St Lucia, known for its Nobel laureates, has much to offer and is an island on the move. MillionaireAsia speaks with His Excellency Prime Minister Allen Michael Chastanet.

It has been three years since Allen Michael Chastanet’s opposition United Workers Party won the parliamentary elections that would make him the prime minister of St Lucia, a Caribbean island republic in the West Indies bordering the Atlantic Ocean.

A 4.5-hour long flight from New York, it is a small sovereign state with a population of over 170,000. It has a land mass of 617 sq km, only slightly smaller than Singapore’s 723 sq km. A former British colony, the country’s official Head of State is Queen Elizabeth II, who is represented by an appointed Governor-General.

Chastanet swept into power in June 2016, winning 11 out of 17 seats in Parliament from his predecessor, Kenny Anthony and the Labour Party (2011 to 2016). The win came after widespread public discontent over the imposition of a value-added tax (VAT).

St Lucia is a former British colony and maintains a unique relationship with the royal family.

Fiscal Reforms

St Lucia’s slow growing, tourism dependent economy was not in good shape back then with unemployment at a high of 25%. Chastanet had his work cut out when the World Bank began advocating urgent fiscal and structural reforms to boost growth and development.

An economist by training, the businessman turned politician was no stranger to politics. Having previously served as the minister for Tourism and Civil Aviation, he was also a member of the St Lucian senate from 2006 to 2011. He also worked in the public sector to promote the Organisation of Eastern Caribbean States (OECS) under the Caribbean Basin Initiative and attracted manufacturers to the region.

He was subsequently elected leader of the opposition United Workers Party in 2013 and eventually won a parliamentary seat in 2016 before becoming prime minister.

On the business front, alongside his civil service, Chastanet was the sales and marketing director for Air Jamaica for eight years and has been the managing director of Coco Palms Resort since 2003. He had first cut his teeth as a hotelier when he launched the luxurious Windjammer Landing Villa Beach Resort in 1989.

Dominant Airline

Chastanet regards his time at Air Jamaica, a quasi-government, public-private sector partnership as significant because the airline grew to become the dominant airline for the entire Caribbean. It gave him the opportunity to meet heads of state, ministers of tourism and important figures from the private sector.

“Next, I opened my own hotel in St Lucia. When then Prime Minister Sir John Compton asked me to serve in his cabinet, I was very keen because I had already realised the importance of the public sector to propel the country. Unhappy with policies coming out of the public sector, I felt there was need for a closer relationship between the two sectors,” Chastanet told MillionaireAsia.

Promising to ‘build a new St Lucia’, his campaign slogan that eventually got him elected, Chastanet compared St Lucia’s Gross Domestic Product (GDP) against other Caribbean countries. St Lucia’s GDP is US$1.7 billion with a population of 170,000, as compared to, say, Barbados’ GDP of US$5 billion with 270,000 people and the Bahamas’ GDP of US$12 billion with 370,000 people.

“We believe St Lucia’s GDP should be in the range of US$4 and US$6 billion. Once you accept this and look at the country’s terrain and location, we think it is actually very feasible to achieve this,” Chastanet said.

Building A New Saint Lucia

“People were frustrated with where St Lucia was. We were not moving out of poverty fast enough. The standard of living should have been rising more quickly and there was not enough government support. To realise the country’s potential, we have to build a new St Lucia.”

And how much has changed in three years with Prime Minister (PM) Chastanet at the helm? The numbers reflect a significant shift.

When PM Chastanet took office in 2016, St Lucia was floundering with several years of declining or stagnant growth. Debt was ballooning, with 50% caused by short term loans that led to rising interest rates. There were also insufficient funds for proper maintenance of vital infrastructure.

Three years later, things look decidedly more upbeat. By broadening its tax structures and moving away from relying on VAT alone, St Lucia has boosted its tax revenues to more than US$1.1 billion, achieved a primary budget surplus of 2% in 2018 and reduced its fiscal deficit to less than 1%. Impressively, this was achieved by lowering tax rates.

“Instead of one tax trying to carry the whole weight of the government, all other taxes: income, corporate and property are now doing much better because the economy is starting to pick up and grow,” PM Chastanet explained.

Boasting stunning natural landscapes, the Caribbean island's top income earner is tourism.

Growing Tourism

Tourism, the country’s top income earner, is on a strong upward trajectory. In 2018, St Lucia attracted a record 1.2 million tourists mostly from the US and Britain, marking a brisk and unprecedented increase of 10.2% from 2017.

The fiscal surplus allowed St Lucia to embark on increased infrastructure investments, with the Chastanet government having spent US$10 million on road maintenance, US$150 million on developing existing roads, and US$150 million on improving its water supply so far. The country broke new ground when it spent US$200 million to re-develop St Lucia’s Hewanorra International Airport, tripling its capacity by adding a 337,000 sq ft terminal building, air traffic control tower and parking aprons for aircraft.

“We are doing all this without increasing our debt,” PM Chastanet remarked. St Lucia levies an airport tax on travellers and fuel/gas tax to fund its development and social projects.

A Change In Scenario

“We have changed the scenario to where St Lucia is now in control of its own destiny. When we came into office, unemployment was at 25% and youth unemployment at 44%. We have reduced these figures to 15% and 25% respectively,” PM Chastanet shared.

