Barbados has turned to China to finance the renovation of a hotel that once exemplified the island’s refined style but has now become a cautionary tale about the fickle winds of the global economy.
Sam Lord’s Castle, built in 1820 by a British pirate said to have gained his wealth by plundering ships lured aground on the reefs lining the country’s eastern coast, was the haunt of celebrities and royalty during its heyday in the 1970s and ’80s. Two debt-plagued owners and a devastating fire later, it now looks more like a haunted house, with one of its palatial buildings already demolished and others being surrendered to encroaching plants.
On Nov. 23, the Barbados government broke ground on a $200 million restoration backed by a loan of up to $170 million from the Chinese Export-Import Bank finalized just before the ceremony.
Skeptics denounced terms that will allow the Chinese contractor, China National Complete Plant Export-Import Co. Ltd., or Complant, to bring over workers to fill 60 percent of the project’s construction jobs, citing the dire need for work in a largely stagnant economy that relies heavily on the tourism sector. Government officials point to 1,000 direct jobs and 2,000 more that will spill over into the local economy once the hotel is in operation. They also say it will bring in $70 million in foreign exchange per year.
Still, many are distrustful of China’s intentions, worrying that easy money — 2.5 percent interest over 20 years for a country with an international credit rating that has struggled in recent years — could cloud leaders’ judgment when it comes to negotiating future projects with the Asian giant. Indeed, Prime Minister Freundel Stuart noted that this would not be the last Chinese-backed project, an assertion echoed by Chinese Ambassador Wang Ke when announcing the project. In other Caribbean countries, Complant has bought ailing sugar factories, according to news reports.
Maxine McClean, minister of foreign affairs and foreign trade, told Global Atlanta during an interview that the project will be a boon to the island, saying conceding a few construction jobs in the short term was the price of winning a much bigger economic impact.
“We negotiate to have a mix, because at the end of the day it’s an opportunity. They come to construct and will be employing workers during the construction period but the hotel will be staffed by locals. In the absence of the project we wouldn’t have any employment at all,” she said.
She viewed China’s growing interest in the Caribbean Community, or CARICOM, as a positive development — one large developing country helping other smaller ones to their mutual benefit.
“We have had diplomatic relations with them, and it’s part of maintaining those diplomatic connections that they’re able to provide us with that kind of foreign direct investment,” she said, noting that Barbados has made a point to be “friends of all, satellites of none,” as founding Prime Minister Errol Barrow urged in his first address to the United Nations after the country gained its independence in 1966.
She added that this is not at the exclusion of stronger ties with the United States, which Barbados is aiming to enhance through the Barbados Comes to Atlanta festival next May. Global Atlanta, a partner in promoting the event, learned of the Sam Lord’s project during a government-backed trip to Barbados in mid-November.
To be operated by Wyndham Hotels and Resorts, officials hope the hotel will help build Barbados into a year-round tourism destination, which could impact the viability of flights like those of Delta Air Lines Inc. from the U.S. to the island, once a week from New York and twice weekly from Atlanta. Those flights help underpin business links for Barbados, whose hub for international business and financial services also feeds into the tourism sector.
Locals surveyed by Global Atlanta were split on the issue of Chinese investment. An out-of-work air conditioning technician on the street was emphatic that the government had sold out Barbadian workers. A professional driver, a bit more detached from the situation, lauded the work ethic that the Chinese bring to their construction projects, lamenting what he saw as a lack of productivity among the local workforce.
Dustin Delany, who runs Delany Law, a prominent cross-border legal practice on the island, said that while he doesn’t personally support the Sam Lord’s project, the Chinese recognize value in partnerships with the Caribbean in a way that has been somewhat lost on U.S. firms, especially the large ones.
“The Chinese have a different approach. They’re not leaving any stone unturned, and I’m not saying this in a disparaging way. They recognize the cumulative effect of small investments,” he said.
He’s even gotten some work with Chinese firms in the past, who he says don’t skimp on hiring the best professionals when they enter the market. That could benefit Barbados, which boasts a strong legal environment and a surplus of well-educated professionals.
“It’s like the Louis Vuitton of legal teams, and I don’t mind that,” Mr. Delany said.