PRIME MINISTER'S BUDGET ADDRESS
Tuesday, 28th March 2000
INTRODUCTION
Mr Speaker, the 3.1% economic growth recorded in 1999 extends
St Lucia’s post election recovery into yet another year. Indeed, this is the
highest growth rate achieved in the last seven years.
This growth has been produced through an appropriate mix of
Government activity, private initiative and community participation. Growth has
also been achieved jointly with small and large businesses. It has been achieved
through rising foreign investment and expanding industry. This Government values
those partnerships.
Some of this growth has also been created through improved
efficiencies; particularly where Government has either restructured or reduced
its presence in specific sectors. This has allowed Government to focus its
concentration and its efforts in really critical areas.
That focus is reflected in this budget. By way of example,
the Capital Programme contains those projects which are most likely to be growth
producing; those projects most likely to create and sustain employment. It also
takes a realistic view of what can be achieved within the financial year and
what rates of non-inflationary growth can reasonably be achieved.
Mr Speaker it is already known that this year’s budget is
some 2.4% less than the last year’s. It should also be known however, that we
are entering a phase in our economic development where this is quite appropriate
and there is every reason for such realism and constraint. Nor is this an
anomaly as some radio pundits suggest. It happened in 94/95 and again in 98/99.
Indeed, the shrinkage in 94/95 was as much as 6.8%. Nor are we alone. In
Barbados, the capital account of the National Budget shrunk by 49% to a
seven-year low between 1992 and 1993. And so we move on Mr Speaker, not only
strengthening and modernising, but enlightening as well.
Mr Speaker, this budget contains those initiatives most
likely to continue the process of strengthening, modernising and repositioning
the economy. Moreover, Mr Speaker, it seeks to facilitate, support and sustain
growth; not simply to expand the public sector at the expense of the rest of the
economy.
True, we have had adjustments. We have created new and more
efficient revenue measures, and abandoned others which were tedious and unjust.
This has been part of the repositioning, Mr Speaker which allows for record
growth and efficiency gains.
Not only has this strategy produced the highest growth rate
in 7 years, it has also driven Direct Investment up by 4%. Other Investment, as
reflected in the Balance of Payments, is up by 63.4 million dollars. At December
31, 1999 employment was up by an estimated 2,300 jobs. The transformation and
diversification of the economy is proceeding apace.
THE INTERNATIONAL ECONOMIC ENVIRONMENT
Mr Speaker, as we contemplate the position of our small
country in the world economy, a few notable features of the changing
international environment are inescapable.
In the 1990’s, controls on the movement of foreign currency
and capital were systematically reduced in emerging markets. This followed
extensive liberalisation in developed countries during the 1970’s and 1980’s.
As a result, global financial markets are today more integrated than ever.
This permits capital to flow from country to country with
relative ease, thereby making additional resources potentially available to
developing countries. Capital, however, can flow out as well as in, causing
severe economic instability, as exemplified by the Asian financial crisis.
Moreover, this integration of financial markets, facilitates the spread of
financial shocks from country to country. Strategies to lessen these effects and
to strengthen domestic financial systems, must become an integral part of the
development of our own financial markets.
At present, the international economic environment is also
characterised by low and stable inflation. This is attributable in part to the
self-imposition of monetary and fiscal discipline by many developed and
developing countries. It is also related to spread of competitive forces fuelled
by changes in technology. These have helped to dampen global inflation to a
40-year low. This has proved to be a boon to small open economies such as ours.
It means that the country’s resources can stretch that much further, and costs
can be contained.
Given the general global environment of low inflation,
volatile financial markets and some degree of economic instability, how did the
world economy fare during 1999 and what are its prospects for the year 2000?
In the aftermath of the 1998 financial crises, growth in the
world economy recovered to 3% in 1999. Contributory factors include strong
non-inflationary growth of 3.7% in the U.S.A., an apparent end of the Japanese
recession, recovery in South-East Asia, relative stabilisation of financial
markets and a relaxation of monetary policy in developed economies.
The major industrial countries as a group grew by 2.6%
compared to 2.2% in 1998. Growth in the European Union slowed to 2.1% compared
to 2.8% the previous year. The U.K grew by around 1.1% in 1999 compared to 2.2%
in 1998. Germany grew by 1.4% as opposed to 3.2% in 1998, and the French economy
grew by 2.5% against 3.2% in 1998. Restrictive labour market policies which
inhibit efficient and productive employment may have been a significant factor
in the sluggish growth in Europe. In Canada, which benefited from the strong
performance of the U.S., growth was a robust 3.6%, compared to 3.1% the previous
year.
Developing Countries
Developing countries as a group grew by 3.5% in 1999,
compared to 3.2% in 1998. Weaker growth in Africa, the Middle East and Europe
was offset by strong growth in Asia of 5.3%. The recovery in Asia followed
closely on export growth, competitive exchange rates, lower inflation, recovery
in capital inflows and restored confidence in the economies of the region.
The prognosis for the world economy this year, is for higher
growth of around 3.5%. This is up from 3.0% last year, and is led by growth of
4.8% in the developing countries, compared to 3.5% in 1999. Prices are expected
to continue their stable trend, despite the acute rise in last year’s
petroleum prices. Increases in fuel prices, particularly during the second half
of last year, do not seem to have had a substantial effect on overall inflation
in 1999.
Growth in the main markets for our exports, including service
exports like tourism, is expected to be higher this year. The major exception is
the U.S.A. which is expected to grow more slowly this year at 2.6%, compared to
last year’s 3.7%. It is anticipated that the U. S. economy be reigned in to
avert higher inflation as resources become scarce. Strong U.S. growth in recent
years is starting to stretch resources to their limit.
The lesson for us in the Caribbean Mr Speaker, is that we
must position ourselves to take advantage of higher growth anticipated for the
world as a whole and for most of our trading partners. This budget seeks to
support such a process.
REVIEW OF REGIONAL ECONOMIES
Taking the regional perspective, economic growth within
CARICOM was consistently positive during 1999. As expected in an area with such
diverse economies, the growth experience (compared to recent past performance),
was mixed.
Regional economies, being open, have inherited benefits from
low inflation and economic recovery in the industrial countries. On the other
hand, foreign exchange earnings were adversely affected in some of the countries
dependent on Agriculture. In addition, the damage caused by Hurricane Lenny late
in 1999, had a negative effect on some countries, namely the Bahamas, St Kitts,
Antigua and Barbuda, Dominica and St Lucia.
Our own experience of the destructiveness of Lenny, is
sobering. We live in a region vulnerable to natural disasters. Hurricanes,
landslides, earthquakes and the like, will continue to be a part of our
"development" experience. We obviously cannot ignore them, and must
set aside resources to meet unforeseen events, take steps to mitigate the
effects of disasters and insure against associated risks.
It is in this connection that we have insisted on the
regional Emergency and Disaster Mitigation projects which begun last year and
are financed by the World Bank, the Caribbean Development Bank and regional
Governments. Considerable resources have already been spent, and more will be
spent this year, on strengthening the country’s physical infrastructure of
roads, bridges, sea defenses, etc. to minimise the impact of disasters on human
settlements.
Mr Speaker, the main sectors which provided the impetus for
growth in the CARICOM countries are Tourism and Services, Construction,
Agriculture and Manufacturing.
In Tourism, stayover visitor arrivals grew by about 4% for
the region as a whole. Although this figure is lower than the 5% recorded for
1998, it still provided a significant stimulus to growth. The increase occurred
because of the availability of more hotel rooms and additional flights into the
region. The countries with the fastest growing tourism sectors were the Bahamas
(13%), the British Virgin Islands, and Turks and Caicos Islands, both of which
grew by over 8%. Dominica, St Vincent and the Grenadines, and the Cayman Islands
experienced declines, while St Lucia’s stay-over arrivals were higher by
around 4.6%.
Construction activity was generally buoyant throughout the
region, including St Lucia. It was driven by public-sector projects, tourism
infrastructure, including hotel refurbishment and construction, and residential
accommodation. Its impact on both employment and economic growth was positive
for the Region as a whole.
Agriculture in the Region was adversely affected by hurricane
activity, and in the case of the banana industry, by the unresolved issues
affecting that sector. However, improved banana quality and better prices helped
to cushion the decline of the banana sector. Elsewhere in Agriculture, sugar
production rose significantly in Barbados, Guyana, Jamaica and Trinidad and
Tobago in response to better prices internationally. The Agro-Industrial and
Manufacturing sectors in these four countries plus St Lucia, also improved
somewhat during 1999.
Having touched on the main influences on economic activity in
the CARICOM area, Mr Speaker, I am sure you will permit me to indicate to this
Honourable House, the magnitude of real economic growth experienced by some of
the region’s economies.
Economic growth was positive and relatively non-inflationary
throughout the islands in 1999, ranging from around 0.4% in Jamaica after three
straight years of decline, to 8.7% in the Turks and Caicos Islands. It is
noteworthy that reform of public sector bodies and the financial sector were
significant factors in turning the Jamaican economy around.
It is also noteworthy that the countries with diversified
economies including larger service sectors, fared better than others. The Turks
and Caicos, the Bahamas, Antigua and Barbuda, and Barbados grew by 8.7%, 5%, 4%
and 3.2% respectively, while Jamaica, Dominica, Guyana and St Lucia grew by
0.4%, 1%, 3.0% and 3.1% respectively. The exceptions among countries with strong
agricultural bases were Grenada and St Vincent and the Grenadines. In Grenada,
agricultural exports grew in response to strong demand for spices, while
additional airline seats stimulated tourism. Similarly, substantial growth in
tourist arrivals generated higher economic growth in St Vincent and the
Grenadines.
The experience of countries with substantial touristic and
service sectors and increasingly diversified economies, supports this government’s
approach to economic development. We must accelerate our efforts at putting our
productive base on a more varied footing, in order to be in a better position to
absorb shocks in any single sector.
With a few exceptions, there is evidence that, fiscal
management has improved across the region. Public sector savings have grown in
many countries. On the other hand, overall deficits, outstanding debt and debt
servicing are on the increase, due in part to ambitious capital expenditure
programmes, and in part to a decline in concessionary foreign assistance.
Mr Speaker, the recent economic performance of our Region has
been strongly influenced by the international environment, and by domestic
policies employed by individual countries. The development of the capital
markets of the OECS countries and the growth of offshore financial services, are
rapidly providing an added dimension to our economies. The challenge will be to
continue to finance non-inflationary growth, to deliver essential services to
our expanding populations at affordable cost, to ensure that growth is
translated into greater employment and reduced poverty, and to do all of this
within our means.
PERFORMANCE OF THE DOMESTIC ECONOMY
As stated, the rate of real economic growth in St Lucia in
1999 was around 3.1%, the highest for the last seven years. Despite the decline
of the banana sector, most performance indicators point to a steady improvement
in economic activity.
Inflation, though higher at 3.5% than the 2.8% posted in
1998, was still moderate, despite the substantial increase in petroleum prices
internationally. Higher oil prices in the rest of the world had an inflationary
effect on import prices, but Government’s decision to keep petrol prices down,
helped to moderate the general inflation rate. I will say more about this later
on.
Renewed Confidence In The Future
An indication of the soundness of the economy, is the
confidence demonstrated by foreign investors, external institutions and our own
business sectors. Continuing investor interest shown in St Lucia, particularly
in the hotel sector, is testimony to confidence in the underlying economic
fundamentals, in the good performance of the economy, and in the appropriateness
of government policies. Mr Speaker, I applaud the initiatives undertaken by the
private sector, particularly in respect of commercial expansion and
modernisation.
The assessment of St Lucia’s economic performance by
external institutions is consistent with our own. Their comments about the
country’s future prospects are positive, and are predicated on the
continuation of sound fiscal and economic management. Those institutions and
organisations which have endorsed our development strategy include the Caribbean
Development Bank, the Eastern Caribbean Central Bank, the World Bank and the
European Union. The local business community is also upbeat about the economy.
