate with the world from a stronger position.

    I am from the Bahamas and I can assure you that the decision to grant concessions to Atlantis, Baha Mar and other such projects is directly responsible for the success of our economy. This now means that there is such confidence and eagerness among investors to develop resorts in the country that the government here literally picks and chooses which it will allow to enter the country.

    It would be the height of idiocy not to extend very competitive terms to this brand to enter Grenada, which has had a very low profile to date in the tourist industry.

    • John H

      Building foreign wealth does not directly translate to building citizen wealth. The profits of these companies leave the island and are not given back to the workers with increased salaries. It’s exploitation.

      • what a thoughtless and senseless comment. Profitable resorts do not translate into higher salaries for workers? Then can you explain why the salaries in the Bahamas are about five times the regional average?

        At present, Atlantis (one single resort) employs 8,000 Bahamians at an average wage of US$35,000. It enjoyed large concessions when it established itself here. But the decision to extend those concessions has boosted the local middle class, increased salaries demonstrably across the workforce and brought huge indirect benefits to local business owners, entrepreneurs, professionals and merchants who benefit from the increased consumption of their goods and services by higher waged employees. Do you really understand so little about economics as not to recognize that?

        At this moment, Baha Mar, another resort of the size and scope of Atlantis, is under construction and has benefited from similar massive concessions. When it opens, there will be a competition for skills and workers with Atlantis, further boosting local wages and, ultimately , local ownership in the economy.

        What exactly is ‘citizen wealth’? Sounds like a political soundbite for armchair theorists not interested in the real world.

        If you mean to suggest that the physical plant built by foreign investors somehow remains outside the country, then I invite you to show me an example of foreign investors having built a resort then taking it with them when they leave. It does not happen. Rather it continues to benefit the host community.

        I just hope Grenadians are smart enough to ignore naive and silly opinions such as those bandied by these young ladies.

        • Calling out foreign exploitation

          Disregarding your arrogant jibes. Everyone sees Grenadians struggling to pay rent and put food on the table for their families while resort owners seldom even live on the island.

    • Gus Fisher

      This is not the Bahamas pal

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  • George Whitfield

    This comment is neither in favour of, nor in opposition to, the Sandals “deal”. I just think that the authors have tended to stoke a negative attitude without necessarily considering the fuller picture.

    I speak with some authority having designed the original Couples concept which Butch Stewart happily admitted he copied word for word, in those heady days way back in 1980 when the all-inclusive was re-invigorating Jamaica’s moribund economy, let alone the whole outlook for a new era of hospitality potential in the Caribbean.

    But back to Sandals and the present day in Grenada. Butch Stewart’s company and its off-shoots are easily the largest hospitality chain in the Caribbean. Grenada is by no means the first Caribbean nation to have had the terms of a deal for a Sandals hotel forcefully dictated to it. Just ask the Bahamas. Choosing Sandals as the brand to open a hotel in Grenada assures stability and recognition. It assures quite a few other things also. Like scheduled air services into the country without which the other 268 (Trip Advisor’s figures) ‘hotels’ in Grenada might suffer even more than from the taxation they endure. And it brings only the third true “chain” hotel operation to the island after Radisson and Rex, neither of whom have a particularly enviable record of Caribbean resort operations.

    But your article left an important number of questions unasked and observations un-noted. Firstly, the fact that there was a void that Sandals could fill at La Source was entirely due to the internecine strife within the Taylor clan which has bedevilled almost every aspect of the operation of La Source from its inception right through to the idiotic time it took to resolve family disputes so that the hotel could be re-built after the hurricane. The interference of non-hotelier factions of the Taylor family, with no knowledge of either hospitality or marketing, meant that Sunswept Resorts which operated La Source could never realise the full potential of the hotel which should always have been a “Le Sport – The Body Holiday” brand as part of a chain operation of this unique and successful destination spa concept across the Caribbean. I saw the conflicts first hand. Some of their meetings were in my offices in Canada.

