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Contact:
Chris Satney
Tuesday, 14 October 2008 – Prime Minister Honourable Stephenson King has
been speaking on bread and butter issues, as the global economy continues its
unexpected slump.
Addressing the nation last evening, the prime minister said, the local economy,
like others, has been experiencing a series of economic shocks, relating to the
inflationary impact of increasing commodity prices, including fuel and food
prices.
These were the major talking points of a recently held meeting of Commonwealth
Finance Ministers in Saint Lucia just one week ago.
“Analysts have indicated that they are uncertain of how long this recessionary
period will last. However, the forecast is that the recession may be prolonged
and bottom out over a three year period. It is therefore imperative that we
prepare for the worst, while we hope for the best possible economic outcomes, in
Saint Lucia and the rest of the world,” said the prime minister in his televised
address.
The financial crisis in the US financial market has repeated itself in other
markets around the world, where regulators have implemented a multi billion
dollar bailout. The Prime Minister said the present condition has also been
worsened by the reduction of airlift to the island by certain airlines,
affecting the country’s mainstay—tourism.
“Given our dependence on the tourism industry as a principal employer and source
of foreign exchange, the most direct impact is likely to be felt in that sector.
The crisis is likely to impact the sector, mainly through a decline in visitor
arrivals in the medium term. Notwithstanding, based on advanced bookings,
indications are that the UK market is expected to perform favourably during the
coming winter season,” he said.
Contrary to some public criticism, Prime Minister Honourable Stephenson King
says, his government has taken steps to assist the local economy to weather the
present global financial storm. Prime Minister King noted that government’s
interventions have been very costly to the national purse; government until
recently, subsidized gasoline and cooking gas.
In addition, he says, government has removed the import duty and consumption tax
on a number of essential items including among several others baby juice and
formula, toothpaste, powdered soap and lentils.
“Though very costly, the government maintained this policy, in its efforts to
bring some measure of relief to working Saint Lucians. Under the Price Control
(No 2) Order of 2008, the Government fixed wholesale and retail margins on a
number of basic products, consumed by the average family. We went even further
and doubled the number of items on the list of price control items from 22 to
44. These include baby fruit juices and formula, cheese, corn beef, mackerel,
tuna, tea bags, salted biscuits, margarine, toilet and powdered soap,
toothpaste, powdered soap and lentils, and fertilizers to name a few,” he said.
He says government, out of compassion and concern for its poor and vulnerable
population, particularly the elderly, has also increased public assistance given
to such persons to the tune of 1.6 million dollars, in order to alleviate the
strain on those citizens.
A recent statement by the Eastern Caribbean Central Bank, concerning the
strength of the domestic financial system, Prime Minister King said, has served
to allay concerns regarding the sub-region’s financial system.
He said although government takes a measure of comfort from this revelation, it
has started a series of meetings through the Ministry of Finance, with
stakeholders in the financial sector, to determine the likely impact of the
crisis, with a view to taking any necessary corrective action at the earliest.
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