~~Adz:Left~~BASSETERRE, ST. KITTS, OCTOBER 26TH 2006 - St. Kitts and Nevis' Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas said Wednesday's National Consultation on the Economy focused empowerment and transformation, government's medium term economic strategy.
"It is our Government's firm belief that the transformation of our economy is only possible and sustainable through the empowerment of our people.
We are living in a time when new and innovative responses are required because the challenges, which confront us are not like those we have encountered before, particularly in the post independence era," said Prime Minister Douglas.
He noted that the environment now requires one to operate so that it does "not allow us to remain passive and, at the same time, achieve and sustain economic growth and development A people-focused approach is therefore necessary at this juncture in our development."
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| St. Kitts and Nevis' Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas delivering the feature address at Wednesday's National Consultation on the Economy. |
He said that with changes in the international environment "we are now forced to compete directly in foreign and domestic markets due to the removal or reduction of protectionist barriers and differential treatment, which we had grown accustomed to over the years."
Dr. Douglas said that St. Kitts and Nevis is currently experiencing the direct impact of the change in the European Union Sugar Protocol, which has caused the country to exit from sugar manufacturing.
He said the proposed medium term response to the new EU Sugar Regime in the Adaptation Strategy would be unveiled.
"Other areas which will require the kind of innovative response, which I referred to earlier include the preparation of our economy for the OECS Economic Union and the CSME.
These important regional initiatives have necessitated a re-look at our tax system in order to ensure that we remain competitive within the region.
~~Adz:Left~~This issue of competitiveness and the fear of personal loss of jobs have caused many of our citizens to lose sight of many of the benefits and opportunities that can be derived from operating in the considerably larger market that these unions will produce," said Dr. Douglas to some 200 participants including Members of Parliament, representatives of the Chamber of Industry and Commerce, Non-Governmental Organizations, other non-profit entities, representatives of Youth Organizations, representatives and Leaders of Political Parties, Permanent Secretaries, Heads of Department and Heads of Statutory Bodies and Public Corporations.
Dr. Douglas said that failure to address these issues in the context of a comprehensive programme of tax reform could result in a fall in Government's revenues and, consequently, in its ability to provide the services which the citizens expect and demand.
He noted that in his 2006 budget address last December, he indicated that the issue of tax reform would be further pursued during this year.
"I am pleased to report that with the assistance of development partners we continue to look at our tax system with a view to ensuring its coverage, simplicity and efficiency.
For this reason we have had assistance from CARTAC in introducing the relevant public officials to the basics of the Value Added Tax and we have requested their assistance in carrying out a feasibility study on a more broad based transaction tax for St Kitts and Nevis," said Prime Minister Douglas, who further stated he expects that the feasibility study will examine issues related to the need for the Federation to further reduce its import taxes and move to phase four of the Common External Tariff.
"We have also had to deal with the effect of our high per capita income that has caused our Federation to be graduated from nearly all sources of concessional finances, which in the past have supported our development. This has in some instances constrained our ability to implement all of the necessary capital investment projects.
~~Adz:Right~~At the very least, the premature graduation of our Federation from concessional funding has contributed to the higher cost of our development and translated ultimately into higher debt," said Prime Minister Douglas, who pointed that in addition, shocks in the international markets, through the phenomena, which we refer to as globalization, have the potential of exerting a devastating and lasting toll on our domestic economy."
He recalled that the impact of the September 11th Terrorist attacks in the United States is indelibly imprinted and St. Kitts and Nevis was still dealing with the security and financial market requirements, which emanated from this.
"In addition it appears that the current impact of high oil prices on our already strained resources will be an issue that we must confront on an on-going basis and for which we are expected also to develop creative solutions and invite your input and suggestions in the very important area of energy conservation," said Prime Minister Douglas.
