Address by the Honourable Prime Minister at the Executive Luncheon Meeting of the St. Lucia Chamber of Commerce, Industry and...

Address by the Honourable Prime Minister

at the Executive Luncheon Meeting of the St. Lucia Chamber of Commerce, Industry and Agriculture

October 14, 1998

Introduction

I wish to begin my address by today thanking the St. Lucia Chamber of Commerce and the St. Lucia Small Business Association for orchestrating such a splendid manifestation of collaboration and dialogue between the private sector agents in St. Lucia and between the private sector in general and the Government of St. Lucia.

Today's gathering is a continuation, of as well as an enhancement of the close communication which has obtained between the public sector and the private sector in recent times. The government of St. Lucia is firmly committed to maintaining and participating fully in this process of consultative dialogue with the private sector and to supporting private sector initiatives. It is also a personal ambition of mine as Prime Minister, of this country, to witness the elevation of this collaborative communication process into joint business initiatives and advocacy for the furtherance of the economic development of this country.

My desire to catalyze joint initiatives between the local public and private sectors and between local business entities, arises from an acute consciousness of the need for such activities to stimulate economic growth and to propel e St. Lucia's economy forward.

Public Private Sector Relationship

I have addressed the private sector on several occasions during the past year. In my initial addresses I have sought to establish my government's philosophy towards the private sector to clearly define the pivotal role of private enterprise in the process of economic development. My intention at that time was to strengthen and broaden the relationship between government and the private sector and to focus this relationship on a unified thrust towards the restructuring and rejuvenation of the economy. I must therefore view today's meeting as the logical progression towards the united efforts of the public and private sectors in revitalizing the growth and development of St. Lucia in general and of the Vieux Fort area in particular.

Purpose of this Meeting

I am proud of the fact that the relationship between the public and private sectors has developed to the level at which we are participating today. On this occasion we are able to focus on specific development initiatives in a particular area of the country i.e Vieux Fort. I am consequently extremely pleased to participate in today's dialogue on the opportunities for economic development through private sector input in Vieux Fort. I am particularly priviledged to be engaging in this exchange in the constituency which I represent so that I am able to speak honestly and confidently of the vast development potential of this area and the immense capabilities of the people of Vieux Fort.

The Economic Realities

St. Lucia's economy is at the stage where the first timid signs of growth are apparent after an extended period of stagnancy and restructuring in critical productive sectors. As the major economic agents (public and private sector) we are all well aware of the traumatic impacts of the economic adjustment process. As a consequence, we have sometimes disagreed on mechanisms and solutions to specific difficulties. While it is to be expected that there will be profound differences of opinions about some of the difficult challenges which confront us we must muster our collective efforts to harness the existing opportunities to push this country onto a higher growth path.

The opportunities for accelerating the growth and development of St. Lucia at this crucial time are available in Vieux Fort. This is not a prejudicial statement by a district representative, but a statement of fact which has long been recognized by economic agents and planners in St. Lucia. It is of course painfully clear that while the economic potential of Vieux Fort has been uncontested in the past precious little has been done to unleash that potential.

The economic vision for St. Lucia in the first decade of the next century must embrace new information technology based industries and a higher level of sophistication in commerce and trade. With the overwhelming acceleration of international commerce precipitated by global trade liberalization, the distinction between domestic and foreign markets has become increasingly blurred. Often in St Lucia both public and private sectors have been shocked by undesirable and negative changes in the regional and international trade policy environment. The harsh reality is that in most of these cases the changes have persisted rapidly and unrelentingly even while we protest.

Ignoring these global developments is clearly not an option nor can we continuously protest while the rest of the world marches onward into a new economic age. These are truly harsh economic realities which we must face.

There is fierce pride in St. Lucia about our unique ability as a people to come together and marshall our efforts in the face of adversity. It is at those times and in these circumstances that the true sprit of St. Lucia comes to the fore. And true to form , out of the harsh economic realities which I have described we have carved a bright and positive vision for our future.

The Economic Vision for St. Lucia/Vieux Fort

In this economic vision St. Lucia must and will utilize its economic assets to develop and expand private enterprises that can operate competitively in the global business environment. St Lucia's human resources must and will be trained to become properly functional and fully integrated into the modern technology based environment.

The Government of St Lucia through the public service and the public sector enterprises has delineated its role and function in articulating and achieving these economic objectives. On the human resource development front, the Ministry of Education has recently embarked upon an extensive national consultation on education to determine the parameters for an appropriate reform programme.

In the area of business development, Government has taken stock of the relevant factors and assets that are necessary for business development and has implemented concrete actions to provide access and opportunity to the private sector. The primary factors for private enterprise development happen to be land and accommodation. This is clearly where the Vieux Fort area is unrivaled by any other area in St. Lucia, with thousands of acres of mostly flat expanse, that can accommodate a diversity of productive land uses.

Additionally, Vieux Fort boasts all the necessary economic and social infrastructure for the development of viable modern business enterprises. It is indeed fortunate that St. Lucia possesses such valuable economic assets at this juncture of its development, when it is so obviously imperative that the country requires a renewed economic thrust.

It is probably cliché to offer Vieux Fort as the new location for business enterprise in St. Lucia. In reality Vieux Fort offers the most attractive combination of factors of production, a human resource base and services for business development at this time. These are the precise requirements which St. Lucian businesses need to develop competitively in the next decade.

