Fri 29th Nov 2013

Import substitution can create economic growth in SVG

Our country imports too much food and other products. We need to embark on an economic policy of import substitution and export orientation to create economic growth.

In 2011, SVG imported over 200 million dollars of food. In 2012, SVG imported 964 million dollars of goods in total, and for every one dollar we exported, we imported over eight dollars.

The problem with importing so much goods, is that a large amount of money leaves our country. We cannot afford to have a billion dollars a year lost abroad as was virtually the case in 2012.

As a nation, we need to grow and make much more of what we consume by import substitution. This would create thousands of new jobs, our people would be better off and there would be much more money circulating around our country.

In terms of food, we could grow much more of what we eat and set up factories to do agro-processing of goods such as fruit juices, baby food, peanut butter and other food items. For non-food items, we could easily acquire the technology and machinery needed and train our people in the skills needed to produce many goods.

This would again mean more factories and thousands more new jobs in light manufacturing.

It is important that we reduce our dependency on foreign countries and also increase our level of self-sufficiency. This will create sustainable economic growth. We must have a more industrialised economy and not focus on a dead-end product like tourism.

A Green government would help people set up businesses as part of the import substitution process and provide incentives so that shops and supermarkets sell locally-produced goods rather than imported foreign goods.

One of the main imports that needs to be substituted is the oil we use to produce electricity. We must change to using renewable energies, such as solar, wind and hydro, to produce our electricity. This will make the price of electricity much cheaper, keep much more money in our country and help small businesses prosper.

Under the economically incompetent ULP regime, imports have risen massively from 463 million in 2001, to 964 million in 2012. This is part of the cause for high unemployment, businesses closing down and our economy becoming dangerously weak.

The ULP regime has shown since 2001, that it is hopeless and unable to revive the economy or provide enough jobs and revenue.

As well as a strategy of import substitution, we need to change our economy so that it is export-orientated. In the economic sectors that we carry out import substitution, once we have the skills and resources to produce enough for our people, we can then increase production and export to foreign markets.

Other new SVG exports will be fish from a billion dollar tuna fishing and canning industry, fresh drinking water, and products from new Green and science and technology sectors of our economy.

Singapore's industrial policy in 1959 sought to promote industrialization as a way of diversifying its economy by import substitution. In 1968, when the British started to withdraw from Singapore, import substitution was succeeded by a strategy promoting export-oriented, labour-intensive industrialisation.

Import substitution and export orientation is the vehicle for economic growth in SVG.

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