New UAE deal on the table
His recent proposal for Government to secure US$5 billion in debt financing from the United Arab Emirates (UAE) simply did not fly.
However, after paying an official visit to the Gulf state last week, Minister of Agriculture Dr David Estwick appears to have finally ditched that controversial plan for an equally ambitious Arab cure.
Speaking upon his return home, Dr Estwick did not say what his new proposal would amount to in financial terms but he appeared very upbeat about discussions held with the Arabs about having the Caribbean become the new “bread basket” for the entire Gulf region, with Barbados serving as a transshipment hub, a trade hub and a tourism hub and capitalizing on its easterly location.
“I am confident that this is the strategy that will move Barbados forward by leaps and bounds. It is a platform for the 21st century and we look forward to free zones and we look towards engaging not only the producers of the product, but the consumer of the product,” said Dr Estwick whose visit was at the invitation of the UAE government.
“Let those people come to the region and make their products from our raw material products. That is development by investment and partnership,” he added.
The Minister of Agriculture explained that while the UAE already had a number of free zones established in areas such as education and manufacturing, “it cannot grow mangoes, they cannot grow yams, they cannot grow fruits of any kind and they cannot engage in animal husbandry”.
He therefore sees a major opportunity that could “radically transform” the Caribbean, which he said has not been able to take full advantage of recent trade pacts, such as the European Partnership Agreement, the Canadian Trade Agreement or the Caribbean Basin Initiative, because it operates at the level of raw materials, while the majority of trade was done at the level of value added product.
However, he said the proposed UAE partnership would give the region the stability it needed by way of investments in the value added up-stream products, using the region’s primary products.
The St Philip West MP further argued that with the UAE relationship, the region’s agricultural sector would be able to move from raw material to value added on a long term sustained basis.
“That is the relationship that I am going to push aggressively over the next few months and as soon as Prime Minister Freundel Stuart returns to the country we will engage in more specific dialogue. I am looking to encourage my party to concentrate on these new strategies of development. That is not saying that we will not build new hotels, but we need new platforms for development,” said
However, this is not the first UAE proposal that he has put on the table.
Back in January 13, 2014, the Minister of Agriculture and former Minister of Economic Affairs had written to Prime Minister Freundel Stuart appealing to him to take up an offer from the oil-rich Arabs to restore this country to economic growth.
Dr Estwick had also told the Prime Minister back then that the UAE was interested in helping Barbados re-establish its investment grade rating and ensuring that it returns to a path of debt sustainability. And as chairman of the Cabinet Committee on Infrastructure responsible for project oversight and management, he had deemed it necessary to look to sovereign wealth funds and private equity funds for access to low interest capital since he was concerned about too much reliance on the Bretton Woods institutions model of assistance.
“What the Abu Dhabi and UAE governments propose to do, is to establish a sinking fund to retire the national loans when they become due. They have proposed a US$4 billion fund at a fixed interest rate of two to four per cent, over a 30-year period. These terms are negotiable,” the Minister of Agriculture’s letter stated.
Dr Estwick informed the Prime Minister that this was a one-time opportunity and as a result, he thought Government should negotiate such a fund to wipe out the entire national debt of US$5 billion.
However, that plan never got off the ground, as one senior Government official poured cold water on the reported offer, saying “no one is going to lift up their robes and pull out [US] $5 billion for Barbados without conditions”.
At that time, Government official had also downplayed reports that Dr Estwick was being ignored by the Prime Minister and certain members of Cabinet, saying, “if Estwick wants to be heard he can be heard”.