Add St. Lucia News Online on Whatsapp +1758 712 6700; get major headlines and source us with news tips, photos, and videos

COMMENTARY: Keynesians’ liberal economic days are gone (Part 2)

Melanius Alphonse

 Share This On:

Melanius Alphonse

Saint Lucia’s central statistics current data reads: “The inflation rate for Saint Lucia for the year to date to June 2013 was measured at 3.5 percent over the same period in 2012. The inflation rate for the food and non-alcoholic beverages category of consumer prices was 9.0 percent for the year to date up to June 2013.”

Economic growth: “Total value added at constant prices for the Saint Lucian economy decreased by 0.8 percent during 2012 when compared to an increase of 1.5 percent in 2011. This was due largely to an eight percent increase in the agriculture sector and a modest increase of 2.6 percent in hotels and restaurants. This compares to a decline in the construction sector of five percent in 2012.”

Has the construction stimulus package “blocked a hole” – to borrow Hon. Phillip J. Pierre phraseology? Absolutely not! In fact the hole is growing wider, compliments of SLP liberal economics.

Current estimates reveal that the Construction Stimulus Package has cost the government of Saint Lucia EC$56.3 million. That number is expected to increase, causing more skilled trades job losses, lower wages, zero government revenue and more borrowing by the detractors of progress – the Saint Lucia Labour Party, as witnessed in parliament on February 11, 2014 – to balloon the island’s overdraft facility to EC$55 million – due to the government’s inability to source funding, including bond instruments, as proposed in the budget statement for the financial year 2012/2013.

It is even more shameful for Dr Kenny Anthony’s Labour government, even if he tries to duck the minimum wage debate, claiming it is too sensitive to discuss. This is by all means an insult to workers and the people of Saint Lucia.

Inequality is a growing concern that echoes in the depressed incomes of most households and therefore constrains consumption growth, which in turn reduces economic growth. It also raises the risk of instability — fuelled by the awareness of unfairness.

Therefore, reducing inequality via appropriate minimum wage parameters is an important equation to boost economic growth, increase demand, and to have policies that reinforce the links between improved productivity and wages, reducing recruitment cost and to achieve a better bottom line.

Also, making sure the minimum wage is in close proximity to 60 percent of the average wage is smart policy to tackle market-driven inequality, and to affirm a principled position that, since everyone’s work contributes to economic growth, it is only fair to have everyone share the benefit.

This would greatly benefit all to focus on the productive economy, and make a firm commitment to investing in people, skills and jobs, to improve the skills of workers in Science, Technology, Engineering, Maths (STEM) and reduce economic disparity. For the simple fact is that, if no action is taken to tackle the youth jobs crisis, long-term unemployment, high drop-out rates and other pressing labour market issues, the hopes for sustainable growth will be destroyed, while sowing the seeds for deeper social unrest that is already showing up in communities across Saint Lucia.

In the US and Canada, the minimum wage debate is raging openly in every possible medium. Social media, radio and television; in economic and political chambers to the point that policymakers have decided to increase minimum wage to US$10.10 an hour. Canadian workers are expecting an increase to CAD$11 an hour this year that is pegged to the rate of inflation for increases thereafter.

In Saint Lucia, the current minimum wage is EC$350. The proposed increase is widely expected to be EC$750 monthly; an amount that will continue to lock people in deeper wage stagnation. This has economic implications for the purchasing power of the poor, to a balance lifestyle, skills development and higher education, thus creating a further burden on the health services, social services and to legalize the passive dependency syndrome.

Under Dr Anthony’s Labour government, small businesses and the middle class continue to lose hope. The standard of living has dropped. Household debt is rising. As this decline continues, families are in crisis. Crime is on the rise and the underground economy is thriving – by narrowing the beneficiaries of growth to a smaller elite group.

