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European Union to Inject More Life in Local Economy

Contact: Primus Hutchinson

Thursday, August 08, 2002 – Government has concluded agreements with the European Union for the inflow of new funds for capital investment, economic and agricultural diversification and private sector development. The announcement was made by Prime Minister Honourable Dr. Kenny Anthony, when he addressed members of the St. Lucia Chamber of Commerce at their monthly luncheon lecture on Tuesday August 06, 2002.

During the lecture, Dr. Anthony explained that the interests of donors and investors in Saint Lucia are still running high and due to the island’s economic diversity its performance would likely be more vigorous than many other OECS states.

Dr. Anthony who delivered this month’s Chamber’s Luncheon Lecture on the topic “Prospects for the Economy’ indicated that while Saint Lucia has not quite won the economic battle it is however on the path to a cautious recovery.

The Prime Minister attributed this optimism to what he described as the sound state of the island’s macroeconomic fundamentals and the management of the general economic environment. Dr. Anthony added that government is in the final stages of a reallocation process which will deploy some $30 million dollars of unused STABEX resources into the domestic economy.

These resources which the Prime Minister says should be available by the third quarter of this year, will more than double the funds available directly to the private sector. According to Dr. Anthony, the funds will be specifically for market and product diversification and productivity enhancement.

However, Prime Minister Anthony assured Chamber members, that the most significant developments in the economic landscape would be the new investment in the telecommunications sector.

“This will be heralded by the formal issuance of licenses to three telecommunications service providers. This is the most recent phase of the liberalisation and modernisation process taking place across the region .Associated investment which should follow during this third quarter, will expand the economic space into which new and existing businesses can diversify,” Dr. Anthony said.

Regarding interest rates, The Prime Minister indicated that there has been a recent decision to lower the cost of borrowing via a reduction of interest rate which he says is but one tentative step to improving the business and investment environments.

Dr. Anthony added that government also proposes to encourage the formation of new ventures by lowering the corporate tax rate for public traded companies, listed on the Eastern Caribbean Stock Exchange and is also considering corporate tax exemptions, tax holidays and special depreciation allowances for these public traded companies.

• Address by the Honourable Prime Minister to St. Lucia Chamber of Commerce August 6, 2002

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