HAMILTON, BERMUDA, MAY 23RD 2010 (CUOPM) - Bermuda parliamentarians have been told of the need to skillfully and correctly identify and assess the threats to which global events may expose people of small nations and to move with dispatch and discipline to either eliminate or at the very least minimize the exposure to these threats.
Addressing the Bermuda House of Assembly, Prime Minister Douglas pointed to the complex and interlocking global economic crisis that is trashing and pummeling economies far greater than those of St. Kitts and Nevis and Bermuda.
“The economic dislocations being experienced in nations great and small, industrialized and non-industrialized have been documented and quantified. Unemployment in the world’s most powerful economy is high. Fiscal deficits are the order of the day in such countries as France, Germany, the United States, and the United Kingdom. The precarious economies of Spain, Greece, Portugal, and Ireland are being monitored – with great anxiety - literally minute by minute. The terms of trade available to the producers of primary products began collapsing years ago. And, as we speak, oil and natural gas, in volumes that experts are calling utterly catastrophic, continue to gush, uncontrollably, into the waters of the Gulf of Mexico,” said the St. Kitts and Nevis leader.
Dr. Douglas noted that it was not so long ago that the fate of St. Kitts and Nevis seemed to hang in the balance.
“St. Kitts and Nevis, long an exporter of sugar, and long operating within the preferential trading regimes established between Britain and her former colonies, was confronted with some rather stark geo-political realities. Like the producers of primary products the world over, it had become rivetingly clear to us that the emergence of a unified Europe, the creation of the World Trade Organization, and the subsequent dismantling of the trading regimes under which we had traditionally functioned, was sounding the death knell for sugar producers like us.
And so Mr. Speaker, my Government set out, in an internal atmosphere of great intensity and focus, to chart a new strategic path toward economic stability and growth, gripped, throughout the process by certain key questions:
[a] What would be the impact of the alternate economic models on levels of employment?
[b] What would be the impact on the national debt?
[c] What would be the impact on revenue generation for the Government, on the one hand, and spin-off opportunities for local entrepreneurs, on the other?
[d] To what extent would the alternate paths being considered facilitate the establishment of symbiotic and energizing relationships with such sectors as agriculture, construction, fisheries, the creative arts, tourism, manufacturing, and so on,” explained Prime Minister Douglas.
He added that his Cabinet not only had to grapple with these problems but had to do so while managing the conflicting needs for both speed and thoroughness.
“In this highly competitive era of global re-alignments, Mr. Speaker, undue delays in Government decision-making for a country as small as mine can be quite costly……..but rash action can have an equal effect. That was the reality that St. Kitts and Nevis faced in the first decade of the 21st Century, as the trade and economic options associated with the sugar industry, the mainstay of our economy for over three hundred years, were no longer viable,” said Prime Minister Douglas.
Pointing to the importance of maximizing revenues and minimizing expenditures, Dr. Douglas noted that the sugar industry had become a net drain on the Treasury of St. Kitts and Nevis, and was, in addition, causing a ballooning of the national debt.
“The sugar industry did not provide the type of economic symbiosis that we, as a Government, felt was essential in nation like ours, in the 21st century. There were few other sectors whose vibrancy and viability were aided by the sugar industry, and this, too, in our view was far from ideal,” he said.
He added that giving full regard to the possible repercussions of the closure of the industry, his St. Kitts-Nevis Labour Government was keenly aware that something as simple as a rise in food prices had been enough to create massive social tumult in other countries.
“We had all witnessed how the implementation of structural adjustment programs, wreak havoc elsewhere. In this atmosphere, and being aware of these realities, the present St. Kitts-Nevis Labour Party Administration undertook the daunting task of completely dismantling the economic underpinning of the state, while simultaneously restructuring the economy – all at once. In short, we decided to never again leave ourselves vulnerable to the vagaries of a mono-sector economy,” Prime Minister Douglas told the Bermuda lawmakers, several of them whose parents, grandparents and great grandparents were from St. Kitts and Nevis.
Dr. Douglas said that in an effort to diversify the economy, his Government pursued high-end tourism projects, “mindful of the economic activity that these projects would generate for the local construction industry, and the long term economic benefits that would accrue once these projects were completed, and the facilities became fully operational.”
“Expanding an OECD-consistent financial services sector in order to benefit from its accompanying revenue flows; releasing over one thousand acres of virgin government land to the Ministry of Agriculture and local farmers, in order to facilitate the upgrading and expansion of non-sugar agriculture; investing in local fisheries and vessels as a means of expanding and upgrading that sector, reducing our Federation’s related import bill, and facilitating our own marine-based exports to neighboring islands; embarking on a massive infrastructural program in order to improve, even further, the quality of life for Kittitians and Nevisians, ensure the Federation’s ability to attract and retain highly competitive investors, and expand employment opportunities for nationals,” said Dr. Douglas.
St. Kitts and Nevis launched a massive re-training with remuneration initiative to equip those persons displaced by the closure of the sugar industry to enter new, more lucrative, and less onerous fields and also ensured that those leaving the sugar industry did so with varying, but significant, Government-provided compensation packages.
“Like Bermuda, then, Mr. Speaker, we in St. Kitts and Nevis must not only remain alert to the impact of the global economic crisis on our tourism industry, but must be prepared to anticipate and mitigate the associated shocks. Like Bermuda, we must not only remain alert to the ever evolving realities of the off-shore financial industry, but remain vigilant in our quest to protect our social and economic interests throughout,” Prime Minister Douglas told the Bermuda House of Assembly.
“As a result of very hard work and the mercies of the Almighty, my Labour Party Administration was, indeed, able to completely transform the economy of St. Kitts and Nevis without any social or political upheaval, and that, as a result of this move, there is now greater economic diversity within our country; the opportunities for employment and entrepreneurship have greatly expanded, and my Government has, at last, been able to begin managing the national debt,” said Dr. Douglas.
He said that the experience in St. Kitts and Nevis was, in many ways, unique as the approaches chosen to address the challenges faced had to be equally innovative.
Bermuda News