    As I read your article, I speculated on the reasons why Sandals had been selected and who else the Grenada Government might have approached. For instance, the first choice must surely have been Sunswept Resorts out of St Lucia who had operated La Source from its first days as a new hotel back in the early 1990’s. With Grenada’s most enviable reputation for unspoiled beauty and safety, would other luxury class operators not have been seen as prime candidates, One & Only Resorts, Rosewood, Six Senses, Four Seasons, even Couples? Why Sandals, which caters to a very mixed but primarily mid-market all-inclusive clientele?

    Then there are the perks and incentives with which your article deals in some detail. Which makes it all the more surprising that you fail to mention what nature of work permit relaxations were part of the Sandals deal. In my rather extensive past experience of establishing new hospitality enterprises in different Caribbean countries since Hedonism in Jamaica in 1976, the one item that was almost guaranteed to stir up the most controversy was how many non-indigenous workers would be allowed work permits, for how long and under what provisions. Given that Sandals has the Sandals Foundation dedicated, we’re told, to Education, the Environment and Community, one might expect that there would be some generous provision for non-Grenadians to work at Sandals La Source for a limited time until Grenadians themselves could satisfy the Sandals requirements and graduate from whatever courses were made available through the Sandals Foundation. Is this the case or has Butch also “negotiated” carte blanche for non-Grenadian workers as part of his deal?

    It has been said that Butch Stewart is more powerful than many Caribbean prime ministers. If this is the case, and Sandals is using this power in some sort of neo-colonial strategy to negotiate on their terms only, then your article is right to question the deal. If, on the other hand, Sandals was the only chain from among many approached that was prepared to make the investment required to open a new and internationally branded resort in Grenada, perhaps the negatives perceived by some in the generosity of the deal offered to Sandals can be justified in light of any number of associated benefits, just some of which I have attempted to highlight here.

    • Paul Hughes

      Butch Stewart, Peter de Savary, Georges Cohen, and even Leon Taylor…. All got investment packages, each depending on what the norm was for the time they were kicking off their projects….

      Again even though the authors are well travelled and well educated, it seems that stating facts don’t paint the whole picture and do give a ignorant perception to what is needed to attract foreign direct investment .

  • Mark

    I think you seem to have misunderstood that the cost of competing is already on the table. Many of the so called virtues are from an inward looking perspective not from a world wide view and investors can go anywhere. Grenada as a country has many virtues, but those of us that live here experience the reality daily.

    Grenada is a risk and the return has to be backed by incentives, massive debt does not help investors confidence in a country they do not know. Perhaps a fresh perspective would create a new set of ideas and business models to drive the country and future generations rather than a ‘me to’ approach.

    Tourism is a hard business and any hotel owner will tell you it is not the massive money maker everyone thinks it is. Transparency, level playing fields and investment in our country’s and childrens future should be the main drivers of any investment strategy.

    Tourism has been actually shrinking for the past decades, what new hotels have been built, what change in room stock have we experienced?

    Let us also remember when discussing in hindsight the taxes lost of a project that would not be here unless we accept the offer, we are not in any position to negotiate really, you just think you are. What has this cost the nation compared to a bankrupt La Source project, which was actually a burden on the financial institutions on the island.

    What we must understand as a nation is what we are prepared to give away and have a long term plan to ensure we have a cohesive land plan (hahaha, that would be good) to avoid piecemeal bad decisions taken out of context for short term gain.

    Its good to be debating and discussing these ideas, to help us all understand what this means and how to move forwards for the future of Grenada.

    • Paul Hughes

      >I think you seem to have misunderstood that the cost of competing is already on the table. Many of the so called virtues are from an inward looking perspective not from a world wide view and investors can go anywhere.

      You have summed it up in a nutshell here. The government will probably never look at legalizing gambling, marijuana, even prostitution, and gay marriage or any other progressive out of the box ways to generate income so don’t why the author is knocking them for doing what is “standard” practice.

      There are huge operating costs that goes into running a resort of this size that Grenada will benefit from, far beyond local salaries and advertising.

