Sept. 21, 2007 — The U.S. should jump start a wave of investment in the Virgin Islands and the wider Caribbean Basin with changes to the tax code, Texas and Antigua billionaire Allen Stanford told St. Croix Economic Summit participants Friday.
Stanford heads the Stanford Financial Groups, a private, family-owned group of companies founded by his grandfather in 1932. He was listed at no. 239 on Forbes Magazine's latest list of the 400 wealthiest Americans, noted Anthony Weeks, a co-host of the weekly radio show "Money Matters" and a sponsor of the two-day summit.
“In order to make this list at all, you have to have a net worth of at least $1.3 billion,” Weeks said while introducing Stanford. The summit took place at UVI's St. Croix campus.
Stanford shared his personal vision for a more prosperous Caribbean Basin, and the role the U.S. government, the Virgin Islands and St. Croix in particular can play in bringing about that vision.
“On St. Croix, I believe the big part of attracting the right kind of serious investors, is if … the outdated EDC (Economic Development Commission) tax-incentive legislation was rewritten as a new law," he said. "One that absolutely eliminated tax cheating, that is simple to understand and unambiguous.”
These changes alone would make business in St. Croix much more attractive to investors, he said. But Stanford believes such a new tax-incentive program could leverage development and greater prosperity throughout the region if crafted properly.
“A new law — one expanded to allow investment throughout the Caribbean, as long as the company is headquartered in the Virgin Islands," he said. "… if that were to happen, the Caribbean Basin as a whole, and the Virgin Islands in particular, would see serious investment begin to flow in almost overnight.”
The original law is outdated and no longer meets the economic conditions on the ground, Stanford said.
“You cannot take something like that, first enacted in 1954, patch it together and make it work,” he said. “A new law needs to be drafted that is in tune with the original congressional intent, but also in tune with the realities of today’s Caribbean Basin.”
During a question-and-answer period after the speech, Sen. James Weber III asked Stanford if he had had any conversations about his ideas for EDC changes with the U.S. Treasury. Stanford said he had, and hoped to have draft legislation ready to present by Oct. 15.
“Ultimately it has to be the government presenting the legislation, though," he said. "It can’t be a private person doing that.”
Stanford painted Caribbean development and investment as a critical U.S. national interest, as well as benefiting the various countries in the region.
“The third border of the U.S. is the Caribbean,” he said. “Yet there is very little will to address the economic and social problems of the region. Forty million people live in the region. … To not have the U.S. government aggressively promoting and supporting a program for the entire Caribbean is, in my personal opinion, unacceptable. Because right now, who are the spokesmen for the region? Hugo Chavez in Venezuela, Castro in Cuba, and China?”
Promoting democracy is in the U.S. interest, and promoting prosperity is a critical step, Stanford argued.
“Democracy can only thrive when people believe their children will have better lives than they did,” he said.
Much of his talk linked St. Croix and the Virgin Islands to the broader Caribbean.
“There are many challenges here on St. Croix shared by other Caribbean nations,” he said. “Take the brain drain: Every year we lose thousands of our brightest, just like other Caribbean nations, to places like London, Houston and New York, because the first-world economies offer opportunities for wages, for compensation that they cannot find at home. They spend a lifetime, 40 years working and making contributions to that economy, and then come back home to retire. What have we lost?”
More immediately relevant to St. Croix, Stanford said his group had recently purchased about 40 acres of land near the Henry E. Rohlsen Airport and will build a 90,000-square-foot building and hangar there. About 100 people will work there once the project is complete, he said.
Stanford has lived part of the year on Antigua for more than 20 years, and has invested in numerous businesses there. With 1,700 employees, he is the single largest private employer in Antigua and Barbuda. Friday he said that he has moved to St. Croix and plans to make it his permanent home.
The billionaire venture capitalist is also a philanthropist, having given tens of millions to foundations and charities in Antigua and elsewhere. He is well known for numerous sports sponsorships. His companies are title sponsors of the PGA Tour’s Stanford St. Jude Golf Championship in Memphis, Tenn.; the Stanford U.S. Open Polo Championship; and several other golf, polo and sailing events. Of late he has been especially supportive of cricket, and said at the summit he wants to promote the game on St. Croix. He put together the Stanford 20/20 Cricket Tournament in 2006, with 19 Caribbean nations competing for its $1 million prize, and has 21 nations lined up for the 2008 tournament.
“Stanford-style Caribbean 20/20 cricket, I predict, will be the most popular team sport in the world,” he said. “Just watch and see if it becomes a reality in the next three years.”
Stanford was one of the principal sponsors of the St. Croix Economic Summit, which is working to create a systematic body of knowledge and ideas aimed at promoting the economic development of St. Croix. (See "Frank Talk of Partnerships and Progress at Economic Summit.")
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