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COMMENTARY: Keynesians’ liberal economic days are gone (Part 1)

Melanius Alphonse

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Melanius Alphonse

The biggest bluff to Saint Lucia’s politics and economic environment may very well be the arrogance that assumes we are all Keynesians.

The affinity by the prime minister and minister of finance Dr Kenny Anthony to portray variable depletion of fiscal and political influence is sticking, as has been displayed forcefully, to deliver a double red card on the people of Saint Lucia.

The first red card was the re-election of the Saint Lucia Labour Party (SLP) on November 28, 2011, on the hypothesis of “our blueprint for growth” concealed with high taxes, high spending policies and now, with the conjecture of “a year for renewal”, without accountability, restoration and a redevelopment plan going forward.

The Lucian People’s Movement (LPM) continues to bring to light the SLP government’s job creation programmes, such as the National Initiative to Create Employment (NICE), the Short Term Employment Programme (STEP), the Construction Stimulus Package and other incoherent initiatives that continue to fail miserably.

Saint Lucia’s central statistics only recently put the growing unemployment number at 24.9 percent (as of the third quarter of 2013), a frightening new record.

A more critical number not reported is the percentage of the labour force of younger people (18-35 years) who have stopped looking for work; and the growing population of middle-aged unemployed grandparents without a revenue stream or the adequate support of a social safety net.

The LPM reiterates that the government must give priority to a master plan for sustainable growth, job creation, poverty reduction and crime reduction in a systematic manner. With an accompanying new education approach to science, technology, engineering, maths (STEM) – and the introduction of an apprenticeship and job training program to narrow the mismatch of the necessary skills that employers look for, and are prepared to pay a living wage for the services provided.

In January 2014, most forecasts, including the international Monetary Fund, estimate that the global economy may grow by about 3.5 percent. While China’s growth of seven percent to eight percent remains a factor in keeping global demand relatively buoyant and helping raw material exporters in Africa, the Americas and Australia. Both the euro zone and Japan are expected to grow from 1 percent to 1.5 percent next year.

The assumption is, if forecasts work out and the rich countries average two percent growth in 2014, while the emerging economies average 5 percent, the expected 3.5 percent overall growth would be a rate similar to what the world experienced from 1995 to 2004, except that this 3.5 percent would be reached by the higher weight of the emerging economies offsetting slower growth of rich nations.

It is quite possible that a substantial boost for growth and renewal could emanate from energy, trade, technology, infrastructure, and talent development to create jobs quickly.

This painstaking compilation is necessary to put into perspective the future horizon and to understand my second look at the paralysis of liberal economics as delivered in an undemonstrative and dejected speech to the nation on January 26 by Dr. Kenny Anthony that “Tough and sometimes unpopular decisions have become necessary.” However, he made no attempt to say what the tough and unpopular decisions would be. Or to substantiate with some degree of reasoning the extent of sour economic reality he is cuddling.

This is not unusual for a savvy political veteran and a political party with deep cynical moves that bluff voters in broad daylight to elect an empty cabinet of ministers. This reminds me to draw your attention to my previous article “Why we don’t need cabinet doctors”, dated January 24, 2013.

In this article, I made the case why Saint Lucia needs economic practitioners, who are experienced enough, and would not feel overwhelmed when confronted with the socio-economic challenges, including some ideas and math equations that a cabinet of doctors should resolve. It was my observation then that “the economy continues to suffer from chronic retardation and protracted uncertainty.” Regrettably I was correct!

In the prime minister’s speech he said, “I believe that the worst is over for our private sector.” He went on to say, “There has been a good, solid rebound in tourism. Stay-over arrivals for the period January to December 2013 totaled 317,318 visitors, a 3.4 percent increase from the previous year. The island recorded increases in nine of the twelve-month period with June and September recording double digit increases. Likewise, we experienced a 5.3 percent increase in cruise arrivals over the previous year, 2012, particularly between the months of May to October. There is evidence of renewed life in the real estate sector.

Some of our hotels are now engaged in expansion and refurbishment. Foreign investment is gradually returning to Saint Lucia.” He continued, “I cannot say the same thing for the finances of the government of Saint Lucia. This is where our problem exists.”

This is precisely what I want to focus on – unbalanced growth.

As much as the prime minister would hope to cling to the positives to outweigh the negatives, this hope remains counterproductive without a credible job creation plan and a financial reform agenda, targeted towards (jobs, growth and prosperity) economic stimulation. Inflation is pushing people every day into deeper poverty. Home rentals and ownership, health care costs, utility bills, public transportation, to name a few, continue to increase.

Yet, despite the pronouncements of increased tourism arrivals and Dr Anthony‘s assertion that “I believe that the worst is over for our private sector”, his Labour government has failed to deliver jobs and labour reform to put people back to work for better days.

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]


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  1. Good Day Mr Alphonse, once again you have not fail to amaze me. That having being said, I have only this one thing to say. You above all else should know that no government cannot create jobs, rather it is the private sector which has the ability to do so. The government can and should create the atmosphere for job creation.

    • You speak my mind. But in fairness to Mr Alphonse I think the title of his article shows he understands the limits of Government. Problems always happen with a nation's finances when politicians (usually lefist ones) start promising things with other people's money.

      All of us in society have to learn that Governments themselves have no money, they either tax you and/or borrow on your behalf. It just ends up Peter robbing Paul.

      • I am in agreement with you, politicians when campaigning should not promise the people that they will create jobs but rather they should assure the people the they will create the atmosphere for job creation. Two thousand NICE jobs are not sustainable to revamp the economy as this is short term. However two thousand long term jobs created by the private sector will better sustain the economy.


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