Government Interventions

Government through the National Development Corporation has developed a land use plan for Vieux Fort which ensures that the current and future spatial development of the area is in keeping with its economic and social developments. In conformity with this plan the NDC has conceptualized several development projects that are aimed at encouraging, facilitating and supporting private sector activity in the area. These projects are not merely aimed at encouraging business expansion into Vieux Fort, but are intended the stimulate the growth of new enterprises in diverse areas such as information technology and international commerce.

These projects include the construction of a Goods Distribution Free zone which will accommodate commercial enterprises that will provide distribution services throughout the Caricom region.

Another important project is the development of an Informatics Park in the vicinity of the Vieux fort industrial estate. This project for which funding has already been secured from the Caribbean Development Bank, involves the construction of two industrial buildings to house information technology based enterprises.

The Southern Shores Commercial development which is located in the Cocodan area is another imminent undertaking by the NDC. This development encompasses an area in excess of 42 acres of flat lands that is ideally located for the purpose intended. Given the many limitations of the town centre of Vieux Fort, the Southern Shores Commercial development is likely to develope as the new commercial center for this area. In this case too, the development has been designed to usher in new visual attractiveness with amenities such as sidewalks, green areas, and parking.

Later on, as today's program unfolds, you will have the opportunity to visit some of these project sites as well as some of the existing infrastructure and amenities in this area for the support of private sector ventures.

The People of Vieux Fort

As we contemplate the land assets and other infrastructure that beckons both local and foreign enterprises to Vieux Fort, we must not discount the value and contribution of the people of this area. As you tour the facilities you will see many depressed areas as well as areas where there are visible signs of advancement. We all know well the recent history of this area and so we must appreciate that tremendous tenacity and industriousness of the Vieux Fortians who have generally managed to build homes, support and educate families with little outside assistance and a zero asset base. We as St. Lucians have seen this area before but during the tour let us attempt to view the people and the landscape with a new shared vision. Let us see the hard work that has already been put into this area by the community and the Government and by the existing private enterprises and let us all resolve to fully exploit the opportunities that exist for further growth.

The Government of St Lucia has made a major policy shift as part of its strategy to stimulate business development in this area and in other areas where significant development potential exists.

Special Development Areas Act

The Special Development Areas Act is an extremely progressive piece of legislation which seeks to support the most fledgling attempt to initiate business activity I the designated areas. This incentive legislation is innovative in that it supports both commercial and industrial development. A summary of the benefits of the Act was recently published in the St. Lucia Gazette.

This incentive legislation supports business ventures from the onset of implementation that is, from the initial land purchase for siting of the business, whereby the purchaser and vendor are exempted from payment of duties on the transaction. The Act allows for the reduction of duties on the import of materials and equipment to be utilized in the renovation of existing buildings and conversion of existing dwelling houses for commercial use.

The Special Areas Development Act provides fiscal incentives for businesses that are engaged in any of the following types of economic activity:-

The fiscal benefits provided under this act are enjoyable for a period of no more than ten years and include:

A reduced corporate tax rate of 20%

Accelerated Capital Allowances on Buildings

Exemptions from Import duty, Stamp duty and Consumption Tax for Building Construction and Renovations

Exemption from Stamp Duty on the purchase of property for Industrial and Commercial use

Industrial enterprises enjoy the most advantageous package in terms of the acceleration of capital allowances of up to 40% in the first year and 5% annually thereafter

These incentives are available to all business ventures that are initiated in the Vieux Fort area. Both Vieux Fort North and South have been designated as development areas to facilitate and support those businesses that wish to take advantage of the opportunities which exist in this area. Other Special Development Areas are:-

Soufriere/Fond St Jacques

Anse La Raye and Canaries

The Existing Business Environment

Many businesses have already established themselves in Vieux Fort and have been satisfied and successful in this area. At the private sector level I am conscious of the existence of a supportive and generally welcoming business environment. In August of 1997 I participated in a major consultation with business persons from the Southern region at the Club Med Hotel. This was indeed an impressive gathering of the significant business interests which already exist in this region. Out of last year's consultative process a new organization of business persons has emerged in the form of the Southern Tourism and Beautification Committee. This organization has already generated greater vigour in the community and has brought a surge of interest and renewed effort towards economic advancement.

Today's gathering is even more impressive, and this is testimony that the surge in interest and effort towards economic permits in Vieux Fort, has become infectious. It is clear that business persons, and public sector agencies throughout St. Lucia, have a heightened awareness of the economic importance of this area and are ready to take positive actions to realize the potential economic benefits.

Expectations for the Future

I wish to make it abundantly clear that my understanding, when I was asked to participate in today's exercise was that the private sector is ready to commit to the development thrust in Vieux Fort. It is my expectation that you will establish new business ventures locally and with external counterparts to operate regional distribution enterprises within the Goods Distribution Free zone.

It is my expectation that the Commercial development in Cocodan will soon be busting with business and entertaining activities that are solely lacking this area at this time.

Some private entrepreneurs have already began to renovate, expand and upgrade their businesses. The Club Med Hotel for example has embarked on a renovation programme which to attract higher occupancies and bring larger numbers of visitors to the area. Many local Vieux Fort businesses have launched new small ventures and we are looking forward to the inflow of new investment to augment their efforts.

The local private sector must be bold and enterprising and I interpret by your presence at this meeting a readiness to take the Quantum Leap into the new development era for Vieux Fort and for St. Lucia.

I firmly believe that in this area St. Lucia possesses the qualitative and quantitative development attributes, which will make business, located here profitable and competitive.

Business Investment in Vieux Fort must consequently be seen as the qualifying step that will ensure the growth and survival of local business into the 21st century.

Ladies and gentlemen I trust that we are already to proceed into the new millenium.

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