(Excerpts from Keynote address, delivered June 16, 2016, on the occasion of Caribbean-American Heritage Day at the U.S. Department of Agriculture)
Amb. Everson W. Hull, Ph.D.
Ladies and Gentlemen our Caribbean region is at the crossroads. Today, I will focus on a few of the opportunities that we have come to enjoy as the most recent wave of immigrants to this great land as well as a select few of the vulnerabilities that test our mettle that lurk around the corner.
Although St. Kitts and Nevis is the smallest sovereign state in the Americas, it stands tall at, or close to, the head of the regional class in a number of very important performance rankings The 34-member Western Hemispheric States of the Organization of American States (OAS) for which I serve include all the countries of North, Central and South America and the Caribbean, with the single exception of Cuba.
In 2015, St. Kitts and Nevis recorded an economic growth rate of 6.6 percent. It was the second fastest rate of economic growth in the entire OAS region. Only the Dominican Republic at 7 percent recorded a faster rate of economic growth.
(Exclusive of the USA and Canada) St. Kitts and Nevis recorded the third highest level of per capita income in the region at (U.S.) $15,774 per annum. Data reported by the World Bank shows that only the Bahamas with a per capita income of (U.S.) $23,903 and Trinidad and Tobago with a per capita income of (U.S.) $18,086 were higher. Additionally, St. Kitts and Nevis recorded the third highest level of per capita exports in the OAS region. Only the Bahamas, Trinidad and Tobago were higher.
We are gathered here today, in large measure, because of a common attribute that is unique to all mankind. In substantial measure, we tend to move around in search of better alternative opportunities. Whether we arrived in pursuit of higher educational or work opportunities, those of us from the Caribbean invariably came to the U.S. of our own volition to improve our own welfare and that of our loved ones at home.
It was a tough life for Caribbean students. There was no time left to enjoy college dormitory life, to join fraternities and many of the opportunities that college provides outside of the classroom. Few of us could go home at Christmas because the funds that would otherwise be used for flying home were needed to be able to register for classes in January. Despite these challenges, I know of no other country that has allowed those of us who came to the U.S., greater opportunities for living out our dreams and aspirations by sheer dogged determination and an enduring will to succeed.
Today the penchant for man to move around in search of better alternative opportunities is as alive today as was the case more than 400 years ago when the earliest settlers set sail from Bristol England in 1607, on the way to establishing the first permanent English Colony in North America. Along the way, they stopped in Nevis, where they watered their ships before continuing on to Jamestown in Virginia. The museum at Jamestown, VA, just outside of Williamsburg memorializes this historic voyage, and the role that Nevis played in the establishment of the very first English Colony in the New World.
The motivation for man to move around in search of better alternatives does not end with the three ships which stopped in Nevis on their way to establishing the first English settlement in the new world. Since then, Caribbean immigrants have continued to migrate to the U.S. and are widely dispersed across this great land enjoying its wide range of benefits.
And at this point, I’ll make a shameless plug for a famous Caribbean immigrant who was born in Nevis. It turns out that Alexander Hamilton, one of the revered Founding Fathers of the U.S. was born in Nevis on January 11, 1755. His image is prominently displayed on the U.S. ten-dollar bill. Like other immigrants, Hamilton moved around in the pursuit of better alternative opportunities. At age nine, he emigrated to nearby St. Croix in the U.S. Virgin Islands. At a very tender age, he showed extraordinary business, management and financial skills. Yearning for more, he emigrated to New York and became famous as a great debater. He was a confidential advisor of President George Washington and because of his business and financial acumen, this Nevisian became the very first Secretary of the U.S. Treasury.
Hamilton came from very humble beginnings yet his legacy and accomplishments are memorialized as one of America’s Great Founding Fathers whose life’s work is embodied in the successful Broadway musical that bears his name. As you may be aware, the musical earned 11 Tony awards on Sunday evening and the popularity of the play is considered to have played a role in the Treasury’s decision to retain Hamilton’s pride of place on the U.S. $10 bill.
