Riding the powerful global horse
Dickson Igew - Saturday, September 22nd, 2012 at 8:25 AM
Dickson Igwe
There is no stopping foreign investment, free markets, and globalization, in the Virgin Islands
Two assertions made by vocal voices in the local press over the issue of Foreign Investment in the Virgin Islands are these: ‘’the Virgin Islands are too dependent on Foreign Investment; and a good swathe of the national economy is in the hands of foreigners, which is putting Virgin Islanders on the back burner.’’
OK! These are fair, acceptable, and even understandable allusions. But this Observer believes they represent a naïve assessment of modern economics. And just like any other country in the world plugged into the global dynamic of free markets, free trade, and cross border capital flows, Foreign Investment in the Virgin Islands is part of the reality of international trade and global integration. And that means countries being receptive to the inflow and outflow of capital, and borderless trade: a dynamic brought about by crucial developments in sea and air transportation, digital technology, and advanced telecommunications.
Another thing is this: there is no incompatibility between Foreign Investment and national economic diversification. If anything, Foreign Investment, and the access to technology and global expertise foreign investment offers, is crucial to diversifying the Virgin Islands economy.
International trade is both competition and partnership between countries that specialize in what they do best. And access to the scientific and technological knowhow of developed societies is a major benefit of globalization and Foreign Investment for developing economies.
Beginning with the merchants and explorers of the 1600s, 1700s and 1800s, Western businesses and businessmen in the early 1900s initially invested in the Asian region when it was relatively undeveloped, at least by the standards of early 20th Century Western industrialization.
Then after World War 2, the inflow of Foreign Investment into the Asian Pacific increased substantially. This led to major economic growth in the Far East. The extent and scope of that growth, beginning in the early 1970s, and then continuing for decades after that, eventually surpassed the economic growth of Western countries. This was a narrative about the flow of technological knowhow and capital from west to east: a gradual transference of Western manufacturing to Asia through foreign investment and trade that went on for decades.
As a consequence, Western investment in the Pacific was trigger for hurling Japan, Singapore, South Korea, Taiwan, and China into the forefront of global economic growth. Foreign capital inflows ultimately spurred an export dynamic that was the catalyst that has led to contemporary Chinese and Asian Pacific commercial and industrial power.
Skepticism about Foreign Investment is essentially a cry for help to the Government to intervene in the local economy, to manage and direct scarce resources to ensure local control. However, Virgin Islands businesses and entrepreneurs are better off facing the global and foreign investment beast head on, and ensuring their businesses are competitive by global standards.
And that means international collaboration; but it also determines possessing excellent education, effective job training, the very best mechanism for providing the vocations and technical skill sets critical to strong economic growth; and the type of innovation and creativity crucial to a modern free market economy. Add exceptional customer service in every part of the social economy.
Today’s Western economies cannot grow strongly through a culture of entitlement, protectionism, and building walls against international trade. They grow through competition, free trade, and efficiency. Globalization requires a high degree of collaboration, nimble footwork, resourcefulness, and imagination.
Global trade and inward foreign investment will offer Virgin Islands businesses and consumers better options, choices, and economies. Free market globalization will strengthen the national economy by placing Virgin Islands businesses in a far better position to play their part in a world governed by borderless commerce and the lightning fast movement of financial capital across vast and varied landmasses and time zones.
Protectionism and placing barriers against cross border commerce has not been successful policy anywhere. If anything it has proven a barrier to higher standards of living and a better quality of life. Government is always better positioned to do good when it takes its hands off the economy. And this Observer has been hearing about the need for economic diversification and ensuring local control of the business environment in the Virgin Islands for years now.
Economic diversification and national control over the economy in this new and increasingly integrated world is easier said than done. It entails a huge reallocation of scarce resources that are simply unavailable during a difficult economic period. Government led economic diversification also means unhealthy interference in the national economy by the state: never a good thing for free trade and free market dynamism.
Central planning does not work! Just look at the Old Eastern Bloc and the economic collapse that led to the end of Communism and Totalitarianism. Let the market decide the direction of Virgin Islands trade and commerce, and everyone is better off. That is the experience of modern capitalism.
