KEYNOTE ADDRESS ON CHALLENGES AND OPPORTUNITIES FACING THE CARIBBEAN REGION Prime Minister of St. Kitts and Nevis Dr. The Hon. Timothy Harris Malta, November 26, 2015
Distinguished Guests, Ladies and Gentlemen;
I am delighted to be able to join you today in Malta at this Commonwealth Business Forum. The Commonwealth remains a unique organization that links more than 2 billion people from 53 countries through our shared history and common values. It is an organization to which St. Kitts and Nevis, which I have the honour of being Prime Minister, is proud to belong. St. Kitts and Nevis is one of twelve Caribbean countries that are members of the Commonwealth. While different in some ways, we share a common heritage, history and similar concerns about our future, including the effects of climate change, arbitrary graduation from access to concessional loans and, the need to stimulate economic growth with jobs for our people, particularly the young.
Today, I would like to talk about some of the challenges we face in the Caribbean region, the importance of greater regional cooperation, the rise of the Global Citizenship programs and the need for enhanced governance, transparency and integrity as we seek to better respond to the needs of our people.
Like several other Caribbean islands, St. Kitts and Nevis has surmounted numerous challenges. It was forced to make urgent and necessary policy and economic realignments due to the demise of its sugar industry, rebuild infrastructure due to catastrophic natural disasters; high-indebtedness and prolonged vulnerability to exogenous shocks.
Nevertheless, I am delighted to report that the macroeconomic environment in St. Kitts and Nevis is showing positive signs of improvement. Inflation remains relatively low, public indebtedness is declining and private sector confidence is growing. St. Kitts and Nevis continues to build a well-regulated Financial Services Sector and a responsible, business-friendly taxation system, which imposes no restrictions on the repatriation of profits and imported capital. We will maintain our internationally competitive low tax regime and remain one of the few countries in the world that imposes no personal income tax, no estate tax, and no capital gains tax. We are however equally committed to tax transparency and we will continue to adhere to international regulatory standards.
Today, St. Kitts and Nevis is one of the best performing economies in the Caribbean basin; and according to IMF estimates, its growth rate is projected at 5 percent - more than 10 times the average growth rate for Latin America and the Caribbean. I will talk later about this, but first I want to talk about the regional outlook.
Regional Outlook
With the possible exception of Cuba, whose economy will no doubt get a major boost from the rapprochement with the United States of America, many economies in the Caribbean are struggling and the future is not particularly bright. The region was badly affected by the economic crisis of 2007-2008 and activity is yet to pick up sufficiently. Secular growth has been fragile. Tourism however remains a growth area.
Today, the member states of the Caribbean Community are at the frontlines of some of the most serious global problems. These are generally not of our own making and affect us disproportionately, posing a threat to our way of life, our welfare and even our very existence. Such challenges include limited and shrinking access to concessionary sources of financing; unsustainable debt levels, additional demands and compliance costs associated with global efforts to regulate the financial system and maintain security; and increased environmental risks associated with climate change and rising levels of youth crime and delinquency. This list is not exhaustive but merely representative of the challenges and problem which the Caribbean faces.
On the vexing issue of climate change, in particular, I remain optimistic that the world will come to an acceptable and binding arrangement at COP 21 in Paris. Climate Change poses an existential threat to the Caribbean region and other Small Developing States.
St Kitts and Nevis – Uniquely Moving Forward
How then does the Federation of St Kitts and Nevis, two small islands with a combined population of about 50,000 inhabitants, cope in an increasingly hostile global environment? We have coped by seeking to leverage the intellectual capacity and resilient spirit of our people to fashion, and in some cases, pioneer new areas of economic endeavor. One such innovation was pioneered by us over three decades ago. It is the Citizenship-by-Investment Program.
This global citizenship program has created opportunities for deserving persons, who pass strict due diligence and security checks, to become citizens of our country either by making a philanthropic donation to the Sugar Industry Diversification Foundation or by investment in real estate. The program, which has been woven into our economic development framework, will play an important role in our efforts to build economic resilience and modernize St. Kitts and Nevis. We are prepared to work with all countries to ensure that the best standards operate in this emerging industry.
In addition to the program, St. Kits and Nevis boasts new opportunities in tourism, financial services, manufacturing, commercial agriculture, renewable energy and miscellaneous small sectors. These opportunities are complemented by the existence of a resident well-educated, adaptable and easily trainable English-speaking population, practiced at operating in a good governance culture, political stability and traditions of reliable democratic and legal systems and the rule of law, which protect individual property rights and freedoms.
Great opportunities abound for investment in our high-end tourism sector where the islands’ natural beauty and heritage can be further leveraged to support and enhance the tourism product. There are growing opportunities for leisure and recreational services. Similarly, offshore education has been identified as a priority sector for further investment and incentives.
And consistent with our sustainable development agenda, my Government encourages investments in commercial agriculture to meet growing private sector demands and to ensure domestic food security. We also want investment in hydroponics, aquaponics, agro-processing and livestock farming.
Determined to reduce our national carbon-footprint and dependence on fossil fuels and to transform St. Kitts and Nevis into a fully environmentally sustainable island-state, priority attention is being placed on renewables. We welcome investment in this sector. Additionally, St Kitts and Nevis has the largest electrical and electronics assembly industry in the Eastern Caribbean, with the majority of exports going to the United States of America and Europe. We intend to grow this sector and increase output of higher value added electronic equipment to take full advantage of the partial scope agreement with Brazil and Guyana.
St Kitts and Nevis a Responsible Partner
In conclusion, ladies and gentlemen; investment, jobs, and closer trade links are what will transform all our economies. I look forward to greater co-operation, trade and investment among all members of the Commonwealth and hope in the coming days that we can forge closer intra- Commonwealth links.
I invite you to become strategic partners for the Caribbean and to maximize its growth potential. I also invite you to take part in the growth of a modern St. Kitts Nevis; to explore the mix of opportunities for economic prosperity and the rewarding richness of a tranquil lifestyle.
Come make our home, yours. Come experience my St. Kitts and Nevis.
I thank you.
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