At this point, if Dr Anthony’s Labour government is unable to negotiate a minimum wage of no less than EC$1,000 dollars monthly for the workers of Saint Lucia, then his administration would have directly contributed to the cycle of poverty and will have no legitimacy to pride itself on Bread, Justice and Freedom for the malaway!

Saint Lucia may be caught between a rock and a hard place depending on what happens in the external markets of North America and Europe, but it is really the weakness to act with a focused policy, a clear and concise economic strategy for Saint Lucia that really stalls the way forward. Coupled with an isolated political philosophy of rhetoric, deflection, obstruction and fiscal profligacy of economic leadership to persuade business and investment to appropriately leverage Saint Lucia’s resources towards economic growth.

As a result, corporate leaders, both local and international, have turned a deaf ear to Dr Anthony’s Labour government construction stimulus package (or loyalist bonanza in disguise): projects of dubious merit, and weak job creation initiative for the past two years, to expand business operation and the hiring of employees.

But as skillfully as Dr Kenny Anthony may try to distract the people of Saint Lucia, he cannot ignore his miserable record and incoherent brand of socialist governance that is failing miserable.

Therefore, the LPM urges the SLP government to borrow Nina Compton’s top chef knife to cut the fat in cabinet and government of symptoms of ministerial inefficiency and to get lean.

Thereafter, as a progressive option, Dr Kenny Anthony’s Labour government should borrow the actionable ideas of the LPM as follows:

1. Review corporate taxes and the VAT tax policy for a more equitable allocation and collection of existing taxes (e.g. one flat rate), enhance local revenue collection and to finance the current account deficit with more inflows of corporate service, foreign direct investment (FDI) and financial services

2. Build institutional capacity to support energy, trade, technology, infrastructure, agriculture development, talent development; and to streamline efficient systems that allocate resources well to achieve high growth and reduce risk

3. Reduce the size and cost of government and undertake a voluntary IMF renewal agreement for fiscal consolidation of deficit reduction below four percent of GDP

4. The implementation of universal health care and a drug policy reform

5. The full adoption of the labour code and the approval of minimum wage to EC$1,000 monthly

6. Expedite public sector modernization along with the redistribution of business development sectors from the public service to the Chamber of Commerce to enhance private sector structural services, stimulate investment and to improve the effectiveness of basic services

7. Accelerate financial sector reforms for greater oversight and governance, regulatory independence, accountability, and public sector financial management (debt servicing, risk management) legislation and the rule of law

8. Reduce government expenses and financial risk in foreign holdings and operational liabilities in office rent, lease and automobiles

9. Combine the use of monetary policy, structural reform and fiscal stimulus, and to enable a better balance between price stability, growth and inflation in an enabling macroeconomic environment for strong investor confidence

10. Make use of the instruments of capital markets, insurance and hedge funds in alignment with regional and global markets to make business development financing, capital and housing financing and equity financing accessible – as well as a clear plan to empower cooperatives and pension funds, encourage greater local savings and Diaspora investment options

11. The implementation of a Centre for Policy Alternatives; and a Centre for Innovation to enhance the promotion of skills upgrade in Science, Technology, Engineering, Maths (STEM) research and development (R&D)

12. Develop enterprise in areas of skills development alongside agro-commodities markets, farm and cooperative markets and initiatives like the LPM home and garden club

13. Proceed with a number of new residential, commercial and civil projects that were deferred upon coming to office on November 28, 2011, and continue investments in infrastructure development of airports, seaports, roads, bridges, public transportation, clean energy production, utilities resource management and distribution using the three Ps model (public-private partnership – PPP) and to create new financing structures for long term funding pools of investments (Saint Lucia Development Bank)

14. Return to a market based approach to development such as the LPM Sulphurcity Sustainable Action Programme (SSAP) and Manufacturing, Agriculture, Infrastructure development and Tourism, (MAIT), powered through Science, Technology, Engineering and Maths (STEM)

15. Enable access to microloans and low interest loans, low bank charges and credit card fees, for home based start-ups (that centre on the family – rural and community development ) women and youth in the areas of agriculture and agro-business, solar energy, and communication technology