      But none of that is explored here…..

      • One might argue that perhaps we need some ‘out of the box’ practices regionally because ‘standard’ practice doesn’t seem to be translating into thriving nations around here.

  • These comments remind me of my Sandals experience last Sunday:
    I’m one of the not so many visitors to Grenada.
    After enjoying BBQ at The Aquarium I decided to walk down to Sandals for a drink and desert. It was blasting hot on the dusty street and not much to see apart from rusty containers and the airport fence. There was no sign and I started to ask myself if I really was on the right way to a luxury resort. When I reached an entrance which turned out to be the main entrance to Sandals, I told the security man of my plan and asked for permission to enter. ‘No’, he said, ‘you need to buy a day card.’ It was a little before 5 pm. ‘Hoch much is a day card?’ ‘I don’t know’, he replied. ‘Where can I buy it?’ ‘You will have to come back after 12 January.’ ‘What? But I’m here now and would love to buy a drink and get out of the sun.’ Not telling him that I needed to visit the rest room as well, but looking around I could see there was no toilet in sight.
    Meanwhile another security man showed up with grumpy face ignoring me totally. ‘Could I please go to the reception?’ ‘No’, I was told, ‘this is not possible.’ ‘Can you call the reception and tell them I’m coming in?’ ‘We don’t have a phone line yet’, was his answer.
    I was left a little speechless. Then I remembered some water I carried in my bag. ‘Good thing I brought my own water here because Sir you are not much of a help!’
    I looked around to figure out how to get back home. No bus, no taxi, no nothing out there. ‘Is it possible that you call a taxi for me?’ ‘No sorry, no taxi, no phone.’
    I left very disappointed and made it back to the road when I saw a car showing up in the distance. I waved, the car stopped and I asked for a lift back to The Aquarium. The driver – a local gentleman with his two children in the back of the car – drove me all the way back to Lance Aux Epines (thank you again) and saved my day. I then went to The Calabash Beach Bar to finally get that drink…

  • Salisha F.

    For those looking for a political spin on this please note that this deal was set BEFORE the last local elections. It was done when Parliament was porogued. It denied the ability of a proper opposition and perhaps bipartisan vetting of the deal. It was done during a time when funds in Grenada was at an all time low and loans were being made to pay our public workers. Though it appeared to be a good investment, raised the public profile of Grenada internationally and promised an infusion of funds into the local economy there is still alot of smoke screens up. In my opinion, any deal that leaves the government in a position where an investor is not contributing legally to the national purse according to laws established to maintain a well funded nation is ridiculous. International notoriety will not pay national bills, it will not expand our natural resources. It is the perpetuation of an ideal that we are so desperate we are willing to desecrate the value of our soil, resources and citizens for a brand name on our island. The mismanagement of all these things have put our blood in the water, do not be surprised then when the sharks – I mean investors- come!

  • poultry

    the incentives given to sandals means that sandals will not buy a pound of local chicken. all their chicken will be imported. the poultry industry alone can provide 4000 permanent jobs. the government have once again betrayed the people.

  • Comfort

    At last young Grenadians are speaking out !! Sometimes I wonder if our youths are paying attention to what is really going on in our country or are just hypnotized by the hype. We need some new thinkers in the fore front. These old leaders are just running the country in the mud for their personal gains

  • CountryBoy

    THE BEST, most concise article I have read so far on the Sandals Grenada venture! It would serve the residents on the island well to read this article and understand the intricacies of that horrible deal the government and ministry of finance made with Mr.Stewart. Needless to say: The Minister of Finance recognizes how huge of a luxury brand Sandal’s is, but can’t see the same for the island.

