St. Vincent and Grenadines faces a “budgetary conundrum” at the beginning of 2022.
“In the wake of a pandemic and two natural disasters, how does a small island state – burdened by debt and limited fiscal space – resolve the imperative to increase spending, arrest developmental setbacks, and remain resolute in the face of pervasive challenges like climate change?” said Minister of Finance Camillo Gonsalves.
He said in his Budgetary Speech last week that Budget 2020 “answers this conundrum with bold attempts to rapidly expand the economy beyond its pre-disaster parameters, creative resistance to the empty neoliberal economic agenda, and the pursuit of fresh initiatives to accelerate transformative recovery, while simultaneously addressing the complex social challenges of COVID and La Soufriere”.
He said that the EC$1.3 billion fiscal package contains “innovative measures to meet today’s challenges.
“We embark on a digital transformation initiative that is specifically tailored to create citizen-centric technological solutions to the challenges people experience in their interactions with the State.”
Gonsalves said that the government is also launching “a multifaceted series of initiatives to expand our embrace of the blue economy”.
It will also make “unprecedented investments in building resilience to climate change and protecting our coastlines and watercourses”.
The 2022 fiscal package will also “revitalise programmes designed to educate, train and provide opportunities to our youth.
“We expand social protection. We advance fresh approaches to protect people from COVID. And we roll out far-reaching initiatives to address the physical, social and economic fallout of the La Soufriere eruptions.”
Less apparent, but equally important, will be initiatives that “address foundational challenges or chart fresh approaches to life, living and production in a post-volcano, COVID-challenged St. Vincent and the Grenadines,” the minister said on Monday, Jan. 10, one day before his own COVID infection would bar him from further participation in the Budget Debate.
Budget 2022, Gonsalves said, addresses aging infrastructure in the Grenadines, from airports to roads to schools.
“It makes provisions for critical medical equipment like CT Scanners and MRI machines. The Budget marks 2022 as the year for hotel construction, school upgrades, a reinvigorated road repair programme and the commencement of a transformative upgrade to our port facilities”.
He said that the budget also “initiates a year in which our approaches to education, security, and health will change fundamentally in response to the challenges of COVID”.
These initiatives range from education, to youth empowerment, to job creation and police reforms, he said.
Parliament approved the EC$1.3 million budget on Friday without the support of the opposition, which withdrew from further participation after an eighth (of 14) government lawmakers tested positive for COVID-19 on Wednesday.
The budget represents a 9.6% increase over the approved 2021 budget.
It has a current account deficit of EC$50 million, which the minister said resulted from COVID- and volcano-related fiscal shocks. EC$50 million is budgeted to respond to the impacts of the 2021 eruption of the volcano.