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Caribbean Islands Role of Government
Although most economic activity was privately controlled and
operated, state enterprises represented an important element in the
economy in the late 1980s. Beginning with the electric power
industry, the public sector expanded into agriculture,
manufacturing, and tourism, as well as infrastructural services
such as seaports, airports, roads, water supply, energy, and
telecommunications. Productive enterprises included a cotton
ginnery, an edible-oil plant, two large hotels, a commercial bank,
an insurance company, the Antigua and Barbuda Development Bank, and
most of the prime agricultural land.
The government's rationale for involvement in infrastructure
and public utilities was that it contributed to firmer bases for
further development. The purchase of failing enterprises, such as
the sugar factory and the oil refinery, limited the anticipated
increase in unemployment should the enterprises actually close. The
government entered the tourist sector primarily to influence the
employment practices of private investors. By keeping the stateowned resort open year round, the government was able to persuade
the privately owned resorts to stay open as well, which alleviated
unemployment in what had been the slow season. In addition,
operation of the resort allowed the country to keep some of the
tourist industry profits. In the manufacturing sector, the
government constructed factory shells to be rented at low cost in
order to attract foreign investment.
Despite achievements in some areas, such as tourism, the
government's entrepreneurial efforts were relatively ineffective.
Lacking an adequately trained managerial work force, the government
often contracted with foreign nationals to run the state
enterprises. In many cases, mismanagement grew out of the political
patronage system used to fill senior public sector positions.
Because the government also tended to act as the employer of last
resort, it effectively gave a higher priority to reducing
unemployment than to economically efficient use of labor. Despite
its employment priority, the government was forced to shut down
some operations, including the sugar factory and the oil refinery
just mentioned, because they were serious financial liabilities.
Data as of November 1987
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