The reliance on aid by the ULP regime as the engine for development is counterproductive. The greater the amount of aid SVG has received, the greater is the level of dependence, and the worse our economy has become. The way to make our people richer is economic development, driven by high quality education and trade, not aid.
In 2002, aid was $58m and the fiscal deficit was Nil. In 2015, aid massively increased to $168m, yet the economy was so much worse with a fiscal deficit of $143m. We have had another couple of years recently of massive aid inputs, including food aid. In the 2023 budget estimates, there was over $400m in grants and loans.
The problem with being an aid junkie, is that the ULP regime has lost its capacity to make our country strong. The addiction to aid makes government lazy, and they do very little to increase our country’s productivity and self-sufficiency. The consequence is a weak economy and an increase in unemployment, poverty and crime – evident all around our country.
Aid and handouts from Taiwan and the super-rich of Mustique and Canouan are not making our economy strong. These entities must pay tax, because our economy is moving backwards, as is the increase in fiscal deficit since 2005 illustrates.
The Global Partnership for Education (GPE) says that for poor countries, it is vital to:
- increase education spending. The GPE encourages governments to commit between 15% and 20% of national budgets to education. In SVG for 2023, only $29.6m is allocated for education. This is only about 2% of the budget estimates for 2023. This is outrageously low. A Green government would pump at least 20% of the budget into education;
- increase the overall size of government budgets by stopping harmful tax exemptions to foreign companies. Action Aid estimates that over $138 billion annually is given away unnecessarily in tax incentives to foreign companies by developing countries. A Green government would cut ties with Taiwan and tax the super-rich of Mustique and Canouan and set up a tuna fishing and canning industry. This will increase the government budget by hundreds of millions of dollars a year;
- spend more in primary education and help poor families to meet education costs. A Green government would make books and uniforms free for all children and build a university. Education should be free from preschool to university.
Trading value-added products is the way to expand the SVG economy. For example, 1lb of green coffee will earn a Ugandan coffee farmer approximately US$1, whilst roasters in developed countries sell the same coffee for approximately $8. This means that poor coffee-growing countries lose US$7 per lb of added value, simply because they are not roasting and packaging the coffee.
Importing countries ‘add value’ to the coffee and make over 7 times as much money as the Ugandan coffee grower!
A Green government would help SVG businesses add value to their goods and focus on exporting processed goods and services. Our country must increase its economic output and GDP to about $5 billion. This is feasible if we cut ties with Taiwan, tax the super-rich of Mustique and Canouan, set up our own tuna fishing and canning industry and focus on value-added products.
The only thing that makes people richer is economic development. Trade. This is how Singapore did it; this is how China is doing it. We must adopt the successful Singapore model of sustainable development and drive the economy with high quality education and trade, not aid.
Warrant Officer Ivan O’Neal BSc (Hons), MSc, MBA, Leader of SVG Green Party, strongly believes SVG must wean itself off aid.
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