By Caribbean News Global
TORONTO, Canada, (CNG Business) – ‘Pregnant with opportunities and poised for the transformation of our country’ was the flagship of Saint Lucia’s prime minister, Philip Pierre, new year’s address. He went on to explain: ‘All our planning will be for naught if we do not have a healthy and productive populace.’
Every pregnancy has a delivery date. April 26, 2022, sums-up nine months [to date] since the general elections of July 26, 2021.
On April 26, 2022, prime minister and minister for finance, economic development and the youth economy is expected to deliver on the ‘pregnant opportunities’ of the $1.842B budget “the largest budget in Saint Lucia’s history” styled “the peoples budget”, outlining his government policy prescription for the economy.
As previously noted, ‘numbers to look for includes debt to GDP, the annual rate of inflation, cost of servicing the national debt, the current debt load and deficit, priority to expenditure, revenue forecast, grants, external contributions and new tax receipts, if any, to offset spending restraint.’
Finance minister Pierre would be expected to deliver on Saint Lucia’s unemployment rate and acknowledge important measure that determines Saint Lucia’s standard of living in the face of increased inflation.
Key’s to economic growth will be fundamental as well as new and renewed policy in the face of low productivity and a full return to work. In accordance, a scale up of productivity and output is paramount to achieve projections – to come mainly from the following major revenue categories:
- Taxes on income and profits are forecast to achieve a surplus of $16.91 million compared to the estimate;
- Taxes on goods and services – An overage of $11.3 million is projected by year-end, the main contributor being $17.50 million and $10.12 million surpluses from import duties and service charge, respectively.
Some of the major contributors to the expected outturn includes [the continuance of projects]:
- Vieux Fort Water Sector Redevelopment Project;
- Disaster Vulnerability Reduction Project;
- Jude’s Hospital Reconstruction Project;
- Constituency Development Project;
- Road Improvement Maintenance Programme;
- PROUD (SUP) Project;
- Emergency Response COVID-19 Project; and
- The National Roads Rehabilitation Programme.
Prime minister Pierre in accordance with policy matters and stablizing the economy will have to give meaning to the estimates and expenditure – substantiated with clearly defined policy, relative to expected annual growth in real GDP per capita vs. current domestic and global events.
Saint Lucia’s ‘performance and strong economic growth’ matters in terms of pregnancy and a successful delivery, that guarantees the dream of every parent and Saint Lucian to be prosperous.
The role of the government is to increase access to a struggling workforce, reduce taxes, improve access to trade, housing and economic value by investing in new ways of research and innovation, providing goods and services more efficiently, and underlining the inflation threat.
These areas warrant a strong response and corrective measures, against the prospects of more fiscal stimulus and interest-rate hikes that is likely to curtail economic growth, lengthen by the Russian – Ukraine war.
The price of everything has increased. Inflation is beginning to do so, up 6 percent and rising. Inflation and increased interest rates will have an impact on everything in the economy, as well as the 2022/23 estimates, [$1.842 billion budget] and [major contributors to the expected outturn] and new policy expected, Monday, April 26, 2022.
The foremost fundamental here is young people increased difficulty entering the workforce, and the challenges of accumulating assets, [the impetus of the youth economy] as well as the continued pressure on companies’ margins of return.
“The war in Ukraine is adding risks to unprecedented levels of public borrowing while the pandemic is still straining many government budgets,” Vitor Gaspar, director of the International Monetary Fund’s fiscal affairs department, and Ceyla Pazarbasioglu, the IMF’s strategy chief, Reuters reported. “About 60 percent of low-income countries were already in, or at risk of, debt distress, the authors said. Rising interest rates in major economies could lead to widening spreads for countries with weaker fundamentals, making it more costly for them to borrow.”
In simple terms, micro – macro strategy and rising inflation could further limit Saint Lucia’s policy manoeuvres. And notwithstanding, Return on Investment (ROI) a rudimentary gauge of investment profitability.
In the short-term, and more particularly, a review of debt payments, foreign currency reserves, maturing sovereign bonds, treasury bills and agreement with creditors will need essential focus.
Other benchmarks of concern are government committed loans and drawdowns over the last eight months – that requires transparency and accountability. And the source (s) of the 2022/23 net financing requirements [$505 million].
The positive social and financial impact of the Taiwanese government, specifically during the last 12 months [agriculture, housing, education, loan financing] has been exceptional. The next step is most essential, as Taiwan continues global advancement was recently ranked 16th among the world’s economies in merchandise trade in 2021.
In the estimates, finance minister Pierre, noted: “The total projected recurrent revenue for 2022-2023 is comprised of tax revenue of $1.016 billion or 88.4 percent and $133.9 million in non-tax revenue.
Tax revenue is forecast to increase by 9.5 percent […] The significant increase in non-tax revenue is projected as a result of the higher anticipated Citizenship by Investment (CIP) inflows expected to be deposited in the Saint Lucia National Economic Fund pursuant to the Saint Lucia National Economic Fund Act.
Value Added Tax (VAT) from international trade transactions (collected by the Customs and Excise Department) is projected to yield $165.5 million in 2022-2023, […].
Airport tax is projected to record an increase of 16.41 percent or $3.6 million above the 2021-2022 outturn to reach $25.5 million for the new fiscal year. This projection is influenced by the higher revenue intake anticipated from an increase in tourism arrivals, including stay-over arrivals, which is expected to increase by approximately 26.2 percent in the new fiscal year.
Service charge on imports is projected to increase by $6.94 million or 8.41 percent above the outturn for 2021-2022 to reach $89.5 million for the new fiscal year.
New money / New projects
Economists and policy observers expect new measures towards Foreign Direct Investment (FDI) and a report from ministers travelling to multiple cities in Europe, Latin America and the US, not reported in mainstream media. This is perhaps in the interest of transparency, accountability, and security uncertainty.
The projected increase in capital projects of $104 million is not specific to new capital projects. Observers expect clarification and progressive announcements to new capital and development projects.
Further, Saint Lucia is among the least reporting counties on the benefits of Expo Dubai 2020 and Global Business Forum Latin America (GBF LATAM 2022) and attendance at other global events.
The delayed announcement perhaps “forms part of the prolonged policy that requires monetary and sanctions easing” said an economic analyst, “besides the citing of “mysterious” aircraft landing in Castries and undisclosed “Russian investments” that authorities hesitate to authenticate.”
Averting economic distress
A delayed pregnancy has consequences that most would prefer to avoid, based on an all-encompassing and applied advisory, rooted in reality. In the interest of governance apprehensive and public concern, political survival and policy decisions require a happy medium.
Considering a deepening economic crisis driven by increases in domestic fuel, electricity rates, goods and services, and bus fares – compounded with the pressure of fiscal deficit, balance-of-payments troubles and rising interest rates are reasons to quicken governance and economic reforms.
These kitchen table matters are adversely affecting many families. Should the government of Saint Lucia fail to give priority, it has the potential to quicken discontent, as present in South Asia.
Extraordinarily, Saint Lucia has similarities.