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Fri 24th Feb 2017

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Economic weakness stoking high unemployment in SVG

It is believed that at least eight out of ten youths leaving school and college in SVG are unemployed. Economic weakness is stoking high unemployment. The ULP regime has been managing the economy poorly, so much so, that there has not been a fiscal surplus in SVG since 2005.

The ULP regime has focused on airports and jails, but neglected education. There are five airports and three jails, but no university. Also, a number of the nation’s schools are in need of repairs. The cause of high unemployment is quite obvious.

The ULP regime has been wasteful in its spending. There needs to be focused investment in high-quality education, skills training and job creation. Far too many young people are not trained with skills for the job market and are missing out on opportunities for employment.

To create employment and wealth, our children need high-quality education. When unemployment is high, crime and poverty remain high too. SVG needs effective programmes of macro-economic management to create a fiscal surplus to drive economic growth.

Tourism can never be the answer to create high employment, as the net revenue from tourism is very low. According to the United Nations Environment Programme, over 80% of the money spent by a tourist on holiday in a developing country, leaks abroad.

That means, for developing countries such as SVG, only a small amount of revenue gets to developing country’s economy. Consequently, there is little revenue available to invest in job creation and other industries. Also, tourism is very vulnerable to global fluctuations and most jobs are only seasonal.

Jamaica's economy is based on tourism and its tourism industry started in about 1890. Yet, Jamaica still has high unemployment and public debt running at about 130%. It is one of the most indebted countries in the world and recently had to secure $2 billion in loans to stop its economy from collapsing.

In a time when the world is dominated by countries with economies based on knowledge, science and technology, and highly-educated workforces, SVG should not place all its bets to create employment on tourism.

To create, sustainable, long-term employment, SVG should diversify away from tourism to light manufacturing and encourage entrepreneurship. We need our own billion dollar tuna fishing and canning industry. We need the proper infrastructure available to create an environment in which small businesses can start up and flourish.

Small businesses are the foundation of strong economies. Small businesses rescue struggling economies, create the wealth that can pay the taxes needed to repay public debt and create the finance needed to stimulate jobs.

The internet is a gateway to knowledge and an extraordinary resource for learning. A Green government would provide free wi-fi internet, so that everyone, especially young people and children of the poor, have access to the internet. The more our people are exposed to new ideas, new technology and innovation, the better able they will be to become entrepreneurs or get jobs.

To boost employment in SVG, we need import substitution, whereby we grow and make much more of what we consume. This would create thousands of new jobs, with factories for agro-processing of goods such as fruit juices and other food items, and factories for light manufacturing and textiles.

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