To achieve his target of doubling the country’s GDP, PM Chastanet identified four critical regions of the island that needed to expand: Rodney Bay in Gros Islet, Castries, Soufriere and Vieux Fort.

A mega project in the pipeline is the Pearl of the Caribbean integrated resort in Vieux Fort, a multi-billion dollar project spearheaded by Hong Kong’s Desert Star Holdings (DSH), whose founder and chairman is renowned architect Teo Ah Khing.

Targeted to be opened in phases from 13 December 2019, Pearl of the Caribbean is close to St Lucia’s airport and will be the largest and most ambitious project on the island. Occupying a massive 700 acres (30.5 million sq ft), it will include a state-of-the-art race course, a marina, resort facilities, shopping mall, casino, free trade zone, entertainment venues and residential units such as villas and apartments.

Pearl of the Caribbean was proposed by Teo Ah Khing (left) and was one of the first projects signed off by the Chastanet government.

A New Frontier

The Pearl of the Caribbean project was one of the earliest projects the Chastanet government signed off on in July 2016 soon after it came to power. Development work started in 2017.

PM Chastanet can still recall his introduction to the project, “Three days after I got into office, a good friend in Barbados told me about Teo Ah Khing and how he was looking to start a development but was unable to make any headway in St Lucia. I decided to meet Teo a week later.”

When Teo unveiled his vision for his mega-scale project, PM Chastanet was “overwhelmed” and immediately saw huge potential to transform his country.

“We had some projects earmarked in Vieux Fort but I had not yet even envisaged how we could use that land. Teo’s ability to have captured our imagination was very welcome. It was easy for me and my government to buy into his vision.

“Vieux Fort has been described as the new frontier from the 1970s, so everybody understood the potential, but nobody could picture what that was. What Teo has done is to put that into a viewable form.”

Impressive Introductions

Soon after their first meeting, Teo invited PM Chastanet to attend his horserace event in Inner Mongolia where the who’s who in the horse ownership and racing community were present. PM Chastanet understood the relationship Teo had with them and concluded that he had the means to deliver on what he was promising. “I was very impressed with Teo’s network of investors and his credentials in building the Meydan Racecourse in Dubai. When we returned, an agreement was signed with DSH to proceed with the project,” said PM Chastanet.

The development plan involves parceling components of the mega project to international operators and investors. While DSH will build the centrepiece horse racing track and residential component, Carnival Cruise Line will develop and build the cruise facility. Other investors have also announced plans to build boutique hotels within the project.

Pearl of the Caribbean has been able to generate excitement and interest globally which the country hopes will be a magnet to reel in visitors who never thought of visiting St Lucia. “We think that the timing is right, the Caribbean continues to be a safe haven for tourism,” PM Chastanet enthused.

Apart from this project, PM Chastanet explained that his government’s aim is to build increased capacity: roads, water, the airport, security systems, and housing sports. “We have a massive initiative investing in sports facilities. We have several private sector projects coming on such as the Sandals project (350 suites). A Barbados group and Mexican group are putting up a Hyatt. Two Bulgarian groups will add a Marriot Courtyard at Pointe Seraphine and another Hyatt. A Chinese group is developing a 350-room resort near Vieux Fort. We are also initiating a 100-acre subdivision to build about 1,000 bedrooms at the three- and four-star level. We are putting in all the infrastructure. All they have to do is buy the land and develop the property.”

More Visibility

“There is much on our plate right now. In the next three years, St Lucia will significantly increase its level of arrivals and become a more visible destination. We are dominating the honeymoon market and are about to add a secondary home market.”

When asked how he would like to be perceived as a leader, PM Chastanet replied, “A pragmatist, but with empathy. In a small state like ours, the choices are very limited. You cannot continue seeing a problem and not address it. We want to give St Lucians skills at an earlier age that will help shape them for the future. We emphasise sports and the arts because at a young age, these help develop discipline, team work, excellence and the will to win – all very important values that can be taken into the workforce. We must understand that we now have to compete on a global basis.”

A source of national pride for St Lucia is to have two Nobel laureates, the second highest per capita in the world. Sir W Arthur Lewis won the Nobel Prize in Economics in 1979 while Sir Derek Walcott’s Omeros – an epic poem about his journey around the Caribbean, America, and London – won him the Nobel Prize for Literature in 1992.

Chastanet has adopted the slogan ‘Let us inspire you’ and would like St Lucia to be a “place of innovation”.

“We want people to come to St Lucia. Look what Singapore has done with challenging people’s imagination. We are physically the same size as Singapore but we do not have five million people. We want to show the world that we can succeed against the odds. We have already shown signs of greatness in having two Nobel laureates. This speaks volumes for the country. God has blessed us with a beautiful island. The two Pitons (volcanic spires) are majestic landmarks that distinguish St Lucia. We are a melting pot that accepts other cultures. There is a spirit of living here that is a wonderful thing. We enjoy ourselves and I wish we could bottle that up and share it with the world."

PM Chastanet hopes to equip St Lucians with skills from a young age that will help shape them for the future.

This article was first printed in MillionaireAsia Issue 52 - July 2019

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