Address by the Hon. Emma Hippolyte
Minister for Commerce, Business Development, Investment and Consumer Affairs
On the Occasion of the 128th AGM of the St. Lucia Chamber of Commerce, Industry and Agriculture
November 14, 2012
Let me start by congratulating you, the members of the St. Lucia Chamber of Commerce, Industry and Agriculture on your 128 annual general meeting. It is also my distinct pleasure to address the full membership for the first time as Minister for Commerce, Business Development, Investment and Consumer Affairs. The St. Lucia Chamber of Commerce, Industry and Agriculture is the oldest private sector organization in Saint Lucia and therefore your contribution to the growth and development of this beautiful country, the Helen of the West is valuable and has been and will continue to be well noted.
The business landscape is fierce and competitive. Globalization has redefined the way we do business even in this small country of 238 square miles. In this dynamic global landscape, size does not matter to our competitor nations. One must simply device strategies to be competitive and survive. How you respond to emerging threats and opportunities will determine your profitability and sustainability. The government of Saint Lucia is aware of the global challenges, opportunities and threats and as such has undertaken several policy initiatives, all aimed at ensuring that Saint Lucia remains competitive in this global environment.
In 2007, realizing that Saint Lucia needed to be recognized globally as an investment destination, the decision was taken to participate in the International Finance Corporation (IFC) World Bank Doing Business Report. The IFC has indicated that enabling private sector growth is the surest and most sustainable way of ensuring that poor people can participate in wealth creation and become beneficiaries from the created outputs. The IFC believes that by providing a regulatory environment with greater predictability and streamlining the processes stipulated by Government in facilitating the private sector, new entrants, regardless of their gender or ethnic background can get started in business and existing firms can grow (Preface, Doing Business report, 2012).
In short, Doing Business is a way to shed light on how easy or difficult it is for a local entrepreneur or international investor to open and successfully operate a business while complying with relevant laws and regulations of the state. Saint Lucia is evaluated and ranked in 11 areas within the life cycle of a business: starting a business, dealing with construction permits, getting electricity, ease of closing a business, registering property, trading across borders, protecting investors, paying taxes, getting credit, ease of enforcing contracts and resolving insolvencies. These indicators are used to analyze economic outcomes and identify what reforms need to be implemented.
Since Saint Lucia started participating in the Doing Business Report, the Country has been recognized worldwide as one of the best countries in CARICOM to do business. In fact, in 2007 Saint Lucia ranked 27th, out of 127 countries, and number one within the CARICOM Grouping. While Saint Lucia’s position has slipped in the rankings from 2008 to 2013 because of deliberate government policy and the work of supporting agencies like your organization we were ranked in the newly released 2013 doing business report at 52 out of 186 countries, the best in CARICOM and better than the Bahamas and Brazil.
The IFC has also ranked Saint Lucia in several areas of competitiveness and their indicators. According to the competitiveness and review benchmarking study done in 2010, Saint Lucia ranks significantly stronger than most competitors in terms of overall ease of doing business and quality of institutions. To better understand the relevance of those rankings, let me explain what competitiveness means.
The World Bank describes competitiveness as ‘an economy’s ability to attract the demand for its exports and the investment to supply that demand, all within social norms that result in an improved standard of living for its citizens. Competitiveness can be broken down further to mean sustainable growth, essential conditions which take into consideration business performance (investment and Trade) and Policy inputs which covers business environment (taxation, regulation, political and regulatory institutions).
Notwithstanding the above, we still have a lot of work to do to ensure that we continue to improve our ranking. It is important to ensure consistency in improving Saint Lucia’s ranking in the Doing Business report as this suggest to investors that we maintain a good investment climate; one which provides opportunities and incentives for firms, both microenterprises and multinationals . Improving the investment climate is critical to a developing country such as ours. Here are some issues to consider:
Need To Drive Private Sector Growth
With rising population, economic growth is the only sustainable mechanism for increasing a society’s standard of living. A good investment climate drives growth by encouraging investment and higher productivity. This is done by removing unjustified costs, risks, and barriers to competition.
The private sector accounts for more than 90 percent of jobs in developing countries. Better job opportunities also increase incentives for people to invest in their education and skills, thus complementing efforts to improve human development and reduce poverty as we strive to meet the United Nations Millennium Development Goals by 2015.
Tackling cost, risks and barriers to competition
Government’s influence on the investment climate is through the development and implementation of policies and behaviors that impact the costs, risks and barriers to competition facing firms. Government’s policies and behaviors influence the costs of doing business and hence the range of investment opportunities that might be profitable. Government has renewed its commitment to promoting public sector investment, international investment and improving the investment climate. The end result we hope will be job creation, quality education and skill development and good governance.
Against this background, the Government of Saint Lucia is moving forward with a number of reforms and policies, which include but is not limited to the establishment of a commercial court, investment roadmap project, investment climate assessment survey and the development of an investment policy.
The investment roadmap is an analytical tool that will be used for documenting and analyzing Saint Lucia’s attractiveness for investment and serves as a catalyst for change. The road mapping project will examine the processes involved in facilitating investments against the policy and regulatory systems. It will involve a comprehensive analysis of the general and specialized procedures that constitute public regulatory interaction.
The investment climate assessment study is done every three (3) years and it is an evaluation of the investment climate in Saint Lucia as it relates to its operational dimensions and promotion of policies to strengthen the private sector. The last survey was done in 2009 and the Ministry of Commerce will be conducting the 2012 survey in the coming months. Therefore, I urge you to give the Ministry your full cooperation and support as we gather the data for this assessment.
The policies and projects discussed above will all lead to the much needed investment policy and strategy. The Ministry of Commerce cannot do it alone. I stress again the importance of the private sector and organizations such as the Saint Lucia Chamber of Commerce in the process. The government of Saint Lucia continues to streamline and harmonize the administrative, regulatory and legal framework such as the upgrading of the e-registry software to facilitate efficient online filing of companies and name searches, operation of a single window to increase efficiency among agencies, classification of all economic activities by Standard Industrial Classification, the commencement date for the e-commerce legislation as well as the recent announcement of the establishment of the Commercial Court.
The Ministry will redouble its efforts at ensuring that the process for filing and approval of applications for import licenses is streamlined and done through electronic interface. The project to address the current process is at an advanced stage and was delayed as a result of the implementation of the VAT system. The implementing of the new tax system lead to the diverting of human resources at the Customs and Excise Department away from the project during the early stages of implementing the VAT. A refocusing on the project is currently being undertaken.
In conclusion I want to reiterate the Government of Saint Lucia’s commitment to improving the investment climate in our Country. Our goal is to improve our ranking and be among the world’s top ten countries for doing business. This we want to achieve over the next four years.
Let me congratulate you once again on your 128th AGM and wish you success in the future.
I thank you.