(MENAFN - Caribbean News Now) By Melanius Alphonse
Caribbean News Now associate managing editor
CASTRIES, St Lucia – Saint Lucia's prime minister and minister of finance, Allen Chastanet, delivered his 2019/20 budget address, pivoted on 'people-centred growth,' to allow Saint Lucians to change gears and take the next step. However, leader of the opposition, Philip J Pierre, in his rebuttal in parliament said, 'The prime minister is living in an alternative reality.'
'The Saint Lucia he speaks of is not the real Saint Lucia. It's a Saint Lucia where health care is getting worse, the cost of living is increasing, and people have no confidence that the government is transparent in its dealings and will be fair and equitable. It's a Saint Lucia where the people were promised a reduction in Value Added Tax (VAT) with a view to its elimination. However, they have only seen VAT reduced by 2.5 percent and fuel taxes increased by 60 percent,' Pierre said.
The budget proposal for 2018/20 requires EC$246.7 million for capital expenditure. In 2017/2018 capital expenditure fell $19 million short of the approved estimates and in 2018/2019 capital expenditure again fell short by $33 million of the approved estimates of $176 million.
Pierre, said, 'Tabling of these estimates of revenue and expenditure must be viewed from its impact on the local populace.'
'Have the monies spent in the last fiscal year 2018/2019 improved the lives of most Saint Lucians and are there reasons to believe that the planned expenditure for the 2019/2020 are realistic and likely to improve the living conditions of Saint Lucian[s]?' Pierre asked.
'Instead of unrealistic projected growth based on an increase in borrowing and unrealistic expansion in capital expenditure. Steering the economy in the right direction with good legislative agenda and financial forecast that match expectation for 2019/20 must reflect a more accommodative socio-economic policy.'
Saint Lucia has been on a consistent path of economic expansion, recording positive consecutive real growth rates since 2016, according to the finance minister, and illustrated by key performance indicators, presented by the minister for finance.
'This year's budget is grounded in the need to break free from stagnation and focus on the things that are going to turn lives and the country around… unlock the opportunities that will propel every Saint Lucian to an acceptable standard of living and offer the chance to build wealth for themselves and their families. This is our singular focus,' Chastanet said.
'On the fiscal side, there was an improved performance driven by higher revenue of 6.4 percent. Receipts from the CIP were significantly higher at EC$66.4 million compared to $27.8 million the year before. This led to a larger primary surplus, up from $52.3 million to $101.5 million and a lower overall fiscal deficit down to $69.7 million from $110.1 million the year before. Our public debt to GDP declined to 64.9 percent in 2018, from 65.2 percent in 2017,' he continued.
Last week, the International Monetary Fund (IMF) lowered its global growth forecast from 3.5 percent to 3.3 percent, amid "a delicate moment for the global economy" and cautioned against several measures of global activity.
"A common influence on sentiment across advanced and emerging market and developing economies has been high policy uncertainty in the wake of policy actions and difficulties in reaching agreement on contentious issues," the IMF said.
Government's major infrastructure investments in this fiscal year, include the following:
The Hewanorra International Airport (HIA) rehabilitation project has started with designs and related geotechnical surveys at an advanced stage. The project is expected to take 30 months from ground-breaking to completion and is expected to cost US $175 million;
The Taiwanese funded road development programme, amounting to US $42 million over 36 months is about to commence on strategic roads islandwide, including roads that will link farmers and rural communities with the rest of the island;
Also, road rehabilitation projects are in train for the West Coast Road and the Millennium Highway, where the consultant has been appointed, and designs are well advanced. Both of these roads are funded by UK Caribbean Infrastructure Fund (CIF) grants amounting to approximately US $43 million.
Site preparation has started in anticipation of the construction of the new wing at the St Jude Hospital, as well as rehabilitation and improvement to the existing structures. The estimated cost of works is US $30 million.
Construction works will accelerate on the John Compton dam, Dennery water supply redevelopment (phase two) and Vieux-Fort water supply redevelopment all in this fiscal year.
The Castries market redevelopment project is expected to commence during this fiscal year and will be undertaken on a phased basis. A temporary site has already been identified for the relocation of vendors.
Port development is expected in the medium term in both Castries and Vieux Fort. Preliminary discussions are ongoing with international partners.
Construction of the Cul-de-Sac bridge, which has undergone some project re-design as no tenders were received that fell within the grant budget provided by the government of Japan. The bridge will be built, but the government of Saint Lucia will provide the funding for works ancillary to the bridge.
It is also anticipated that in the private sector, at least seven major hotel projects are expected to commence during this financial year:
"The environmental impact assessment for the resort and residences at Honeymoon beach in Canelles is 95 percent complete, and the developer hopes to break ground shortly. This project will be constructed in three phases. Phases 1 and 2 will be the construction of the hotel and residences, which will be financed by the developer. Phase 3, which is a citizenship by investment (CIP) approved project, will be the construction of villas.
"The hotel in Choiseul has been taken over by a new investor and will no longer be a Fairmont branded property. There have been minimal changes to the design, the financing has been secured, and construction is expected to commence in the fourth quarter of this year.
"With the Sandals project, we are awaiting the outcome of a legal matter and once this is resolved the 360-suite project at the cost of US $200 million will get underway. A 400-room hotel is earmarked for Choc with plans well underway.
"A 150-room Courtyard Marriot at Pointe Seraphine. We will announce a major hotel-golf course very shortly in Cap Estate.
"The development of the Desert Star Holdings (DSH) project continues with our first race rescheduled to National Day this year. The horse racing track is being enhanced with two boutique hotels along with a polo and equestrian field. The second phase of the track is to include apartments, offices and commercial space is due to commence later this year."
Chastanet concluded his budget presentation saying, 'The budgetary proposals for the upcoming financial year are designed to achieve growth that will break the bonds of economic stagnation that has been holding back our country and our people. The two previous budgets have built the foundation to cause this transformation.'