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Fri 31st Mar 2017

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Focus on Argyle airport and tourism is killing the SVG economy

According to the Leader of SVG Green Party, Warrant Officer Ivan O’Neal BSc (Hons) MSc, MBA, the focus on Argyle airport and tourism is killing the SVG economy. The empty promises given by the ULP regime that Argyle airport and tourism will boost our country are hogwash.

The SVG Minister of Finance has stated that the annual maintenance cost for Argyle airport will be $20 million. This means Argyle will be draining our economy of money, as it offers nothing more than what E. T. Joshua airport provided.

Most Caribbean countries base their economies on tourism and consequently they are plagued by debt, poverty and high unemployment. Tourism does not offer long-term stability and prosperity to SVG. Gonsalves told us that the OECS countries have pushed back the date for bringing down their debt to GDP ratio to 60% from 2020 to 2030. Another sign that indicates that tourism is not the answer.

Jamaica has based its economy on tourism since 1890 and since the mid-1950s, Jamaica was serviced by eight international airlines – BOAC, BWIA (British West Indian Airlines), PAA, KLM, Trans Canada Airways, Delta, Avianca and Avenca. Yet, after 127 years of tourism, Jamaica’s economy is in a real mess.

According to the Jamaican Gleaner newspaper, at the end of December 2016, Jamaica’s total stock of public debt stood at $2,150.0 billion and is expected to increase further by end-March 2017 to $2,180.3 billion.

Should SVG be following Jamaica and basing our economy on tourism too?

The Jamaica Minister of Finance and the Public Service, says that Jamaica’s public debt is expected to be 115% of GDP by the end of March this year. The Jamaican government will this year pay $137 billion in interest on loans and pay back loans to the tune of $172 billion. The Jamaican economy is in such a crisis that the government recently announced an increase in taxes amounting to an extra $13.5 billion.

Basing the Jamaican economy on tourism is actually killing the tourism industry in Jamaica, because of the excessive property taxes. The Jamaica Hotel and Tourist Association (JHTA) president, Omar Robinson, said one small hotelier in Kingston has seen property taxes move from $594,000 to $6.4 million and another operator in Port Antonio, Portland saw property taxes move from $92,000 to $895,000.

The JHTA says that hotel occupancy levels are low and operators are struggling to remain sustainable as hotels across the island are being asked to pay as much as 980% increased taxes.

Jamaican society is also in crisis. The youth unemployment rate in Jamaica averaged 31.56% from 2012 until 2016, reaching an all-time high of 37% in the second quarter of 2013 and a record low of 27.4% in the third quarter of 2016.

It is astounding that, after 127 years of tourism, the lowest ever youth unemployment rate in Jamaica was as high as 27.4%. This is bad news for the youth of SVG if we follow Jamaica and focus on Argyle airport and tourism.

Following Jamaica, and basing our economy on Argyle airport and tourism will bring SVG doom, not economic growth. The SVG economy is getting worse by the day and could collapse at any time.

Under a Green government, SVG would focus on exports and stimulating the growth of small businesses. SVG needs an import substitution system to help agricultural export and small business development.

SVG needs to focus on education and vocational skills too, to create an educated and skilled workforce. This will attract foreign investment, strengthen the economy and create jobs. Capital Expenditure on Education for 2017 by the ULP government is only $7.7 million. This is a joke and bad for the economy. We need our own science and technology university to stimulate a knowledge sector in the economy.

It is foolhardy to think Argyle airport and tourism will boost our economy.

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