If the prime minister hadn’t already made it clear enough in his May Budget address that better days are a long, long way from arrival, that the nation must somehow find a way to deal with the Sisyphean stone that now threatens our very survival, then consider this:
“We really have issues and these issues are with low productivity, inadequate skills and people not being properly educated.” Yes, this in 2013—not 1964. On the other hand, “if the people had better skills and more education, we would not necessarily be able to absorb everybody, because the number of new jobs being created is very small.”
Besides: “As long as we have those issues of low productivity and inadequate skills, it means that even where there are sectors that are improving and generating more growth, unemployment will not change in those sectors that don’t employ a lot people or have to bring people in to perform the kind of skills necessary.”
The doomsday delivery was chartered account Richard Peterkin’s contribution to the Budget Review seminar at Bay Gardens last Wednesday, hosted by First Citizens Investment Services. The event featured a panel of local and regional experts who were expected to “analyze and break down the nuances of the Budget” presented by Prime Minister Kenny Anthony in May.
First Citizens’ regional manager Carol Eleuthere-JnMarie opened the session before research analyst Vagie Bhagoo-Ramrattan provided an overview of Saint Lucia’s economic situation. The last mentioned addressed VAT, the implementation of which several months ago had drawn the ire of many Saint Lucians.
Said Bangoo-Ramrattan: “VAT revenue totaled almost $64 million, which was actually eight percent of current revenue, and that’s just for the period November 2012 to March 2013. Once VAT is fully implemented and all the administrative issues are taken care of, it has the potential to really propel the fiscal account, particularly the current account, forward.” She did not say what she meant by “fully implemented.”
Also on hand was the finance ministry’s permanent secretary Reginald Darius. He confirmed that for the local economy “last year was not particularly a good year.” Most sectors had contracted, he said, save for the agriculture sector that was “pretty strong.” He said hotels and restaurants had “rebounded from 2006, despite the decrease in stay-overs, partially because of the added increase in dead nights, which counteracted the decrease in arrivals.”
The key to the budget was to boost growth and sustainability, said Darius. “Both of them are difficult and to do them together is even more difficult. Fiscal sustainability, or fiscal consolidation, hopefully will stabilize your debt. As a small economy, we think that boosting growth is the only way we will be able to grow on a sustainable basis. The only way to grow is through export expansion. If you think the budget is strong, then try to focus on structural reforms.”
Also needed was “well-targeted infrastructural development, which implies that with fiscal sustainability issues we need to find other ways of funding those investments rather than central government taking the direct role.”
First Citizens Investment Services annually promotes the seminar, typically within ten days of the budget presentation.