BREXIT AND NEVIS
Brexit vote: rest of the world has moved on from the EU
Supporters of the remain vote argue the EU is a beacon of free trade, and for the UK to leave will create further impediments to the free movement of goods and money across the world. In the event of majority support for a Brexit in the referendum, there may be opportunities for our own export industries. The truth of the matter is no one is precisely sure what will happen if the leave vote gets up.
Back in 1975, the EU was known as the Common Market – a trade and tariff free trading zone between member nations within Europe. Once the UK joined, it knocked Australia’s markets to the UK around but we were big enough and ugly enough to find new markets closer to home.
It did come at a devastating cost to many of the UK’s former trading partners in the developing world, many of them former British colonies.
I’ve written before about the Federation of St Kitts and Nevis in the Leeward Islands, better known to cricket fans as the West Indies. I have visited the islands twice on cricket tours, the first time in 1991.
The tiny island of Nevis – with a population of 17,000 – is travelling well now, no thanks to the EU but back in 1991, it was doing it tough.
Great Britain’s enduring gift to St Kitts and Nevis is the same gift bestowed upon all former British economies — parliamentary democracy, the rule of law and the separation of powers. Those gifts have ensured St Kitts and Nevis has enjoyed relative political stability in independence. But the gift giving has been very one-sided. Two hundred years of slavery, another 150 years of indentured labour, a half a century of neo-colonialism before independence was granted and with it a further twenty more years of economic uncertainty.
Post World War II, the UK brought the entire Kittitian and Nevisian sugar harvest each and every year, and the economy of the two tiny islands ticked over.
The UK set the price of sugar low while pushing the price of goods it manufactured and exported to St Kitts and Nevis like farm equipment high. This is a working definition of neo-colonialism. Treat ‘em mean and keep ‘em keen.
The final indignity came when the UK turned their backs on the sugar harvest. Under the UK’s treaty obligations as an EU member, it was required to source 25 per cent of its sugar from elsewhere, thus crippling the economy of St Kitts and Nevis.
In its wake farm owners (many of them British citizens) walked away from the cane fields. The sugar industry was nationalised briefly but the jig was up. Now there is no sugar cane grown on either island, the last harvest in St Kitts came in 1985.
St Kitts and Nevis had to find other ways to keep its economy afloat or slip into a vortex of systemic poverty from which it is all but impossible to clamber out.
It chose wisely, placing priority on the tourism industry, establishing niche markets for Americans and Europeans to visit and part with their money. It went a step further when it became the first nation to create economic citizenship. Foreigners who brought property on St Kitts and Nevis under government proscribed developments, could become citizens while others who brought property not proscribed for economic citizenship could become citizens by parting with a $50,000 fee.
The benefits of economic citizenship are many. Citizens can travel visa free to over 120 countries, including the EU. Brandishing a Kittitian passport rather than say, an American one for travellers in certain parts of the world can be a distinct advantage and sometimes a sensible security measure.
There are taxation benefits that come with economic citizenship but St Kitts and Nevis is not a tax haven. There are land and property taxes, sales taxes and import duties. There are no income taxes, however, and for those seeking a sea change who can generate revenue at the same time, it stands as an appealing prospect.
Today St Kitts offers tourists a bit of a lively time. There is a casino and some substantial high and medium level tourist developments available for short and long stays. The smaller island of Nevis sensibly allows only smaller developments. No dwelling or hotel complex on Nevis can be higher than 20 metres – no higher than the tallest palm tree – as the axiom on the island goes and this has made it especially attractive to upper middle class American tourists.
When the furore over her separation and ultimate divorce from Prince Charles became too much, Princess Diana took off to Nevis to escape the limelight and the constant media presence. That is the sort of place Nevis is. A throng of media and paparazzi would be quickly noticed and told to take their leave.
Nevis attracts families and small groups of wealthy Americans and Europeans to stay, or even purchase property on the island for the ‘get away from it all’ lifestyle experience. For all that, there are all the comforts of home – high speed internet (faster than Australia’s), cable television and zero carbon emissions electricity (geothermal, wave, solar and wind drives the small Nevisian electricity grid).
In 2013, Forbes Magazine described Nevis as the best holiday location in the Caribbean and tourists looking for an escape flock to the island in the peak holiday periods, outside the hurricane season which traditionally runs from July to November with the most savage storms likely in October although there are no guarantees.
St Kitts and Nevis is merely a microcosm of the damage wrought on many developing economies when the UK joined the EU in 1971. For countries like St Kitts and Nevis, the EU stands as an exclusionary trading bloc that did great harm to its people.
Remain or leave, it won’t matter much to the tiny dual island federation. But if a Brexit it is and the UK comes knocking looking for a cup of sugar, the Kittitians and Nevisians will politely inform the UK, they have learned to live without their former colonial masters and have moved on.
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