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Minister of Finace, Camillo Gonsalves, is greeted on arrival at a Chamber of Industry and Commerce event on Thursday. At right is his wife, Karen Duncan-Gonsalves, while Executive Director of the Chamber, Anthony Regisford is at left. (iWN photo)
Minister of Finace, Camillo Gonsalves, is greeted on arrival at a Chamber of Industry and Commerce event on Thursday. At right is his wife, Karen Duncan-Gonsalves, while Executive Director of the Chamber, Anthony Regisford is at left. (iWN photo)
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By Kenton Chance

Just under two weeks before presenting his first Budget to Parliament, Minister of Finance, Camillo Gonsalves, on Thursday sounded a note of optimism as he addressed the business community in St. Vincent and the Grenadines.

“I am convinced, as are many of the economists in my ministry, that there is considerable cause for optimism about the growth and development prospects for St. Vincent and the Grenadines in the near term,” said Gonsalves, who became finance minister last November, replacing his father, Prime Minister Ralph Gonsalves, who has held the post since 2001.

The minister, however, said there are potential pitfalls as well.

“However, my central message to you today is that St. Vincent and the Grenadines will only maximise its theoretical potential if the local private sector seizes upon the many opportunities that are available in this new leg of our developmental journey,” he said at the Chamber of Industry and Commerce’s first business luncheon for 2018.

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The luncheon in Villa came just three days before Gonsalves goes before lawmakers on Monday to ask them to approve the Estimates of Income and Expenditure prepared for his ministry, and pave the way for the presentation of the Budget on Feb. 5.

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Members of the business community at the luncheon. (iWN photo)

He said that the global economic and financial crisis of 2008 was followed by the “largest, longest, deepest recession since the great depression of the 1930s”.

However, this year marks the end of the post-crisis decade coming out of the global financial crisis, Gonsalves told business representatives at the event at Beachcombers Hotel.

“Compared to some of our neighbours, St. Vincent and the Grenadines weathered this period in a slightly better manner, without the need for massive job cuts, without the need for IMF (International Monetary Fund) structural adjustment programmes, without debt levels that extended well beyond 100 per cent of GDP, as we saw in some other countries.”

He said part of the nation’s relative success is explained by the adage “the bigger they are, the harder they fall”.

“And we are not that big, so we didn’t fall that hard. But, we also owe a debt of gratitude to my predecessor finance minister for his stewardship of the economy during that stormy period. Not many of our Caribbean neighbours were investing in major state-funded infrastructure projects during the post-crisis decade. They were just trying to pay salaries on time.”

The finance minister was apparently referring to the construction of the EC$729 million Argyle International Airport, which began operating on Feb. 14, 2017, almost a decade after construction began and about six years behind schedule.

“Today, we have come through what we hope was the worst of the storm,” Gonsalves said, adding that the IMF is predicting the strongest levels of global growth of the post-crisis period.

“Both developed and developing countries and economies are looking up,” he said, adding that with the exception of prospective withdrawal of the United Kingdom from the European Union — Brexit, the European Union has moved past the fears of a collapse caused by the difficulties in Greece, Portugal and southern Europe.

“In short, things, globally, are looking up. Here in St. Vincent and the Grenadines, we find ourselves in a position to take advantage of the many key developments that did not exist at the beginning of the crisis.”

Areas of focus

The business community applauded the minister’s announcement that the Budget includes “a comprehensive plan for the clean-up of Kingstown and the relocation of vendors to specific areas”.

He said that this year, Vincentians will see critical new tourism infrastructure and an increase in arrivals, a better-educated young workforce, many new public works projects in various stages of development and the possibility of new opportunities in emerging niche industries in agriculture and fisheries.

“I believe we have crafted a Budget for this year that takes advantage of these new developments and lays the ground work for new opportunities this year and in the year ahead.

“Without saying too much about the Feb. 5th presentation, I can say that the major planks of the budget that may be of interest to you include, firstly, a comprehensive plan for the clean-up of Kingstown and the relocation of vendors to specific areas,” the minister said to applause.

He also mentioned the commencement of the first phase of an EC$90 million road rehabilitation programme; improvement of air access to St. Vincent and the Grenadines via the Argyle International Airport; intensified state involvement in the hotel sector with a view to adding significantly to our room stock; major investments in climate resilience and environmental protection; commencement of the drilling phase of the geothermal energy project; and, expansion of ICT connectivity, particularly to the Grenadines.

The government has commenced and signed contracts for the design of the new cargo port at Bottom Town and a new hospital in Arnos Vale at the location of the decommissioned E.T. Joshua Airport runway.

The government is continuing the planning process for a new city at Arnos Vale and is in discussion with various private sector entities about potential interim use of the E.T. Joshua Airport terminal building, the finance minister said.