In referring to a Business Performance Survey for the first half of 1999,
undertaken by the St Lucia Chamber of Commerce, Industry and Agriculture, the
Chamber’s Annual Report for 1999 reveals that members experienced
significantly higher sales, compared to the same period in 1998. In addition,
the Report had this to say about the confidence of its members and the prospects
for the economy and for business growth this year:
"Confidence in the economy appears to be high with
84% of all respondents forecasting growth in business in the year
2000".
The Report goes on to indicate the positive effects which
this confidence is likely to have on employment. It reads: "The
outlook for 2000 indicates that 43% of respondents plan to expand employment,
while 45% plan no change, (and) decreases are anticipated by only 10%…."
Mr Speaker, we share the confidence of the private sector,
fellow St Lucians, regional and international agencies and foreign investors. We
will invite the doubters to re-evaluate their position and participate to the
fullest in the growth and diversification of economic activity now taking place
around us.
Expansion In Construction
The growth of several sectors accounted for the overall
economic growth in 1999. Construction, which strengthened by 6.0% compared to
3.4% in 1998, was a primary contributor. The main areas of growth in the private
sector were in commercial, hotel and residential infrastructure. In addition,
public sector construction grew by some 32.5%, mainly in road, transportation,
security, fishing, free-zone facilities and government building infrastructure.
Continued Growth In Tourism
Tourism grew by 2.6% in 1999 compared to 2.4% the year
before. Investment expenditure was considerable. The Hyatt Regency Hotel is
ready for business. The Rosewood Hotel is now under construction. Plant
expansion at Sandals, Bay Gardens and Le Sport have been completed. Related
services in the areas of entertainment and transportation have also experienced
growth.
The cruise ship sub-sector continued to grow, though at more
realistic levels. The number of cruise ship calls increased by 12.3%, while the
number of disembarking cruise passengers increased by 3.6%. Despite the growth
in all categories of tourist arrivals, including a 3.3% increase in stay-overs
compared to 1.5% in 1998, it is estimated that tourists spent less in 1999. We
must do more to encourage the tourist to spend, but the key is to provide better
quality and greater variety, to do so more efficiently and to package and market
our product more effectively. The public and private sectors, indeed the entire
community, must join forces in this effort.
Decline In Manufacturing Arrested
The negative growth experienced by the manufacturing sector
over the three-year period, 1996-1998, was arrested in 1999. The sector as a
whole did not expand in 1999, but neither did it contract. We expect that the
consolidation which is underway will lay the basis for growth in the future.
However, increasing international competitiveness will test our creativity to
the fullest extent.
A decline of 17% in the output of paper products, was
associated with the decline in the banana production, which uses cardboard boxes
for packing fruit. Production of textiles, chemicals and rubber products also
declined by approximately 13%, 7% and 4% respectively. On the other hand, the
output of copra derivatives grew strongly by around 44%; the Food, Beverages and
Tobacco category by 22%; Wearing Apparel by 15%; Electrical products by 11%; and
Wood products by 9%. The net effect in manufacturing as a whole was the reversal
of the decline of recent years. This is a vital source of growth, and our
limited success in winning new export markets must be addressed if future growth
in the sector is to be achieved. I appreciate that the situation in the
manufacturing sector continues to be delicate, and so I have mandated the new
Minister, Hon Philip J Pierre, to pay particular attention to the problems being
experienced there and engage the manufactures in early dialogue to address
existing concerns.
Mixed Performance In Agriculture
Banana production in 1999 decreased from the 1998 levels of
73,039 tonnes to 65,197 tonnes. Reductions in the tonnage of bananas exported
were also experienced in Dominica and St Vincent and the Grenadines,
demonstrating that these declines were due to problems experienced in all of the
islands. Indeed, in the case of St Vincent, the overall decline was in the
magnitude of 6%, despite the introduction of irrigation. While a Windward
Islands Banana Industry Production Recovery Plan has been in operation for over
one year, the positive benefits of this Plan have not yet been realized. A
severe drought in 1999 caused production in St Lucia to decline, and the
unavailability of funds for irrigation projects prevented the timely
implementation of drought mitigation measures. While the revenue earned from
banana exports suffered a commensurate decline, banana farmers in St Lucia,
during the course of 1999, received a consistently higher price for their fruit
than their counterparts in Dominica, Grenada and St Vincent and the Grenadines.
On the other hand, the production and exportation of most
nontraditional crops expanded, cushioning the decline in the agricultural sector
as a whole. Agriculture contracted by about 1%, despite the 8% decline in the
banana sub-sector. The quantity of fish landed rose by 26%; egg production rose
by 34% and copra production improved by 92%. Increases were recorded in most
areas of livestock, avocado, hot pepper and mango production. Output of
breadfruit, plantation and soursop declined somewhat, while that of cocoa
continued to decrease, though at a slower rate of 5.5% compared to 24% in 1998.
Nevertheless a 68% improvement in the quality of exported cocoa resulted in
higher export earnings from that crop.
These developments in non-traditional agriculture are
encouraging. They are an indication that Government’s efforts at
diversification, assisted by the European Union, are having positive effect.
This government’s commitment to agricultural diversification is not just a
matter of rhetoric, but is demonstrated by concrete results. In spite of the
vagaries of agriculture, there are viable markets available to us, and we must
increase our efforts to supply them with quality produce on a consistent basis.
Complementary Growth
Different sectors support one another as growth takes place,
and the expansion of Construction, Tourism, Manufacturing sub-sectors and
Agriculture, is associated with substantial growth achieved in other sectors in
1999. They include growth of 9.8% in the Electricity and Water sector, compared
to 0.7% in 1998; 5% expansion in Communications compared to 3.7% in 1998; and
3.4% growth in Transportation against 3.2% in 1998. Wholesale and Retail trade
grew by a creditable 3%, although this was lower than the 4.5% recorded in 1998.
The support of the banking and financial sector is reflected in growth of 4.9%,
much lower than the 9.1% of the previous year, but still significant considering
the problems of the banana sector and their significant effect on the overall
growth rate.
Assessment of Fiscal Performance
Mr Speaker, with your permission, I will now report on the
government’s fiscal performance against the targets set out in last year’s
budget. The fiscal targets and our performance for 1999 are as follows:
TARGET ACTUAL
Ratio of Central Government Savings
To GDP. Min. 3%
Desired 5% 7.4%
Ratio of Current Revenue to
GDP Min. 26% 26.6%
Ratio of Current Expenditure to
GDP Max. 25% 19.2%
Ratio of Capital Expenditure to
Total Expenditure Min. 30% 33.8%
Ratio of Public Sector
Savings To GDP Min. of 7.8% Not yet
available,
but believed to
have been
achieved.
Ratio of Loans to Deposits
- measure of bank liquidity 92% 96.4%
7. Real Economic Growth 3% 3.1%
Honourable members, all but one of the targets were
surpassed. The Liquidity in the banking sector tightened. This was, in part,
linked to the decline in the banana industry. However, it was also associated
with the economic expansion which placed greater demands on the economy’s
financial resources. Bank lending increased by 9.7% to help finance economic
growth.
It is noteworthy that the government increased its current
account surplus from 5.2% in 1998 to 7.4% in 1999, in order to allocate more
domestic resources to the financing of capital expenditure. In the new era of
reduced preferences from developed countries, it is incumbent upon us to finance
a significant part of our development from our own resources. The targetted
ratio of capital to total expenditure of 30% was also surpassed. We achieved
33.8% and expect to increase this ratio even further, by continuing to improve
our rate of project implementation.
St Lucia’s debt ratios are well within acceptable limits,
despite increases in the absolute debt outstanding and debt service in 1999.
Total debt to GDP was virtually constant at 25.3%, indicating that our ability
to sustain our debt obligations remains favourable. Our ability to service
external debt, as measured by the ratio of external debt service to exports of
goods and non-factor services, was 4.1% in 1999, compared to 3.7% in 1998.
However, we are well within accepted norms of 15-20% for countries of our size
and classification.
REPOSITIONING OF ECONOMY
Mr Speaker, over the last two and a half years, we have been
engaged in the process of strengthening, modernising and re-positioning the
economy, after the years of decline and dysfunction. Our efforts have not been
in vain. The recovery which began in 1998, has continued in 1999, and by all
accounts will be further strengthened this year. In addition, we are at an
advanced stage of the transition to a predominantly service economy, and must
strive for common ground in the public and private sectors, in order to find
ways of bringing about the necessary structural adjustments associated with such
fundamental changes.
It is well within our capability as a people to deal
effectively with the issues affecting us, and I am confident that St Lucia can
take advantage of the opportunities offered by the new international economy.
It must be recognised that the process of consolidation and
re-positioning is not yet complete. We are in the process of establishing the
Goods Distribution Free Zone and the rules of engagement for gaming facilities,
and so on. The International Financial Services Sector has taken off. Our
commitment to regional economic integration has taken one major step forward
with the introduction of the third and fourth phases of the Common External
Tariff. We have restructured the management of the Banana Industry, boldly
re-engineered WASCO, privatised NCB , and are now reconfiguring Radio Saint
Lucia and NDC.
In taking a new direction, it is essential to act in the best
interest of the nation. The strategies adopted must serve to place the country
firmly on the desired course, and to iron out the kinks that might appear or
persist along the way. Distortions might surface here and there, but these are
inevitable in the course of development, particularly in an environment of rapid
and profound change. Success will come where there is oneness of purpose,
tenacity and consistent policies, without compromising our capacity to interact
with a dynamic environment.
This is what we have sought to do in the last 2½ years. This
is what this government is about. This consolidation of the process of
re-positioning, is what this year’s budget is about.
THE CHALLENGE TO REDUCE UNEMPLOYMENT
Mr Speaker, one of the most comforting items of information
released in recent times was this statement by the Statistical Office:
"During the past twelve months there has been a
decrease in the unemployment rate in St Lucia from 21.5% in 1998 to 18.1% in
1999 (the rate in 1997 stood at 20.5%). In 1999 the rate of unemployment fell
from 20.5% in the first half of the year to 15.7% in the second half of the
year, a substantial decline even discounting the fact that there is a tendency
towards lower unemployment rates in the second half. From 1998 to 1999 the
total number of persons unemployed declined from 15,500 to 13,200, if the last
half of 1998 is compared with the last half of 1999 the decline is even more
apparent."
According to the Director of Statistics:
"The main reason for the decline in the unemployment
rate was higher rates of employment in three sectors, namely construction in
particular, followed by hotels and restaurants and wholesale and retail trade.
In construction, approximately 1000 more persons were employed during 1999,
and in tourism and wholesale and retail, approximately 1500 more persons were
employed. Employment rates in other sectors remained fairly constant (example
agriculture and transport and communication); public sector employment showed
a small decline which is however statistically insignificant."
Mr Speaker, despite the significant decline, the existing
unemployment rate remains unacceptably high. The challenge is to reduce it even
further. Together, we must put an end to persistent unemployment.
In so doing, we must acknowledge that even as employment
opportunities improve, there will be shifts in the pattern of demand for labour.
Witness that while construction is demanding labour, the garment sub-sector is
contracting. We are deeply concerned about the current difficulties at Belle
Fashions and PLU. We are aware of the ongoing dialogue regarding each and are
hopeful that positive outcomes can be agreed. These transitions reflect
international trends. It also reminds us to remain competitively priced in the
markets we choose to service. In the global market production will shift in
response to cost changes. If our labour is to earn a quality wage it must
produce a quality product.
According to a recent Eastern Caribbean Central Bank report:
"it is generally accepted that "the most
optimal strategy for reducing employment is to increase the demand for labour.
