2009 New Year’s Address To The Nation By The Honourable Stephenson King
New Year's Address to the Nation
Honourable Stephenson King
Prime Minister, Minister for Finance (International Financial Services), Economic Affairs, Economic Planning,
National Development and External Affairs.
Theme: “Resilience and the Transformation of the St Lucian Economy”
January 14, 2009
Fellow St Lucians at home and abroad, friends, good evening;
As Prime Minister of this beautiful and blessed land let me wish all of you a productive and prosperous New Year. The coming of a new year gives us an opportunity to reflect on our personal and community lives. It is a time when we make resolutions, with the expectation that our resolve and determination will see us successfully through, what ever may lie ahead.
Ladies and Gentlemen, the last year was one full of challenges. Believe me; I am quite aware that it took much fortitude, for us to make it through the year, that has just ebbed away.
On reflection, we have had to cope with rising oil prices and its cascading negative effects on our economy; a food crisis that left its devastation among the less fortunate; an adverse and prolonged hurricane season, which played havoc with our road network and more recent, the global financial meltdown, which continues to pose a present danger to world economies and financial systems. However, despite the storm clouds, we have had good reason to be quietly confident.
My message this evening therefore, stresses the challenges we will continue to face, the hopes and aspirations of our people, our resilience, and the need for us to embark on a mission of transformation of our country, together as a people. It is about community, and the need to move our country forward, by taking lessons from our past experience. It is about growing a successful and prosperous country, about creating jobs, about security, about rebuilding and transforming our country, child by child, community by community, and village by village, while caring for each other at the same time.
Today, as leader of this country, it is my honour to speak to you about transforming Saint Lucia and making it a special home for every one of us - a safe place for our children, our women, our young men, and our elderly. If I sound a little nostalgic, it is because I have reached the age where I can look back with pride on our accomplishments over the last thirty years, and I am satisfied that we have been able to make something of our selves, through challenging times. As a young independent nation we have achieved much, and in more recent times Saint Lucia has enjoyed the honour of having been voted as the number one country in Latin America and the Caribbean in the World Bank’s “Doing Business Report” ranking. Given the current climate we must continue to now strive harder to maintain that ranking. I am confident that with improvement to our investment and business posture, we can continue to maintain our stature.
In 2008 Saint Lucia, along with the rest of the Caribbean Community and indeed the world, faced a number of crises. Not least among them was the unprecedented increase in the prices of most food items. For example, here in Saint Lucia, for the three commodities imported in bulk by the Government, we saw the price of flour rise from $65.00 to $120.00 for a 100lb bag. The landed cost of sugar and rice also increased substantially.
We also experienced increases in the prices of basic commodities imported by the private sector. Needless to say, these rather rapid increases had a painful impact on you, the citizens. How did the Government react? With respect to some items imported by the private sector the Government implemented two critical policies. In the first instance we identified a list of twenty-two (22) additional items which were brought under price control. Further, we moved to amend the consumption tax; and where possible, the import duties on these items. This had the immediate effect of reducing the rate of increase in the prices of these commodities. While we were not in a position to determine the landed price of these goods, we were able to determine the level of markup on these commodities and this is precisely what we did.
With respect to the bulk commodities of rice, sugar and flour imported by Government through the Ministry of Commerce, we have up to this day maintained the same level of prices to the consumer. It has cost the Government over six million dollars to maintain this level of subsidy. I do not believe that we can continue this subsidy much longer and at some point this year; St Lucians will be asked to pay more for these commodities.
Government also had to deal with an increase in the price of fuel, the level and speed of which had never been seen before. We handled the situation, by ensuring that, while the price of a gallon of gasoline was being sold to the consumer at $16.00 and $17.00 per gallon in some of our neighbouring territories, in St Lucia we maintained a price of $12.75 per gallon. This policy decision cost the Government greatly and impacted negatively on revenues. We maintained the price, at the pump, mindful of the fact that the trend in world oil price increases was not sustainable and hopeful that prices would have fallen at some future point.
Today, when we examine the price of crude oil, we feel vindicated in our assessment of the situation and our actions then. The subsidy has come at a price to government and hence it is necessary to recover some of this revenue to undertake projects that are vital to the development of the country. Notwithstanding, you have seen significant reductions in prices of all petroleum products, especially the 20lb cylinder of cooking gas that is so essential to the majority of households, especially the low income earners.
In addition, the government of Saint Lucia has taken and continues to give consideration to a number of measures aimed at mitigating the impact of the global economic slowdown on the domestic economy. We launched with a fiscal stimulus package of over $60m during the last quarter of 2008. This package involved spending on capital projects such as rehabilitation of roads, construction of drainage, beautification projects and refurbishment of public facilities and infrastructure. Hundreds of Saint Lucians have gained employment under this programme as the impact of spending on the implementation of the various projects is expected to filter throughout the local economy.
