UWI Principal’s say on disputed Government guarantee
Minister of Finance Mr. Christopher Sinckler clearly has a right to seek the correction and clarification of any comment made in respect of any national financial matter. This is fine and should be expected. If by chance he is misled by any reported statement attributed to me then this is not intentional and is regrettable.
But in this instance his response is clearly based on a misunderstanding of the nature of comments (and their context) made by me after the opening of the international student accommodation complex, the Keith Hunte Hall.
Here are the issues. The new accommodation complex was conceived and planned as part of the internationalization program of the campus, which began in 2006, and resides at the heart of campus’ strategic plans, 2007-2012, and 2012-17.
The government in 2005/6, was asked by the university to grant two non-repaying loan guarantees in this regard. The government agreed.
First, it gave a letter of guarantee for the loan that led to the expansion of the medical faculty which now attracts hundreds of overseas students, and is a major foreign exchange earner. That guarantee was for a loan of BDS$ 25 million. To date near $50 million in fees have been collected; about 40 percent of this amount collected from non- Barbadian students. This is a classic case of campus and country working hand in glove.
The government affirmed that the loan was to be repaid by the UWI. The Ministry of Finance made it clear that no financial obligation was to be laid at the door of the government. That project has been a great financial success for the campus and country.
The next phase of the internationalization project, related to the first, was for a loan guarantee for the international student accommodations under the same conditions.
The UWI would raise a bond, guaranteed by the government. The UWI would repay the loan from the revenue. The government would have no financial obligation. The project started on the basis of the promise of this second guarantee.
Then the government changed and with it came a changed policy posture to the internationalization and development of the university. Prime Minister David Thompson made it clear that the growth path should end. Prime Minister Freundel Stuart asked for dialogue. We continue to be responsive to him as is our duty and responsibility.
But in the changed political environment, despite our many expressions of concern, the promised second letter of guarantee was downgraded to a letter of comfort.
The latter failed to satisfy most investors who had hitherto expressed strong interest in the bond.
One third of the bond was taken up, and one third of the complex was built.
The bond collapsed on the basis of the absence of the promised explicit loan guarantee.
The university, after its best efforts to comfort the market had failed, withdrew the bond. This was unfortunate and could have been avoided.
The university desperately needs these income generating facilities now that the government has drastically cut its budgets. The university needs to earn money in order to survive, and to serve the country. It cannot survive with both budget cuts, and non support for its income generating strategies.
The university can become even more of an elite foreign earner for the country. It brings in and generates more than US$100 million in its biennial budgetary cycles. It can do so much more. The potential is enormous.
The university does not attribute this crisis to any one political party or government, but is concerned with the question of continuity in development planning and thinking across election cycles.
This lack of continuity on critical development issues is the hallmark of national disaster leading to failed nations. We must avoid this chop and change approach in respect of approved and secure projects.
The country and campus can move ahead faster in a more consultative, financial planning environment.
Country and campus must work together to build the new foreign exchange income earning economy. The university cannot do it alone. Neither can the government. A culture of transparent consultation must be institutionalized at the core of the economic recovery and development strategy across the Caribbean.
The university is a large business enterprise.
In addition to being a major foreign exchange earner, it employs over 800 people.
To secure their jobs by earning revenue it too needs technical support from government in order to become more independent and less reliant on the public purse.
I offer these words of explanation in support of the program of national financial consolidation being led by the Minister of Finance, and for which the university has every interest in its success.