This effectively means instituting measures to increase demand for goods and
services since the demand for labour is derived demand. Implementing
expansionary, fiscal and monetary policy or instituting special labour market
measures can increase aggregate demand. However, in the context of St Lucia,
expansionary policies would only provide short-term temporary relief and the
extent to which such policies can be pursued is fortunately constrained by the
existing monetary arrangement which necessitates prudent fiscal management."
Ultimately, the best approach is to encourage an acceleration
of domestic investment in the production of goods and services which attract
strong external demand. It is for this reason that Government has identified
Tourism and services in general, as the leading growth sectors.
If we are to sustain the production of high-demand goods and
services, we must strengthen capacity by continued investment in our human
resource base, maintain and strengthen our ability to attract and sustain
domestic and external investment, and crucially develop a well-trained and
diversified work force. Mr Speaker, a well-trained and diversified workforce is
essential to the modernisation of our economy. We have to develop the response
capacity to move from one economic activity to another. The emerging economic
environment calls for flexibility. It is for that reason that Government is
working to ensure that the Skills Training and Employment Resource Centre comes
on stream as quickly as possible.
In order to reduce unemployment, Government will continue to
apply a mix of policies to stimulate demand for labour. These include:
Continued efforts to stimulate investment in Tourism and
Services;
Introduction of new areas of economic activity, such as the
Free Zone, Financial Services and Gaming;
Maintenance of policies to stimulate construction in the
public and private sectors;
Creation and expansion of opportunities for
self-employment, particularly in small business;
Diversification of opportunities in the Agriculture sector;
Strengthening of capabilities to train and re-train our
workforce.
THE BUDGETARY STATEMENT
Mr Speaker, it is now time to present the Estimates for
2000-2001. Total Expenditure amounts to 726.4 million dollars. Of this, 40.1% or
291.2 million dollars is for Capital investment, 55.7% or 404.3 million dollars
is for current operating expenditure and 4.2% is for meeting principal
repayments on the public debt.
Total Government Expenditure of 726.4 million dollars will be
financed from:
Capital revenue of 6.2 million dollars;
Grants of 78.9 million dollars;
Loans of 103.3 million dollars;
Bonds of 23.1 million dollars which will be available to St
Lucians and overseas investors; and
Recurrent revenue of 514.9 million dollars.
Revenue last year included 36 million dollars of
extra-ordinary revenue. Thus, the projection for 2000-2001 represents an actual
increase in revenue of about 20 million dollars. This increase is the direct
result of previous revenue measures and efficiencies in revenue collection. It
is anticipated that Gaming Fees will result in an increase in revenue
collections of 0.7 million dollars in the first instance.
The Capital Program
The Capital Programme of 291.2 million dollars is financed by
205.3 million dollars from grants and loans, 79.8 million dollars from Current
Revenue, and 6.2 million dollars from the Sale of Assets.
The Budget is designed to achieve a current surplus of 110.5
million dollars or 6.1% of G.D.P, which Mr Speaker, is in excess of the desired
level of 5% and well over the 2000-2001 target of 3.2% agreed with the European
Union. The target surplus for the public sector as a whole, over which we have
limited control, is 8.0%.
Current Revenue of 514.9 million dollars is 28.4% of G.D.P
compared with the minimum desired level of 26%. This Mr Speaker, reflects not
only the optimism which St Lucians and outsiders have in our economy, but the
achievement of continuous real growth in the various sectors.
Current Expenditure of 404.3 million dollars is 22.3% of
G.D.P, well below the ceiling of 25%. The ratio of capital Expenditure to total
expenditure is 40.1%, well above the desired minimum of 30%.
Mr Speaker, it will take some time to improve the liquidity
of the banking system. The service sector does not have the cash impact of the
banana sector, while the demand for finance for the growing sectors is expected
to increase. Consequently, while it is desirable to reduce the Loan to Deposit
ratio below 90%, we do not expect it to go below 95.5% this year.
We are still within the prudential external debt servicing to
exports ratio of 15-20% and total outstanding external debt to GDP ratio of
30-35% for the public sector. The external debt service ratio implicit in this
budget for the Central Government is 2.8%, while the external debt ratio is
around 18%. For the public sector as a whole, the external debt service ratio
goes up from 4.1 to 4.7%, while the external debt outstanding to GDP rises from
25.3% to around 29%. Our success in being able to borrow on concessionary terms,
accounts for the low external debt service ratio, but opportunities to do so in
the future will certainly be more limited. We are approaching the outside
threshold of 35% for total external debt and must find alternative ways of
financing capital investment.
In summary Mr Speaker, based on the public investment
programme, and on the articulated expansion plans of the private sector, and
consistent with our strategy for strengthening and re-positioning the economy,
our target for real economic growth this year is 3.5%.
Permit me now, Mr Speaker, to highlight the distribution of
total expenditure among the various Agencies and some investment expenditure of
particular interest.
The agencies of Parliament, including the Office of the
Governor General, the Legislature, the Service Commissions, the Electoral and
Audit Departments will receive a total of 4.828 million dollars in total
expenditure. Included in that allocation is the hosting of a conference for the
Heads of State of CARICOM countries.
The General Service Agencies, which include the Office of the
Prime Minister, the Ministry of the Public Service and the Parastatal Department
will receive a total allocation of 45.1 million dollars. This allocation also
includes 7.0 million dollars for land acquisition, and 15.2 million dollars for
the Black Mallet and Hurricane Lenny reconstruction. A sum of 1.0 million
dollars will be made available to the Government Printery to purchase a
multicolour-offset press. The National Trust will also receive an increase of
250,000 toward the establishment of a National Museum.
A total amount of 73.2 million dollars is allocated to the
Justice Sector. This represents an increase of 3.8 million dollars. Portfolios
under this sector include the Ministry of Legal Affairs, Home Affairs, Labour,
Judiciary and DPP and the Attorney General’s Chambers. The allocation includes
1.1 million dollars for the filling of 50 vacancies within the Royal St Lucia
Police Force.
A total amount of 401.1 million dollars is allocated to the
Economic Services Sector. Of that amount, 122 million dollars is provided for
Debt Servicing, Pensions and Contingencies. A total of 196.7 million dollars is
for the Capital Investment Programme of this sector. Agencies under this sector
include:
The Ministry of Agriculture, Forestry and Fisheries;
The Ministry of Commerce, International Financial Services
and Consumer Affairs;
The Ministry of Communications, Works, Transport and Public
Utilities;
The Ministry of Finance and Economic Affairs;
The Ministry of Tourism and Civil Aviation;
The Ministry of Development, Planning, Housing and the
Environment.
The Ministry of Foreign Affairs & International Trade.
Capital inputs into the Sector include:
35.8 million dollars for the Ministry of Agriculture,
Forestry and Fisheries. Of that money, 13.4 million dollars is for Banana
Commercialisation to be dispersed to the Banana Industry Trust Fund, 4.8
million dollars for the Agriculture Diversification Programme, which is
directed at reducing the levels of foreign exchange spent on food imports,
while at the same time seeking to increase foreign exchange generation by
encouraging greater production of a wider variety of export products.
$400,000 to establish an appropriate Standard Industrial
Classification system for the manufacturing sector and to provide a medium
for systematically and empirically assessing the contribution of the
industry to the Gross Domestic Product i.e. the output performance and
productivity of the sector.
33.3 million dollars for the improvement of roads
infrastructure throughout the country.
1.6 million dollars is earmarked for the completion of
works on the Castries River Wall.
66.6 million dollars is allocated for various projects
under the newly established Ministry of Development, Planning, Environment
and Housing. These projects include PROUD, Solid Waste Management, Poverty
Reduction and Disaster Mitigation.
22.4 million dollars is allocated to the Tourism Sector,
an increase of 4.8 million dollars. This allocation will be distributed as
follows: 16.7 million for Marketing and Promotion including 3.0 million
dollars for the Tourism Repositioning Strategy, and $250,000 for the
construction of Community Tourism Outlets. Funding of 2.6 million dollars
for the Nature Heritage Project and the National Conservation Authority is
included in the Capital Expenditure for this Sector.
202.1 million dollars is allocated to the Social Services
Sector. Portfolios under this sector include the Ministry of Education,
Human Resource Development, Youth and Sports, the Ministry of Community
Development and the Ministry of Health, Human Services, Family Affairs and
Gender Relations.
Capital Projects under this Sector include:
$666,000 for the establishment of a National Heroes Park;
1.0 million dollars for the establishment of a Youth
Venture Capital Programme which I will elaborate on shortly; and
5.0 million dollars towards the construction of a new
National Hospital.
NO NEW TAX MEASURES
Mr Speaker, I indicated earlier that Government has nearly
completed its programme of fiscal re-positioning. It gives me great pleasure to
advise Honourable Members that there will be no new tax measures, whether direct
or indirect. I repeat, there will be no new taxes. It is now for the economy to
grow on its new-found energy.
I shall now address certain fiscal issues. I start with the
volatility of fuel prices on the international market.
FISCAL INITIATIVES
IMPACT OF FUEL PRICES
Mr Speaker, our decision to stabilise domestic petrol prices
has come at a significant cost. Oil prices internationally have risen by 218.5%%
over the last 12 months, (March 22, 1999 – March 5, 2000) and petrol prices in
St Lucia should have risen to 8.03 for leaded gas, $8.47 for unleaded gas and
$7.45 per gallon for diesel in accordance with the formula introduced last year.
This formula allows government to share the cost of fuel increases with the
public, by absorbing some, and passing on only part of the increase to
consumers. On the other hand, if prices fall, both consumers and government
enjoy the benefit. It is that same formula which allowed us to reduce fuel
prices in December 1998.
However by managing the formula to maintain lower fuel prices
to consumers, Government lost an estimated 11 million dollars in revenues. As a
result, we had to curtail capital expenditure and the reduction of outstanding
payables. On the positive side, inflation was kept at a moderate level.
Gas prices all over the non-oil exporting world have gone up
significantly in the last few months. Most countries in the Caribbean have been
unable or unwilling to keep down fuel prices, and there have been significant
increases in some neighbouring countries.
Current fuel prices in some Caribbean countries, including
the OECS are as follows:
COUNTRY |
FUEL TYPE |
PUMP PRICES
EC$ equivalent |
Anguilla |
Unleaded Gas – Company (a)
Unleaded Gas – Company (b) subsidised |
6.65
6.35 |
Antigua |
Unleaded Gas |
6.55 |
St Kitts |
Unleaded Gas |
5.70 |
Dominica |
Unleaded Gas
Leaded Gas |
6.90
6.70 |
Grenada |
Unleaded Gas
Leaded Gas |
6.98
6.99 |
St Vincent |
Unleaded Gas
Leaded Gas |
6.60
6.10 |
Barbados |
Unleaded Gas
Leaded Gas |
9.76
9.76 |
Guyana |
Leaded Gas |
5.14 |
St Lucia |
Unleaded Gas
Leaded |
6.42
6.06 |
Apart from St Kitts and Guyana where the price is subsidised,
St Lucia has the lowest prices of all those countries. Despite the steep
increase in the price of imported fuel, I do not intend to raise fuel prices at
this time. In part, this approach is influenced by the need to keep inflation at
a moderate level, unless any negative effects of such an approach outweigh the
benefits. The situation will be kept under constant review and, should the
situation warrant it, I will inform you of any adjustments during the course of
the financial year.
DEALER MARGINS ON FUEL
Mr Speaker, all the players in the petroleum market in St
Lucia have to play their role in the national effort to keep inflation at
moderate levels. The fuel dealers are seeking an increase in their fuel margin.
