A cold economic freeze has taken control of the economies of the Caribbean countries as the recession has tightened its hold on the economies of Western Europe, the USA and North America. Several European Nations are struggling for economic and social survival as their economies flounder on the brink of disaster. The Caribbean economies are small with a narrow or non-existent manufacturing base.
Most, like St. Kitts and Nevis are overly dependent on a fickle industry called tourism. The tourism industry has been declining in this Federation since 2004. The negative impact was felt from 2008 to the present. Unemployment has escalated not only in the tourism sector but throughout the economy as a whole. Four hundred school leavers are now on the job market floundering without hope in search of their first job.
The country is facing severe recession with its associated social and economic problems of crime, domestic violence and the continued closure of small businesses. Existing medium size businesses have continued to down size as aggregate demand falls and there is simply no money to pay wages and salaries. This economic malaise could have been avoided with sound economic policies aimed at producing at the school level skills which the students could usefully apply in the economy.
Every Secondary School in the Federation should have been equipped and staffed with the relevant technical facilities to produce electricians, motor vehicle technicians, plumbers, carpenters, bricklayers, electronic technicians and other associated relevant skills which would contribute to economic and social development. The students should then be self-motivated to create employment and would shun the dependency syndrome which has crippled initiative and enterprise.
The sugar industry was closed without any long term planning as to a replacement program to absorb the human resource or to develop an industrial or semi manufacturing sector to fill the void. It is essential that this untapped resource be developed and encouraged through the active involvement of the middle class in the Federation. This segment of the community has the managerial ability and the means to raise finance to develop their own business. The role of Government then is to create the means and fiscal benefits which will enable them to operate in an environment free from political bias and interference.
The marginalization of the middle class has resulted in a decline in productive investment and a loss to the contribution this important segment of the community could and should make to economic and social development. Forcing investors to take a reduction in their investment will further dampen any effort to generate wealth and hence the creation of employment in the Federation by this segment of the population. Governments, traditionally make poor investment decisions and, defacto, bad managers of investment projects. In this Federation examples are the La Vallee Golf Course, the White Gate project to name a few.
The country should develop its unique development model/program and concentrate on those areas in which it has a comparative advantage for example the development of the agriculture, agro processing, craft and high quality furniture for the local market. The emphasis should be import substitution and not replacing a high quality product with an inferior product at a high price. The escalation of prices in general is cause for alarm. The price of local produce has risen at an alarming rate and essential items such as fish are being priced out of the range of ordinary citizens.
Equally alarming is the closure of small businesses in the Federation and their replacement by medium size foreign owned business, does not auger well for economic development and employment generation. These businesses have not created employment amongst the local population. The unanswered question is whether the profits generated will be reinvested in the Federation. The Nation must therefore create its own stimulus package by harnessing the individual local skills and by creating an environment where enterprise, hard work and fair-play are rewarded. In the long-run the policies and programs initiated will contribute to economic growth and ensure the survival of this Federation.
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