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Public contributions to the 2007 Budget

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by Camillo Gonsalves

St Vincent and the Grenadines’ first “VAT Budget” will soon be upon us.

Technocrats and ministers are no doubt already busying themselves with the annual tug-of-war between developmental desires and fiscal realities.

Given the imminence of the new budget, the deafening silence of the nation’s political punditry is curious.{{more}}

Surely they don’t simply plan to comment on the budget after it is set in stone? Instead, everyone should take this opportunity to meet the Prime Minister’s constant call for ideas and solutions to the vexing questions of national development, rather than beating the hollow drums of post-hoc pontification.

The Prime Minister constantly stresses that the budget is not a matter of credits and debits, but a holistic exercise in creating an annual blueprint for national development. Given the PM’s conceptualization, apathetic silence or benign neglect of the budgetary process is almost an unpatriotic act. I would like to offer some ideas.

ELECTED REPRESENTATIVE BUDGET

People continuously demand more from their representatives, both in terms of tangible actions and responsiveness. However, the political system has not evolved to meet these increased demands on elected representatives.

The 2007 budget should allocate $100,000 to each representative – government and opposition – with an explicit goal of localized poverty alleviation. The money should be centrally administered by the Ministry of Finance to maintain accounting transparency and fiscal responsibility; but the elected representative should decide when, where and how the money is spent. Such a measure would not only diffuse some of the immense power and responsibility vested in the office of Prime Minister, but it would also foster innovation and responsiveness among representatives, whatever their political stripe.

INVESTMENTS IN RENEWABLE ENERGY

The successful Wigton Windfarm in Jamaica consists of 23 wind turbines with a capacity of over 20 megawatts of energy. Recently, the Barbados Light and Power Company received approval to erect 11 wind turbines to create a 10 megawatt “wind farm” by 2009. It will save over BDS$5.6 million per year in foreign exchange by reducing oil imports.

The Budget should prioritize a similar project in St Vincent and the Grenadines, perhaps a three or four megawatt farm.

Similarly, the government could take a page out of Barbados’ book in encouraging solar water heaters. For over 30 years solar water heaters in Barbados were fully tax deductible on income tax while simultaneously discouraging electric water heaters with a 50 per cent consumption tax. The more than 30,000 solar water heaters save US$2.7 million per year in electricity. Jamaica encourages solar water heaters by zero-rating them.

With a construction boom underway, renewable energy should be aggressively encouraged.

BRIDGING THE DIGITAL DIVIDE

The much-ballyhooed transition to a service economy cannot take place without competencies in computer and Internet technologies. The government must address the digital divide between SVG and its neighbours, and also eliminate the internal differences among our communities and socio-economic classes.

The 2,400 “Max” computers – promised in the 2006 Budget – have yet to find their way to the 80 centres island wide, as proposed. Even when they arrive, the government must invest heavily in computerizing schools, promoting the use of computers and providing the necessary training and support. Our definition of “literacy” must include computer literacy, and our Budget should reflect this educational priority.

A “POST OFFICE TAX”

The Post Office faces new threats to its economic viability. However, the necessity of a smoothly running postal service can scarcely be overemphasized and it therefore should be further subsidized by a small tax on private broadband Internet connections keeping the postal service affordable to the Vincentians who still rely on it.

MAINLAND TOURISM DEVELOPMENT

The spectacular natural beauty of the Grenadines continues to be the engine that drives SVG’s tourism development, and this will likely continue. However, mainland St Vincent has a number of natural wonders whose tourism potential must be utilized.

Proper development of our volcano as a tourist site – with the proper expenditure on security and training of guides – cannot wait. Similarly, North Leeward’s waterfalls and mountain trails are fertile ground for tourist development. Mainland St Vincent is hampered by a poorly located and badly conceived cruise ship berth, which thrusts tourists into a bustling but hardly welcoming capital city. Our failure to extract more than the “Three Ps” from these cruise ship tourists is largely due to our lack of imagination in embracing the visitors.

Apart from continued and explicit Government incentives to tourist-centric private enterprise, this Budget should creatively tackle ways to make the tourist experience more valuable, and therefore more profitable, to us. Investments in the training and marketing of souvenir craftspersons and cultural attractions, publication of attractive tour guides, and the creation of special events on cruise ship arrival days must all be prioritized to get the most out of our lead economic sector.

The areas of focus and emphasis in the budget are numerous, and the 2007 Budget will no doubt build upon the remarkable progress of the ULP government in both infrastructural and socio-economic development. The ULP’s tremendous record of success to date no doubt augurs well for another ambitious and realistic budgetary blueprint for 2007. But even with the tried and trusted governmental brain trust sifting through various developmental priorities, we should let our voices be heard on what areas matter most to us. The time to speak is now, not after the Budget is presented.

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