The following are the margins enjoyed by dealers in neighbouring OECS and
CARICOM countries:
COUNTRY |
FUEL TYPE |
DEALER MARGIN
PER GAL. |
Anguilla |
Petrol |
38¢ |
Antigua |
Petrol |
55¢ |
St Kitts |
Petrol |
45¢ |
Dominica |
Petrol |
43¢ |
Grenada |
Petrol |
65¢ |
St Vincent |
Petrol |
50¢ |
Barbados |
Petrol |
89.8¢ |
Guyana |
Petrol |
26¢ |
St Lucia |
Petrol |
64¢ |
I note that, apart from Barbados and Grenada (which is almost
on par with St Lucia), dealers in St Lucia receive the highest margins of all
the countries mentioned. Taking all the circumstances into account, increasing
dealer margins is not warranted at this time. However, I will also review their
position later on, as part of the general review of which I spoke a minute ago.
Phasing out Leaded Gas
There is one fundamental change which we have to make this
year. National health and environmental considerations, alongside market
realities dictate that we phase out leaded fuel. It has been shown to be harmful
to people, particularly children, as well as to the environment. The true cost
of continuing to use leaded petrol includes the cost of producing it, the cost
of treating the illnesses which it causes, and the environmental cost.
In addition, the Leeward Islands have all moved to phase out
leaded fuel, as has Barbados from the 1st of May this year. In the
face of dwindling demand and the health issues, suppliers in the region are
themselves not renewing contracts to bring in leaded petroleum. Given the
reduced demand, unit costs are likely to rise, if indeed leaded fuel continues
to be readily available in the future.
As a consequence of all these factors, leaded fuel will be
phased out completely by the end of August, 2000. I am giving everyone five
months to make the necessary adjustments. The majority of vehicles in St Lucia
are of Japanese origin and should already be capable of using unleaded fuel if
they were made after the 1970’s. The relevant dates for the U.S.A and Europe
are after 1982 and 1986 respectively. The conversion to unleaded gas is both
necessary and desirable, and the lead time of five months should enable everyone
to make the transition smoothly.
ABOLITION OF DUTY AND CONSUMPTION TAX ON MOTOR VEHICLES FOR
USE AS TAXIS
Mr Speaker, I have stressed that equity must prevail between
and within all economic sectors, including tourism. Since the advent of this
Government, taxes on gratuities and tips received by hotel workers have been
abolished. In 1999, concessions were extended to the car rental sector. On this
occasion, I have decided to abolish duty and consumption taxes on new motor
vehicles for use as taxis. The purchase of these vehicles will now be treated as
an approved tourism venture. However, certain conditions will apply.
Duty and Consumption Tax will be waived on a motor vehicle
imported by, or on behalf of an individual who currently operates a taxi
service, solely as a replacement for a taxi operated by the individual, subject
to the following conditions or any other conditions as may be determined by the
Minister with responsibility for Finance:
that the motor vehicle to be replaced is at least five
years old and has been used exclusively as a taxi for a period of at least
five years immediately preceding the date of importation of the replacement
motor vehicle;
that the replacement motor vehicle is used exclusively as a
taxi for a period of at least five years after the date of its importation;
that the replacement motor vehicle is not sold or disposed
of until the expiration of a period of at least five years after the date of
its importation;
that the individual keeps and renders accounts in respect
of the use and disposal of a vehicle imported in such manner as the
Comptroller of Customs requires.
In order to qualify, the following support documents, insofar
as they apply, are required:
A Certificate issued by the Ministry of Tourism to certify
that the owner is an approved taxi driver;
A Certificate of Clearance from the National Insurance
Scheme;
A Certificate of Clearance from the Inland Revenue
Department;
A letter from the Licensing Department confirming:
that the applicant is the owner of the vehicle being
replaced, and
the number of years the vehicle was continuously registered
to him/her.
A letter from the insurance company consenting to the
comprehensive insurance coverage of the vehicle being purchased.
I must emphasize that all taxi importers remain liable for
the payment of Service Charge and the Environmental Levy.
These concessions will come into effect after the Ministry of
Tourism and Civil Aviation has met the representative bodies of taxi drivers and
finalised specifications of the motor vehicles to be used as taxis. The
concessions are also intended to encourage taxi drivers to modernise their
vehicles and provide greater comfort to their clients.
PROPERTY TAX AMNESTY
Mr Speaker, you will recall my announcement in the 1998/99
Budget Statement on the new initiatives to be undertaken for the management of
property tax in the country. These measures included the centralizing of the
management of Property Tax at the Inland Revenue Department. I am happy to
report that the Inland Revenue Department has assumed responsibility for the
collection and administration of this tax.
As we attempt to place the management of Property Tax on a
firm footing, we are reminded of the many attempts to encourage defaulting
taxpayers to pay up, often with limited success. Indeed, for some time now,
business establishments in the city have refused to pay arrears because they
deemed certain increases introduced by the Castries City Council and authorized
by the former administration to be exorbitant and unjustifiable.
In fact, the Chamber of Commerce complained to the City
Council, but to no avail. We know too, that there is a hardcore of arrears that
probably will never be collected. Perhaps the owners of the property can no
longer afford the tremendous burden that results from the accumulation of debt
or that there is a perceived unfairness in the system. It is estimated that some
14.7 million dollars are owed in property taxes. However, Mr Speaker, there is
the need for us to try to clean up and clear away old assessments, and so we
believe that it is time to take some bold steps.
Effective April 1, 2000 a national property tax amnesty will
be in effect for a period of one year. All outstanding balances, which existed
prior to April 1, 1997, will be written off completely. That is, Mr Speaker,
taxpayers who have amounts owing prior to April 01, 1997 will not be asked to
pay the principal amount, neither penalty nor interest, which has accumulated on
the amount up to April 01, 2000. Put differently, individuals and companies
would be liable only for property tax arrears, for the period April 01, 1997 to
April 01, 2000. In addition, Mr Speaker, the following payment arrangements will
be in effect during the amnesty period.
1. If payment is made by June 30, 2000 on property taxes
which are due at April 1, 2000, then no interest or penalty fees will be
charged;
2. If 30% of the amount due at April 1, 2000 is paid by June
30, 2000 and the balance is paid by September 30, 2000, then no interest or
penalty fees will be charged;
3. No interest or penalty fees will be charged if payments
during the amnesty period are made in accordance with the following schedule:
· 30% of tax paid by June 30, 2000;
· 30% of the tax paid by September 30, 2000;
· 40% of the tax paid by March 31, 2001
4. If the 30% payment payable by June 30, 2000 is missed, but
the taxpayer wishes to pay the full amount by September 30, 2000, then 25% of
the accumulated interest and no collection fee will be charged;
5. If the payments at June 30, 2000 and September 30, 2000
are missed, but the taxpayer wishes to make full payment between October 1, 2000
and March 31, 2001 then 50% interest and no collection fee will be charged.
Mr Speaker, I know that you will agree that this is a rather
generous amnesty programme, and I implore all defaulters to make arrangements to
take advantage of this offer. I think too that you will also agree that having
offered this generous package of tax relief that perpetual defaulters will have
to be sanctioned in accordance with the provisions of the law.
NEW BUSINESS START UPS
Mr Speaker, since introducing the tax provisions for
encouraging new business start-ups in conjunction with the small business
development programme, there has been a great deal of interest shown in the
programme, through the Small Enterprise Development Unit. However, I believe
that even greater interest can be stirred up if more effort is spent in
promoting the concessions.
I understand that many persons would feel a great deal of
trepidation in starting up their own business but I am convinced that we need to
encourage and challenge the creativity of our young persons.
It is normal for businesses in their formative years to incur
losses, so as an additional incentive, I propose to allow the 100% offset of tax
losses to be carried forward against the succeeding years taxable income for a
period of six years. This is 50% more than that allowed for established business
operations.
PHASING OUT OF LICENSING REGIME
Mr Speaker, one of the proposals submitted by the Chamber of
Commerce to the Minister of Finance concerns the licensing regime. This regime
was instituted to protect certain domestic products from external competition.
At present, licenses have to be obtained to import several items. Not only is
this requirement inconsistent with obligations to CARICOM and WTO, but it also
consumes considerable time and effort of public officers. Indeed, no matter how
honest officials are, there are persistent complaints of unfairness and
favouritism. The Chamber of Commerce has recommended that the regime be
"phased out or minimized". In the Chamber’s view, this measure would
"increase revenue, facilitate trade and make St Lucia’s trading regime
more WTO compatible". I concur with the Chamber of Commerce that the regime
should, within the accepted rules, be phased out and replaced by tariffs cast at
a level to offer protection to local manufacturers and exporters, as has been
done in some CARICOM countries. While Government accepts this policy approach,
it will be left to the Ministry of Commerce, Consumer Affairs and International
Financial Services to consult the Chamber and advise the Minister of Finance on
the appropriate tariffs.
RELIEF FOR PENSIONERS
Mr Speaker, the pensions of Civil Servants are linked to
their salary levels. This means that the recent salary increases awarded last
year will improve the monthly pensions of those people who received them.
However, those who had already retired from the service prior to the years to
which the salary increases apply, would not have benefited.
In effect, those pensioners have been on fixed incomes since
the last increase in 1996. In order to redress this situation and go some way
towards compensating them for the erosion in their real salaries, I propose the
following pension increases:
(1) For persons who retired before March 31st,
1997, the increase will be 5 percent;
(2) For pensioners who retired before March 31st,
1998, the increase will be 3 percent;
(3) For those who retired before March 31st,
1999, the increase will be 2 percent.
You will note that those who retired in later years have
received some measure of salary increase, and will, therefore, get a smaller
pension increase.
There will be no retroactive payments. The increase takes
effect at the beginning of the fiscal year 2000-2001, and the payment will be
made from the end of May 2000.
INCENTIVE TO INVEST IN SECURITY EQUIPMENT AND REFURBISH
BUSINESS PLACES
Mr Speaker, individuals within the private sector have
requested that the Government reintroduce for a further year, the initiative to
remove duties and consumption tax on:
surveillance and security equipment imported by business
places; and
all building materials and equipment purchased to repair,
rehabilitate and renovate places of business in the centre and immediate
periphery of Castries, Vieux Fort, Gros Islet and Soufriere. In the case of
security equipment, the concessions ended on March 31, 1999 and in the case of
building materials the concessions will end on December 31, 2000.
I propose to extend both concessions to December 31, 2001,
but on this occasion, allow all towns and villages throughout Saint Lucia to
benefit.
CAPITAL INVESTMENTS AND INITIATIVES
Mr Speaker, I propose now to introduce the principal capital
initiatives for this financial year. Unlike the approach adopted in the past
budget presentations, the interventions will not be listed under Ministries with
subject responsibility.
EDUCATION AND HUMAN RESOURCE DEVELOPMENT – THE HUMAN KEY TO
COMPETITIVENESS
Mr Speaker, Honourable members, this administration brought
the portfolio of Education together with human resource development on the clear
perception that the challenges of the 21st Century require that
education become far more than the maintenance or expansion of the traditional
educational system. Education and human resource development together constitute
the basis for the emergence of a learning society – in other words a society
in which learning takes place from the cradle to the grave, and in which the
creation, digestion and dissemination of knowledge is a continuous process.
Without dispute, every analysis of the globalization process emphasizes that
knowledge is now both a factor of production and a product in its own right, and
that the real competitive edge in national wealth creation is the educational
level of the general population.
While challenging the Ministry of Education, Human Resource
Development, Youth & Sports to achieve the tightest efficiencies in its
recurrent expenditure, particular attention is being paid in the capital
allocation to the major strategic initiatives of that portfolio.
This administration is concluding the Basic Education Reform
Project funded jointly by the Government of St Lucia, the Caribbean Development
Bank and the World Bank. It has been repeatedly suggested that this
administration does not give credit to its predecessors where it is due. Mr
Speaker, we are willing to do so graciously, if Her Majesty’s Loyal Opposition
will accept along with the credit, the responsibility for commitments made.
