Government should have spent building material money locally – Eustace

Opposition Leader Arnhim Eustace says the EC$7.1 million being used to buy material from Jamaica for the on-going Hurricane Tomas recovery programme could have been spent locally to help stimulate the economy.{{more}}

The Cabinet in June authorised the ordering of US$2.6 million in building supplies from Tank Weld Metals Ltd, to be paid in four equal monthly payments, the first coming 90 days after the bill of lading.

Prime Minister Dr Ralph Gonsalves did not disclose the value of the material when he spoke on the topic in August, but said on radio that the materials will be used to rebuild and repair houses damaged during Hurricane Tomas and the April floods of 2011.

But Eustace said on radio on Thursday that the local private sector “is not really functioning in any meaningful way, in terms of its contribution to the economic development of this country”.

From a macro economic standpoint, the environment does not encourage the private sector to invest, he said, and noted private sector losses in the failed British American Insurance Co Ltd and CLICO.

He further said that “many” private sector entities “are owed by the government of St Vincent and the Grenadines and they are getting licks on both sides.

“And I am amazed that the government will sit down in that environment and bring in millions of dollars here in galvanize and cement and lumber and not bring any of that through the private sector of St Vincent and the Grenadines … which is struggling and fighting to keep people employed. They have sent home a lot of people already,” Eustace said.

He further noted that the local private sector makes galvanize and imports building supplies.

He suggested that the government should have allowed the local private sector to join together and import the materials duty free, sell to the government at the duty free prices and sell the rest to the public under the normal protocol.

“But that wasn’t done, because they want to get credit. Credit from somebody you are talking to on the telephone. And up to now, we are not told what the terms of the credit are, what the interest rate is, and when it has to be paid back,” Eustace said.

“So, what is the private sector to do now?” Eustace further asked, adding that local merchants won’t be able to sell the building materials they have in stock.

“Cause much of it (the material the government imported) will be given away and therefore the market for those things for the next few months will be destroyed and the private sector will be much worse off,” he said.

“What kind of government is that? In this difficult time, when you owe the private sector money, millions and millions of dollars, you now ignore them and offer business to somebody outside, to the tune of millions of dollars … without them getting an opportunity to participate and therefore keep their labour force intact, rather than having to send home people.

“You tell me that is a serious government, in a country where you already have four years of negative growth…”

Eustace has cited International Monetary Fund statistics, saying the Vincentian economy has contracted for four years running.

The Eastern Caribbean Central Bank has said that the Vincentian economy grew 0.4 per cent in 2011, after three years of decline.

But Eustace also spoke of the “trouble” that the banana industry faces and added that tourism “has not blossomed into anything new”.

“For me, that is just a deal,” he said of the purchase of building supplies from Jamaica.

“It has nothing to do with the development of the people of this state. And I notice people are questioning the quality of the galvanize that is being brought in here and whether it meets the standard that is required in our country.” (kentonchance@searchlight.vc)