16. Rebuild rural and community development through the model of town and village councils via the open election model of governance with shared responsibility and decentralization between central government and councils. Urbanisation is an imperative to address poverty, healthcare and education to empower job creation and economic growth

17. There is an urgent need for a land use policy, the protection of farmlands, water resources and animal habitat via a National Land Trust, and to keep farmlands in the hands of farmers for generations to come

18. Promote the development of aquaculture, biogas and greenhouses, agriculture and energy agro-business, fish production, and in the process increase farm productivity with the goal to reduce by 30 percent the food import bill; close the trade gap imbalance; safeguard jobs and foreign exchange

19. On matters of fair trade and competition, merger and acquisitions there is need for a robust competition bureau and consumer protection legislation

20. Support manufactures to retool plant and equipment; provide short-term tax relief to curb high raw material cost and the promotion of renewable energy to produce competitive products to revive local demand and satisfy international markets

21. Focus on some heavy lifting in overseas trade and commerce in major hubs, cities and regions to build a Saint Lucian brand and boost a real economy, instead of a La Charité economy that gives malaway pluck!

In order to realize a year of renewal, the solution lies in progressive and responsible planning, clear policy direction and decision making that is economically sound to favour the long-term investment horizon.

Saint Lucia’s opportunities are not infinite for foreign direct investment, trade, development inputs, infrastructure and private sector investments.

A such, it is time not only to engage in real economic conversations but to implement policies that would embody these actionable ideas to meet the desperate problems Saint Lucia faces, but also to reposition Saint Lucia for larger market needs and to focus on future openings to define the economy and its people.

The time for platitudes is over!

Melanius Alphonse is a management and development consultant. He is an advocate for community development, social justice, economic freedom and equality; the Lucian People’s Movement (LPM) critic on youth initiative, infrastructure, economic and business development. He can be reached at [email protected]

Copyright 2020 St. Lucia News Online. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.


  1. Interesting read!! But I will start by saying, governments do not have monetary power, especially not GOSL. I once read a quote which said "give me the power to control ones money, and I'd car not, who makes the law"... All we can do is comply with the IMF sanctions and work within the limited founds they provide to us. I admire the 30% food import reduction goal you recommended to set, but I think this should be over the cost of 5 years. We need to take back our country out if the hands of the IMF... I see VAT as surety for debt... If we are to take over food production, we need to start with the lugistical things like proper markets, access to running water on farms, access to electricity on farms, proper roads to farms... Etc... This would put all the factors of productions to work, thus increasing GDP vastly.. I believe in farmers!!

  2. Well, that's what you get with lawyers who's got no background in economics...from Compton to Kenny.

  3. I am still unable to understand why SLP was voted back into government. Yet although they were voted by the populace there is no reason why they treat the populace with such contempt, resentment and disregard. Talking about minimum wage is a sensitive subject, yet placing 15% VAT wasn't? A modern airport, which would create years of employment, was too good for SLU they stopped it. The vendor area for poor people in Barbonneau closed. Talk of university status for SALCC so that education may elevate young ones from ignorance and give them skill useful anywhere in the world has been stifled. Sports and entertainment initiatives to give youths another outlet to earn a living has no support from the government. etc etc etc...the question really is this: did we get the government we deserved...Heck no!

  4. Instead of putting money towards step, Government could make those monies available to farmers who have an otherwise difficult time accessing funding through banks/credit unions through soft loans, on certain conditionalities, that is, employing a certain number of people. In that way, Government can recover their money, ensure that people have more sustainable jobs, food security improved and maybe our import bill will be lower.


Leave a Reply

Your email address will not be published.

For security, use of Google's reCAPTCHA service is required which is subject to the Google Privacy Policy and Terms of Use.

I agree to these terms.

This site uses Akismet to reduce spam. Learn how your comment data is processed.