Right now, I’d say the narrative of change and changing of the guard is so pervasive that it has created an existential hysteria in Saint Lucia; the over reliance on short-term political fads and promises that crush instead of advancing policy ideas, which debases thoughtful analysis.
Having said that, the Senate proceedings on November 15, 2016, were not particularly beneficially, which is really quite extraordinary.
The arguments presented and that of the House of Assembly the week prior, point unenthusiastically to economic fundamentals to boost capital expenditure (primarily infrastructure spending), investment surge [FDI and domestic] and household spending.
Minister in the ministry of finance, Ubaldus Raymond said:
“We changing the face of this country. The printery for example, why should the government be in the business of printing? Why?”
Oftentimes the process and rationale to outsource is hidden, while taxpayers are given a little glass half-empty. Even then, related questions attest to the view that judgment is a confession of character, to understand:
- Who is the preferred corporate entity that will be charged with publishing functions for government?
- What is the market value and asset component of the National Printing Corporation?
- Was there a hostile takeover; or is it feasible that the administration has leaned over backwards in the distribution of nationalised gifts?
On the VAT matter, Minister Raymond asked the question:
“Why the need for an exempted list? Why the need for a zero rated list, [pause for emphasis] why the need?”
Further to St Lucia’s spiral to happy VAT reduction, with Trinidad and Tobago affected by the phenomenon; Ontario, Canada, presents a different model where a 15 percent goods and service tax [GST] was converted to 13 percent harmonized sales tax [HST].
There are some items that don’t attract taxes such as basic groceries.
Independent Senator Adrian Augier had me thinking literally and figuratively, as he put it: “I would like us to Make Saint Lucia Grow Again!”
“Mr President, specifically on the VAT reduction which in fact is not two percent but 16 percent. If you take 2.5 percent off 15 percent it is actually a 16 percent reduction, which I think is a significant matter in the economic life of any country,” he said.
One would have expected opportunity in the outcome of such! However, the caviar in the food basket that once fed consumer confidence will soon produce real pain [12.5%] for most households in February of 2017, earlier than had been assumed.
When adding to consumer’s financial worries comes to pass, the improvised VAT policy would have formed the dual threat of false hope and protectionism.
The depth of government budgetary pain is yet to be clarified in either the upper or lower house. Perhaps this is a smart play, based on the integral calculus of the huge potential decrease of EC$52 million in VAT revenue, and hidden measures to offset government financial planning.
And likewise, the strategy to finance the approximately EC$3 billion national debt [GDP 77 %] and curb overall budget deficit at EC$128 million is not, however, a festive getaway because, when government cost centres increase, this adds to corporate finance risk.
In other words, this demands more policy resource and collaboration on a constructive plan to assist companies’ economic viability, on measures to reduce risk factors, encourage investment and economic growth, and stimulate job creation. In return, boosting output, growing the economy and servicing debt.
More so, there are reasons to be skeptical, though, in terms of a transactional, trans-colonial Saint Lucia, Brexit now engulfing the UK, an “alt-right” Donald Trump White House and French far-right presidential candidate, Marine Le Pen, now looks possible.
As proof of this new wave, fear and protectionism have send shockwaves to most emerging markets across the global.
However, the message to the “establishment” is growing inequality and hopelessness, and that inclusive growth is capable of regaining dynamism and restoring advancement collectively.
Although, for growth levels to rise and economic grow to take root; productivity would have to improve by approximately 1.5 percent annually from the existing labour force, together with an enhanced digital skills revolution, keeping pace with structural and economic reform.
This also lends credence that a public strategy is required to explore new business endeavours to boost commerce, along with the removal of structural deficiencies and endless bureaucracy, in order to surge economic growth [above 4 percent ] to advance the quality of life.
If not addressed, the country will be stuck for the foreseeable future in mediocre corporate investment, absurd taxation, ballooning national debt and, with current policy consideration towards food stamps, a permanent mendicant culture looms.
Indeed, the effects would be regressive and shameful, from an administration “prized with petty bourgeois” to engage in double delusions, as the originator of negative gearing policy.
What’s next, if not to confirm the risk of economic uncertainty, insecurity and vulnerability that has created a deep quandary in scapegoat-based politics?
Turning to other matters that require immediate redress in the economic landscape, Mary Juliana Charles, president of the Bar Association of Saint Lucia, speaking at the annual general meeting of the Chamber of Commerce, Industry and Agriculture said:
“…Every other day the Land Registry is closed… described as a mould infested location… a simple thing like a map sheet, the photo copier is not working.
“We have a Citizen by Investment Programme. You mean to tell me we will invite a multi-million dollar investor to do business and I cannot get a simple map sheet on time.
“I will not touch on the Development Control Authority (DCA) or the Companies Registry; we may be in here for the whole day.”
By all means diagnosing the problem properly and winning the argument is a staggering blow.
The issue is that tactical decisions, legislation nor a feasible growth model is available in virtual reality to determine the country’s future.
The World Bank report on the ease of doing business ranks Saint Lucia at 101 of 189 economies. This ranking needs redress, along with the VAT policy, domestic deficiencies and current economic viability, not advantageous to position leverage that affords, staking out negotiating positions on the world stage, from numerous ministerial travels and attendance at conferences.
This is the height of lunacy. Equally, the philosophy is fiction and, the integral [economic] calculus a long way off, which coincides with intellectual dishonesty and hypocrisy, at an all time high in the country.
Long-lasting progress is best achieved by focusing on structure, legal, economic, cultural and social fundamentals.
If not, this reinforces the narrative that Saint Lucians are getting a raw deal in the villainy of mythical fortification.