Although still in the early stages of implementation, this programme has already positively impacted the economy by creating short term employment and provided much needed stimulus during the Christmas season. It has also generated income, particularly within the communities that benefited from these projects.
In the Education Sector, Government has also reintroduced dedicated transportation at seventeen (17) secondary schools from Soufriere and Vieux Fort in the southern part of the island to Gros Islet in the north, costing Government over EC$4 million. We are already seeing the benefits as this system has improved punctuality and increased levels of attendance at schools. In addition, parents now have the added comfort of knowing that their children should be home by a certain time. In this way they can implement more effective supervision programmes, for their children.
This Government has a bursary programme costing EC$1 million a year, to ensure that there is greater equity; not only in access to secondary schools, but to the resources, such as books that the students need, to make maximum use of their secondary school opportunities.
To further enhance education in Saint Lucia, we have reintroduced the granting of scholarships to teachers. We realised that the granting of scholarships to teachers was of too great importance to our education system. With the reintroduction of this facility, we now have eighty (80) teachers on full scholarship with full pay, pursuing various teaching programmes at the Sir Arthur Lewis Community College.
Of course we have not forgotten the more unfortunate and vulnerable families and have continued the school feeding programme with an allocation of one million dollars and have now introduced a breakfast programme in the Marchand community.
In spite of the turbulences of 2008, we achieved increases in tourist arrivals, banana production has improved, persons receiving public assistance have benefited from significant increases, and we have doubled the number of items on the price control list, in our endeavour to “ease the squeeze” on the poor. Ladies and gentlemen, our list of accomplishments is by no means exhaustive, and we will continue to work diligently to consolidate our position. Regardless some of the negative rhetoric you may have heard last year, this Government understands the nature of the problems that we face as a nation, and have implemented policies aimed at addressing them. As Prime Minister, I know there are many challenges, but the effective approach to their resolution calls for calm and steady leadership. The solution to some of our problems is not short-term, but requires patient investment today, so that the results will be felt in the years ahead.
Fellow Saint Lucians, we could not have survived the past year without the hard work and sacrifice of our talented people. Let me, therefore, thank you for seeing us through these difficult times. But let me also make it abundantly clear that more challenging times lie ahead, and while the government is doing everything possible to mitigate the circumstances, you will also be expected to play your part. It cannot be business as usual, with the hope that the government alone will make things right. Every citizen, every government department, every business, every sector, will be asked to dig deeper, to increase productivity, to increase efficiency, to cease wastage, so that all will emerge stronger, once we reach calmer waters.
We have now entered 2009 on a “low tide” of mingled hope and nerve – raking fear. We are expected to be even more vigilant, as we now navigate uncharted waters. As we do so, we are hopeful that the current global economic crisis will soon bottom out and that fairly soon we will see a turnaround in global economic fortunes. However, there is the likely possibility that we could be affected a lot more than we anticipated. The IMF predicts that the recession in the US is likely to continue until the third quarter of 2009, but in a worst case scenario it could be extended until 2010. We pray that the soundness of the policy initiatives to be pursued by the new Obama administration will inspire confidence in America and the rest of the world. I am sure you will join me at this juncture, in wishing President – Elect Obama, every success, as he undertakes this most difficult task of leading his country and guiding the rest of the world.
As your Prime Minister I have recognised that this global crisis demands swift, focused and decisive action at the local level. The deteriorating global economic outlook is likely to dampen economic activity in Saint Lucia, which is heavily dependent on inflows from tourism, Foreign Direct Investment, remittances and external public sector financing. It would be disastrous and foolhardy, if we as a government, stood by, full of rhetoric, and with only paper plans hoping for the best, while being unprepared for the worst. It is imperative, that we think creatively, employ practical short, medium and long term solutions, and that we must work together to overcome this downturn. In the end, we will emerge stronger as a nation from the experience gained and from the opportunities and possibilities presented to us, as we undertake to restructure the public and private sector, as well as our personal lifestyles.
Fellow Saint Lucians, as a nation we have been through recessions in times gone by. Recessions offset plans, blur visions and disrupt development. It is quite inevitable that this year, as a consequence of this looming recession, we will certainly fall short of our projected growth, articulated in the 2008/2009 budget. However, let me assure you that under my administration, as under previous administrations in which I have served, there will be some “measured growth”. My expectation for growth, is based on the fact that in spite of the downturn, banana production increased by 30.7 per cent to 34,396 tonnes in the first 11 months of 2008, relative to the same period in 2007. Export earnings from bananas were also up, by 39.8 per cent to EC$53 m. In addition, production of other crops is estimated to have increased by approximately 25 per cent over the first three quarters of 2008 relative to the same period in 2007. This was largely due to favorable weather conditions and higher prices, as well as the spending on rehabilitation, fertilizers and drainage undertaken by the Government.