In this instance, the BERP Project included definitive
commitments with respect to the ending of the schools transport subsidy. It was
pointed out to the former government that the 3.2 million dollars spent on
transportation of school children every year (taking for example, Micoud
students to Vieux Fort and Vieux Fort students to Micoud), could have been
better spent on construction of new secondary schools in different parts of the
island, making it unnecessary to transport children for long distances. For the
money saved every two and a half years, a new school could have been built. Yet
having made this commitment, the former government was unable to muster the
political nerve to implement that conditionality. Mr Speaker, this was a
difficult but logical and necessary condition that this administration has
fulfilled, and yet Mr Speaker they want credit without accepting responsibility.
This project is ending, having now completed the construction of four new
secondary schools, redesigned the original project to include the provision of
computer facilities and multi-purpose courts for each new school, and converted
sizeable funds originally allocated for external consultants to funding for
local training. The project will end in June of this year and the sum of 2.8
million dollars will bring it to successful conclusion.
For twenty years, Mr Speaker, the Ave Maria and RC Boys
Schools were placed on what was originally supposed to be a "temporary
shift system"; they are still on shift. More than ten years ago, the Rock
Hall Senior Primary School was told that it would be converted to a Secondary
institution of some kind; it is still waiting. More than eight years ago, the
Primary School in Jacmel was promised that a new wing to replace one burnt in a
fire would be constructed; that new construction has only just begun. A new
Basic Education Project with the Caribbean Development Bank will deliver on
these tired promises made by a tired administration. For this financial year,
the sum of 1.3 million dollars will begin to make these promises a reality. The
entire project will cost 12.9 million dollars and will not only result in a new
Secondary Technical Institute built in Ciceron but a new primary school in the
Castries basin, the upgrading of the Grande Riviere Senior Primary (Mabouya
Valley) and similar transformation of the Vieux Fort Primary into technical and
vocational institutes.
Our schools infrastructure, Mr Speaker, is generally in a
woeful condition of neglect due to the absence of a proper maintenance program.
For many of these facilities, it is too late to talk about maintenance. We are
incrementally seeking to undertake major replacements and extensions through an
allocation of 1.6 million dollars in this financial year.
Among the capital commitments is the allocation of 1.23
million dollars from EU resources for the School Feeding Program. Here too Mr
Speaker, deliberate distortions have been perpetrated – contrary to the
reports about the cutting back of this program, there has been an expansion of
the program by the Ministry of Education, Human Resource Development, Youth
& Sports. In the new thrust, 18 schools have been provided with greenhouses
to undertake their own production of vegetables (linking school feeding with the
teaching of agriculture in the school), and kitchens and cooking facilities have
been constructed in schools unable to participate in the program on account of
the previous lack of these facilities.
The capital allocation for education includes the sum of 4.8
million dollars for the new thrust in technical and vocational education. The
Ministry has recently appointed – for the first time – an Education Officer
for Technical & Vocational Education and an Education Officer for Special
Education. The allocation for technical and vocational education will help to
reequip tech-voc departments including the strengthening of information
technology in Technical Education.
YOUTH VENTURE CAPITAL PROGRAMME
There are many new business opportunities which present
themselves in St Lucia today as a result of the Tourism and Hospitality
Industry. We had in 1999 over 400,000 cruise ship passengers, and over 350,000
stay-over arrivals. We need to make use of these opportunities as they present
themselves. However, we understand the frustrations that currently face young
persons leaving the educational institutions with innovative ideas for
businesses, full of enthusiasm, but with no means of financing their ventures.
Young men and women who are desirous of being self-employed find extreme
difficulty in accessing loans, but are often still burdened with debt incurred
while they were students.
To assist with the difficulties confronting young people, the
government is committing funds of 1.0 million dollars to set up a Youth Venture
Capital Program. This will provide the youth, that is persons between 18-35
years old, with the capital required to set up a small business. Interest-free
loans, of up to $20,000 will be given depending on the requirements of the
business. The funds will be repayable over a period of up to 5 years, interest
free. This program will be set up as a revolving fund, to
ensure continuity in the entrepreneurial spirit of tomorrow’s youth.
This program is seen as a natural progression from the Junior
Achievement Award scheme, where already about 850 students are benefiting from
"hands–on" experience of running businesses. These businesses vary
from craft making, car washing and electrical services to Tourism related
services, such as, travel agencies. These students now have the option after
school, of applying the knowledge learnt, to launch their own small business
ventures under this program.
The Youth Venture Program will be administered by the
Training and Employment Center. This Centre, announced in the 1999 Budget and in
its final stages of implementation, will provide the applicants with the
necessary skills required to set up and maintain their own small business
venture. A certificate will be given on graduation, which will be used as the
key to entering the world of VENTURE CAPITAL! The criteria for financial
assistance include:
Age between 18 and 35 years old
Graduation from the Junior Achievement Program
Graduation from the Entrepreneurial Program at the Training
and Employment Center
The program is subject to an evaluation each year to assess
its success in transforming entrepreneurial dreams of our young people into
thriving business successes of the future.
REPOSITIONING AND MARKETING OF TOURISM
Globally, tourism is the fastest growing international
industry. In 1999, it accounted for 8% of total receipts from world exports and
34% of total world exports in services.
Redesigning Saint Lucia‘s Image
In order to remain competitive in the global economy, a
review of St Lucia’s position in the market place is necessary at this time.
In 1997, St Lucia’s share of all Caribbean tourism including the Bahamas,
Cancun and Cuba was only 1.3%. To maintain our momentum we must consolidate and
increase arrivals from the traditional markets to 5% of the Caribbean market in
the medium term. We will make every effort to achieve this over the next three
years. Clearly, we need a new image for St Lucia in the market place. It is not
enough to be "simply beautiful".
To facilitate this repositioning exercise, a sum of 3.0
million dollars has been allocated to the Ministry of Tourism and Civil
Aviation, under the Capital Programme. This money has been provided by the
European Union.
Marketing and Promotion
In addition to this sum, an allocation of 13.5 million
dollars has been made available, taking the total for marketing and promotion to
16.7 million dollars. Included in this amount is $150,000 for community
promotion of tourism. This amount is intended to assist efforts to spur the
development of tourism in Vieux Fort, Soufriere and other villages throughout
our island.
It is instructive, Mr Speaker, to note that the total
expenditure on Tourism increased from 13.8 million dollars in 1999/2000 to 17.9
million dollars in 2000/2001 or 29.4%.
TOURISM MARKETING OUTLETS
Everywhere throughout Saint Lucia efforts are underway to
embrace tourism and explore its economic potential. I am anxious to assist the
communities that wish to enter into the mainstream of economic activity.
In the course of this financial year, it is proposed to
initiate the construction of Tourism Marketing Outlets, in two pilot
communities. These facilities will be modelled on the Thomazo Market which was
completed last year. This facility has attracted nothing but positive feedback
from the public. I am sure, Mr Speaker, that you will also agree that it is
indeed an aesthetically attractive structure.
The Thomazo Market concept was designed and its construction
managed by the Architectural Section of the Ministry of Finance and Planning. We
were so pleased with their efforts at Thomazo, that they have been commissioned
to design facilities to accommodate tourism marketing activities in several
other communities around St Lucia. This project targets small ongoing commercial
activities that are inadequately housed, such as production of local foods and
crafts, and seeks to further diversify and enhance our tourism product. Designs
are now substantially complete for facilities at Dennery, Vieux Fort, Anse La
Verdue and Roseau.
The design of the facilities will embody the character of our
indigenous architecture, and provide entrepreneurs with better facilities in
which to operate. The total estimated cost of these four (4) facilities is
$500,000. This budget makes provision for land acquisition and construction of
the first two facilities in the amount of 250,000 from local revenue.
CONSTRUCTION OF A NEW NATIONAL HOSPITAL
Mr Speaker, it is not long since I addressed this House on
the decision to construct a new hospital for St Lucia. I indicated that we have
held preliminary discussions with the European Delegation, as the European Union
had already agreed to the allocation of some 30 million dollars of STABEX funds
for the substantial improvements required at the Victoria Hospital.
The experience at Victoria Hospital over the last eight years
has shown that attempting to operate a hospital on a site under construction is
extremely difficult. The resulting scenario is one, that is, to say the least,
challenging and inconvenient for health workers and patients, and adversely
affects construction activities and costs. The design and reconstruction of
Victoria Hospital would be constrained by existing buildings and services,
topography, available space and the need to keep the hospital functioning during
phased demolition and construction. There is no doubt that continuing with this
option will produce a compromised hospital facility, at a higher construction
cost.
We should note also that the decision to develop Victoria
Hospital on the existing site was taken over a decade ago. This was prior to
construction of the Millennium Highway, which has taken a considerable
proportion of land that would have been available for present or future
expansion of the hospital. Proceeding with reconstruction at the Victoria
Hospital site at this juncture, therefore, would result in a hospital just
adequate for the existing population served by Victoria Hospital. Projected
population growth and changing demographics can be expected to place additional
demands on the existing site, which simply does not have the required capacity.
Frankly, we must end the shame associated with Victoria Hospital.
Our fresh approach to this hospital project has a number of
distinct advantages:
(a) It is more cost-effective to construct a new building
on a new site. This allows for an optimum functional design, in a modern
setting, with construction unencumbered by hospital operations. The 1999
consultant’s report on Victoria Hospital indicated that the phased
reconstruction of Victoria Hospital would take five years; the recent decision
to start afresh at a new site has not delayed us.
(b) The operations and services at the existing Victoria
Hospital can be addressed and improved without being compromised by ongoing
construction. It is time to address the management and services at this site
without the distraction of construction. The recent opening of the refurbished
Accident and Emergency Department and the recruitment of qualified and
competent staff, to that Department, are testimony to our commitment to
improving the operations of, and services delivered by, Victoria Hospital.
(c) The new hospital on a new site will have the
flexibility to be expanded to meet the future needs of Saint Lucia.
Mr Speaker, the European Delegation has endorsed our proposal
to develop an entirely new facility. We have, since I last addressed this House
on this issue, identified a site for the new Hospital along the Millennium
Highway, and Cabinet has approved its acquisition. The New Hospital Task Force
is currently negotiating with the consultants who were commissioned to undertake
the preliminary design and costing study for Victoria Hospital, to undertake a
secondary study for the new hospital project. Their work, scheduled to take
approximately three months, will facilitate the preparation of a financing
proposal for the construction of the new national hospital. The financing
proposal will also address recommendations for the use of existing facilities,
human resource needs and equipment, and transitional plans for the phasing and
transfer of services. The detailed design work on the new hospital will commence
within the year.
Budgetary provision to the tune of 5 million dollars has
therefore been made in 2000/2001 for the acquisition of the proposed site and
for associated design works. Full costings will be provided for in the 2001/2002
Budget.
ROAD DEVELOPMENT AND REHABILITATION
In the 1999/2000 Budget, I announced an ambitious programme
to be financed by the Caribbean Development Bank. A few weeks ago, Parliament
approved a loan of 72.9 million dollars for this programme. Provision is made in
the Capital Estimates for a total expenditure of 19.98 million dollars made up
of a loan of 12.98 million dollars from the Caribbean Development Bank, 3.5
million dollars from local revenue and a further 3.5 million dollars from the
sale of bonds.
In addition to the above expenditure, a sum of 1.0 million
dollars has been made available for road-reinstatement. A further sum of 3.5
million dollars has been allocated for rehabilitation of secondary roads. It is
proposed to finance this latter expenditure by issuing bonds. The following
areas and roads will be targetted:
- 1.Castries
- Entrepot
- Bocage
- Sunny Acres
- Hospital Road
- Central Castries
-
Micoud Village
-
Dennery Village
-
Richfond, Grand Ravine
-
Belmont, Derniere Riviere
-
Belmont, Morne Panache
-
Vieux Fort
Upgrade of Castries to Gros Islet Highway
The last two years have made ever more evident the inability
of that section of the Castries Gros Islet Highway from Cap Estate to Sandals
Halcyon to effectively handle the traffic demands during peak hours. The
limitations of the road are plain to all and sundry.