Yes, government should build the roads, hospitals, airports, and docks; schools and colleges; and the drainage, sewage, and key physical infrastructure that aid economic growth. That is the job of government: facilitator and protector. But it is the businessman and businesswoman who must be front and center of economic growth, leading to greater security and prosperity.
To be continued
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23 Comments
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People only invest to make money. They cut corners, they want returns for giving nothing but, making dollars. The poor get poorer the rich get richer and the making of more & more dollars to take “home” is all you need to know about “investment”.
Globalization started to take root in the 1960′s and became a buzz word in the Roaring 90′s. Yet, what is it? Some define it as a process, condition, force or an age. If we cannot fully defined it, how can the BVI embrace and adopt it without reservation. Globalization may be spreading like a wild fire across a prairie but it is still an illusive issue.
The illusiveness of globalization aside, the BVI needs internal and external capital investment to fuel economic growth, development and sustainability. Local entrepreneurs must be keyplayers in the continued growth and development of the territory. The BVI must established itself as friendly, stable, and safe place to conduct business. But smart, savvy business people also understand that an engaging and participating populace is vital to creating a safe and healthy investing environment.
Is neoliberal globalization a Trojan horse? Some horses may appear tamed and docile but once mounted they can buck and take you for wild, frightening ride. Should the BVI throw caution to the wind and mount the powerful global horse before a full vetting of the pros and cons?
No. Globalization may be spreading and taking the region by storm. But the process and condition of globalization is still evolving. The globalization process is apt to leave economic causualities in its wake. Consequently, we need to take a bird’s view of the process looking for gathering clouds and shoals before fully embracing the process.
Without a doubt, we need external investment to grow and sustain the economy. Nevertheless, the investment must be in the best interest of the BVI and Virgin Islanders. It must be a win-win for the BVI and both internal and external investors. Any investment should be Virgin Islander inclusive to the maximum practical and protect natural resources, cultural assets, and environmental resources.
EXACTLY! we have a lot to offer foreign companies:
stability
currency
natural resources
They can come in on terms more favourable to us. We can actually dictate the pace and quality of foreign investment.
Or we can be like the Nigerians who sold out resources to foreign entities leaving an anomaly, a desperately poor population sitting on billions and billions in oil.
Globalization is based on opportunities, cost reduction and economies of scale, which small islands cannot offer and compete with. Special and creative ways and means must be found to attract foreign investments but we should be careful, how much will be staying the local economy?. But more importantly for the inhabitants and governments of small Islands are to begin to think conservation and sustainability. (1) if we had a well planned and timely transportation/bus system we could organize out lives and work around this system …may we don’t need so many cars and petro. (2) In addition to being careful with constructions of roads and buildings should we not try to create major manmade ponds and try to stop the water from going directly into the sea? Maybe we could also introduce fresh water fish like tilapia and catfish major sellers worldwide and easy to grow. (3) Should we find a way to export out trash? 90% plus of the stuff we use is imported where is it going? We are also importing stuff for an additional ½ a million or more tourist annually. (4) Is our college actually training productive and the right kind of employees for our society? (5) We will never be a powerhouse in farming but we can do better and I don’t mean the government’s green house. (6) We are blessed with sun and wind, should a concerted effort be put here? I can go on but I think my point is made.
my opinion is that igwe is a shill
Globalization is the latest tool or mechanism to exploit poor, underdeveloped, and developing countries, taking from the have nots to enrich the have mores. Globalization, often times leave in its wake cultural, political, economic and environmental wastelands.
The capitalists, exploitation completed and resources depleted, move on to find the next victim at the next locale. And with certainty all find people to front and pimp their plans at their next locales. It is occuring in the Caribbean, in Africa, in Central America, in South America and in Asia.
Foreign direct investment may be needed and globalization may be barreling towards and spreading across the BVI but Virgin Islanders must be more than pawns and bit players. They must be key players, not after thoughts. Lets stop selling out and giving away our birthright for a bowl of porridge. Porridge consumed, the globalists still own the land and control the economic resources.
