Fri 5th Sep 2014
The International Monetary Fund's (IMF) August 2014 country report about SVG, highlights many problems with the SVG economy.
The IMF says that there are significant lags in the availability of national accounts data. Balance of payments data suffer from significant weaknesses, especially capital account data, and data on the international investment position, which is critical given the large external liabilities, is not available.
The second quarter of 2014 has passed and yet the figures for the actual revenue of the SVG government are still not available. It is this lack of data which shows that the ULP regime is operating in an economic daze, unaware of how to strengthen the economy.
The IMF report talked about the need to reduce the cost of doing business in SVG, focusing on the need to reduce the cost of electricity. SVG Green Party has said continually that we must phase out the use of expensive oil to produce electricity and turn to renewable energies to produce cheap electricity. This would reduce the cost of electricity, help businesses grow and create jobs.
The IMF report talked about the need to improve cash management and strengthen controls. There is a need also to strengthen budget transparency and accountability and minimize payments arrears. The Director of Audit reports mentioned also the lack of transparency and poor accounting practices and this was partly the reason that the incompetent ULP regime failed the audit of public accounts three years in a row.
The IMF report highlighted that our economy is extremely vulnerable to changes in international food and fuel prices. This risk can lead to an increase in inflation that would be hard to control. Higher food and fuel prices are a major source of risk and could undermine growth through their impact on inflation and the current account.
SVG Green Party has said for a long time that we must grow more of our own food and reduce food imports. This will bring prosperity to our farmers, reduce food prices for our people and make our economy less vulnerable to external international price changes. The dependence on oil, too, makes the economy vulnerable and risks many jobs being lost.
The IMF report mentions the decline in overall balance and revenues and directly contradicts the laughable budget estimates proposed by the ULP regime in recent years, which estimate increased revenues. The ULP regime budget estimates are an economic delusion.
The IMF report talks about the deterioration in the competitiveness of tourism and exports causing a sustained widening of the current account deficit over the last decade. Declines in tourism and
export receipts have contributed to keep the current account deficit high.
SVG Green Party has continually said that tourism cannot drive the economy and that we must focus on exports by increasing the number of small businesses and encouraging entrepreneurship. The IMF report shows that the ULP regime's reliance on begging and borrowing since 2001 has left our economy in a very weak state.
SVG Green Party's concerns about and vision for the SVG economy have been vindicated in the recent IMF report about SVG. To strengthen the economy, we must create revenue by creating a billion-dollar tuna fishing industry, educating our people and building factories. We need to build our own science and technology university, help small businesses to grow and re-orientate the economy so that it is export-driven.