Letters & Opinion

The Bad Choices We Make (Second and Final Part)

AND a small word of caution; though there are great expectations for the future, there is at this time, no alternative or renewable source anywhere that, without subsidy, can produce electricity cheaper than existing traditional power generation means. The modern diesel engine, a marvel of technology, is perfect for our small systems, and remains the most efficient prime mover in the world. So, at least in the short to medium term, whatever that means, expect to pay more in the new environment.

Things are never what they seem, especially to the uninitiated and uninformed eye. By the way, in the power utility business, the world over, the end price of the product is determined by the size of the market, and no manipulation or sleight-of-hand, short of direct subsidy, can alter that reality. So it is ludicrous to try to compare situations in our tiny environment with developments in the larger, more developed world.

What about water? My simple advice, privatize it, quickly, with a significant local participation, of course.

The rise of wholesale “vending on the street”, a relatively new phenomenon for us, is seen in some quarters as the expression of the best ideals of personal initiative in any society. This is jobless people getting off their butts and seeking to make a living for themselves in difficult economic circumstances where jobs and opportunities are scarce or simply not available. Good, one might say. But there are substantial perils in this. Street vending the world over is an informal business enterprise that in many economies is very carefully managed and even curtailed. Informal means it contributes little, directly, to State revenues, is almost impossible to measure in its contribution to GDP, and can have a disastrous impact, particularly on the small formal business sector, where jobs are created and taxes are paid. It is estimated (guessed) that the informal sector constitutes almost 40% of the Jamaican economy, meaning it is free from all State supervision and regulation and also subject to possible criminal activity; and we are all only too familiar with the state of the Jamaican economy.

While in most developing countries the informal sector plays a valuable role, it cannot be left completely free from over-sight and we must find the right balance of regulation and enterprise while preserving city sidewalks and town centres and, of course, the critical and small, formal business community. In any event the art has moved from its earlier concepts to “side-walk business”, a deliberate and entirely different concept. A start might be the preparation of a “Code of Practice” for such enterprise.

Informal also means that persons engaged in such initiatives remain outside the recognized and accountable labour pool and will eventually become part of the no-pensions conundrum the World Bank has warned about.

We seem to have accepted the fallacy that public spending can create lasting and productive jobs when any economist worth his degree will tell you the opposite. St. Lucia currently has one of the highest public sector employment rates in the region, more than 10% of the entire labour force, reflected in the sad reality that the greater part of the nation’s annual budget goes to pay emoluments for public servants. Throw in the cost of operating schools, hospitals, repairing roads etc. and it is no wonder that government has little capacity to make any significant social impact or contribute to productive economic activity. Government is the national regulator and enabler, in the promotion of enterprise, and it must refrain from trying to behave like a business which it can never be. Here, a little creative thinking would lead to a policy of outsourcing a myriad of government efforts, particularly in IT and data management related areas (ports and posts included), creating opportunity for young people, improving efficiency and reducing the size of the Public wages bill. My advice on this? Set up a Ministry for Outsourcing and see the dramatic impact this will lead to on performance and cost while creating a climate of managed enterprise and personal endeavour across the nation. Of course, such a radical move must be very carefully managed and administered with clearly defined regulations, but there are many bright people in the service who would make excellent over-sight administrators if given the opportunity.

Here’s another failed effort we still seem to think will one day, against all odds, deliver a miracle. The NDC concept (Invest St. Lucia) has never realized its ambitions but we continue to hang on to it like a drowning man clings to a log. My advice? Shut it down with its equally useless emulation, the SLMB, and create an agency, overseen by a driven executive, with just one obsessed and dedicated objective: “to find overseas markets”, regional or further afield, for local small businessmen and farmers, whether the product is pepper sauce or whatever we can produce. Can you imagine the impact of a group of, say, 50 farmers specially selected and vetted and contracted to produce orchids (or anything) for an overseas niche market?

It is easy to describe the current state of social unrest as a crime wave. We have passively accepted the alarming statistic of a miniscule nation of fewer than 200,000 persons having a murder rate close to ten times that of say, Cuba, a nation of more than ten million persons with a GDP per capita we are told that is about the same as ours. Perhaps we might adopt Cuba’s tough policy on drug trafficking if we want to be more like them.

But that is only part of the story. St. Lucia boasts some of the worst housing and slums in the entire Caribbean and up to one-third of homes still used pit latrines (NCC Report). Successive reports by international agencies have advised that the quickest and easiest way to address crime generally is to address poor housing conditions. St. Lucia has 35 recognized squatter settlements (and God only knows how many unrecognized), crime breeding eyesores where people live in some of the most deplorable conditions seen anywhere. Yet successive governments, instead of concentrating on low income housing, have focussed resources on laying footpaths in these same slums only guaranteeing that these pits of despair will become a permanent feature of the landscape. I know, the stock response is “where will the money come from” leading to the obvious retort, “but we could find it for a useless Financial Centre” to house more public servants in air-conditioned comfort; choices again.