My government and I will be the first to step up and play our part by being strong, focused and together. We will lead by example. Our first aim must be to strive for excellence. Our plans for 2009 will include addressing the anticipated decline in tourist arrivals and expenditure; the decline in remittances, as our relatives overseas feel the economic pinch of the recession in their adopted homes; the continued decline in foreign direct investment; all of which will have the impact on growth, employment, poverty, government revenues and the profits of the private sector.
In 2009, we expect that there will be a rebound in growth in the construction sector. Activity in that sector is projected to increase based on the planned implementation of a number of private and public sector construction projects.
In this regard, work is expected to resume on major resorts, including The Raffles and Le Paradis. It is also expected that the Ritz Carlton, Jalousie and The Landings Expansion will also commence this year. However, access to financing at a reasonable cost will largely determine the speed at which these projects commence. This will be the year when the private sector will be expected to step up and bring these projects to fruition. Government cannot be expected to undertake this transformation on its own. There must be collaboration with and among our social and economic partners.
A number of public sector projects are also expected to be implemented in 2009. These include the new national hospital which is estimated to cost approximately EC $140m (for construction only), the Jeremie Street Redevelopment Project costing US$15m and upgrading of the Hewannora International Airport and the construction of a state of the art Fire Service Headquarters in Vide Bouteille, Castries. In addition, three major road improvement programmes are expected to commence within the coming weeks at an estimated total cost of EC $44m. These projects entail the resurfacing of the Allan Bousquet Highway, the rehabilitation of the remainder of the East Coast Road and the overlaying of the West Coast Road. All contracts have been awarded and these are expected to provide a major boost to the construction sector and creation of employment, resulting in projected growth of an estimated 21 per cent in the sector for 2009. Also, Government is in an advanced stage of negotiations of a contract for the rehabilitation of a package of 20 roads in the Castries urban communities. This too, will further boost the construction sector and provide additional jobs. With this level of intensified activity in the Public Sector Investment Programme (PSIP), this will be the year when transparency, accountability, efficiency and effectiveness must be the watchwords of the sector.
You may have heard of the request for assistance from stakeholders in the vital tourism industry. We are fully cognizant of the importance of the industry, but we are also mindful that our response must address the problem at hand and must be holistic in nature. We have already agreed to assist the tourism sector in mitigating the slowdown in visitor arrivals, by increasing the marketing budget of the Saint Lucia Tourist Board by EC $5 million. In addition, government is considering other ways that it could provide support to the tourism sector, conscious that it is a critical cog in the economic wheel of St Lucia. However, it is not the only cog. Consequently, this sector will be expected to more innovative and become more accountable to the Government.
Over the last two days I have held vital sectoral meetings with stakeholders in the economy, including the Chamber of Commerce, the St Lucia Industrial and Small Business Association, the St Lucia Federation of Trade Unions and other established unions and workers organisations, as well the Saint Lucia Chamber of Agriculture, to discuss these issues and to devise a strategy to combat the effects of this recession. To this end, I will also join my colleague OECS Prime Ministers and Ministers of Finance at a Special joint meeting of the OECS Authority and the Monetary Council, at the Eastern Caribbean Central Bank in St Kitts, later in the week to assess the impact of the global situation on regional economies, and to formulate a sub regional strategic approach to these challenges. On my return I shall continue my dialogue with stakeholders and other social partners, towards broadening the consultations and institutionalizing a framework for onward progress. When these consultative meetings are completed, I will be able to return to you with a more detailed action plan for 2009.
Ladies and Gentlemen, 2009 will be the year when we once and for all must address the social safety nets that we need to put in place, for our most vulnerable. This will be the year when the Ministry of Social Transformation will step up and deliver. Let 2009 be the year to assess whether the promise of the education system is being fulfilled. With the signing of the contract for the building of the new national hospital, we will begin to look at the systems and structures that will deliver first class health services to our people. The National Strategic Plan in Health must be executed to the health benefit of all Saint Lucians. This will be the year when the Ministry of Health must step up. Ladies and Gentlemen, this will be the year when all must be held accountable.
With our resilience and quest for transformation, we have not only attempted to take care of the medium and long-term solutions to some of our developmental challenges, we have also sought to meet the immediate needs of the people of this country. I understand and recognize that the Public Servants of this country are the ones who are charged with the responsibility of delivering on Government policy. That is why, in spite of the obvious strain it has placed on the resources of the state I agreed, after negotiations with the Labour Unions, to the award of a 14.5% increase in the salaries and wages of officers, from grades 1-18 in the public service. I am sure the officers and the Labour Unions recognize that the public now demands greater efficiency and a better quality of service from them. This is the year when the Public Service must cut waste, become more productive, become more efficient and be more accountable to the Government and people which it serves.
