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Hanging in there


The great economist, Kenneth Galbraith, long ago pointed out that according to the laws of thermodynamics, the bumblebee is not supposed to fly, but it does! Sir Arthur Lewis put it much more directly. Economies, he argued, do not work, because of what economists say, but because the people living in them decide they must work.{{more}} SVG is a classic demonstration of this. About 50 years ago, a group of economists from UWI came here and because our very small economy did not fit in neatly into any theory, concluded that we were a stationary state. In fact, far from being stationary, we grew rapidly for most of those 50 years. With SVG it is best not to get too entangled in the theory, but to look at what is happening on the ground and take it from there. Food and energy are as good place as any to start.

Most commercial agriculture is today carried out on vast expanses of flat land, with lots of farm machinery, very little labour and virtually no protected overseas market. SVG, with 20,000 acres of mountainous land, divided among heaps of people, cannot do this type of agriculture. Fortunately, food can be produced by other types of farming. Ever since the slave owners gave our ancestors little plots of land on the outskirts of their plantations to grow their own food, we have been in backyard gardening. We must continue with it, using modern inputs such as quality seeds and pesticides, as well as compost and dung.

In addition to backyard gardening, there are the small and medium-sized farms scattered across the island, where food can be and is produced for the home and also the regional market. Greenhouses and small poultry units also have their part to play. The problems are low productivity of labour and praedial larceny. There is a further complication: marijuana cultivation sometimes pays better than food production.

Iceland has long made use of geothermal energy. Many other countries have followed or are about to follow that small volcanic island. SVG is among them. Even more imminent is solar energy. In fact, solar energy is already here, for full electricity in a few homes, but much more widespread as solar water heaters. In England, homes in even remote rural areas have solar panels providing electricity and feeding the surplus into the national grid. There, the roofs of the houses, however, have to face south to ensure that there is enough sunlight to make the system work. In SVG we have so

much sunlight there will be

no such problem. England got into it before us because they are rich and could subsidise

the process. Now that the cost of solar panels has fallen steeply, there is little to hold us back.

The next issue is how do we get the foreign currency to pay for all those goods we import: oil, cars, drugs, clothes, building materials and some food. It is often pointed out that we import some 700 million dollars, but export only 100 million. What is being emphasised is how few goods we do export in comparison to the amount we import. Incidentally, the pattern is the same in England. England imports far more goods than it exports. Like them, we have to think about how we pay for these “excess” imports. Before we go into that, it should be noted that in so far as we are able to use solar energy for electricity and transport, then there will be a big reduction in a major import – oil.

We get the foreign currency to pay for the ‘excess’ imports through remittances,development aid,foreign investment and export of services such as tourism, shipping and medical education.

Remittances are the money Vincentians abroad send home. It is a large sum, but nothing to be embarrassed about. It is larger and even more important in India, Pakistan and Egypt. We should, however, not make the very stupid mistake of referring to Vincentians living abroad as foreigners.

With development aid, both the goods and the money to pay for them come from abroad.

We get most of our foreign investment in the hotel sector. Let me enter a caveat here. We are a very small Third World country. We are not going to get the world’s blue ribbon investors coming here. To a large extent, we have to take what we can get. Once we ourselves are neither corrupt nor dishonest, there is nothing about which to worry.

The Argyle airport will not only bring in more tourists, but it will also bring us closer to our diaspora. All this should help us to get more foreign currency to help pay for our imports.

Our biggest source of concern has to be the Government’s budget. But then national, regional and local governments in many countries face problems on this issue at this time. Look at Cyprus!

Finally, in this article there have been several references to what is happening in other countries. This is deliberate. Too often in SVG we behave as if what is happening here is peculiar. It is not. Some years ago, the US government had to step in because of mismanagement in its Savings and Loan industry, that is, their Building and Loan. More recently, the UK government had to intervene to the tune of billions because of mismanagement in Northern Rock Building Society and Royal Bank of Scotland. We should not always look inwards and lose perspective.