In his first-ever budget address to the nation, Prime Minister Allen Chastanet delivered a blistering rebuke of what he characterized as the egregious mismanagement of the nation. Referring specifically to the slow-motion, economic train wreck that was the Labour Party administration, Chastanet described the SLP as an economic vampire. The only legacy left by the SLP, he went on, is the septic, jugular wound they left in the neck of Saint Lucians: “First we must stop the bleeding. The national debt must be reduced before it kills us!”
The country’s economic and social indicators affirmed what we already knew: the country is broke. Saint Lucia has all the trappings of a country on the brink: low growth, high unemployment, and unprecedented levels of debts. The prime minister argued that during its farewell bid to the reins of leadership on June 6, 2016, the SLP left Saint Lucians with a parting gift: the kiss of debt. Over the past five years Saint Lucia’s economy grew only 0.03% – a figure Chastanet described as “unacceptable”.
“We must also address the high cost of doing business in Saint Lucia which gives our competitors an advantage,” he said, reflecting on the country’s crumbling reputation on the Ease of Doing Business ranking which demoted Saint Lucia from 34th place in 2008, to 86th in 2016.
Citing a slight reduction in the unemployment rate from 24.1% in 2015 to 21.6% in 2016, Chastanet vowed to aggressively tackle the pernicious issue of youth unemployment. Saint Lucia’s youth unemployment rate is among the highest in the region, seemingly frozen at over 40%, like a bug in amber.
Not all of 2016, however, was doom and gloom. There was some growth in the Saint Lucian economy over the past year, albeit it modest growth. Construction was by far the most dynamic sector as a result of investments in hotels and commercial properties. Out of all persons who landed jobs in 2016, 17% of them were in construction. Manufacturing also clocked some growth with a 7.2% increase in production, despite Saint Lucia’s infamously expensive electricity costs which Chastanet vowed to attack head-on through a Sustainable Energy Sector Development Strategy aimed at reducing dependence on fossil fuels while creating an enabling environment capable of supporting a renewable energy industry.
Despite his well-documented penchant for tourism, the PM tossed a lifeline to the country’s manufacturing sector: the introduction of a deferral procedure for paying VAT on imports. Last month at a SMA meeting, overtaxed manufacturers vented to the Finance Ministry about the plague of “reverse charging” on the industry. In undeniably inclusive fashion, the deferral scheme announcement was a direct contribution from civil society.
After establishing context, the PM identified five strategic imperatives that his government plans on unapologetically pursuing: creating sustainable employment; social reengineering; making government more responsive to the business community; security and justice; and energy and climate change.