This highway was, in large part, built at least two decades
ago, before urban growth and development generated such a large number of
vehicles and commuters. It is estimated that well over 70% of all motor vehicles
in St Lucia which now number between 20,000 and 25,000 according to current
estimates, are based in the Castries and Gros Islet area. Traffic along
the highway is expected to increase by over 60% by 2003 and 120% by 2013. Road
rehabilitation to meet current demand is impracticable, as the close proximity
of dwelling and commercial houses to the roadside precludes the possibility of
carriageway expansion. The entire network exhibits systemic structural failure
due to a lack of continuity and the presence of various section changes,
producing "bottlenecks" at various points in the system.
Given that the stretch of road between Rodney Bay and Choc is
already operating at virtually full capacity, a rapid deterioration is imminent
in the ability of the road to function as the main arterial route.
The short to medium term solutions will include some, if not
all, of the following:
(a) The creation of a second south-bound lane south of Choc
to facilitate channelisation from Union/Babonneau onto the Castries Gros Islet
Highway;
(b) The creation of a one-way loop through Marisule/Corinth/
Grand Riviere/Union. This will, in the short term, contribute appreciably to
an increase in flows from Marisule to Sandals Halcyon, translating by
extension into a significant easing of the traffic congestion further north.
(c) Complete rehabilitation of the Vieux Sucrier road, so
as to facilitate a motorable road link between Monchy and Corinth. This will
provide a significant bypass to most of the already congested Castries/Gros
Islet route.
(d) The creation of holding lanes for the junctions
synonymous with residential and commercial developments along the route.
(e) The construction of parallel service roads where
possible to service fringe developments in order to reduce the number of
egress/access points off the various routes.
(f) Creation of a climbing lane for northbound Heavy Duty
Vehicles on the incline near Wyndham Morgan Bay at Choc.
(g) Improvement of the existing junction at Choc via the
construction of a roundabout, with a view to increasing capacity.
(h) Establishment of bus stops and laybys along the route
in question.
(i) Establishment, jointly with the Chamber of Commerce, of
a Pedestrian Bridge at Bisee to eliminate pedestrian vehicular conflict and
ensure uninterrupted traffic flow in that area.
(j) Commencement of an aggressive information disseminating
campaign with a view to educating the public on possible alternative routes
for accessing or bypassing the city.
It is estimated that this capital intervention will cost 6
million dollars. Given the urgency, it is proposed to finance this by a loan
raised on the regional capital market.
Agricultural Feeder Roads
Agriculture is a vital sector in the economy of St Lucia,
providing revenue, employment and sustainable local production and consumption.
In an attempt to improve efficiency, production, quality of
produce and to facilitate diversification within the agricultural sector, a
number of feeder roads will be addressed in this financial year. Provision has
been made in the Capital Estimates for the expenditure of $600,000 to
rehabilitate feeder roads, particularly in the crucial banana sector. Attention
will be focussed on:
Barre Florent
Ti Rocher/ Calypso
Morne Bois Den
Bois Gwen For
Raillon.
Fond Bwa Pain
Victoria/Mon Jacques
Despointe/Malatigue
Side Walks & Road Shoulders.
Mr Speaker, a number of communities throughout St Lucia are
without side walks and road shoulders. This poses a hazard to daily commuters,
particularly school children, who walk to and from their communities, attending
school and work.
In response, the Government of St Lucia has seen it fit to
finance the construction of sidewalks over a five-year span. An allocation of
$250,000 was approved for the establishment of sidewalks to serve the
communities of Faux–A-Chaux, Vieux Fort and Sans Souci. Side walks will be
constructed along the Bexon Road as soon as the re-paving of the highway in that
area is completed.
Self Help Community Roads
The Government of St Lucia will continue its efforts to
engage a number of communities throughout the island in self-help programmes,
aimed at rehabilitating their respective community roads. An amount of $200,000
is allocated for that purpose.
Throughout financial year 1999-2000, communities such as
" Odlum City" benefited from such an initiative, allowing for improved
accessibility, as well as comfortable and suitable community roads.
Initiatives such as these are not simply aimed at achieving
the basic rehabilitation of community roads or establishment of side walks, but
they also empower communities throughout St Lucia with a sense of responsibility
and governance of their affairs. They also enable constant skill development and
utilization as well as community interaction.
FACILITIES FOR MINI-BUS OPERATORS
Mr Speaker, for several years now, mini bus operators have
pleaded for improved convenience facilities for users of bus stands in Castries
and Vieux Fort. We reviewed the existing situation and propose to undertake
improvements to some of the existing facilities, as well as construct new ones
during this fiscal year.
Facilities In The Castries Basin
Existing operational public conveniences in close proximity
to some of the bus stands, include those near the St Lucia Marketing Board, the
Castries Market and Leslie Land. We have reviewed the capacity of existing
facilities and examined the feasibility of erecting new ones in priority
locations.
Mr Speaker, it would be impractical to provide bus shelters
and public conveniences at every one of the nineteen bus stands in Castries.
However, those bus stands are located in the vicinity of five focal areas.
Therefore, it is proposed in this financial year to fund four new public
conveniences at George the fifth Park, Jeremie Street, Manoel Street and High
Street. The provision of new facilities and the upgrading of existing ones will
cost around $645,000.
NEW TERMINAL FOR VIEUX FORT
Mr Speaker, the Government has decided to proceed with the
design and construction of a bus terminal in Vieux Fort. A sum of 1.2 million
dollars has been allocated in the capital estimates for this project. A terminal
is also badly needed in Castries and during the course of this year we will
continue our efforts to identify an appropriate site.
CONSTRUCTION OF JETTIES
In times past, each of the towns and villages on our eastern
and windward coast had a jetty. In those days, boats such as Jewel, Canaries,
M.V. Compton, Santa Maria, Gaedon, and Wellcome transported mail, cargo and
passengers from the ports on the East to Castries and back. How times have
changed! Over the years, we never adapted what history bequeathed us to the
emerging economic landscape. To compound matters, our jetties became victims of
the hungry and unrelenting sea.
Mr Speaker, in a bid to respond to the ever-changing leisure
pursuits of our people and to bring our villages to the mainstream of tourism,
Government proposes to commence construction of two jetties this financial year,
one in the village of Laborie and the other in Canaries. Also, the jetty in Anse
La Raye will be rehabilitated.
In the case of the Laborie jetty, Cable and Wireless has made
a $50,000 commitment to the village, through the efforts of Hon Velon John,
Parliamentary Representative. It is hoped that these jetties will attract
pleasure boats and day cruises and allow their passengers the opportunity to
visit and enjoy these hinterland communities. It is estimated that this capital
initiative will cost 4.0 million dollars. Of this amount, 2.0 million dollars
will be spent this year and will be financed from the bond issue.
SPECIAL FRAMEWORK OF ASSISTANCE FOR AGRICULTURE
Mr Speaker, in April of last year, the Council of the
European Communities established, through a special Council Regulation, a
special framework of assistance for traditional African, Caribbean and Pacific (ACP)
suppliers of bananas. This regulation established, for a ten-year period, a
special framework of technical and financial assistance for the traditional ACP
suppliers of bananas to allow them to adapt to the new market conditions,
following the anticipated amendments to the common arrangements in the market
for bananas.
In order to qualify for this assistance, the Government of
Saint Lucia was requested to prepare a Country Strategy Paper for the Banana
Industry, Agricultural Diversification and the Social Recovery of Rural
Communities. Additionally, our Government, like the other three Windward Island
Governments, was asked to initiate and implement specific actions designed to
improve the regulatory and legislative framework within which the banana
industry operates. Due to the hard work of our technical officers, and our bold
steps in re-engineering the industry, the Government of Saint Lucia became the
first of the four Windward Island Governments to receive approval from the
European Commission for use of the new SFA funds. I wish to single out the
Ministry of Agriculture, Forestry and Fisheries for its work in ensuring that
Saint Lucia’s Strategy Paper and Financing Proposal were submitted to the
European Commission Delegation ahead of all the stipulated deadlines.
Mr Speaker, as of this financial year, Saint Lucia will
receive 8.5 million Euros for the commercialization of the banana industry,
agricultural and rural diversification, and the social recovery of those
communities that are adversely affected by the restructuring of the banana
industry. This amounts to a total of 23.5 million dollars every year for the
next five years.
Funding For Irrigation And Drainage
In the first year of the programme, over half of the funds
will be used to provide on-farm irrigation and drainage infrastructure in the
banana industry. It is expected that irrigation infrastructure will be provided
for as many as 1047 acres of banana farms by the end of the first year. For too
long we have spoken of the need for irrigation to modernize our banana industry.
For years we have suffered through months of drought, which coincided with the
period when market prices were most favourable for our bananas. For decades our
farmers have had to bear the unfair burden of dead freight, caused by our
inability to produce sufficient fruit to fill the storage space on the Geest
boats.
Mr Speaker, something is finally being done to address this
perennial problem. The irrigation of our major banana producing areas will allow
us to modernize our banana industry, wipe out the troughs in production that are
experienced during the dry months, and permit our banana farmers to benefit from
better prices and lower losses due to dead freight. The implementation of this
project depends, to a very large extent, on the willingness of our private
banana companies to act as project carriers. We are hopeful, therefore, Mr
Speaker, that our companies will rise to this challenge and allow their farmers
to benefit from this excellent opportunity.
Agricultural Diversification
The second element of the SFA programme is Agricultural
Diversification. Under this element, 4.69 million dollars will be made available
in the first year to establish an Agricultural Investment Facility, create
greater avenues for the marketing of agricultural produce, facilitate the
transfer of appropriate technologies, and strengthen the farmer organizations
that will be involved in the implementation of the programme.
SOCIAL RECOVERY PROGRAMME AND POVERTY ALLEVIATION
Mr Speaker, one of the themes of my budget address last year
was Social Recovery. It is no coincidence that I have returned to it. Government’s
commitment to eradicating poverty is unyielding in its intensity. The need to
avoid creating a new class of poor is uppermost in our minds, as we attempt to
grapple with the changing international economic order.
Mr Speaker, we were the first island to initiate a study on
the socio-economic impact of the restructuring of the banana industry, precisely
because we wanted to adopt a proactive approach to assisting this affected group
of the population. The study indicated that up to 2,200 farmers were likely to
be displaced as a result of restructuring efforts. If one factors in the
families of these farmers, then as many as 10,000 persons will be affected.
The problems manifest in such families and communities are
diverse. Not only is their economic stability compromised, but social problems
as diverse as substance abuse, child and partner abuse, anxiety and depression
and even suicide, are not uncommon. Mr Speaker, it is imperative that government
takes the initiative in addressing these escalating problems. The Social
Recovery Programme represents this government’s commitment to fostering a
holistic and practical programme of interventions for dislocated farmers and
their families.
Mr Speaker, the Social Recovery Programme will receive 40.3
million dollars or 34% of all SFA resources, over the anticipated five (5) year
duration of the programme. For this first year of operation, the total resource
allocation is 5.7 million dollars. It is envisaged that the distribution of
resources to this programme will progressively increase over the ensuing years
of the SFA initiative.
Mr Speaker, the list of possible interventions is limitless.
Specifically, over the next five years, the Social Recovery Programme will
direct financial assistance to Adult Education, Housing and Sanitation,
Reproductive Health Care, Recreation and Sports activity, Child Protection
Measures, Drug Prevention and Rehabilitation, Care for the Elderly, Skills
Training, Land Reform and Community Empowerment activities.
