BASSETERRE, St. Kitts - PRESIDENT of the Chamber of Industry and Commerce David Lake has brought to the fore a number of concerns from the private business sector and made several calls for government’s assistance in order to stimulate further growth within the different areas.
He laid out these concerns during his address at the 2013 National Consultation on the Economy held today (Oct. 17) at the St. Kitts Marriot Ballroom under the theme "A Pathway Towards a Sustainable Future".
Lake commended the St. Kitts-Nevis government for its continuing effort to bring the Federation into a green economy but said that there are other areas of concern that need to be addressed.
He raised concerns over the non-debate of the Motion of No Confidence, stating that it continues to drag on to the detriment of the economy, the investment climate and the good name of the country.
Lake repeated the call for the Motion of No Confidence "to be disposed of without further delay".
He raised the alarm on the rising cost of energy and the effect it is having on the manufacturing sector, adding that this cost has been raised considerably over the last couple of years.
"Energy cost is priority number one for all manufacturers. If St. Kitts and Nevis is going to remain competitive, the cost of energy for this vital sector needs to be reduced considerably. Over the last few years, the cost of energy to manufacturers has increased by 47 percent."
He continued: "Most of the manufacturing companies have had consultants audit their facilities to indentify and target areas for electricity reduction. The manufacturing division under the Chairmanship of Hosea Rosa has taken the initiative to present proposals to various international funding agencies, such as the Centre for Developmental Enterprise, to help in identifying opportunities to reduce energy cost."
He encouraged the government to work with the manufacturers in exploring ways of reducing the cost such as "fund technical support needed to implement the improvements identified during energy audits" as well as "develop an energy credit programme based on increase in production, head count or any other relevant economic indicator that positively impacts our Federation's economy".
With regards to the Partial Scope Agreement (PSA) with Brazil, he said it is at a critical juncture as the economic manufacturing and assembly plants "are gearing up to increase exports to Brazil under the PSA".
Lake said that this should result in additional products and increased employments in the sector, "averaging over 100 employees per year for the next four years".
"Given this potential uplift that this could have on our labour market, I would think we all would agree that ratifications and implementations of the PSA by all of the countries involved must be treated with urgency," he said.
The CIC President encouraged the government to play the leadership role and do whatever it takes to bring the seven-year journey to completion by the end of 2013.
"Specifically, we need to engage the government of Brazil to ratify the agreement, finalise the discussion on the list of products to be exported by St. Kitts and Nevis and complete the implementation," he explained.
In the area of the National Manufacturing Strategy, Lake said: "A task force of private sector and government officials have continued to work on the final revision, which will be ready by the end of November 2013. The Chamber looks forward to the adoption of this document by government early in the new year."
Lake also raised the concern about the CAP Southwell Industrial Site and its buildings, stating that the lack of space in that area has been raised before and the situation needs to be addressed.
"This, of course, limits the possibility of expansion for many of the existing companies located there and creates a barrier to entry for new manufacturers. The Chamber calls on government to fast track the opening of new industrial parks to attract new manufacturing companies.”
The Chamber congratulated the government for making Venture Capital available to the Micro Sector in the Federation but added that some of the lending could be channelled through the Foundation for National Development, "as this institution already has a suitable facility with a track record of high success among Micro Sector entrepreneur".
Lake went on to say that an incubator building for small business development is needed to enable small manufacturers to share overheads and reduce start-up costs, adding that the possible locations could be the Kittstoddart buildings, the Factory Social Centre and the former Fort Thomas Hotel.
"Here, start-up businesses would receive assistance for 12 to 24 months after which they would be weaned to make space for new entrepreneurs," he suggested.
He went on to state that the Hotel and Tourism sector has received notable government assistance that has been vital to the sustainability of many local tourism businesses through very difficult times, but more help is still needed.
Lake said that the number one area in which the Tourism sector is crying out for assistance is the cost of electricity, "which is the main driver of operating cost for many tourism businesses".
He said that Value Added Tax (VAT) and fuel surcharge have caused their energy bill to skyrocket and "any easement in these areas would be welcomed".
Other areas for which the Tourism sector is requesting assistance is in the cost of tourists to travel to the Federation, finding funding to refurbish properties during off season, the suggested service charge split of 90-10 and the reviving of the Beautiful Basseterre Committee as a joint public-private sector organisation.
Lake said that revision in these areas is greatly needed in order for the Hotel and Tourism sector to continue to strive.
The Chamber also repeated the call for further reduction in corporation tax, removal of restrictions on capital allowances, removal of restrictions on losses carried forward, removal of restrictions on bad debt, passage of legislation to address restrictions on the nation and removal of restrictions on write-offs for employees earning in excess of $75 000 per year.
Lake said that this would enable companies to attract premium talent at competitive rates.
While reiterating the Chamber's firm belief in and support for a green economy as the pathway to a sustainable future, Lake emphasised that "several other areas of economic endeavour are just as important and must be given equal priority if we are to maximise on our developmental efforts".
