- “… with the potential emergence of Cuba in the tourism market, I think there is a genuine cause for us to start to get more focused … The anticipated resurgence in the banana industry is a lot slower than most people would like.” — Accountant Brian Glasgow
The private sector has expressed concern about what it described as weak performance of the tourism sector in St. Vincent and the Grenadines, but welcomes the efforts to make financing more accessible to farmers.
Brian Glasgow, an accountant at accounting firm KPMG, told a Chamber of Industry and Commerce organised overview of the 2015 Budget this month that this was the feedback from industry stakeholders after the government outlined its fiscal package.
In the 2015 Budget, approved by Parliament earlier this month, Prime Minister and Minister of Finance Ralph Gonsalves announced continued concession for construction, expansion, refurbishing and equipping hotels.
He said some homeowners are receiving concessions to expand their homes to accommodate medical students, and again mentioned the possibility of a large hotel being built at Mt Wynne on the leeward coast.
Glasgow said that some of the older members of the Chamber will recognise that for the past 30 years, successive governments have been talking about a large hotel at Mt. Wynne.
“So we hope that something materializes,” he said.
Giving the private sector perspective on the government’s proposals for the tourism industry, Glasgow said:
“We all recognise that tourism benefits employment, the construction industry, the agricultural industry, but I think — again from talking to players in the tourism industry — there is a lot of concern about our relative position in the regional tourism picture.
“There were some statistics that were discussed during the Budget, and assuming these statistics to be correct, we seem to be on the weak end as a player in the tourism market, and with the potential emergence of Cuba in the tourism market, I think there is a genuine cause for us to start to get more focused,” he said.
Glasgow spoke of a need for more dialogue between the government and the private sector on the future of the nation’s tourism product.
“Otherwise, we will not be able to continue to compete.
“And, with the eventual completion of the Argyle International Airport, if we do not have the tourism plant to support an airport, we will have an airport that is unable to sustain itself from a cost-benefit perspective.”
The government has budgeted EC$4.6 million for agriculture modernisation and development, and a second EC$6 million tranche for the Farmers Support Company, a revolving loan initiative.
It has also budgeted EC$500,000 for small business support a similar amount for the arrowroot industry revitalization, EC$500,000 for the upgrade of agricultural stations, and EC$600,000 to develop the arrowroot and cocoa industry.
Glasgow said the perspectives of the private sector on these proposals were garnered through discussions with stakeholders.
“The private sector appreciates the fact that commercial financing is being made available to the agricultural sector because the agricultural sector, by nature, is from a banking perspective, high risk. So bankers typically would not look at agricultural projects very high on their priority scale, so the government is addressing that by making a revolving fund available to farmers,” he said.
“On the other hand, there are residual concerns in the private sector about the ability of small farmers, which we generally have in St. Vincent and the Grenadines … to compete with the large multinationals and the large plantations in Latin America. We don’t have the economies of scale and we don’t seems to be able to take advantage of the fact that we can sell our products as organic product, compared to the large farmers who tend to use a lot of pesticides and so on,” he told the gathering.
Regarding the banana industry, which is still struggling to recover from the ravages of Black Sigatoka, which ran amok amidst government inaction, Glasgow said:
“The anticipated resurgence in the banana industry is a lot slower than most people would like.
“For many decades, the banana sector has been the driving force of this economy and what we have now is really a shadow of what the bananas industry used to be. There is talk of revitalisation, but from discussions with the private sector, it seems that there is concern that the level of revitalization is not as aggressive as they will love.”
Glasgow also said, that manufacturing, as one of the pillars of the economy, “is not as robust as it should be”.
He said that apart from the efforts of the stalwarts who continue to persist in that sector, supplying the local market and have enter regional markets, “We do not seem to be breaking a lot of new ground in manufacturing.”
The private sector is pleased with the rehabilitation of the hydro plants in South Rivers and Richmond in 2014 after the Christmas Eve floods of 2013.
Glasgow said this is useful, because it reduces reliance on fossil fuel and the lower the fuel surcharge.
He said that government’s plans to develop a geothermal plant in the north of the country has been gaining a lot of support and the country, noting that the country has secured a US$15 million loan from the International Renewable Energy Agency to go towards the project.
Glasgow noted that SVG is 6th place regionally and 82nd globally in the ease of doing business ranking.
“Notwithstanding that, there are some areas is which the country is not necessarily competitive, regionally or globally, and these would include the ability to put a company into insolvency and so on. On the other hand, the country did receive a number of positives,” he said.
I am happy to see this additional information on the presentation made by Mr. Glasgow, where he very carefully touched on the that so important matter of the real possibility of lack of benefit flows from the Argyle Airport, given the state of our tourism product, and also that of agriculture. I wish that he would have more clearly called a spade a spade, instead of tiptoeing around the matter, using the kind of ‘officialese’ that we have come to expect from IMF representatives. You know ,” on the one hand,this, but on the other hand, that”? I recall the comment attributed to a former US President, ” give me a one hand economist! Then he cannot say, on the other hand!”
By the way, I encourage all concerned to look at the report in the Barbados Nation today on Barbados performance on visitor arrivals for December and January. Look at the numbers and the percentage increases. Therein hangs a tale!
It is a shame to hear this coming from the private sector. The private sector is mainly responsible for hotel development. They are the engine of growth in any country.The government should provide the right climate I don’t know of any Caribbean country in which the government has been investing directly in hotel development. The private sector should take the initiative in industry. The private sector is weak in this regard. They are mainly import oriented enterprises–buying goods for resale. Years ago when I lived in St. Vincent they used to take pride in showing off the invoices-they had them in their hands walking up on Bay Street enroute to customs.