While the government lauds the continued support of the
European Union in our attempts to adjust to the new banana regime, I wish to
sound a note of caution. This gesture, as considerable as it may well be, may
represent the proverbial golden handshake. If that is the case, then the onus is
on us as a people to ensure that it is utilised wisely and to the ultimate
benefit of those for whom it was intended. This is the challenge that lies
ahead. We must ensure that projects and programmes are viable and sustainable.
We must instill within the target communities and among target groups the
capacity to take charge of those issues and resources which impact on their
lives. Ultimately, communities must be the ones to determine priority
interventions and be actively involved in implementation. We cannot seek to
implement projects which place undue burdens on Government or which are
incompatible with national strategies and policies. We must be bold. We must be
determined to succeed.
Increase In Subventions To NGO’s
In an environment of dwindling financial support from donor
agencies and constraints on local resources, it is imperative that we continue
to look inwards for solutions to the problems with which we have to contend. In
this context, the role of NGOs assumes critical importance. Nowhere is this more
evident than in the social sector, where NGOs and local organisations have
traditionally proven to be the main, if not sole, means of support for those
marginalised socio-economic groups in society.
Permit me, Mr Speaker, to highlight two NGOs that have ably
demonstrated the vision, commitment and capacity to act as agents of change for
their respective marginalised groups.
Strengthening The National Council For The Disabled
Data from our last census indicate that almost 7% of our
population are persons with various types of disabilities. The National Council
for the Disabled (NCD) has for a long time been the lone voice in the wilderness
crying out for the needs of the disabled in terms of education and training,
employment, and access to public facilities. This organisation has recognised
that it is not enough to depend on Government. They have submitted to government
a five (5) year plan of action focussing on various forms of intervention for
the disabled. They have clear and concrete ideas for policy development and over
the course of this year, they intend to embark on a range of institution
building, policy formulation and public sensitisation activities. In support of
the efforts of the NCD, an allocation of $50,000 was committed for the fiscal
year 1999-2000. This amount will increase to $150,000 in the new financial year,
and in the four succeeding years.
INCREASED ALLOCATION TO CARE
Mr Speaker, we are all aware of the perennial task of trying
to find school places for all those students seeking to gain admittance to
Secondary Schools. Despite Government’s best efforts, a significant proportion
of our adolescent population slips through and roams the streets with
"nowhere to go and nothing to do". In 1993, the Centre for Adolescent
Rehabilitation and Education (CARE) was established, operating at the Marchand
Community Centre and catering for sixteen (16) students. Today, over 300
students are enrolled at Centres established in Castries, Gros Islet, Anse La
Raye and Canaries. According to CARE’s records approximately 80% of all
graduates are now fully employed.
The growth of the programme is testimony to the need to
provide meaningful education and marketable skills to our deprived and
disadvantaged adolescents. The success of the programme is testimony to the
capability and commitment of CARE. Mr Speaker, I would like to take the
opportunity to commend Father Patrick Brunnock and his organisation for their
contribution. I know there are plans for expansion of the programme and the
government welcomes the opportunity to collaborate with CARE, as their
interventions are consistent with, and complementary to, government’s human
resource development initiatives. In 1998 CARE received a subvention of 60,000.
This figure was increased to 150,000 in 1999. I propose to increase the
subvention to 200,000 in this financial year.
Support For The Elderly
Mr Speaker, while the debate about the institutionalisation
of the elderly rages on, there is no doubt that without the sterling efforts of
the Marian Home, the St Lucy’s Home and the Adelaide Frances Memorial Home,
the lives of a number of our elderly population would be a lot poorer. We want
to work with these institutions, to ensure that the services provided are in
keeping with the respect, dignity and quality of life the elderly deserve.
Mr Speaker, as I have said in this Honourable House before,
caring for the senior citizens of this country is the responsibility of us all.
It is Government’s responsibility; it is the responsibility of the private
sector, of NGO’s, of families and communities.
Mr Speaker, it is disheartening to note that more than three
quarters of the older persons of this country who were interviewed during the
recent study on Care for the Elderly in St Lucia, identified issues of
isolation, neglect, abandonment, decline in family support and loneliness as the
biggest social problems facing older people. In a word, Mr Speaker, a culture of
loneliness and abandonment is sweeping our land!
Consistent with this Government's concern and commitment to
improving the quality of life of our senior citizens, I propose to increase the
annual contributions to private residential homes for older persons as follows:
Homes for Elderly |
Present Allocation |
New Allocation |
St Lucy’s Home |
42,000 |
80,000 |
Villa St Joseph |
10,000 |
26,000 |
Marian Home |
50,000 |
66,000 |
Adelaide Frances Memorial Home |
30,000 |
60,000 |
Interventions by Government
Government is also playing its part more directly. For the
first time, there is a programme to repair and rehabilitate the homes of the
elderly and the destitute.
To date, seventy-three (73) older persons have benefited from
this humanitarian project. Twenty-one (21) homes had to be completely rebuilt.
Sixteen of the persons assisted were afflicted with some form of disability, but
were independent and managed their daily living activities as effectively as
they could. Two persons under the age of sixty were assisted, one of them being
physically disabled and immobile, while the other lived with three children who
were disabled in one way or another.
The needs in some constituencies were so extensive and
demanding that some of them surpassed the amount allocated. Consequently, there
is a dire need to continue this project. We intend to do so on a phased basis in
order to have a significant positive impact on the conditions that exist in
these communities and show equity in our dissemination of relief to older
persons.
In this financial year, it is proposed to expand the
programme to assist the elderly. The Human Services Division will be provided
with $800,000.00 in the Capital Estimates to assist with the care of the elderly
and a further $800,000 for integrated child protection and development.
Additionally, Mr Speaker, a capital allocation of $100,000 has been provided to
enhance the physical and general living conditions of residents and staff at the
Malgretoute Home for the Elderly.
ESTABLISHMENT OF THE PROGRAMME FOR THE RATIONALIZATION OF
UNPLANNED DEVELOPMENTS (PROUD)
In the 1999-2000 fiscal year the PROUD programme was
conceptualized and launched, with the objective of rationalising unplanned
settlements on public lands. Through PROUD households can be given security of
tenure and benefit from the improvement of community infrastructure and
services. The unit for implementing this programme has been established in the
Ministry of Planning.
The PROUD programme recognizes the fact that spontaneous
settlements have become so entrenched that it is socially, politically,
financially and economically impractical to dislodge them. In such cases the
pragmatic solution is to rationalize the affected lands and to regularize land
tenure. This will allow for ownership by established occupants. This
regularization of ownership will be the primary target of the program.
For this budgetary year, a sum of 6.75 million dollars has
been made available to fund this programme. Of this amount, 6 million dollars
will be provided by a Caribbean Development Bank loan and $750,000 will be
derived from local revenue.
INCREASED COMMITMENT TO YOUTH AND SPORTS
Mr Speaker, it is a constant battle each year, for young
people to find employment that is not only sustainable, but also challenging and
progressive for the ever-increasing working population.
Mr Speaker, I now turn to the Government’s commitment to
the development of youth and sports. Ever since 1997, there has been an
increasing allocation of resources to creating a social climate, conducive to
the development of our youth. I have earlier outlined plans for the
establishment of a Youth Venture Capital Programme, which is a direct response
to the calls of young people for a source of financing to enable them to start
their own enterprises.
This Government is concerned about the state of youth clubs
in the country. In this year’s estimates, a special allocation is available
solely for the purpose of undertaking activities to encourage the establishment
and sustenance of youth clubs.
But Mr Speaker, my greatest joy at this time is with the
focus of the Government on the construction of sports and recreational
facilities. The Government believes that sport must serve as a tool for
development, and is committed to providing, as quickly as possible, the basic
and modern facilities that our sports persons have long called for. Almost 7.5
million dollars will be spent in the financial year on the commencement of a
programme aimed at creating a sporting infrastructure unparalleled in the OECS
and comparable to any in the entire Caribbean.
In the next few days the formal ceremony to commence the
construction of the national stadium will take place at St Urbain in Vieux Fort.
In this financial year, 3.8 million dollars is allocated to complete the site
preparation works for the actual construction due to commence in June. Never
before has any Government invested a larger sum in the provision of a sporting
facility in St Lucia. Notwithstanding our extensive efforts to provide
facilities for national, regional and international events, our primary focus
will be on ensuring that people in their communities have access to appropriate
facilities. Towards this objective, 1.45 million dollars will be spent on
establishing and upgrading playing fields. Mr Speaker, I ask that you compare
last year’s figure of $450,000 with this allocation - an increase of 1
million dollars. In addition to playing fields, Government intends to
spend $650,000 on establishing and upgrading multi-purpose courts. Again, Mr
Speaker, this represents an increase over last year’s figure. Allocations will
also be made to further work on the Vieux Fort Pavilion, and to acquire needed
sports equipment for schools.
Such is our commitment to youth and sports in St Lucia.
INVESTMENTS BY PARASTATALS
The capital programme in the public sector will be
strengthened by approved investments by parastatals.
WASCO’S Capital Projects
Mr Speaker, I am pleased to advise Honourable Members that
the restructuring efforts at WASCO are beginning to inspire confidence. During
the financial year 2000 to 2001, WASCO will undertake the following capital
projects.
Construction of a twenty-inch transmission pipeline to Choc
Bay. This will improve the supply of water to the north of the island. The
project is expected to cost approximately 10 million dollars and will be
funded by the Agence Francaise de Development, at an interest rate of 5%.
Installation of a booster pump at Sans Souci to improve the
existing transmission and distribution line to the north of the island. This
project is expected to cost about $200,000 and will be completed this year.
Continued implementation of the Universal Meterisation
programme. This programme is expected to cost some 3.5 million dollars. The
programme is expected to lead to more efficient use of water and improvement
in the financial viability of WASCO.
Commencement of the improvement of the intake and treatment
facilities at Beausejour. This is expected to cost approximately $395,000.
This project will improve the quality and reliability of supply to the Vieux
Fort community.
Commencement of the improvement of the intake and treatment
facilities at Grace. This is expected to cost $350,000.
Commencement of the improvement of the intake, treatment
and storage capacity at Delcer, Choiseul. This is expected to cost
approximately 1.175 million dollars.
Capital Investment by St Lucia Air & Sea Ports Authority
(SLASPA)
Mr Speaker, in the course of this financial year, the Saint
Lucia Air and Sea Ports Authority expects to invest 30.1 million dollars in
capital projects. Two of these projects merit special mention.
In the financial year 1998 to 1999, La Place Carenage
produced a net income of $600,000 for SLASPA. Despite this performance, the
facility faces several constraints and these cannot be rectified unless the
complex is expanded. SLASPA therefore purchased the Art Printery building and
acquired the Peter Photo Studio building. Those two buildings, along with a
small shed owned by SLASPA, will be demolished to make room for the much needed
expansion.
The La Place Carenage Extension is scheduled to commence in
June 2000 and should be completed in May 2001 at an approximate cost of 6.689
million dollars. The doors should be open to business in time for the start of
the 2001 cruise season.
This extension will feature an area of small shop units
solely for local vendors of indigenous products like jams, fudge, coconut cake,
guava cheese, etc. Tourist and heritage tourism information booths; a taxi
dispatch counter and a taxi driver rest area are all included in this project.
Significantly, the second floor of the extension will be dedicated entirely to
local artisans and craftsmen to both produce and sell their wares on site.
But the flagship of the extension will be an animation centre.
This will be the first of its kind in this part of the Caribbean. This feature
will use computerised audio and visual effects to depict and trace Saint Lucia’s
history and achievements. While it would no doubt provide an additional
attraction for the visitor it would also be very educational for locals, in
particular, school children.
This investment, together with other planned investments by
the Private Sector, will transform lower Jeremie Street.
Improvements To Facilities At Hewanorra
Some attention too, Mr Speaker, will be paid to our principal
airport. During the coming fiscal year, most of the systems and services at
Hewanorra Airport will be refurbished or replaced. These will include the
air-conditioning system servicing the passenger lounges, the airport
administration offices, the airline offices and other areas of the terminal.
