Dr. Lewis, who was speaking to a One Caribbean  reporter and expanding remarks which he recently made at public meeting in Castries said: “St. Lucians are worried. They are worried about how the stagnating economy of the country is impacting on their own incomes and future employment prospects. Not only are St Lucians feeling the burden of the large number of taxes, duties and financial levies which Government has imposed in recent months, but they are becoming increasingly aware that many employers are beginning to contemplate measures which will actually reduce employment through, for example rotation; or that employers are actually beginning a process of downsizing of their companies, leading to the elimination of some persons employed”

 

Dr. Lewis observed that people are now beginning to understand the consequences for the economy as a whole, of the badly implemented privatisation of the banana industry. People are realising that it was a major error of judgement on the part of the Government to simply absorb the debt of the old St. Lucia Banana Growers Association (SLBGA) and then leave the industry to fend for itself. “The fact of the matter is that the individual farmer has been left in a great degree of insecurity. All small businesses operate on a certain amount of short term credit, but the small farmer has seen the credit arrangements suddenly removed, so that he is now constantly short of enough cash to provide the proper level of inputs to produce efficiently. This situation has, unfortunately, been made worse by the drop in prices on the market. The result is that the many farmers have simply been dropping out, leading to a dramatic decline in production; while those who remained have seen their incomes, and therefore their purchasing power, substantially reduced.

 

Dr Lewis said that the reduced farmers’ income has had a dramatic effect on the availability and circulation of money in the commercial sector, leading to an economic squeeze in the business world: “Almost every businessman is wailing and crying about the dramatic drop in sales that has occurred over the last year and a half at least. The business sector is itself realising that we have never seen such a prolonged recession in the banana industry. Their salesmen going into the rural areas to service the small shopkeepers are finding them only willing to purchase small amouts of goods. People are beginning to realise that this is due not so much to any external factors, but to internal or domestic factors.  For in spite of the WTO ruling and all that, we still have our quota of 127.000 tons annually on the European market, but the fact of the matter is that from producing 105,000 tons in 1995, we are now down to 65,000 tons in 1999 and all indications are that we will not do more than that in the year 2000. The banana dollar has ceased to flow in the St.Lucian economy.  Government, in failing to provide a proper regulatory framework for the industry, has allowed the development of confusion and demoralisation in the sector. People now realise that the privatisation of the industry was conducted more on a political than an economic basis”.

Dr. Lewis continued to say that the business sector in particular, but people in general, are coming to realise that the St.Lucia Labour Party seems to have come into power without any idea of how to continue the development of the St Lucian economy, and how to ensure its adjustment in the changing and dangerous international economic environment: “For the first few years Dr Anthony and his crew coasted on the projects which they found either being implemented or already well planned for implementation by the UWP Government. Now that these are in various stages of finalisation the Government seems to be adrift as to what to do next to maintain the momentum which the economy had when they took over. They have been unable to create any framework of incentives for investment, especially as far as local St.Lucian investors are concerned. They have been unable to prioritise any particular sectors for investment and to create conditions which would draw investors. And they have failed to regulate the monetary system in a manner which would ensure credit on reasonable to terms for medium term investment. This is extremely unfortunate because  local investors in particular now face a situation of increasingly tight credit on the part of the banks who seem to have grown concerned about the capacity of  current and projected economic activity to sustain repayment of loans. It seems to me that in the circumstances, the banks have revised the criteria for loans, making it more difficult for St.Lucians in particular to access funds for medium term investment. This is a very bad sign”.

 

Dr. Lewis said that because of major slowdown of the economy, Government has, in desperation, been resorting to extensive borrowing to sustain its own activities, and to try to induce some movement of economic activity: “But we are particularly concerned as to how Government has been pulling down financial resources from institutions like the National Insurance Scheme for investment in somewhat dubious construction schemes; how they have been resorting to institutions like, we understand, the Port Authority (SLASPA) for funds to meet their own cash flow requirements, thus reducing the substantial reserves which that institution had accumulated”.

 

Further, Dr Lewis continued, “we are extremely concerned at how the Government has been accessing commercial money, particularly from Trinidad commercial banks for all sorts of activities. We are concerned about the Government’s capacity to meet repayment schedules in the future. In other words we are perceiving the serious situation in which the Government is mortgaging St.Lucia’s financial future, to the desperate need for funds which it has in the present.

A lot of this borrowing is not properly being reported to Parliament.

 

Dr. Lewis said that St.Lucians were concerned, as a result of what they are feeling and experiencing, about the way in which the economic management of the country is being conducted, and the unprecedented long recession that the economy is going through. This is making the population worried not only about the economic present about the economic future of the country: “ People are beginning to realise that for the first time in perhaps thirty years or so, they are unable to plot a future for their own personal development and for their children’s development, especially the financing of their childrens’ education. Government is actually reducing expenditure in some critical areas of education, and changing for the worse the financial conditions under which persons engaged in teacher training and health or nursing training for example, have been able to access education, particularly at Sir Arthur Lewis Community College. There are signs to that for the first time in our modern history, Government is being extremely selective about access to education at the University of the West Indies. This is an extremely dangerous trend in an era in which knowledge is being defined all over the world as the key ingredient in future economic and social development of countries and peoples”.

 

“Another aspect of this - what can be called ‘disinvestment’ in the economy - is the persistent deterioration in the country’s public health facilities. St.Lucians are beginning to feel that after all the taxes being extracted from them, they will still have to turn to expensive private health facilities for safe health care”, Dr. Lewis said.

 

Dr Lewis went on to argue that St.Lucians’ current economic distress is also being converted into concern and worry about the Labour Government’s general management of the country: “It is amazing” he said “how people are beginning to feel that there is increasing lack of equity and fairness in the distribution of those goods and services over which Government has some control. For example many small contractors are very concerned about how Government contracts for public construction are being awarded. We had warned two years ago that Government’s approach to the award of contracts for the so-called NIPDEC projects - an approach which substantially excluded normal tendering processes - would have serious consequences. We were not listened to at the time, but now concern about the award of contracts is a widespread one”.

 

“There are signs too”, Dr.Lewis continued “the so-called privatisation process is being utilised for private gain. People are increasingly concerned about the use of formerly public institutions - now so-called ‘privatised’ or corporatised” - to provide jobs for well known political activists of the Party. All this goes against the grain of natural justice”.

 

Dr Lewis said that there are signs that Government is becoming aware of the widespread public dissatisfaction about the lack of progress of the economy: “In any case any inclination to dispute the extent of public concern has been removed by the songs of the calypsonians this Carnival season. But Dr. Anthony and his colleagues are still in denial, being unwilling to accept that their unplanned and erratic approach to economic management is a big part of the problem. For example, they still will not accept that their approach to taxation - the continual imposition of taxes and levies outside of any real policy on taxation - has been harmful to investor confidence and has made St Lucia look like a country of unpredictability. Instability in the taxation system of any country is a major contributor to instabilitiy in the general economic climate. Continual rumors about the imposition of a Value Added Tax in the near future are making this situation worse”.