  • Radisha

    1. Sandals coming to Grenada was the most wonderful thing I’ve ever heard off, especially to recieve something we never had.
    2. First thing I thought off, more Jobs, which will be great for the whole country considering that there’s not much opportunites for the people.
    3. Now from what I’ve been reading no tax paying for 25 years ! They must be CRAZY !! Because from what I know Countries run on their tax payers MONEY and if Grenada don’t make any from that investment, why is Sandals there anyways ? This ain’t not Free Show PAPI Show ! While Sandals making MONEY, GRENADA Struggling !
    4. The Leaders have to do Better than that alu doh grow so ! Take y’all heads out y’all asses ! Did y’all even think this through, water source ? Electric sourse ? Food source ? And still keeping the Natural sources around ! Call another Meeting ! And work this shit out ! 25 years from now There will be no Grenada, it wouldn’t be the same no more !
    5. I would love a Deal, but if it would bring a down Fall than an Uplift to the Economy then I say “NO DEAL” !! It’s not a Gaining to Lose Situation ! It’s a Gain to Gain Situation !
    6. Grenada to the World, Born n Grow ! Soon come back and help ma people ! After I Finish Stacking that US Paper !
    ❤️

  • John H

    If you look closely at the new political policies, they are aimed at increasing foreign wealth versus increasing citizen wealth. This leaves the people working as slaves for foreign companies while paying the rest of the countries debts with paltry salaries. It’s not a long term plan to bring prosperity or build citizen wealth.

  • Ashanti child

    This is a lovely forum for young grenadian professionals who are serious concern about the way our lovely island is heading……..

  • Alroy

    I love the article. I am all for investments but the relationship should be mutually beneficial to both parties.involved. It does not make sense went one party gains,in our case, the middle class is made to saddle the debt. The net worth of Grenadian middle class is in serious crises.

  • George Steele

    My two cents having worked in many Caribbean islands for over 20 years in the tourism field is: Firstly its idiotic to argue that governments bending over for major hotel chains is a good thing, but that’s the market world wide and if you want to attract major hotels to your country that’s the game you have to play. Traing that the workers will receive to meet Sandals standards is world class, even if they are paid less than what is ideal. It will make a huge impact on our tourism product in the short term and long term, workers who move on will carry that training into new fields and the education on how to deal with customers is critically important to our tourism product..Yes all inclusive is not the best way to inject tourism dollars into the economy but I have found that Sandals guests do wonder off the reservation at other islands, and will spend a lot of foreign capital that is not there now at our local establishments.
    New tourism tours and excursions will have to be introduced to meet the demand by the Sandals guests which will be a major gain as well for us Grenadians and make the island more appealing to other tourists as the will now have more to do when they stay with us.

    BUT the biggest contribution that will be made and it is invaluable and not spoken of enough is the advertising they will give our island! Sandals at every hotel they own and through world wide media has already raised the profile of Grenada by a significant amount. I say this with confidence because through my work I meet Sandals guests weekly and Sandals has been pushing the launch of their new hotel very very hard.It has been quite a thrill as a Grenadian to hear so many guests asking me in Antigua what I know about Greanda.
    Our Government can never ever have the advertising budget of a major hotel chain like Sandals,fact. So please don’t knock the fact if nothing else the international attention we will receive and all the major positive spinoffs this will generate.

    • Alroy

      steele,: this is a moot point of view. This are not quality jobs. what significant impact with this have on the grenadian economy? How can one give up so much and gain so little. Would want you child with 8 cxcs and A levels to be working for such wages. The previous government had a deal sandals and Grenada was not loosing so much.
      You talk about advertising: this is a new resort,and like any other product- you have to advertised. This is not a new concept. it is simple business, therefore the gain is sandals.I am appreciative they are spend money to bring people to their resort, unlike some of our hotels in grenada ,who feel that the government should advertise for them.
      you talk about spin offs… what are they in real terms? Steele, for 30 years, sandals with be paying no property tax, no corporate tax, no custom and excise tax .what makes this worst is the fact that most of their purchases will be outside of grenada, such as hotel merchandises because we don’t have manufacturers of such commodities, so the only way of the government collecting revenue through custom duties and taxes. This is revenue forgone.Imagine: sandals profit is 30 million. Grenada stand to gain 30% of 30million.=900,000 for our coffers. you talk about employment, ok, Let say sandals employed 200 person paying 1200 (median wage) =240,000. I mean, it just cannot compare. Grenada is still the loser. we are forgoing 900,00 + property tax (don’t know the rate) + custom and excise tax for 30 years. This adds up to millions of dollars that could have had a significant impact in our little economy.
      This monies could have increase the advertising budget for tourism, enhance our tourism products…….etc