Much needed attention will be given to the passenger screening service, where
new x-ray equipment will be installed.
Increased aircraft and passenger activities at that airport,
along with the poor design and layout of the terminal building have resulted in
congestion during peak periods. It is therefore necessary that any development
or expansion of this airport be undertaken in accordance with a Master Plan.
That plan will be prepared taking into consideration forecasted air traffic over
the next ten to twenty years and the corresponding services be required to meet
this demand. Overall, 6.5 million dollars will be spent on improving
infrastructure and facilities at our airports. The projects include:
Project |
Cost |
Status |
(1) |
Improvements of Facilities at Hewanorra |
347,000.00 |
New |
(2) |
Development of a Master Plan for Hewanorra |
500,000.00 |
New |
(3) |
Acquisition of Two Fire Trucks for The Airports |
2,400,000.00 |
New |
(4) |
Shore Protection for Western End of GFLC Airport |
818,000.00 |
On-going |
(5) |
Airport Extension at GFLC Airport |
426,000.00 |
On-going |
(6) |
Access Road to Fuel Farm and Hangar at GFLC Airport |
426,000.00 |
New |
(7) |
Acquisition of Distance Measuring Equipment for
Hewanorra |
459,000.00 |
New |
Total |
6,568,000.00 |
|
INFORMATICS PARK AND SMALL BUSINESS INCUBATORS
Mr Speaker, I am now in a position to advise Honourable
Members that the National Development Corporation, NDC, will, at long last,
commence the construction of two CDB-financed projects, during this financial
year.
A new Informatics Park will be constructed in the Vieux Fort
Industrial Zone. This facility will provide employment opportunities in
informatics, including telemarketing, for the hundreds of secondary school
graduates in the South. An area measuring four (4) acres of land has been
designated for the Informatics Park. A total of 20,000 sq feet of space will be
constructed at an estimated cost of 3.0 million dollars.
More interestingly, progress has been achieved on the
Government’s plan to establish Small Business Incubators. A total of 2.3 acres
of land has been allocated in Odsan for the construction of a complex of five
(5) buildings at a cost of 2.6 million dollars. This project fulfills, yet
again, another commitment in the Contract of Faith.
DISASTER RESPONSE AND REHABILITATION
Hurricane Lenny Reponse
Mr Speaker, when Hurricane Lenny threatened the north
Caribbean in November last year, we feared for our Caribbean neighbours, but
heaved a sigh of relief that we were not in the direct path of the Hurricane.
Unfortunately, we were not spared the effects of Lenny.
I wish to focus, in today’s address, on the damage wrought
by Hurricane Lenny in Baron’s Drive and Coin de Lance, in Soufriere, which has
further reinforced our recognition that we must mitigate the effects of such
natural hazards in the future by avoiding certain types of development in
hazard-prone areas, and by building to standards sufficient to withstand the
effects of natural hazards. Ironically, Government had already, under the
housing programme, contemplated the need to relocate the entire Baron’s
Drive/Coin de Lance community. This was a deprived neighbourhood comprising more
than 100 homes in poor condition. Some 53 of these were damaged by Hurricane
Lenny, many beyond repair. Rather than assist the most severely affected
residents, numbering approximately 200, to rebuild in Baron’s Drive, a
vulnerable and therefore unsuitable location, we are preparing sites with a view
to relocating them permanently out of the area.
Two relocation sites in Soufriere have been identified and
acquired by Government. HUDC’s construction of housing units and
infrastructure is underway at the Celines site, and we expect that those
families who have endured life in the shelter for the past several months will
be accommodated in these new homes very shortly.
Mr Speaker, Hurricane Lenny struck in the wake of the Black
Mallet Landslide, and the need to respond to these two disastrous events has
placed an immense strain on Government’s limited contingency allocation. While
Government, in response to Hurricane Lenny, substantially completed community
clean ups, temporary reinstatement of some of the infrastructure and utilities,
and commenced work on relocation sites, external assistance must be sought to
support the Government’s relief efforts, particularly in the Soufriere, Gros
Islet and Choiseul communities. The Caribbean Development Bank came through, yet
again, for the Government of St Lucia, and approved another emergency response
loan, this time to assist the Government with the financing of the response to
Hurricane Lenny.
We must not forget to thank our other friends who have
pledged assistance to the Hurricane Lenny Response. These include the Regional
Council of Martinique, USAID, OCHA, CIDA, UNDP and DFID, who, all told, have
pledged the equivalent of $819,500. We are particularly grateful to the Regional
Council of Martinique for their commitment of $446,000 in this regard.
Unfortunately, these generous gifts are not sufficient to finance the full
extent of restoration works required. The hard engineering works required, for
which we have approached the World Bank and the CDB for assistance, are
estimated to cost 8.5 million dollars. Loan funds combined with local resources,
must be put towards the repair or reconstruction, as the case may be, of
institutional buildings, markets, roads, jetties and sea defenses in Soufriere,
Choiseul, Gros Islet, Canaries and Anse La Raye.
The Ministry of Communications, Works, Transport and Public
Utilities has prepared detailed Terms of Reference for coastal studies,
diagnostic analyses of shoreline erosion, and recommendations for remedial
action, along the coastlines of Gros Islet, Anse La Raye, Canaries, Soufriere,
Choiseul and Dennery. The OECS Secretariat has approached the German Technical
Cooperation Agency GTZ, to fund these studies. GTZ has endorsed our proposal,
and we now await confirmation of funding from the German Government.
Waterfront re-development plans, with an emphasis on
improving the capacity of our communities’ abilities to better cater to the
demands of the tourism industry, are now being prepared by the Ministry of
Planning for the Soufriere and Gros Islet towns, in recognition of their
significant tourism development potential. A similar exercise was underway
before Lenny struck, in Anse La Raye, under the St Lucia Heritage Tourism
Project, and this exercise continues.
We have provided in this budget, Mr Speaker, a total of 9.3
million dollars for the Lenny Response Effort over 2000/2001. Of this amount,
1.7 million dollars will derive from Local Revenue, and the balance from grants
and loans.
LAND SLIPPAGE AT BLACK MALLET/MAYNARD HILL
An even more worrying and haunting problem has been the land
slippage at Black Mallet and Maynard Hill. To date, we have had to move more
than 80 households out of that community, to temporary rental accommodation
across the country. Government provided all affected households with
transportation and 3 months rental in their new residences, whether they owned
or rented houses in Black Mallet. This rental arrangement has been extended for
all householders who owned properties in the affected area.
The condition of the houses within the area affected has
deteriorated to the extent that they are, by and large, unsafe for occupation,
and many have already had to be demolished in the interest of public safety,
while facilitating salvaging by the owners to the extent possible. Many of the
dwellings affected are constructed, either in part or in total, of blockwork
rather than timber, so that the dismantling and re-erection of existing
structures at another site was often not an option.
We are advised that stabilisation of the area can only be
achieved through a combination of a variety of remedial actions. These include
stabilisation of the toe of the land slip, improved surface and sub-surface
drainage, and increasing the vegetative cover in the area. A stabilising toe
berm was constructed, and drilling for the purposes of de-watering the
sub-surface has been completed. Over the next few months, surface drainage
improvements and bio-engineering measures will also be implemented in Black
Mallet.
I must, Mr Speaker, take this opportunity to commend the
residents of Black Mallet and Maynard Hill for their continued fortitude, and
cooperation with the Task Force, particularly when circumstances warranted their
immediate relocation out of the area. These families have been faced with an
extremely difficult, and at times frightening, situation, and they have without
exception, demonstrated strength of character and an innate capacity to respond
to a trying situation with courage and vitality. While most residents in the
immediate area affected have been relocated, some have been able to remain, and
of course, there are the communities on the fringes of the affected area. We
must ensure that these persons are not forgotten in our response to the
situation at Black Mallet and Maynard Hill.
We recognise that contributing factors to the earth movement
are poor planning, poor drainage and poor sanitation practices, all exacerbated
by the high density of occupation of the area. I note that this is not a
situation unique to this community. The technical officers in the Ministries of
Planning and of Communications and Works have been directed to review conditions
in other communities facing a similar risk, with a view to developing
recommendations to mitigate similar disasters in such areas. The dangers of poor
planning, especially on slopes, have been brought into sharp focus, and we urge
the public and particularly prospective developers to take due note.
We anticipate that many of the persons who have moved from
the area of land slippage at Marchand will not move back into the area. Although
the movement has slowed, conditions there must be closely monitored before a
decision to put the land back to hard use can be taken. In most instances,
return to the area, even in the medium term, is unlikely to be an option.
Government has therefore identified a relocation site within the UDC Carellie
Development. The subdivision design was undertaken by the Ministry of Planning
in collaboration with the Ministry of Communications, Works, Transport and
Public Utilities, and the utility companies. Tenders for the development of
infrastructure at that site have already been invited.
Our response to date has been funded from the capital
contingency vote. However, the Caribbean Development Bank has agreed to provide
emergency loan funding as well as a longer term loan, to assist the Government
of St Lucia in dealing with this disaster. Very early on, we declared the
affected area a disaster area, which made us eligible for the emergency response
loan from the CDB. With CDB assistance, we will complete the work required at
Black Mallet and Maynard Hill, which includes remedial works on the water
distribution, sanitation and road systems, clean up, improvements to the surface
water drainage in the general area, sub-surface dewatering and re-vegetation.
Infrastructural development at Carellie will also be funded under the CDB loan.
However, not all expenditures, particularly those relating to relocation
packages, will be eligible for reimbursement under these loans, and local
revenue will have to bear the brunt of such costs.
We intend to have the affected properties in Marchand
acquired and declared Special Enforcement Areas. To limit the strain on our
local revenue resources, land exchange will be the preference, with parcels
within the proposed relocation site at Carellie preferentially offered to land
owners.
We have entered into discussions with all affected house
owners, with a view to recommending packages of assistance to be offered to
these persons, to aid them in re-establishing their families in a safe and
wholesome environment within the shortest possible time. The proposals for
assistance will be considered by Cabinet early in the new financial year.
Special assistance will, of course, be provided to the senior citizens and
disabled, who have little capacity to recover under these extremely difficult
and trying circumstances.
Mr Speaker, we have, therefore, provided in the estimates of
expenditure for 2000/2001, a total of just under 6.0 million dollars for the
Black Mallet/Maynard Hill landslide response. Of this amount, 1 million dollars
will come from local revenue, and the balance from loans from the Caribbean
Development Bank.
CONCLUSION
Mr Speaker, a National Budget is both a philosophical
statement and a practical tool. At the start of this, my third major budget
address, I indicated that this was a budget to strengthen, modernise and
reposition the economy. This is intended to lay the foundation for generating
and sustaining economic growth well into the medium term. This is the practical
tool at work. Many of the policies however, we have developed and introduced in
concert with social partners. We have forged these evolving relationships to
harness the creative energies of all our people and to stimulate their
collective and individual development. Moreover, we foresee the growing
participation of civil society in determining national economic priorities. That
philosophy is enshrined in the design and implementation of the parameters of
this budget.
Based on the policies that I have enunciated, there is every
indication that the economy will grow by approximately 3.5% this year. However,
in recent years, profound structural changes have occurred and continue to occur
in the social and economic fabric of St Lucia and in the world beyond. We must
therefore, adopt a mindset and a capacity which adjust to this new reality. This
is critical if we are to achieve an even and equitable distribution of the
material and human benefits of growth, among disparate sectors of our society.
Mr Speaker, we are confident that this budget will allow us
to transform the hopes and dreams of our nation into sustainable processes and
programmes for employment, economic growth and national development.
I move, Mr Speaker, the second reading of the Appropriation
Bill 2000/2001.
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