Occasional Essays
October 28, 2005

Hard headed, pragmatic approach

Last month there were three missions in St. Vincent at the same time: a Presidential one from Taiwan, technical ones from Cuba and Venezuela. The number as well as the diversity of the missions is evidence of the considerable effort the ULP Government is making to develop SVG.

Moreover, it serves to emphasise a fact of which we should long have been aware. It is that the smaller a country, the more dependent it will be on the outside world. Economists actually have a way of measuring it. {{more}} They add a country’s exports to its imports and express the total so derived as a percentage of all the goods and services the country produces, that is its GDP. The higher the percentage, the greater is the dependence. In SVG’s case it is about 75 per cent. That it is this high should be no surprise. SVG simply does not have the natural resources to enable it to produce all the goods it needs nor the market size to warrant such production.

Indeed SVG started off its existence as a modern entity, not as an independent country but as part of the British Empire. Its role was to produce sugar for the mother country. The system worked well once the market for sugar was good and most of the population were slaves who merely had to be kept in good working order. Once these conditions ceased to hold, our situation changed. We became a colony teetering on the edge of bankruptcy. Things came to such a sorry state that we rioted and out of these riots came the Moyne Commission, which more or less told the British Government who had set up the Commission in the first place, that it had to do better.

The revenue collected locally was not enough to maintain the few schools we had, the police force and the civil service. The Moyne Report pointed out that unless capital was provided to build roads, schools and other infrastructure, we would never get out of our abject poverty and so the British Government started giving us development grants.

Over the years they refined the system so that by the 1970s the British had a mission in Barbados, the British Development Division, through which not only were these grants channelled but technical assistance to identify and implement the projects was provided. In the circumstances, as Director-General at the time, I was in no hurry to see St. Vincent become independent. Today we talk about reparations for slavery. I would not have expressed it in those terms but I did think that, after many years of exploitation by the British, colonialism had at last reached a stage where the boot was on the other foot and we should make maximum use of the opportunity. Predictably, once we became independent the British cut off the aid and told us to go to the EU for assistance.

For reasons that I do not fully understand the EU assistance has not worked very well in St. Vincent and in most of the other islands for that matter. The civil servants say that the EU wants to spend most of its money on its own experts and consultants. Our bureaucrats, therefore, prefer to work on projects which the Government can itself fund by borrowing money. The problem with this is that unless the economy grows rapidly the time can come when the Government will only be able to pay the civil service or pay its debts. It will not be able to do both. In this sense the drive by the ULP Government to seek assistance from a wider field makes very good sense.

Of course, we cannot rely on aid forever. We have to develop our country to the point where the emphasis is on trade and investment, not aid. Our best prospects for trade and investment are in the tourist industry. This, of course, reinforces the Government’s case for trying very hard to get a jet airport.

Most of the investors and tourists are, however, white, and given the type of racism espoused by some here we may well be faced with a mission impossible. Why on earth should a white person want to go on holiday to a place where people are hostile to them? Whether we like it or not the bulk of the world’s highest spending tourists are not black and this will remain so for a long time to come.

The Caricom Single Market and Economy (CSME) will not solve our problems. By now everyone knows that in integration exercises of this kind the less developed countries gain little. We have been this way before with CARIFTA and this is why, at that time, we insisted on the Agriculture Marketing Protocol and soft loans from the Caribbean Development Bank (CDB) to help to overcome our disadvantages. The OECS had an expert look at the implications of the CSME for Eastern Caribbean countries. It would be interesting to see the conclusions of that study.

Our tiny country does not have many options and we should recognize the few we do have and deal with them in a hard-headed and pragmatic manner.