      • George Steele

        Not arguing that point Alroy, the concerns you voice and the points you make are valid BUT what you are addressing is not Grenadas problem but the regional problem with these hotels and what is required to attract them, I am non political and not concerned with who did what as much as we have attracted a major hotel chain that will increase our exposure world wide, flights into the island will increase, new tourist based business will be created to meet the entertainment needs of the new tourists, tourism training to all employees, provide jobs and be an asset to our island if they are there verses if they are not. What have we gained with no Sandals? Are you willing to take the high moral ground and watch young people have no jobs, and the island stay stagnant? Is your bone of contention that the government did not negotiate tough enough? If they did not then show me figures of what St Lucia and Antigua gave or did not give for their Sandals. I as a Grenadian don’t want my island developed in a cheep haphazard way, but I certainly want quality hotels like a regionally owned company like sandals here.

  • Historian, commenting on the statement where you said : “they’re not going to be paid the minimum wage”. Contrary to what you believe, those people are being paid the minimum wage.

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  • virtuous

    This article is very much bias. The last hotel La Source got the same grants and government tax breaks/ incentives and even more. Also other hotels get government incentives as well, so why be so critical and judgmental about this one.
    Is it because the act / deal was done by a different government? Is it because the “BEST ECONOMIST” the Grenada has didn’t make that deal, the same “BETTER MAN” who has put Grenada in the national debt it is is now, having caused the International Monitory Fund (IMF) to come to Grenada and cutting salaries of $5000 and over by 10% due to the develop of so call “structural adjustment”? Or is it because the dictator who solemnly swore when he got in to office there was not going to be any discrimination but before he even started operations sent home numerous workers and employed retirees who would now be collecting two(2) set of monies: salaries and pension instead of trying to creative employment he increased the number of unemployed persons in Grenada…..? Or is it because the person how tired to tamper with the electoral process and because the electoral officer did want she was expected to do an stood up and said no he had the Governor General write a letter of dis-mission, is it because his government was not involve is this deal? now let us not make a federal case out of this, lets not be bias here or critical of any kind this has happen before it is just history repeating itself with a different hotel and different government. Let us wait to see the out come and how this plays along before casting a word/ judgement ……..#LOVE#RESPECT#PEACE

    • Groundation Grenada Action Collective

      If only it was as simple as different government. my friend, all of these governments are different sides of the same coin. Don’t limit this to party politics. We are critical of this one because this one is the one of this moment. plain and simple. we know this is kind of bending over backwards has a history as old as colonialism itself.

  • Historian

    Salisha F, I don’t know where you’re living but 400 new jobs in Grenada at this time is HUGE, you have to appreciate how bad things are here ! And they’re not going to be paid the minimum wage, how can you make that accusation without any backup whatever? Do you know what the average wage was at La Source? Significantly higher than this mythical minimum wage. Do you know how much FOOD the hotels buy from local farmers? A lot.

    How can we be a “naive and desperate haven for foreign entrepreneurship and investment” when all we’ve managed to attract is a handful of foreign investors, compared to many of the countries around us?

    • Salisha F.

      My contention is not that 400 jobs added is not huge for the people of Grenada. Yes, the economy, and GDP are stagnant in Grenada; while unemployment rates and dissatisfaction with the current momentum of the current leadership is rising. There are other industries and systems that can benefit the majority of our populace if the system of government and its handlers would allow themselves the option to explore and invest. Or national growth should not in this day and age be solely or largely dependent on the tourism and hotelier industry. Clean energy, agro-industries, education and health care are areas that are not afforded the same tax breaks? The reasons we are not attracting the same investors is because the nation is STAGNANT! Industries are growing and evolving and we chasing the same ideals that played out 2 decades ago! Check out the clean energy ventures in Barbados. How has it impacted their economy and society? Why isn’t Grenada at the fore front as well. How many people complain of the hot sun in Grenada why hasn’t it been converted to a cash cow for the people? Check out the deal that the gov’t has with Grenlec – its as though we have amateurs playing with our nation’s future.

