St Lucia economy is on the rebound – Anthony

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St Lucia prime minister, Dr Kenny Anthony (File photo)

CASTRIES, St. Lucia, Tuesday December 2, 2014, CMC – Prime Minister Dr. Kenny Anthony says the local economy is beginning to turn around and St. Lucia should return to positive growth by the next financial year.

Anthony, addressing the conference of delegates of the ruling St. lucia Labour Party (SLP) on Sunday, said there is no doubt that the one issue that transcends all other issues and “that is on the mind of every citizen is the state of our economy.

“We inherited a broken economy from the UWP. Our job is to fix it,” Anthony said, telling supporters there is light at the end of the tunnel and “we are on the right track. We must persevere to the end”.

He said negative growth has now decelerated “and I believe that we will see a return to positive growth next financial year.

“We have bottomed out. Little green shoots of growth have begun to appear,” Anthony said, noting that the recovery is being led by the tourism sector.

“Today, we are experiencing stay over arrivals that are six per cent above the recorded figure for the same period last year. Barring any unforeseen circumstances, we are set for a record year in tourism arrivals.”

He said that airlift from key source markets increased significantly over the past year, with the United States in particular growing by 11 per cent between 2012 and 2013. Additional airlift came from new gateways in the United States, the United Kingdom and Canada he said.

“When we came into office, three hotels were in receivership. One was on the verge of collapse. Today, all three properties are out of receivership, in the hands of new owners and contributing to this economy. “

The SLP leader told delegates that foreign investors were now returning to St. Lucia and that on the fiscal side, “our deficit has not worsened but the delay in arriving at an agreement with the public sector unions has not given us the benefit of the adjustment we needed.

“Despite this disappointment, I want to place on record my thanks to the members of the Trade Union Federation for agreeing to a wage freeze. As I have explained, a wage freeze only addresses future expenditure. It will not resolve the current fiscal deficit.

“The good news is that there is hope that we can hammer out an agreement with the Trade Union Federation. As I have maintained throughout, we can do this together, as one nation, one people. But the job on the economy is unfinished. We must complete it.”

Anthony said that the main opposition United Workers Party (UWP) does not have the answers to the situation confronting the island with party officials indicating that should they win the next general election there would be a reduction in the Value Added Tax (VAT).

Anthony warned that a reduction as small as one per cent would result in the loss of revenue of approximately EC$21.5 million (One EC Dollar =US$0.37 cents).

“Therefore, a five per cent reduction will result in approximately EC$107.5 million loss of revenue. We already have a fiscal deficit. Since a reduction of VAT will aggravate a loss of revenue, then there are only two options: Introduce more taxes and or cut back expenditure more sharply. “

He asked whether this was the strategy being outlined by the key opposition UWP figures, including its leader Allen Chastanet.

“What new taxes they plan to introduce to address a shortfall in revenue? Maybe, they have told their friends in the hierarchy of the CSA (Civil Service Association) and I should ask them.

“This economy is delicately poised. We are making good, sustained progress. My job is to prevent this economy from falling into the waiting jaws of the IMF (International Monetary Fund) . Now is not the time for recklessness.

“We have a lot going for us. Sometimes we have to take two steps backwards to take a giant leap forward. It is so with the recent drop in rankings as the best place to do business. We will recapture our rankings because we are not idle. More changes are on the way.”

Anthony said that the recent Economic Freedom Score done by the Heritage Foundation has put St. Lucia 33 in the 2014 Index of free economies, in terms of improvements in labour freedom, freedom from corruption, offsetting combined declines in business freedoms, monetary freedom and fiscal freedom. He said the island also placed second out of 29 countries surveyed in the South Central Caribbean region.

But Anthony acknowledged that there can be little doubt that the most burning problem facing St. Lucia y especially our youth, is unemployment.

“It is also true that since our assumption of office, some of our people have lost their jobs as companies, including banks, attempted to restructure their operations. We share the pain and anguish of all those who have been affected.”

But he said his government has been putting in place several initiatives to deal with the unemployment factor, noting that on assuming the government a few years ago “we promised the people of St. Lucia that we will “inject EC$100 million immediately into the economy for job creation and reconstruction activities.”

In his address, the SLP leader said that supporters should be prepared for the next general election, which he said “will be like none other.

“You must, therefore, rouse yourself from your slumber. The detractors are now clearer in our sights. You know the song that goes like this: “I can see clearly now…” Well, we see them clearly now. The enemies of progress, those who wish to take us back to the days when only the well to do mattered,” Anthony said, adding that without being apologetic “the entry of Allen Chastanet into the leadership of the United Workers Party has seen the most divisive and class driven politics in our country since the independence of our country in 1979”.

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