Our exports are low and our economy is stagnating. SVG needs its own currency to stimulate the economy and create new businesses and thousands of new jobs.
For some time now, the US dollar has been fairly strong and this is a problem for exports of countries whose currency is pegged to the US dollar, like ours.
The Organisation of Eastern Caribbean States (OECS) dollar has been pegged to the US dollar since 7 July 1976, at an exchange rate of US$1 to EC$2.70. The OECS policy of an artificially high exchange rate is a misfit to the SVG economy. It makes exports from SVG artificially more expensive and it hinders attempts to build a strong, export economy.
The US dollar has appreciated by 11% against the Euro since April 2021 and 12% against the Japanese Yen in the past few months. This most recent increase of dollar strength makes SVG businesses’ overseas sales even more expensive.
U.S. exports suffer because the goods cost more in other countries when the dollar is strong. Jobs can be lost in the U.S. when the dollar is strong because of reduced exports. Likewise, OECS exports suffer because the goods cost more in other countries and jobs can be lost in the OECS when the dollar is strong because of reduced exports.
With a strong dollar, OECS exporters are at a disadvantage in the global market as their goods become more expensive, in comparison to other countries whose currency is not pegged to the US dollar.
This is a problem of our own making, though, because it is the OECS that chooses to peg our currency to the US dollar. This static arrangement allows no flexibility for our economy, when the global economy and other currencies fluctuate.
SVG should have its own currency, as this would mean we could control the economy better by adjusting our currency value, if needed, when the global economy changes.
With our own central bank and our own currency, SVG would have substantial latitude to build a strong and sustainable economy to create thousands of new jobs and a better standard of living and quality of life for all in SVG.
We could peg our own SVG currency to the Trinidad and Tobago dollar or the British pound at an advantageous rate, as this would help exports and trade, but also have the ability to change the pegged level ourselves depending on global circumstances.
Leader of SVG Green Party, Warrant Officer Ivan Bertie O’Neal, BSc (Hons), MSc, MBA, believes that by controlling our domestic currency we can keep the exchange rate low. This would support the competitiveness of SVG goods that are sold abroad. The artificially high exchange rate of US$1 to EC$2.70 stifles economic growth and causes poverty, gross criminality, spiralling high cost of living, high rates of unemployment and the jail being full of youths who cannot read. This must change at the earliest opportunity.
Entrepreneurs and small businesses in SVG have to compete in a global market when they try to export their goods and services abroad. Being part of an artificially inflated currency is hurting SVG businesses and reducing their opportunities to trade. SVG must withdraw from the Eastern Caribbean dollar in order to boost small businesses.
A Green government would move the SVG economy forward with a new SVG currency.