Given the current global economic realities, it would be foolhardy of us to wait or rely on Foreign Direct Investment (FDI) to help us deal with our fiscal and economic challenges. This is largely due to changes that are now taking place in the traditional sources of FDI like the US and Europe. Those countries are now seeking to help their own economies by keeping more jobs within their borders contrary to what they practiced in the pre-global crisis era.
The US and the UK are now outsourcing less to China in their attempts to boost their domestic economy and exports. Even if we are lucky to get more tourist arrivals at this time, new jobs would not be expected as a result due to the fact that the island’s tourism Plant is currently operating below capacity.
Consequently, we MUST do like the US and the UK and urgently seek to stimulate and excite the domestic economy so that some of the billions of dollars hidden away in savings and deposit accounts could march into circulation. In order to achieve that feat; the government needs to intervene to facilitate the expansion of the currently constricted domestic economic space. There are activities that can take place that are currently not taking place.
Permanent income earners need to be enticed to spend (15% VAT certainly does not help). While some may assume a frugal posture at this time; there are those who can and are willing to spend but the construct of the economic space prohibits such expenditures. One big problem is the current shopping hours. Permanent income earners hardly find time to shop; and when they do it is usually at the expense of productivity at their work place (a notorious average price inflating agent). In short, we need to stimulate more spending within the borders of Saint Lucia, both by residents and visitors. Apart from reducing the VAT Tax Rate, the government has a perfect opportunity to make an investment that can have significant immediate and long term impact on the domestic economy. Our suggestion is that the government follows after the 1955 initiative of the Barbados government and institute a subsidized public transport system where a passenger can spend very little to travel to anywhere on island. This initiative has a plethora of revenue and job creating benefits which would very easily justify the annual government subsidy that would be required. There is only a small hurdle to be faced by the Government in this matter – existing bus drivers. In the model that we are suggesting, no bus driver will lose their livelihood.
In fact we are convinced that there would be a need for many more private buses once this initiative begins to the impact the country in the way that we think that it would. Here is the model that we are suggesting. The Government Owned and Subsidized Public Transport System (GOSPTS) will take over only the main routes connecting the major districts around the island from Gros Islet through to the Barre l’isle and back to Cul-De Sac which could serve as the main hub with sub units in other areas.
The remaining routes would remain under the management of the National Council of Public Transport (NCOPT). The GOSPTS may consider initially buying over some of the existing buses into the new system and selling them back to private operators after the anticipated growth in domestic travel. Another feature of our proposal is the use of large buses fueled by biodiesel as obtains, and are available in Brazil. Given the current security threat on buses now; the system could commence with the use of electronic cards and cell-phone credits (transfer of credits on an onboard cell phone system by the boarding passenger).
The creation of the GOSPTS can be funded by selling some existing non-strategic government investments, Loan Funds, Taiwanese Aid, investment by parastals such as SLASPA, investments by stakeholders such as the chamber of commerce, SLISBA, and SLHTA. Its operating expenses would be expected to be defrayed by government subsidies (redirection of existing bus subsidies and reduction in government vehicles as the GOSPTS can be used to move public servants around the island on government business), bus fees, advertisement (Transit TV and bus wraps), private excursions and charters.
Okay I have tried to show how this is going to work; but what will be the perceived benefits and how will it serve to expand the domestic economic space?
1. Consumers and permanent income earners can now spend more time at the shopping centers after work which would slowly cause merchants and restaurants to remain opened later into the evening (9:00pm maybe). This would result in the need for more workers to work multiple shifts. As a result, increases in sales, government tax revenues and private sector investments would follow. The resulting extension of shopping hours will also have the effect of increasing worker productivity as there would no longer be the need to make requests to step out during working hours. Those workers will now have enough time to shop after work and get to their homes whatever time that they please before the last bus leaves which would most likely be around midnight.
2. Jobs that were previously uneconomical due to high commuting costs can now be a thing of the past under the proposed system. Domestic workers for example would be able move across the country to find work without the burden of high commuting costs. Increases in permanent employment would lead to increases in consumption and government tax revenues.
3. The operations of the GOSPTS will cause the creation of some new jobs. The Barbados Transport Board employs about 700 people paying an annual salary of bill of about BDS$29.9 million with a fleet of about 400 buses. A proper analysis would have to be made to determine the size operations that would be required to service the proposed routes here in Saint Lucia.
4. Apart from being used to transport school children, the proposal has other benefits to the education of our nation as more of our people, especially in the rural areas can more easily travel to the urban centers for night classes without fearing how they are going to return home. The possibility of more after-work training can cause an improvement in the productivity and output quality of our workforce.
5. Increase patronization of weekend entertainment activities such as the Anse La Raye and Dennery fish festivals. Prospective patrons who live in distant communities are currently not be enticed to visit those events due to the prohibitive transport costs especially since the majority don’t own a vehicle. With the introduction of the GOSPTS, they would be able leave, say Vieux Fort, and travel to Anse La Raye and head back before the last bus leaves.
6. With more patrons at those communities there would be increases in the sale of food and drinks, guest rooms and other associated services which in turn would increase employment and revenue for the state in terms of sales tax.
7. A proper operating GOSPTS combined with the initiatives of the new Creative Industry Ministry the country can enjoy some level of regional tourism. Regional visitors would find their stay more profitable if they can tour the island at low costs when they visit.
8. It is no coincidence that there are not many houses built along the beautiful coastal bus routes of the island. That is largely because it is not profitable for the current bus operators to make too many stops in those areas. However, with a GOSPTS you will see increases in the constructions of homes along those routes as households would no longer have that problem. With more construction come more employment, government tax revenues and other services such as utilities and grocery shops.
9. Greater patronization of mass entertainment and sporting events would be realized as patrons from all over the country would be able to patronize them without fearing how they are going to get back to their homes. We speak largely of the Jazz festivals, carnival, calypso, football and cricket. 10. There is also the benefit to the development of sports on island. Sports enthusiasts residing in communities without adequate sporting facilities would be able to easily travel across the country to a location of choice to practice their skills. People will travel more if there is a scheduled and subsidized bus system. And as they travel more, they will naturally spend more. Sadly the current bus system does not facilitate such free movement of people. It is too expensive, not scheduled; its operating hours are not consistent island wide. If the government really wants to shift the economic gear of this country this is a project that needs to be pursued with the utmost of alacrity. Now is excellent as the NCOPT is having great difficulties keeping its house in order. Transportation is central to commerce and the country should not be held back by the inefficiencies and ineffectiveness of the current bus system. We need to ‘gas up’ this country and the time is now.
This project can only do well for this country and all concerned. Those bus drivers who would not be absorbed by the GOSPTS will be required to serve the other inner routes and so they won’t be disadvantaged in any way. Besides, those who would be absorbed by the GOSPTS will be working under better conditions where they can have their vacations and other benefits that permanent workers enjoy. Naturally, this would call for a review of the route band system to allow buses that would be pushed out by the GOSPTS to operate elsewhere.