KINGSTOWN, St. Vincent, Thursday February 26, 2015, CMC – The St. Vincent and the Grenadines private sector says it is encouraged by efforts to make financing more accessible to stakeholders within the tourism industry even as it expressed concerns about the weak performance of the industry.
Brian Glasgow, a member of the accounting firm KPMG, told a Chamber of Industry and Commerce organised overview of the 2015 national budget that this was the feedback from industry stakeholders after the government outlined its fiscal package earlier this month.
During the budget presentation of the EC$969 million (One Ec dollar =US$0.37 cents) fiscal package, Prime Minister and Minister of Finance Dr. Ralph Gonsalves announced continued concession for construction, expansion, refurbishing and equipping hotels.
He said some homeowners are receiving concessions to expand their homes to accommodate medical students, and again mentioned the possibility of a large hotel being built at Mt Wynne on the leeward coast.
Glasgow said that some members of the Chamber will recognise that for the past 30 years, successive governments have been talking about a large hotel at Mt. Wynne.
“So we hope that something materializes,” he said, noting the importance of the sector to the socio-economic development of the island.
“We all recognise that tourism benefits employment, the construction industry, the agricultural industry, but I think — again from talking to players in the tourism industry — there is a lot of concern about our relative position in the regional tourism picture.
“There were some statistics that were discussed during the Budget, and assuming these statistics to be correct, we seem to be on the weak end as a player in the tourism market, and with the potential emergence of Cuba in the tourism market, I think there is a genuine cause for us to start to get more focused,” he said.
Glasgow spoke of a need for more dialogue between the government and the private sector on the future of the nation’s tourism product.
“Otherwise, we will not be able to continue to compete. And, with the eventual completion of the Argyle International Airport, if we do not have the tourism plant to support an airport, we will have an airport that is unable to sustain itself from a cost-benefit perspective.”
The government has budgeted EC$4.6 million for agriculture modernisation and development, and a second six million EC dollar tranche for the Farmers Support Company, a revolving loan initiative.
It has also budgeted EC$500,000 for small business support a similar amount for the arrowroot industry revitalization, EC$500,000 for the upgrade of agricultural stations, and EC$600,000 to develop the arrowroot and cocoa industry.
Glasgow said the perspectives of the private sector on these proposals were garnered through discussions with stakeholders.
“The private sector appreciates the fact that commercial financing is being made available to the agricultural sector because the agricultural sector, by nature, is from a banking perspective, high risk. So bankers typically would not look at agricultural projects very high on their priority scale, so the government is addressing that by making a revolving fund available to farmers,” he said.
“On the other hand, there are residual concerns in the private sector about the ability of small farmers, which we generally have in St. Vincent and the Grenadines … to compete with the large multinationals and the large plantations in Latin America. We don’t have the economies of scale and we don’t seems to be able to take advantage of the fact that we can sell our products as organic product, compared to the large farmers who tend to use a lot of pesticides and so on,” he told the gathering.
Regarding the banana industry, which is still struggling to recover from the ravages of Black Sigatoka, which ran amok amidst government inaction, Glasgow said “the anticipated resurgence in the banana industry is a lot slower than most people would like.
“For many decades, the banana sector has been the driving force of this economy and what we have now is really a shadow of what the bananas industry used to be. There is talk of revitalisation, but from discussions with the private sector, it seems that there is concern that the level of revitalization is not as aggressive as they will love.”
Glasgow also said, that manufacturing, as one of the pillars of the economy, “is not as robust as it should be”.
He said that apart from the efforts of the stalwarts who continue to persist in that sector, supplying the local market and have enter regional markets, “We do not seem to be breaking a lot of new ground in manufacturing.”