Antigua may ditch financial services sector

ST JOHN’S, Antigua – The government could decide to call it quits with the country’s second biggest contributor to the economy – the financial services sector.

Experts have previously warned the sector is under severe threat, but it’s the first time the government has admitted it might not be worth the fight.

Finance Minister Harold Lovell said a review would be launched shortly.

“We are in the process of obtaining the services of a consultant who will be able to assist us in weighing the relative merits and to look at the pros and cons of the sector,” said Lovell.

He said this would help the government “to decide whether or not the costs which continue to escalate in respect of our regulatory obligations, whether they are worth it.”

Lovell is Chairman of the International Financial Services Sector subcommittee for the Eastern Caribbean Currency Union (ECCU).

No decision on the sector has been taken and the finance minister said the feasibility of developing niche areas of the market are also being looked into.

Lovell was speaking in Parliament during the debate on the Money Laundering Prevention Amendment Act 2013, which was passed on Thursday.

The act is one amendment in a long line of costly legislation, which has had to be introduced in recent years to keep up to date with international standards in the sector.

“When we think we would have met all the requirements, next time we have discussions they say no we have to go further, we have to go further, so it’s a constant cycle,” said Prime Minister Baldwin Spencer.

“The rate at which this is happening it simply means that sector is likely to be meaningless to us in terms of the benefits that we can derive and I suppose this is the whole idea, to push us in a position where we say ‘hey this really is not worth it,’” he added.

Leader of the opposition Antigua Labour Party (ALP) Gaston Browne earlier used his opportunity in the debate to question the benefit of the sector to the country.

“We now need to determine whether this particular sector is working in the best interests of this country or whether or not it is a burden to the country or if it is, whether or not there are interventions that can be made to make this a profitable sector,” said Browne.

“We also have to look seriously as to how do we link that industry to the domestic economy. What is that sector doing for the economy, is it profitable to have a bank operating here with US $500 million in assets and at the same time only employing two members of staff?” he queried.

The opposition leader suggested at least two offshore banks in the island only employ around two staff members each and own no buildings in the country.

(More in today’s Daily OBSERVER)