    • Gus Fisher

      Hotels import all food.vegetables. techi and skilled workers. they might by some rum and carib beer.

  • Salisha F.

    Historian, you made mention of the “wages in people’s pockets” realistically, do you think the 400 or so employees (national and regional) will be of implicit benefit to the national economy? If they will be paying them in hundreds of thousands of dollars a year then perhaps. Sadly, I speculate, that the majority of those employees will be paid the minimum wage or slightly over to accommodate for experience in the industry. Do you agree or no? My issue is not that a brand name investor is coming to Grenada my issue is that the same incentives afforded to SRI is withheld from local companies, employers, entrepreneurs and medical staff who are deserving of a fighting chance and are regularly and systematically denied it. If the same or similar amenities cannot be extended to aid the majority of our nationals why offer it to benefit the minority? It is not my intention to diminish the economic needs of the those who benefit from the tourism industry; rather it is to imply by endorsing this deal, our National government appears to still be hitching its wagon to the dying Tourism horse! It is definitely time to evolve on the idea that persons who vacation on our small islands will stimulate our economy enough to diminish our economic woes. Sandals coming is a wonderful deal in it’s own light but I contend now, and perhaps will forever, that we were indecently exposed as a naive and desperate haven for foreign entrepreneurship and investment.

  • Historian

    Maybe you can address the substance of my argument instead of an off-the-cuff comment. Like I said, lighten up and see the point I’m making.

    • Salisha F.

      Your points are valid. But as you admitted I to concur that your reference to myself as a “girl” is a bit off hand. Though casual and colloquial it is not favorable. As a woman educated in in all female institutions for most of my life, I do cringe when adult women are referred to as such. Thank you for understanding 🙂

      • Historian

        So let’s all have a laugh about it, apologies and no offence meant!

  • Historian

    Girls, nicely presented and so on, but sadly, off the mark. This is what you call “business as usual”: enticing (read: begging) foreign investors to put their hundreds of millions into Grenada. Contrary to your view; we are NOT unique. We are beautiful, friendly, etc, but as far as the tourist goes, there’s not much difference between Grenada and dozens of other “tropical paradises” – we’re a dime a dozen, just check the travel pages!

    The real economic value in Sandals is not the profit tax they may or may not be paying – any good accountant will fix it so taxes paid are minimal anyway – the real value is the MONEY ON THE STREET, the wages in people’s pockets – that’s worth WAY more than corporation taxes!

    WHEN was the last major foreign brand name investment in Grenada? To put it in ordinary parlance: you tink it easy? It ain’t easy, at all!!

    • Groundation Grenada Action Collective

      Historian, girls didn’t write this article, women did. (Had to jump in with that quick point of order)

      Malaika
      Co-founder/Editor

      • Historian

        Y’all need to chill, they’re girls, I’m a guy

        • Groundation Grenada Action Collective

          As a historian, I am sure I do not need to go into detail about the historical and contemporary pattern of women of all ages being referred to as “girl”. We can agree that men have not systematically been referred to as “boy” in the same way. One notable exception is in the case of colonial/neocolonial racial hierarchies, where black men were (and sometimes still are) called boy by white men sometimes even younger than the person they are referring to. I am not implying that you meant any disrespect, but language is important. And these small moments provide opportunity for discussing that and calling into question the ways that we may be unconsciously participating in a pattern that reinforces the status quo of our societies.

