EDITORIAL: Investing in ourselves

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Prime Minister Gaston Browne reported an impressive statistic during his Independence Day address. He stated that private sector savings had increased from EC$1.1 billion in December 2013 to EC$1.6 billion in December 2017. That is a lot of money! And with the paltry interest being to paid the banks to utilise that chunk of money, we often wonder why Antiguans and Barbudans prefer to ‘hoard’ their money rather than invest it?
To understand how impressive that number is, we need only compare it to the United States. Based upon data from the U.S. Federal Reserve, Americans had approximately US$384 billion in savings in 2017. With a population of 325 million, the average works out to be approximately US$1,200. If we use an estimate of 105,000 as the population in our bit of paradise, and we have accumulated US$592 million in savings, we come out with an average of $5,600 in savings. That is approaching a near five times multiple. Hard to believe, but the numbers do not lie.
Of course, raw numbers and calculations do not tell the whole story behind the savings of any country. There are a whole host of factors at each level that will give a more meaningful understanding of how and why people save. For example, in the United States, people under the age of 35 only have close to US$1,580 saved, while those in a higher income brackets, making $70,000 to $114,999, have nearly US$5,400 in the bank. Going further, a 2017 GOBankingRates survey, indicated that more than half of Americans (57 percent) have less than $1,000 in their savings accounts. That statistic simply shows the skew in the wealth distribution of that country.
Demographics and economic performance also contribute toward who has what in the bank. During lean times, people hold on to their money, while in times of economic boom, people are less focused on savings and spend more easily. This can be seen in the U.S. statistics that show that Americans had amassed almost US$1.2 trillion dollars in savings in 2012 following the financial meltdown.
All of this to say, or, rather ask, why do we not use our savings to invest in ourselves? We are always seeking ‘investors’ when there is significant capital sitting in banks collecting little to no interest. We are also very quick to complain about what the foreign investors get when they come to our shores instead of realising that we could probably get those same goodies if we are willing to invest. Are we simply a risk-averse people who prefer the comfort of a bank statement?  Or, are we unwilling to ‘invest’ in other people’s ideas because of the ‘two crabs in a bucket’ syndrome? Or is it a combination … or something else entirely?!?
In case you are unaware, the crabbing reference speaks to the method of ensuring your crabs do not escape from your bucket. Put one crab in a bucket and it will immediately attempt to escape, however, to ensure that does not happen, add a second crab. Every time one seeks its freedom, the other will grab its legs and pull it back into the bucket, trapping both in a repetitive cycle.
It has often been said that Antiguans and Barbudans are envious of other people’s success. It is a variant on the old ‘misery loves company’ feeling that anchors people to mediocracy. Instead of being happy for their neighbour and celebrating their success, they push-up their faces and talk ill of their efforts as they seek to bring them down and back into the bucket of misery. To be honest, it is something that we have seen time and time again, and we are sure that you have as well.  
We can remember, some time ago, a returning Antiguan who sought to start an investment fund. Having seen the power of pooled capital in North America, he enthusiastically thought that he could get a large group of Antiguans and Barbudans to come together to make some meaningful investments in a variety of areas. He was convinced that he could raise enough local funds to build a hotel or undertake some major infrastructural development project. Needless to say, because there is no successful investment fund in the marketplace, the gentleman left our shores a dejected man. Few people were interested in throwing together to risk their hard earned savings on any ‘pie in the sky’ projects; especially not with a bunch of ‘strangers.’ To his mind, his experience represented a lack of financial knowledge, community trust and vision. He could not believe that those with the financial means to take advantage of opportunity would so easily pass.  
We are firm believers in savings and putting away a nest egg for a rainy day, and we are understanding of the need for most to provide for themselves in retirement, so this observation is not meant to chastise anyone. What we are simply hoping to do is to begin a discussion on how we can increase our communal wealth with the resources that we already have.
We invite you to visit www.antiguaobserver.com and give us your feedback on our opinions.

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