I now take this opportunity to address you on the subject of the implementation of the proposed Value Added Tax (VAT) in Saint Lucia”. You will recall in the 2007 budget address government’s policy intention on the introduction of a VAT regime was announced. You will also appreciate that given the complexity in preparing for such a tax system, much time and effort is to be devoted in arriving at a realistic, workable and well conceived and coordinated project plan. This process is likely to extend beyond 12 months, and until such a plan is satisfactorily arrived at by the Government. VAT will therefore not be implemented before April 2010.
I am pleased to announce however that a VAT Implementation Project Team has been appointed within the Ministry of Finance with the specific mandate to conduct the necessary groundwork to guide the implementation plan. The Team comprises varying levels of expertise in Customs and Tax Administration, Economics and Finance, Information Technology, Public Relations and Law.
Saint Lucia will be guided by the experiences and best practices of our regional counterparts who have preceded us in implementing VAT. In the upcoming months you will be apprised of developments as the project unfolds. In that regard, a vigorous and comprehensive nation-wide public relations campaign will be undertaken, so as to engage the population in general. Your full participation is therefore being solicited as we endeavour to modernize our tax system.
While the impact of the current global financial crisis on our social and economic fabric is Government’s main priority, the situation of lawlessness, crime and security now become Government’s primary agenda and must be tackled head on.
Saint Lucia’s 1000 strong Police Force is the largest Police Force in the OECS region. Successive Governments have invested heavily into the Police Force and we have sought technical assistance and support from several friendly governments over the years. Yet still crime continues to be a most critical issue that can have even greater implications on the economy; far greater than we can ever imagine.
To achieve our objective of a “crime-free society”, indiscipline within the school system must stop! Lawlessness and carnage on our streets must stop! Violence in our society must stop! Crime must stop once and for all!
As a consequence, this year, the introduction of tougher measures and greater policing, together with the enforcement of existing legislation regarding our anti-social behaviour, crime and violence will be upheld. The Police will be mandated to get out of their comfortable offices and get onto the streets, the Highways and By-ways, on their feet - on the beat, on patrol, to stamp out the violence and breakdown of law and order in our society. There must be no excuse for failing. Saint Lucia must stand up and stand out and I am prepared and determined to make that difference. Let us stop the Violence!
In addition, Government will be appealing to civil society, the Christian Community, and our social partners to join in a national crusade to stop the crime and violence and return Law and Order to our “Fair Helen”.
As I have already articulated, there will be challenges, but there will also be opportunities and possibilities. Yes, you will be called upon to make sacrifices. You will be called upon to make changes, to transform the way you think about work, about spending, and about your discipline. Yet through all this change, through whatever hardship this global recession will bring, I want us to remain a people who care about each others well being, about each other’s safety and about each others children.
I can recall that my mother’s network was extensive, even without a telephone system. I could not misbehave down the street without her knowing, before I got home. And I also recall, what would be awaiting me, when I finally returned home. Brothers and sisters, I want us to get back to that basic concept of community parenting. I want to speak to the mothers, because, I know that you are the ones who will hold this country together. I want to speak to the fathers about their duties and obligations. I want to speak to the youth about their dreams, aspirations and responsibilities.
My vision is, for a Saint Lucia where there are high ethical standards in Government; a country where we are tolerant of each other, and a place where crime is at a bare minimum. A country where we maintain a high standard of discipline and accountability in every walk of life. These are the standards to which I subscribe; these are the standards which I promise you; these are the standards to which you should hold me. Let us get back to that time when we were proud to be Saint Lucians.
While some of the circumstances are not within our control, I believe that if we work together, if we strive together, we will survive together and reverse the negative trends. So I am appealing to all, to step up and let us work together for our future.
Fellow Saint Lucians, this is not the time for division and confusion, but rather a time for unity. We are a small nation and all ideas on the way forward for Saint Lucia, should be considered. I know that Saint Lucians are intelligent and hardworking. We know how to solve problems especially when we work together, and this year, like no other over the last thirty years, calls for us to once again find out what it means to be Saint Lucian and to show the world that we are a people of character. I call on the Opposition Saint Lucia Labour Party to help us to build this resilience and to be part of this vital transformation.
Together, we must stop seeing verbosity, aggression, negativity and mediocrity as acceptable. To grow as a nation, we need to be compassionate as well as competitive. As we spur one another on to perform and excel, we must also work together and care for those in need.
There is a saying that “the more you have gained from society, the greater your obligation to give back something to your fellow citizens.” You will be called upon to help those who are the weakest and most vulnerable in our society. Let your giving come from the heart. Let us give like Saint Lucians. Let us work like Saint Lucians. Let us succeed as Saint Lucians.
I thank you, and may God richly bless you.
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