Globalization is pitched as the panacea for the world’s economic problem. But has anything change? The poor is still being exploited and the rich are getting richer. Of all the places that Dickson give a shout to as flourishing as result of globalization, the success is concentrated among a few. And the masses are still struggling. The exploitation is universal; it is in Australia and Europe too.
Inadvertently left off North America.
Dr. Igwe is correcting in that globalization is an omnipotent and omnipresent force galloping and extending its tentacles across the globe. Nonetheless, this does not mean that the BVI, along with other regional countries, should embrace its reach hook, line and sinker without a thorough examination of its impact. Neoliberal globalization has many dimensions to it, i.e., political, economic, cultural, environmental…..etc. Moreover, undoubtedly, the BVI needs foreign direct investment for continued and sustained economic growth and economic development.
However, I do differ with Dr. Igwe’s assertion that the vocal voices in the local press are naive for stating that: ‘’the Virgin Islands are too dependent on Foreign Investment; and a good swathe of the national economy is in the hands of foreigners, which is putting Virgin Islanders on the back burner.’’ In fact they are exercising good citizenship by examining the impact of the dependence on foreign investment; and the participation rate and ownership of Virgin Islanders in growth and development. Every other country is looking out for and putting their citizens first. Why not the BVI?
Moreover, I have not seen or heard of any serious advocating for a centrally planned economy. The BVI has a mixture of capitalism and socialism and Dr, Igwe in this piece has advocated for some socialism ( government provided services).
Colonialism and neocolonialism have left their imprint on the Caribbean region. Lloyd Best and Kari Levitt in the Theory of Plantation Economy outlined the impact. Specifically, the economy was foreign-owned and export-oriented, that there was passive incorporation into the international economy , and that there was too much permanent dependence on foreign ownership. And as a result, there was growth without development, adjustment without structural change, and diversification without transformation. An example of foreign-owned and export-oriented and passive incorporation is the Windward Islands Banana industry. It depended heavily on foreign market and ownership but once the preferential treatment was lost it faltered and it is still struggling to regain its footing. Instead, if there were active incorporation into the economy it should have been able to switch capital and labour to new projects.Another factor that Best and Levitt stressed was the strong involvement of the ‘residentiary’ sector ( local); the engine of economic transformation.
True, foreign direct investment(FDI) is needed. But there are numerous questions: how much FDI? what is the capacity of local to invest in the economy? What is the right balance of local vs foreign control of the economy? Is it in the interest of current and future Virgin Islanders to turn over control of the economy to external interest? Should BVI embrace globalization, especially neoliberal globalization without question?
How does Dr. Igwe–a Christian Preacher–marry Capitalism (Globalisation) with Christianity?
He seems to have placed GOLD above GOD!
Just like the old European Explorers, pirates buccaneers and conquistadors.
And today in the 21st century he re-invites them!
Igwe is a “sell-out.” Shameful!
Does Capitalism work in Haiti? A country over which the USA has virtual neo-colonial control.
Igwe’s views are reactionary and right-wing!
globalization is simply a way for industrialized nations to continue to exploit the resources of developing nations.
globalization used to be called colonialism.
it can occur because europe and north america use native mouthpieces to propagate their policies.
some of us are still shackled by this colonial mindset.
we must’nt trust the greeks even when they bring gifts.
See this is the thing, you all love to talk like you have the biggest brain but never have anything to add. How do you suggest we boost our economy which will soon be adding many layoffs, people with mortgages and bills but no jobs. What do you suggest, we send all ‘colonialists’ home, we plant/smoke weed all day, eat coconuts and have sex with our cousins?
1. Foreign partnerships with locals in businesses like hotels and resorts where the employee is also a part owner: enfranchisement!
2. A fair tax rate: many corporations pay less taxes than the average citizen
There are many alternatives we implement that would keep your cousins chaste.
There is nothing wrong with “ok’s” ideas except that they are little overrated economy theories that not always work ant that are not the solution for all our territory challenges.
1) Let’s take first the Foreign-Locals’ partnerships, sounds good, but to make it real you need first to meet one little requirement, this idea is only viable if you have the locals with the money and the determination to be part of a business endeavor. Certainly we have some local wealthy people, but not enough for the amount of new business that we need.
