The economic milieu that confronts Saint Lucia continued unabated in the prime minister and minister for finance, Dr Kenny Anthony’s budget statement 2014. A policy statement that was supposed to set the stage and guide the way forward was nothing more than a continual turning of a blind eye to economic squandering.
The decline in the economy is evident by the vulnerability to debt and the debt burdens that were of no secret to what the possible outcomes could be. The warning signs of climate change, environmental maintenance, unemployment, deficits, interest rates, inflation and rising wages have not changed. Still millions are spent in non productive means with the hope of reversing the dire straits that exist in Saint Lucia.
In any event, the economic performance, policymakers and the lessons of history are very ominous, as the prime minister and minister for finance Dr Kenny Anthony tries to beat the current crisis with nothing.
The very theme of the budget statement -- “Building the pillars for economic success, resilience and fiscal stability” -- reminds everyone of the basic building precepts that are consistently absent. For example, “The agenda underpinning the Appropriation Bill is four-fold. We are seeking: To set our country’s economy on a path of higher and sustained growth and employment; to create sustainable, fulfilling jobs, particularly for our youth; to steer our country’s public finances away from a fiscal cliff; and to build resilience, so that we can bounce back faster from future economic and natural shocks.” ~ Budget Statement 2014
This is another example of rhetoric in a winner take all system of governance that continuously fails to improve productivity, industry, and commerce to build wealth with the resource at their command, for the economic wellbeing of Saint Lucia.
Instead Budget Statement 2014 is a misleading computation that echoes counterintuitive logic.
Consider this from the Budget Statement 2014: “Our fiscal problem will not go away just by growing our economy. The stark reality is that just to maintain the current debt levels and not allow it to increase any further, our analysis indicates that we would have to grow by an average of 7 percent per year. If we were to reduce our debt-to-GDP ratio to the prudential 60 percent level by the year 2025, we would have to grow at an average of 10.5 percent per year from now until 2025.”
“It would mean that foreign direct investment would have to be 55 percent of annual output, every single year. FDI flows are currently one-fifth of that. These growth rates and foreign investment inputs would be extremely difficult to attain and sustain. We need growth, but the reality remains that for us to grow, we also must immediately take action on government’s fiscal position.” ~ Budget statement 2014
In contrast to the pessimism above and the repeated ostensible programs of government in the Budget statement 2014 that has produced negative results it would have been most beneficial to immediately proceed with a concentration on FDI. Certainly, this would be a worthy transformation towards economic freedom, jobs and growth.
However, for government, there is much friction (both physical and emotional) and ignorance about the opportunities to inspire a people and to improve the economic conditions that exist presently.
But removing the veil of centralized control is a hard task for the present day evils. Hard enough, to divest from persistent government failure that harbours political dependence. Hard enough to proceed to useful economic functions that will engage industrious ingenuity, with FDI, to grow the economy. And hard enough to think of giving up control of a political economy is an abstract metaphor.
This is a real danger for the people of Saint Lucia. But the gathering of fiction is no fragile obsession. Especially as it seeks to placate a political agenda that is absent of building the pillars for economic success to putting Saint Lucia on the right track. A track to a balanced budget and a jobs plan that is appealing to business as a reliable place for growth and prosperity. And to focus on the middle class for a win-win situation that pays attention to poverty, building wealth and economic security to resilience, limited government and fiscal stability.
There can but no doubt of the predicament of inflation, high taxes, inefficiency and a bloated bureaucracy of socialist policy. Needless to say of the expediency to the first order of government business on Friday May 16, 2014, to seek the approval of parliament to borrow: yes, borrow again, EC$109 million in bonds on the Regional Government Securities Market (RGSM), to finance the 2014/2015 budget and EC$100 million to rollover existing debt.
The reality is there can be no reassurance to fiscal prudence as the prime minister and minister for finance Dr Kenny Anthony continues in his usual habitat to seek EC$38 million in the form of fixed rate note to provide financing for capital or recurrent expenditure. (Note the word, OR, this is very significant.)
The predicament continued on fixed rate notes to rollover existing debts, Eastern Caribbean Financial Holdings (ECFH) US$18 million, US$7 million and US$12 million respectively.
The amendment to the Electricity Supply Act, for an increase rate to 50 cents per imperial gallon as a fee on all fuel purchased by Saint Lucia Electricity Services Limited (LUCELEC) from Buckeye went through all it stages as expected. “In 1999, this fee was increased to 20 cents per imperial gallon or part thereof. This charge, Mr Speaker, has remained stagnant, or if you prefer, unchanged for fifteen years. This will lead to marginal increases in electricity bills and yield hopefully, an increase of $5.4 million dollars in revenue.” ~Budget Statement 2014
The Treasury Bill Amendment act was next on the table to increase the Treasury Bill “cap” from 30% to 40% of revenue on the Treasury bills market.
These and other counterproductive policies by the prime minister and minister for finance Dr Kenny Anthony are visible shocks that have stifled growth to create sustainable jobs, build resilience and a better future.
This is the present misguided solution that has lead to government failure and kept “Labour Incorporated” in a superficial state of unrelenting governance.
It is inappropriate to continue on this path of a downward spiral.
Fortunately, the people of Saint Lucia still have the freedom to choose, and wisdom, that is invaluable to change direction and the country towards real commerce, economic freedom and prosperity for a better future.
For this reason, let’s not concede the future to any person or persons who act in identical ways to Tweedledum and Tweedledee.
Melanius Alphonse is a management and development consultant. He is an advocate for community development, social justice, economic freedom and equality; the Lucian People’s Movement (LPM) www.lpmstlucia.com critic on youth initiative, infrastructure, economic and business development. He can be reached at malphonse@rogers.com
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