          Malaika
          Co-Founder/Editor

    • George Steele

      Historian, well said! OUR tourism product is not unique, none are truthfully, its all about marketing and what you deliver… I have seen many islands with nothing to offer but tourism thrive economically on nothing but the spinoffs of tourism. St Martin charges no duties and gave massive tax breaks to get hotels to invest, and they made a salt mine a thriving economy. Antigua has a robust standard of living compared regionally due to tourism, they also give and gave hotels massive incentives. I am not agreeing with wether its right the breaks given, I personally don’t agree with huge incentives and really disagree with all-inclusive but I am not blinding myself either to the potential gains for us.

  • Lisette

    Malaika and Akima, wonderful article would be fab if you could do more in Grenada and get involved in the politics, you are an asset to your country Grenada needs to have more young bright local people who understand economy actually active within the community and contribute more towards the growth of the country.

    • Groundation Grenada Action Collective

      Thanks for your support. But please note that Salisha co-wrote the article, not me ^_^

      Malaika
      Co-founder/Editor

  • JC

    Nice article I was not aware of the details of the deal . My question is what incentives did other islands give to attract sandals. And you havnt quantified the revenue their losing due to tax breaks. There will be a lot of local economic activity from this not to mention the marketing oppurtunity for Grenada as a whole. The tax breaks seem like a lot…. actually it is a lot but if its similar to what other islands offered then….

    • Viktory

      ^ My point exactly

  • oonya

    Great article – more like this needed in the press. Won’t you share with the newspapers? Critical views sorely needed there!!

  • M Cyrus

    Ok! So we got a luxury branded hotel in our country-great, jobs for the unemployed-great, revenue coming into our country-yes, but How Much?, NOT ENOUGH! Tax break for TwentyFive YEARS! Come on now, an investment is aimed for satisfying both parties, was this done here, you could say yes but how strong is this Yes. The Government has yet again created a bogus deal. So Sandals will come into our Spice Isle, acquire profits for 25years, and my sweet lil’ island has to wait so long before money is being dumped into our treasury. My question here is, are the other Hotels throughout the island receiving such tax breaks???? #SMH. Sandals could afford to pay tax, they are deeply inscribed into the world of travel. Why why why Mr. ‘Economist’ Burke??!!!! Our narrow minded Grenadians need to dive into this article and get a grasp as to what was ‘really’ done, as it relates to the negotiation of this Deal, cause all they are hearing is “Sandals, a well know hotel-chain is in our Small Island Nation”…..#Everything being sugar-coated

  • Joe Blow

    Been trying to get someone to speak on the deal but no one seems too keen to do so. It seems we gave away too much but then we heard it was coming and it would have looked bad if it did not. This is an all inclusive hotel. What spin offs will we see?

    Thanks for the comments ladies.

  • Abigail

    I am truly disappointed by the deal the Grenadian government made with sandals. I can understand giving incentives but close to 30 years of no taxes is ridiculous.

  • Jason

    very well written, excellent piece

  • Very well written. I am proud that our young people are not allowing the leaders of the day to go scotch-free in the classified poor decisions that are being made. This particular decision has far reaching implications that is beyond the minds of the average voter. A pity.

    Akima and Salisha, continue the good work in championing the good cause.

    Thanks much.

  • Phil Uwe Collins

    Negotiator where ? It’s a shame, it’s ridiculous and it is a full blow in every small business mans face who pays everything from Guesthouse licence, property tax, income tax, stamp duty ….. is there something I forgot. I’m upset and deeply dissapointed. I have to say, if you are not able to negotiate, don’t do it, say no, say ….. I’m not able ! But don’t do a ridiculous contract like that and try to sell it to us …. the grenadien poeple …. as a SUCCESS !
    You didn’t get sandals, you LOST La Source. Maybe our PM and his negotiator team are invited for the opening and have a few free drinks and delicious food ………enjoy it.
    I hope there is some justice somewhere and God help us with negotiators like this. Because this is not negotiation, it’s simply given everything for free …….everybody would take it.
    Thanks !

    • Viktory

      You people commenting are pretty funny. Do you even know what other ECCU countries are doing in terms of tax incentives post 2010? Did you know La Source was going broke and in danger of closing down? Did you know they’ve been looking for a buyer since NNP times to no avail?

