Eustace questions benefits of offshore sector

Leader of the Opposition Arnhim Eustace is questioning whether the offshore finance sector is still beneficial to our economy.

As he made his contribution to the debate on the Financial Laws (Miscellaneous Amendment) Bill 2014 in Parliament on Wednesday, Eustace said over the last five years or so, he has been increasingly asking the question whether we should have an offshore finance sector.{{more}}

“It has come to that for me. What are the costs and what are the benefits? Are the costs now outweighing the benefits of having that sector? This is not to oppose what is being proposed here today; I am asking this question for the future. What, in five years from now, will the offshore sector mean to the economy of SVG?”

Eustace said in the late 1990s this sector was seen as a new pillar for the economy of St Vincent and the Grenadines.

“We had our agriculture, our tourism was beginning to develop, we had some industry and we were seeking to find ways and means, in those days, the late 1990s, to improve economic activity in St Vincent and the Grenadines, and one area seen interesting at the time and likely to provide a boost to our economy, was the offshore finance sector.”

He said after a while, things began to change.

“Then, we had all this harmful taxation talk, all the OECD countries making a lot of noise about confidentiality laws and so forth. And then the vice began to tighten. A lot of measures were proposed and in the end, I see us as having succumbed to them….What we are doing today is part of that, it is a continuation of the exercise which was started by the OECD many years ago to take control, to prohibit the growth of the offshore finance sector.”

Eustace said today, a much larger staff is needed to regulate the sector, but much fewer registrations.

“How long will we continue that kind of exercise? … The sector is going down, but the number of persons involved in administering the sector are increasing. Therefore, what is the benefit to our economy? That is the fundamental question I have,” Eustace said.