YOU CAN’T DIG A HOLE TO FILL A HOLE
By Peter Thomas
Peter Thomas is the man in charge of Not For Party But for Country, St Lucia’s most consistently thoughtful and even-minded facebook page. He is also one of the top five people in St Lucia who make sense on a daily basis.
You cannot dig a hole to fill a hole. Increasing VAT to 17% should be DOA as an option. We have seen that the timing for the implimentation of VAT could not have been the worse. It was implimented in an economy that had just began to hemorrhage businesses and jobs and further stymied any possibility of growth.
There can be no doubt that a double dose of that laxative would cause greater economic hardship. A 5% reduction in salaries of a section of the working population... will have less impact on domestic spending than 17% VAT on the entire population.
However this should not be seen as the elixir that will take care of everything that contributed to the deficit. Further cuts in spending must be sought by the government as well as the possibility of divestment of certain government held assets must be part of the overall plan of deficit reduction.
A long term plan to increase exports in the future must be implemented to increase our foreign exchange earnings and shore up the reserves. The attempt by the Ministry of Agriculture to revitalize the coconut industry is a step in the right direction. That should be complimented by the revitalization of production and processing of cocoa. The high demand that still exists for Windward Islands bananas must be exploited to maximum capacity.
Reducing the food import bill and increasing our exports will result in lessening our negative balance of payments problem. These seemingly obvious prescriptions have been offered before the glaring lack of political will to implement and execute is our greatest impediment.
If this economic crisis should teach us one thing as a nation it is that we should step up our game. We must utilize all the intellectual and academic capacity we have acquired over the last decade to come up with imaginative solutions.
I refuse to believe that we have reached the limits of our imagination.