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Anxious eyes on Budget and testing 2012

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Fri, Jan 6. 2011

Vincentians anxiously await the presentation of our country’s 2012 Budget next Monday with all ears cocked to hear the details of the fiscal measures to be put forward by Prime Minister Gonsalves.{{more}} The Estimates of Revenue and Expenditure, debated in, and approved by, the House of Assembly last month gave an indication that testing times are ahead of us with minimal growth in the economy expected.

Traditionally, the Budget debate is the high point of cross-Parliamentary exchanges. Not only is the Budget itself under scrutiny, but the whole range of government policies and the performance of the government as well. The occasion, with a much wider listening and viewing audience than normal sessions of parliament, is seized upon by politicians on both sides to try and score political points and impress their constituents.

That is understandable in the cut-and-thrust of Westminster-style politics but it sometimes sells the nation short where understanding of economic realities is concerned. A much more sober approach is sorely needed given today’s world. Economic forecasts for 2012 globally are quite gloomy. Even the giants such as China and India, which have been experiencing rapid growth, are being forced to curb expectations and to lower growth forecasts. The international financial institutions such as the World Bank and the International Monetary Fund have already made it clear that the world’s citizens cannot expect much relief from the deep recession which has engulfed the globe.

That recession is affecting not only the major developed countries such as the United States of America and the European Union, but also because of trading, banking, and economic inter-dependence, developing and underdeveloped countries as well. The critical situation of countries in the European Union has been widely publicised with some on the brink of bankruptcy causing the very future of that regional economic grouping and its prestigious currency, the Euro, to be questioned. The EU is a major source of CARICOM exports and the largest provider of development assistance to Caribbean countries, facts which have great bearing on our own capacity for recovery.

In the case of the United States, concerns are equally in order, both on account of the extensive trading and financial transactions with the Caribbean, as well as the fact that it is the major source of remittances to Caribbean countries from migrants from the region. The economic crisis there has resulted in layoffs, high unemployment and thereby reduced capacity to send remittances, at least at levels of those in the ‘boom’ years. US Census figures for instance reveal that there are 49.1 million Americans living below the poverty line with an additional 51 million in the category just above that, the “near poor”. No doubt, amongst these are thousands of Caribbean migrants.

In such a context then, the usual accusations of political parties make little sense. They might provide the basis for short-term political gain, but they do not provide solutions to the critical problems confronting people in the region. It is significant to note that two political parties which gained electoral victories on the strength of the colossal difficulties facing their people, those in St. Lucia and Jamaica, have not been triumphal in their moments of glory. They know that the challenges before them have no easy solutions.

It is important therefore that we approach the Budget and the year ahead with sobriety. Yes, parties may differ on approaches to possible solutions, bit it is the responsibility of both Government and Opposition to lay the truth before our people. The crisis requires a new mindset, a re-examination of our consumption and spending patterns, a very different outlook on matters like environmental preservation, a focus on innovativeness and a realisation that sacrifice and hard work are necessary if we are to weather the storm. This year will test our capacities to the limit. We must have the courage to face our difficulties, the determination not to give up and the confidence that if we put country and people before narrow, selfish concerns, we will succeed.

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