Remarks by Hon. Dr. Kenny D. Anthony, Prime Minister and Minister for Finance, Economic Affairs, Planning & Social Security at kick-off workshop of the Saint Lucia Chapter of the Caribbean Growth Forum on Jan. 22, 2013 at Bay Gardens Hotel.
Ladies and gentlemen, it is with great pleasure that I welcome you here to the launch of the Saint Lucia Chapter of the Caribbean Growth Forum. Let me take this opportunity to extend a special welcome to our partners from the World Bank, the Inter-American Development Bank, the Caribbean Development Bank and Compete Caribbean.
Welcome to Saint Lucia, one and all!
Your presence here is testament to how important an occasion this is and I would like to assure our partners that we are indeed very happy to be collaborating with them on the objectives of the Caribbean Growth Forum.
Today’s launch and plenary session is a good opportunity to reflect and dialogue about our future. At issue is a search for a model, an approach to restore growth to our economy, to provide employment opportunities, reduce our debt levels, and ultimately, improve the quality of life of our citizens. This is no easy task for a small island economy in these turbulent times. We are at the mercy of a world economy that has become oblivious to the needs and peculiarities of small island states. We know only too well what it means to be thrown to the wolves as happened in the case of our banana industry. We know too what it is like to be the victim of natural disasters, be they hurricanes or otherwise.
Amidst it all, we must come to terms with this new and different world.
GROWTH DESPITE THE DEBT AND THE DOUBT
The title of the IMF World Economic Outlook in October 2012: “Coping with high debt and sluggish growth” perfectly summarises the state of affairs of the global economy.
Many countries struggle with the deleterious effects of low growth, high unemployment, weak financial fundamentals and increasing debt levels. From that perspective, we are not alone in searching for a new model of economic development, in carving solutions to old problems and shaping a new and different future. The most vital asset in all of this is our courage, our shared resolve and our common faith in ourselves and our country. This is not an economic necessity, to be left to the market to resolve. It springs from our collective will.
The year 2013 is expected to be shaped by the on-going Euro crisis and the need to find common ground on the part of US policy makers with regards to their fiscal policies. The IMF has indicated that the global recovery is expected to weaken and has revised the growth for advanced economies from 2.0 per cent to 1.5 per cent and the growth for emerging and developing economies from 6.0 per cent to 5.6 per cent.
OBSTACLES TO GROWTH
It is in this global context that we dialogue here today to search for solutions to the challenges that face us. We may be small but our challenges are many and complex, sometimes defying economic wisdom and logic.
I dare say that all of us here in this room today are fully aware of these obstacles to growth. In summary, we suffer from a general lack of competitiveness, human resource constraints and a narrow economic base. Historically, our economy has been sustained by only a few industries. Our long admired reputation for fiscal responsibility and macroeconomic stability is under threat by conditions we never imagined would occur in our lifetime. The real question is this: what are we going to do about it?
A RESOLVE TO RESTRUCTURE
It is evident that we need to radically restructure our economy to become more competitive and innovative and this means that we need to find creative ways to more effectively develop and employ our human capital and natural resources to improve productivity and competitiveness in our economy.
The current situation calls us to summon the resolve to be bold and make meaningful changes in our country. It is true that Government must cultivate an enabling environment for growth that includes having appropriate infrastructure, and vital social services. It is true that economic development cannot take place in an environment that is unsafe and insecure. It is also true that Government must enact reforms that allow us to competitively and efficiently provide services to the business sector and the wider public. However, the private sector too must be brave and innovative; it too must face up to the realities of this new and different world. It too must also make a paradigm shift in its thinking, in its approaches, in the ways that it does things. It is vital that the option that Government face at this time is understood by all.
Thankfully, we have common ground, not in all things but in most things. The issue of competitiveness and productivity is one. We all agree that we need to begin a process of change that sheds unproductive work attitudes and practices.
AN INCONVENIENT TRUTH
Whenever the word “productivity” is mentioned alarm bells are sounded. We bristle and become uncomfortable. It is as I said recently, “an inconvenient truth”. The truth is if wages continue to rise and productivity falls then we are in trouble. No foreign investor will look at us, no matter how enchanting, seductive, and beautiful we may be as an island, if we are uncompetitive. And this problem goes to the heart of the challenge that we have. No economy can grow or develop if it is uncompetitive and unproductivity. Every single one of us, from the highest to the lowest, from politicians to daily paid workers, need to be productive and give sound value for what we earn.
OUR ROLE IN THE NEW PARADIGM
As citizens of this country, we all have a role in this new paradigm. We need to re-examine attitudes toward entrepreneurship, business partnerships and the expansion of business beyond our domestic market space. We need to critically examine issues which hinder our ability to produce and market products and services at superior quality and at minimum costs.
Government has already begun initiatives that dovetail with the work of the growth forum. In our Budget address of 2012/2013, we outlined a three-point plan recovery process, that is, job creation, construction expansion and fiscal consolidation.
We have undertaken the creation of short to medium term jobs by a series of measures that are designed to boost our productive sectors and provide much needed support to our social agenda.
We have introduced measures to encourage private sector investment in construction and housing aimed at creating further jobs and restoring our social and economic infrastructure; and finally we have introduced fiscal measures to improve Government’s revenue base, reduce the deficit and achieve fiscal strengthening.
DIALOGUE AND ACTION ON COMPETITIVENESS
However, to arrive at our desired outcome, we need the input of all. Therefore, we are working with stakeholders in the tourism industry and the IFC to benchmark the competitiveness of our tourism industry vis-à-vis other regional and international destinations and to implement a series of actions to result in the improvement of this important industry.
Shortly with continued support from IDB we will bring to life Saint Lucia’s National Competitiveness and Productivity Council which will serve as an institutionalized forum for public-private-dialogue (PPD). It is my expectation that this will be an effective way to achieve consensus on initiatives to stimulate business development, enhance competitiveness, and increase economic growth.
This forum will involve wide-ranging consultations between public sector officials, representatives of small and medium size enterprises, business groups, firms, labour unions, and civil society. Such dialogues will highlight the likely micro-economic foundations for growth and create a sense of partnership with the business community, which increases the likelihood of successful reform.
VISIONING FOR GROWTH
Ladies and gentlemen, amidst all of these initiatives, I am convinced more than ever before, that there is no better timing for Saint Lucians to come together to develop a national vision for our country. A common vision that would unite all our reform efforts to create an integrated National Development Plan that would chart a new growth path for Saint Lucia. In the coming weeks, the public will begin hearing much more on this initiative.
CONCLUSION: A STRONG DETERMINATION
It is my hope that my words this morning have confirmed Government’s strong determination to implement reform that would result in lasting change towards sustainable growth.
Let us take this opportunity afforded here today – a gathering of private and public sectors, civil society and the donor agencies- to come up with concrete plans that will foster equitable, inclusive and sustainable growth that can lead to the enhancement of lives of the people of Saint Lucia.
I thank you.