It comes as no surprise that Prime Minister Allen Chastanet—who served as the island’s Tourism Minister from 2006 to 2011—is head-over-heels for the industry, but during a candid meeting on Friday with Saint Lucia’s Manufacturers Association*, he reassured local stakeholders that he is equally as committed to developing a growth-oriented environment for the island’s manufacturers as he is to attracting critical foreign investment to its shores.
With an annual budget address looming, the prime minister’s attendance at the SMA roundtable marked the first time a head of government had met with the island’s manufacturing sector at such an intimate level—undoubtedly a positive sign towards the much-needed rehabilitation of public-private-sector relations that had been forcibly flatlined by five years of pseudo-socialism, or what Churchill described as “the philosophy of failure.”
The PM began by addressing the 800-pound gorilla in the room: tourism. Illustrative of the slightly pugnacious relationship between the two industries, members of the SMA cited the “preference” of hotel operators to import foreign goods instead of sourcing them locally—though hardly a recent problem, but an important one nevertheless, evidenced by Kenny Anthony’s quota-based regulations regarding the sourcing of local chicken.
Cautioning against the addition of more regulations on an already overly-regulated industry, Chastanet remarked: “We have to be careful. In countries like ours, foreign exchange is like oxygen. If you’re in the car with the windows rolled up, and the air condition is blowing recycled air instead of using fresh air, your windows will soon fog. The tourism industry earns 85% of our foreign exchange, so on a certain level, as a community, we must come to understand that other industries cannot prosper without the success of the tourism sector.”
Elaborating further, the PM described the higher relative costs associated with operating local hotels versus neighboring islands as one reason for precaution: “It’s almost twice as expensive for an American to fly to Saint Lucia as opposed to flying to Jamaica. That makes our hotel rooms almost twice as difficult to fill. Take Sandals, for example: $800,000 a month in electricity. If they were in Trinidad or Tobago—$120,000. These are just examples, but that’s the reality we’re facing. We have to use tourism as a mechanism to stimulate wider growth in our economy.”
Having established tourism’s place in the pecking order, Chastanet fielded questions from the audience of under-appreciated and over-taxed business owners—all of whom continue to fight tooth and nail in a country whose domestic manufacturers are described by the Caribbean Development Bank as “highly exposed to competition from foreign firms due to low tariffs.”
The primary contentions expressed by manufacturer after manufacturer were all the same: how the feverish implementation of the Value-Added Tax had ravaged the cash flows of their businesses, and their inability to fulfill financial obligations to anxious suppliers, inflexible port authorities, and an onslaught of marauding Inland Revenue auditors.
Beginning to grasp the severity of his manufacturers’ plight, the tourism-champion appeared to soften. Before closing, he reiterated his commitment to “doing what is right for local manufacturing,” while noting that a more active and vocal private sector would be a “good thing.”
* Star Publishing Co. is a SMA member.