      It’s easy to get angry about not getting money that you weren’t gonna get anyway if the deal didn’t happen……if La Source was in a strong position then everyone would have a real point and real reason to be angry….but it wasn’t…..

      • Viktory

        And I didn’t mean to comment on your post in particular….oops….I meant in general…..

      • Groundation Grenada Action Collective

        I recognize that you didn’t mean to respond to Uwe in particular but in his case, this issue is not so much about seeing money from the deal but as a small business owner himself, this trend of mega tax breaks seems very inconsiderate of the small businessmen struggling within the local economy. I think this is an issue of extremes, no one is saying no tax incentives at all for these kind of huge “development” deals but moderation man because we have other people who need support/incentive and public works who need wages. Part of our “selling point” is we are “friendly and peaceful”, well not if the economy keeps stagnating certainly.

        And yes, we would definitely be open to any information that you have, Viktory, about what other ECCU countries are doing in terms of tax incentives. Are you willing to share your findings?

        I do not believe this is a trend only in Grenada and that there is fear that if we don’t agree to these terms then some other country will. This would not be the case if we came up with an agreement that set the tax incentive range that we as ECCU countries are will to work with.

        -Malaika
        Co-founder/Editor

      • Viktory….Rational like yours is the reasons why that for Caribbean islands, so strategically located on the planet are being made poor because we donot understand value. Greedy and short sighted people like yourself make decisions that have long terms effects for the entire nation that only benefit the foreign investors. There are other islands like Tobago next door to Grenada that has had an increase in crime and other social effects due to a number of reasons directly linked to tourism businesses that particularly forster the model of sandals. Go read or maybe visit Tobago. You dont need world bank reports to know what is going on. Its in our faces. Further to which, a documentary aired on PBS called “The National Debt” was researched for 10 years in Jamaica..island from which Sandals originates….I sat in a room of Caribbean of students at UWI crying our eyes out of the decay of many of our countries because of those deals. Emancipate our selves from mental slavery.

  • Viktory

    All I’ve read here is alot of heresay. No mention on the economic impact of sandals presence on the island and comparing it to the tax revenue lost that it would get from sandals. Tax revenue that the gov’t wouldn’t collect if sandals didn’t even come into the island…….

    The notion of tax holidays is older than industrialized society itself. Do I like the notion that we are losing out on tax dollars that could benefit the people for the sake of a giant corporation…hell no….I’m as left leaning as they come financially……but to say that it was as simple as saying “we’re a really pretty island, you wouldn’t make as much money going to another island so you have to pay your taxes in full” is asinine….

    Typical lose-lose situation….you play hard and the hotel rescinds on its commitment to come to Grenada, then people are pissed that the hotel didn’t come and provide jobs and an economic boost……you play easy and offer the company sweet tax breaks….then we are offering our “rump for a very long and public ravaging” as was stated so “eloquently”…….*shrugs* hence why I’ll likely never get into politics…can’t make everyone happy and hence your criticized regardless of your course of action

    • Well said! I support your point. I shall be replying with the concept of the multiplier effect and the wider economic and social benefits that were exempted from this article.

    • Groundation Grenada Action Collective

      In rebuttal- nothing in this article is hearsay. The data was obtained from the press release issued by the GOG and Sandals. In addition, we cited reports and data from the World Bank etc which proves that these deals do nothing for the host states. Show me something in cold hard facts that supports your point of view and I would be prepared to consider. Otherwise, what you are saying is just your opinion.

      -Akima
      Contributor

  • krisstalina

    This is what they offered DeSavary, this is what they offer everyone who comes in here…… not ok!!!! Date: Tue, 20 Nov 2012 14:23:41 +0000 To: beachkriss@hotmail.com

  • OMG BRILLIANT BRILLIANT article! This is what I’ve been trying to draw attention to, People are SO happy at all the glitz and glam the government and the Sandals reps are more than happy to share that nobody seems to be researching the most important thing as Grenadians “what’s in it for them?’