Unless and until the private sector gets on board we cant have any economic progress in the manufacturing and the tourism sectors. what are some of the new grounds in manufacturing that Mr. Glasgow is talking about? We need a paradigm shift. The private sector is clearly asleep. They need to get on board and start the process. I am working in the tourism sector. I always tell the guests about St Vincent. Some have heard about it others haven’t. Those who have would speak in glowing terms of the Grenadines and the dive sites. They said from experience that we have some of the best dive sites in the world.
The two main inhibitors to any tourism progress are the lack of an international airport and many hotel rooms.
We need to sell what we have until we can build the rest of the physical infrastructure.
The private sector in SVG is the most lacklustre, lazy, and unambitious in the Caribbean undoubtedly. Yes, the institutional climate in SVG doesn’t help. Our lack of infrastructure doesn’t help either.Of course the international airport is coming and they will have one less excuse. But our private sector never raises its voice to agitate for any improvements. This is actually the first time that I have heard any official voice from the private sector make some public statement about our economy.
They have the power to bring social and economic change but see no need to exercise that power. Its a crying shame. As long as our private sector fails to organise themselves and become more dynamic SVG will remain an economic backwater, the socio-economic backside of the Caribbean. Every other Caribbean country will be looking back at us with a puzzled stare.
The private sector is so out of it that they can’t even see that its in their own collective self interest to keep their commercial buildings clean and presentable and, especially in Kingstown, avoid having waste water run from their buildings onto the sidewalk. The government has a lot to do, yes, but so does the private sector. They need to shoulder their responsibility.
In response to Peacemaker, I wish to say, “No, my friend. The main inhibitors are not what you identify. It is the absence of a properly thought out strategic plan to build the touristic profile of the country, using the undoubted but undeveloped touristic assets.” We have to make people want to come,by positioning ourselves on the market. So that is where Government’s initial investment should have gone. That will drive the investment ( by the private sector) in new hotel rooms and other supporting activities and attractions. Then, at that point, with the ducks properly lined up, undertaking the expense of an international airport would have made some sense. Just think hard about it. We have put the cart to pull the horse!
I accept that the airport will be built. There is just too much sunk costs to do anything else, even though it was a poor decision at the the outset. We now have to do the strategic work to make it meaningful down the road.Unfortunately, I am not encouraged by the Government’s efforts in this regard. It seems that we have come to the point where, in the eyes of the Government and its champions, the mere building of the airport is an end in itself, and to hell with the cost burdens. The personal and political ego of Ralph Gonsalves would have been satisfied. That is the problem that I, and it seems, so many others have with this Argyle Airport business.
Sometimes its not what government has failed to do, but what the private sector has done. I took a look at the popular website Tripadvisor and some of the reviews given by past visitors about the products offered by hotels and guest houses in SVG leaves a lot to be desired. What the businesses in the tourism sector should fix first are their managerial skills and then stop overcharging tourists when they go on tours to visit FREE natural attractions.
What you must all understand is that the private sector have had the $%it kicked out of them by the government. They are owed something approaching a $100 million by government for purchases by them and cannot get paid. The government have refused to allow these businesss to offset against VAT and Tax the amounts owed to them, despite the IMF suggesting it.
The private sector have been bullied and by the government and are frightened to speak out. The last time they got real brave they had the central car park taken from them and given to a communist led company with the word solidarity in its name.
Cruise ship arrivals and numbers of passengers are up 71% in Saint Lucia, in SVG we are 41% down. There is not a tourist attraction on the island of Saint Vincent that is fit for international tourism.
Kingstown is a dirty stinking unkempt unsanitary rat hole, with open drains which in some cases are being used to dispose of sewage. Men urinate all over the city in open view, because there are no, or just a couple of public toilets that exist in the whole town, and those are a dirty disgrace.
Footpaths are in such a bad state that cruise ship tourists fall over and sustain serious injury on a regular basis.
Tourists are harassed by beggars and hungry children in school uniforms asking for money to buy food.
Saint Vincents Kingstown is the worst destination of all the islands that the cruise ships visit.
I know my writing this will annoy some readers, but its the truth, and unless we tell it the way it is, there will never be any improvement.
Friends, it is very easy to jump on the private sector, wring our hands in despair, and point fingers! Is the private sector in SVG risk averse? Yes, of course! Is it narrowly focused? Yes, of course! Is it innovative? No! Not at all! And we could go on and on, despite the few bright sparks and green shoots. ( Such as IWN!)
Let us however take a step back. What does the private sector do? It uses private capital, that is their own money or money they have taken responsibility for, such as bank financing, in order to MAKE MORE MONEY! Cutting to the chase, that is what capitalism is about, Using money to make more money. Business is not a charity. So those who have access to money, and wish to use it in business, will do that to make money, and they will cut costs and undertake activities where they have a good sense that they will get a positive return on that investment. That is, they will make a profit. That is, they will make money. Business 101. The environment must therefore be provided by the authorities, that is another way of saying the Government , to encourage , persuade, facilitate, the private sector to make the investment, risking their money, in the hope of a return. So if the tourism sector is weak, and the Government seems to have no plan beyond the exorbitant cost of the airport at Argyle, seems not to have a clue how to get more visitors to come, how to get more things produced for export, then we cannot rationally expect the private sector simply to pour money into an empty space.Where are the practical, realistic, tourism development strategies and programmes? Those for agriculture that will enable export agriculture to recover? Those for other services development? Where is the correct macro-economic policy frame work? And we could go on, and on. Do I wish that that the private sector will do more? Of course! Can I expect them to do so in the current atmosphere of policy failure and overheated politics? No.
I have continually called upon persons to reason things out. To think things through. So let us not have a knee jerk reaction to the private sector. Let us understand what is happening. Then ALL OF US will have to act.