2) About the second idea” inviting the employees to be part of an enterprise”, again nothing against it, but you will be surprise on how many people prefer to just receive a pay check without assuming the risk that implies to be partially owner of the business.
We can’t afford to be “naïve” sure we might have the kind of business organization that “ok” is suggesting but not all the business, not even the majority of them, and then what we will do? Are we going to close our doors to the “the Hyatt, the Hilton or the Marriott hotels if they make a crazy decision to come here?… Are we going to say no to Caribbean’s, Disney, Carnival Cruise Ships if they want to invest locally…Can we afford to say no to Kmart, Wal-Mart, True-value or Home Depot if in their crazy wild business minds once consider to open a store here?. Mr. Ok’s suggestion is to say no to all these companies unless they find and include a local partner and/or invite their employees to also become little tiny owners.
We need to open our minds and become more positive about our capacity to compete, and about the brilliant role that our Territory can play “globally”. We cannot keep thinking that everyone wants to use us and to take advantage of us, and please let us not keep carrying on our shoulders the heavy “racial” sheep. We are not just black people, we are also a privileged capable people, we are not Africans anymore we are a developed Caribbean community with access to the First World
The BVI is not the only place going through this right now. Hardly! Look at the news. Every country from Italy and Greece to the mighty USA is struggling with the exact same issues at this time. That is why tourist numbers are down, hello!!!
So why do these arrogant preachers and politicians think this is the time that they can engineer for us alone in the world some massive ‘boost’ for the economy? How stupid do they think we are? That they can do what the best world leaders cannot?
How about do what the rest of the world is doing right now: protect local jobs to the best of your ability, tighten up immigration, tighten up your belts and beware of the Chinese who now OWN the US nnd mean to own everything else. Oh, and resist corporate pirates as well.
Come on BVI, this is the digital age, there is no reason for ignorance! Please don’t act as if you don’[t know that there is a deep and deepening global depression happening. Everyone in the world is being forced to give greed a holiday. Sit tight, implement moderate vital infrastructure projects to maintain employment and most of all, protect local jobs.
Here’s a little something to open your eyes:
http://news.ca.msn.com/top-stories/csis-warns-business-leaders-of-chinese-cyber-spies-1
According to the Canadian Security and Intelligence Service (Canada’s FBI) “while the vast majority of foreign investment in Canada is carried out in an open and transparent manner, certain state-owned enterprises and private firms with close ties to their home governments have pursued opaque agendas or received clandestine intelligence support for their pursuits here.”
The report added that “when foreign companies with ties to foreign intelligence agencies or hostile governments seek to acquire control over strategic sectors of the Canadian economy, it can represent a threat to Canadian security interests.”
BVI beware. The takeover is well underway.
You need to go and live in a country that has been embracing ‘free trade’ for some time, like decades, for you to really see what ‘free trade’ really looks like and means.
‘Free trade’ and ‘globalization’ are the biggest lies ever perpetrated on global citizens in man’s history. They are the means by which fat corporate entities enslave governments and populations, rewriting the laws to suit themselves and maximize their profits.
Most of the first world has come to the realization of this fact over the last few years, and are trying to dissolve their free trade agreements. NAFTA has been declared a failed experiment. The European Union is on the brink of collapse. And here comes Igwe, trying to sell it to the BVI!
Much the way corporations whose products have been banned as unsafe in first world countries bring them to the Caribbean and Africa to unload them on an unsuspecting population.
Once again Igwe, you should be ashamed of yourself touting this nonsense to your fellow black man. This is like the Africans who caught Africans for the slavers.
Talking about ignorants here we have the most… Don’t you see that we are already an open frontiers globalized territory… Have you ever been in a country like Cuba that everything is controlled?… And that thing about blacks and Africans is the most stupid and the most nonsense comments I ever read… Next time if you can’t improve the silence you might consider to remain quiet
Mr. Igwe, not only you are right and the people you are quoting are wrong but going even farther, I should add that due to the critical world economy present situation, lately we are not attracting enough foreign investment and that is part of the reason why our own economy is such in bad shape. Sadly to say that my feeling is that the worst days are still to come
the truth will set you free
go take a hike
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