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Another section of members of the business community at the luncheon. (iWN photo)

In 2018, the Unity Labour Party administration will make significant investments in tactical adjustments to its crime fighting and citizen security apparatus,” he said, noting that the government is giving duty free concessions on closed circuit televisions for businesses.

The government will open the long-delayed Georgetown Medical Complex in a few weeks time and will restructure the administrative apparatus for health care delivery.

The reach of the Zero Hunger Trust Fund, which the minister described as “very successful”, will also be expanded and the government will increase its investments in education, housing assistance, and social protection services.

Clamp-down on tax defaulters

“A major plank of 2018, which is of interest to the Chamber, and also the private sector, would also centre on tax reform and tax collection. While the details of the tax reform programme will be revealed during the Budget address, I can indicate that non-payment of taxes, especially VAT and PAYE will receive special and aggressive attention in 2018. The government of St. Vincent and the Grenadines is owed over EC$300 million in unpaid taxes and over EC$60 million of that is unpaid VAT, which businesses don’t earn, they collect in trust to hand over, and PAYE, which employers deduct from their employees’ salary.

“It is unfair, and it is wrong for some entities to use this trust money, essentially as operating capital, to the disadvantage of those businesses that actually collect and turn over the money as they should.”

The minister said that in addition to the reforms, some of which he said he believes the business community would applaud, the other side of the ledger is that what the government gives up in the reforms, it anticipates it would get back in tax collection.

“And we will be more aggressive in tax collection in the upcoming year.”

The government is predicting a small surplus on the current account this year before debt servicing, the first such surplus in the country in many years, the minister said.

New construction projects and industrial growth are anticipated to place unemployment, which he said is now slightly over 20 per cent, on a downward trajectory.

“Our debt to GDP ratio, which reached roughly 80 per cent last year, is now decreasing, thanks to previously planned debt relief initiative,” Gonsalves said.

“By the time those debt relief initiatives are brought to book, the ratio would have fallen from about 80 per cent to about 72 per cent and that would be the lowest radio we have had since about 2012, 2013,” he said.

7 replies on “‘Considerable cause for optimism’ in 2018 — Finance Minister”

  1. Because of recent events I for one will never be sure who writes the speech, him or his father.

    Every business person in SVG knows that business has never been at a lower point than it is today.

    Because he speaks his fathers words and says its great, we all know it isn’t.

    Wearing dark glasses indoors tells a tale also.

  2. Alike the SVG Finance Minister, “I am convinced that there is considerable cause for optimism about the growth and development prospects for St. Vincent and the Grenadines.” Considering that SVG is yet one of the most lovely of Caribbean Islands, with the warmest, most productive and creative of persons; are the attributes as I have encountered running into them while working in leadership roles with the diaspora and prior to my retirement. However, what has proven unfavourable to our progress is our trustworthy, welcoming but naive ability in embracing and give priority to strangers over our own, a clear sign of our lack of patriotism. Any stranger arriving on our shoes, we embrace and give them preference at our table. Proven yet to be one of our greatest pitfall repeatedly and especially within main positions of Government and related institution.
    In following those principles even with our highly overrated Education revolution, we up to date; have disregarded the most promising of scholars. Not to mention those of great gifts and talents especially women. Sadly because of a culture which seem to discount the importance of women and the contributions we can and have made to the growth and development prospects of our lovely Island. Confirmed only yesterday by the guttural behaviour aired by men “in a studio at Star FM, the radio station owned by the ruling Unity Labour Party”, Captured by one of SVG’s accomplished journalist; under the headline:”Star FM Broadcasts expletive-laced in-studio conversation about Yugge-Camillo saga.” To note that it is the party of the Government in power currently.
    Well now; tell me? How can we with much confident feel “the optimism” expressed from the lips of the Finance Minister when the growth of any Nation relies on the respect, integrity and trust of each other?…>>>> “Misery and poverty of a nation does not depend on how fertile their land is but the fertility of their thoughts.” “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” I STAND IN SOLIDITY FOR OUR WOMEN ESPECIALLY THOSE LESS PRIVILEGED!!!!! Much LOVE to All of You!

  3. Faith Hope and Happiness. Anyone suffering Body Dysmorphic Disorder (BDD) in regard to his or her eyes or face will see big sunglasses as a great hiding place. Even those without BDD may use shades to conceal something, even a black eye. And then some people take semi-delusional comfort from wearing shades. Gangsters and macho men often wear sunglasses indoors to intimidate others.

    The muscles surrounding the eyes are the most expressive. Therefore, people that wear sunglasses inside could be said to be hiding their emotions. If you wear sunglasses at night, or indoors, is any appearance benefit you hoped to enjoy negated by the fact that you’re wearing sunglasses at night or indoors, making you by definition either a jerk or a person with something to hide.

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