While St. Kitts and Nevis has moved aggressively to diversify its economy away from sugar, do pause with me to recognize that we are a low-tax jurisdiction in the same way that the State of Texas is. The movement of money in search of better alternative opportunities is no different from the movement of people. Money is an asset that seeks refuge in places where it is afforded a measure of respect and greeted warmly. It tends to shun places where it is treated with disdain and subjected to open hostility.
And, Yes, Ladies and Gentlemen it is also the reason why economic agents of high net worth seek refuge from high corporate Federal and State Taxes, and seek refuge in low tax states such as the Cayman Islands, the British Virgin Islands and my own island of St. Kitts and Nevis.
Revenues earned from offshore banking are critically important to our largely tourism based economy. When Hurricane Omar wreaked utter havoc on the Island of Nevis in 2008, our flagship Four Seasons Resort was closed for two full years, displacing more than 200 workers, it was the flow of revenues from our off-shore banking sector that served as an automatic stabilizer that cushioned the devastating effects that would otherwise have occurred.
Complicating the issue is a mistaken view that somehow oodles of money are fleeing to offshore financial centers and somehow remains there. The preponderance of the evidence suggests otherwise. These funds are not hidden away in any one’s mattress in the Caymans; they are in turn invested and a large share of these funds find their way back to the U.S. from whence they came as investments in both U.S. private securities as well as Federal securities.
To illustrate, the Cayman Islands which is often pejoratively labeled as a tax haven is the third largest foreign holder of U.S. private sector securities. The U.S. Treasury department reports that as of June 2015, the Cayman Islands held outstanding U.S. private sector debt in the amount of $1,506 billion. The Cayman Islands was also the largest foreign portfolio holder of U.S. equities in the amount of $883 billion. The Cayman Islands is also a heavy purchaser of long-term U.S. Government bonds.
But, perhaps the most troubling of all is the recent practice in which a number of commercial banks in our region are terminating their correspondent banking services. As you know, if you were called on to send emergency funds to a loved one at home, you had the option of calling up your bank and sending the funds by bank wire. The funds would be routed from your local bank through a correspondent bank in New York for transfer to a commercial bank at home. In the past, you would be charged a fee of about $20 and the funds would invariably be delivered the same day.
Today, a number of commercial banks are either terminating their correspondent banking services or raising fees to unconscionably high levels. This has two very harmful effects. First, business establishments will find it extremely difficult to receive payment for their products shipped abroad. Second, the Little Man on the street may be forced to tap the services of the neighborhood loan shark who operates an underground black market, placing your hard earned money in his hands asking him to deliver the funds to Aunt Suzy in a remote village. This, Ladies and Gentlemen, is what we are being reduced to.
As I close, I would like to extend a warm and cordial invitation to each of you to visit St. Kitts and Nevis. Rich in history, consider visiting the birthplace of Alexander Hamilton and other authentic heritage sites that we anticipate will soon earn a UNESCO World Heritage site designation. Visit any of the several award winning resorts that have received global acclaim in Conde Naste magazine.
Mount Pelier Plantation Inn in Nevis was a favorite of Princess Di who took her two sons there shortly after her separation from Prince Charles. The Four Seasons Resort in Nevis is a favorite of Oprah Winnfrey, Robin Roberts and Kelly Ripa. Most recently, the Canadian Prime Minister Justin Pierre Trudeau stayed at the Paradise Beach villas. Visit places like Sunshine’s Bar and sample his renowned “Killer Bee” rum punch. Make a trip to St. Kitts and bask on the beautiful beaches of Cockleshell and Frigate bay, take a round the island tour on the scenic railway or visit the Brimstone Hill Fortress for spectacular views of the neighboring Dutch islands of St. Eustatius, St. Barths and Saba. We would love to have you visit with us.