By the way, the most obvious and best use for this “Financial Centre” would be to lease it to an entrepreneur to operate a city centre businessman’s hotel and restaurant, and shopping arcade for tourists arriving at Pointe Seraphine. We are in dire need of both.

My free advice again? Initiate a major and continuing low-income housing programme (leave middle-income housing to the banks) say, five hundred apartments a year for the next ten years, solely for slum clearance. Even that may not be enough.

In a recent article, John Peters, a prescient and experienced senior engineer, suggested that for outlay of a paltry EC$30million in a sustained programme of drainage and remedial works island-wide, the nation, in his view, could reap significant benefits from reduced erosion and water damage to roadways, while putting many hundreds of both skilled and semi-skilled persons and heavy equipment owners to productive work, if temporarily. Has that suggestion rang a bell anywhere? At the very least some bright Ph.D toting sage in the service should publish a paper demolishing Peters’ theorem or propose something better. Clearly, we will not emerge from the current depressed state of everything if the creative minds in the public service are not put productively to work, especially to seek out solutions to our problems, and we accept the fundamental ethic that we can only spend what we earn or can reasonably pay back.

By Bernard Theobalds

5 Comments

  1. Hope you continue to offer your ideas Mr BT. Must say that The Voice’s commentaries are quite provocative and offer sound alternatives to our current development paradigm.

    Agree completely on the privatization of WASCO with majority local ownership and with limitations on the transfer of locally-owned shares to foreign interests. It’s always been beyond me why Saint Lucians don’t want to own WASCO.

    Also agree with Peters’ drainage program. STEP workers should be trained for this task. At least they would be learning a skill and used in pursuit of a worthwhile national effort.

    I don’t share your views on Renewable Energy. If conventional energy can benefit from subsidies why not RE? The cost of solar and wind energy has dropped significantly bringing them within the realms of affordability. We are not talking about a full transition to RE as in Costa Rica although there electricity costs are lower than in Saint Lucia. Jamaica has significantly developed its wind energy resources with no increase in price.

  2. Thank you for your articles. They have been very informative. I also commend The Voice for having some good contributors at the minute on matters non political. It’s much more interesting to see ideas.

    Good ideas are good ideas wherever they come from. It is a shame so many seek to hold the levers of power without the skills to operate them. There is a lot of things which can be done to improve the quality of life for everyone, with the right planning.

  3. Sir,

    This is a very good article. I would like to disagree with the thesis that if you privatize WASCO, then all the problems of the company will go away. To quote a popular water expert, “you cannot privatize your problem” (Berg). The solution for WASCO do not resides in privatisation but rather in governance. The ownership of a company does not really matter, Most water utilities in the great United States of America and Canada are owned by the various Municipalities and not private sector. In the case of St. Lucia what maybe necessary is to keep the ownership in the hands of Government, but the operations of the company should be private sector led. Further, the private sector can be invited to participate but on a per project basis, using arrangement such as the BOLT and BOOT. Water is too important to have the ownership in the hands of the private sector. Additionally, water is very different from electricity. There is no storage capacity necessary in electricity but water it is a must (Roseau Dam),. So let us not confused ourselves, it is working well in electricity but water is totally different.

  4. I recommend that there be an INFORMED national debate on the role of privatization in WASCO’s future. I emphasize “informed” because it would seem that not many people are aware of the state of play in the water sector. Privatizing WASCO is not the same as privatizing water. WASCO does not own the water resource. It has rights to extract water from the island’s water courses which are owned by the Government on behalf of the people. A privatization of WASCO in which Saint Lucians have a majority stake by law, would be a good thing as it would ensure that we have a voice in WASCO. We could choose our own board to run WASCOs affairs and through annual meetings we could have a say in WASCOs business. While this happens ownership of the islands water courses remains intact. This to me is a win-win for WASCO and for Saint Lucia. For this reason I would buy shares in WASCo within hours of if being privatized.

    Still I find it intriguing that we make a big deal about WASCO being privatized and are not so concerned about the deforestation and pollution of our water resources which are not caused by foreigners but by Saint Lucians. If we continue with such wanton destruction then there will be no water and a debate over the privatization of WASCo would worthless.

    1. Sherlock, your response is on point. The general public does not know the difference between ” Privatizing WASCO is not the same as privatizing water ” and so the rotten politicians continue to keep it that way.

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