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In proving his point, Prime Minister Dr. Kenny Anthony compared local public sector salaries to that of St. Vincent, Grenada and Dominica during his national address Sunday night on the financial status of the economy and the ongoing wage negotiations for public service employees.
According to Dr. Anthony, an accountant II in St. Lucia earns $59,533 per year compared to $40,611 in Dominica, $50,136 in St. Vincent and $51,060 in Grenada.
In St. Lucia, an economist I earns $52,080 per year compared to $40,611 in Dominica, $44,256 in Grenada and $48,711 in St. Vincent.
A police constable I earns $25,176 in St. Lucia, $20,220 in St. Vincent and $15,484 in Grenada, while a police corporal earns $36,992 in St. Lucia, $27,228 in St. Vincent and $23,504 in Grenada.
A secondary school principal earns $63,259 in St. Lucia, $57,948 in St. Vincent, $50,808 in Grenada and $53,387 in Dominica.
In St. Lucia, a customs officer II earns $59,533; $32,532 in St. Vincent and $31,849 in Dominica.
The prime minister however cautioned: “I know it will be tempting for some to argue that St. Lucia is better off than its neighbours and should not be compared with them. However, this is not the case anymore. St. Lucia’s borrowing requirement as a percentage of GDP is the highest in the Eastern Caribbean Currency Union. This was the case in 2010, 2011 and in 2012. If this trend is not reversed very soon, we will be firmly on the path to an IMF programme.”
The prime minister also explained that St. Lucia is not the only Caribbean island facing “serious fiscal caution” due to the worldwide recession.
He said Antigua and Barbuda and St. Kitts and Nevis are facing the consequences of high debt and are undergoing adjustment programmes implemented by the IMF.
“In those islands, expenditures have been severely curtailed and tough measures undertaken to reduce their debt burden,” he said.
Grenada’s government is having problems paying for the services that it provides, including the salaries of public officers. On more than one occasion, he said Grenada has had to resort to borrowing money from its National Insurance Scheme to pay salaries of public officers.
In Barbados, the VAT rate was increased from 15 percent to 17.5 percent in 2010.
“This was only supposed to be for a short while, but has been retained in an effort to manage the fiscal imbalances of that country. Even with these measures, the international credit agencies indicated a lower level of confidence in Barbados’ debt and Barbados has had to suffer two sovereign rating downgrades in the past year. Our regional bank, the Caribbean Development Bank, has also had to suffer the indignity of two sovereign downgrades this past year,” the prime minister said.
He added: “These are difficult and troubling times for everyone, for people, for governments and for institutions. All of us know too well the Kwéyòl saying: “Lè bab kamawad ou pwi difé, wouzé sa’w” or “when your friend’s beard is caught on fire, sprinkle your own.” I ask our unions to consider the temper of the times. Let us look at developments in our sister islands.”
Dr. Anthony further noted that St. Kitts and Nevis implemented VAT in November 2010 at a rate of 17.5 percent with VAT on water and electricity. However, St. Kitts also had to freeze public sector wages from 2011 as part of its IMF adjustment programme.
In Barbados, despite the increase in VAT to 17.5 percent in 2010 and relatively high inflation in the subsequent years, Dr. Anthony said the wage increase has been very modest. He said Barbados had a cumulative wage increase of 2.1 percent increase for the three-year period, 2012-2012.
Meanwhile Antigua has had to freeze public sector wages as part of its adjustment program, St. Vincent and the Grenadines settled for a 4.5 percent increase, and in the case of Jamaica, for the 2010-2012 contract period, public sector workers, mindful of a looming IMF programme agreed in 2012 to zero percent increase.
In Dominica, the government has offered its public sector workers a one-percent increase but the union representing the workers say they will only accept three percent.
“Why then should we be so different?” Dr. Anthony asked.