By Peter Richards
(PORT OF SPAIN, TRINIDAD) ST. LUCIA says it will not rule out approaching the International Monetary Fund (IMF) for assistance in turning around its ailing economy.
“I don’t think we have got to that point but I certainly would not exclude the IMF or the World Bank or CDB (Caribbean Development Bank) or the Central Bank (Eastern Caribbean Central Bank) from any of the discussions,” Prime Minister Allen Chastanet told the Caribbean Media Corporation (CMC).
Chastanet, who was here attending the one-day 2016 High Level Caribbean Forum that brought together Caribbean Community (CARICOM) Prime Ministers and Finance Ministers, said that Castries has embraced all these regional and international financial institutions as it seeks to revive the economy.
“We have got a diagnostic study that was done….that is formally the foundation…we have also engaged outside private firms to assist us in coming up with a better taxation system, we are looking at our education system, we are looking at health care, we are looking at reviewing our judicial system.
“So there are a lot of changes we have to bring about and ultimately this always has to resound to the benefit of the people,” he said, repeating his concerns about the quality of education, health care and the security systems.
“We have put priorities on those critical areas and trying to rebuild them in a manner in which we can sustain them and so ultimately it means that government does not have the capacity to pay for all those things to the standards that we need by ourselves and so we have to engage the private sector, we have to engage individuals in order to get a higher support from them so we could improve the quality,” he told CMC.
The Barbados Caribbean Development Bank (CDB) has urged the St. Lucia government to implement fiscal reform as it projects a concerned economic future based on current trends.
The study of the island’s current economic status requested by the five-month old United Workers Party (UWP) administration showed that St. Lucia’s debt to gross domestic product (GDP) radio stands at 75 per cent and the experts have advised government to act on recommendations made to reduce that radio to 60 per cent by 2030.
The report undertaken in conjunction with the Eastern Caribbean Central Bank (ECCB) points to an economic growth of 1.2 per cent for St. Lucia in 2015, with a preliminary forecast of a 1.1 per cent growth for 2016.
CDB’s Director of Economics Dr Justin Ram who was present when the diagnostic report was released, told reporters that according to the document, in the last decade average growth in the economy of St Lucia was point nine per cent.
“Over the last five years the performance of St. Lucia’s economy has been generally weak with real output averaging negative four per cent,” he added.
Chastanet told CMC that St. Lucia has recorded “three consecutive years of negative growth” and is now waiting to see what the latest figures will be.
“Tourism numbers are down, debt continues to grow in St. Lucia, I am not seeing any abatement to the unemployment matter. We are a new government and clearly…We have taken out a clean sheet because the structures and processes and policies we have right now are not working.
“We have to have the courage to make changes. The good thing is my party was elected on a mandate for building a new St. Lucia, that’s clearly what our intention is to do,” Chastanet added.
He said that his administration is likely to revamp the Citizenship by Investment Programme (CIP) through which foreign investors are encouraged to make a substantial investment in the island’s socio-economic development in return for citizenship of the Caribbean Community (CARICOM) nation. The CIP was introduced in St. Lucia by the former administration.
“We will be making that announcement very soon,” he said, indicating that there could be a “revamp of the programme (because) I had concerns about some of the things they were doing.
“One is its competitiveness and two there is no transparency. We want to make sure the CIP programme resounds to the benefit of St. Lucia and St. Lucians and so we will be making an announcement very soon with that programme,” he told CMC.