128th AGM- President's Address
First, thank you for all for attending this, the 128th Annual General Meeting of the St. Lucia Chamber of Commerce Industry and Agriculture. These are extremely important and critical times for our economy and our country. The state of the global economy remains tenuous at best, the regional economies precarious, and the jury is still out on St. Lucia’s). The seriousness of the current situation is not so much to do with the state we are in, but rather in what we are going to do about it.
When I was elected President of the Chamber, I indicated that I would have a single but simple Agenda, to pursue “Making it Easier to Do Business in St. Lucia.” I knew then, and I certainly know now, this is not an easy task. The majority of the hurdles to overcome are in the domain of the Public Sector: legislation, government policy, regulation, entrenched bureaucracies and tightly guarded interest groups. Yet we have started the process and we are staying the course. I admit that it is extremely difficult to institute change in our system, but it is not impossible. My thinking was to start a pebble rolling and cause an avalanche of change to follow. The first step, the first reform, was always going to be the hardest to achieve.
So we started by publicly announcing our Agenda. Then we introduced it to the Prime Minister and Minister of Commerce. From that point on, every conversation with anyone, any institution we interacted with, we spoke about “Doing Business”. We were heard. We did not always get the response or reaction we hoped for, but we plugged on, and continue to sing that same song.
When we spoke on VAT, despite broadly supporting VAT, we pointed out that it would not simplify the payment of Taxes for the Business Community. It complicates business processes. We pointed out while VAT may be more efficient for the Government, the bulk of the responsibility for collection rests with the numerous VAT registered businesses. The impact of this subtle point, I believe, was underestimated by the VAT team: the change of the business community from tax payer to tax collector.
We pointed out that the transitional issues made it more costly to do business and thus the consumer would pay more. We pointed out that the extensive VAT exemption list complicated the computation of VAT claims and put additional costs on business and hence the consumer. Our voice on those, and other matters, for the most part, fell on deaf ears. In due course we will all feel the repercussions of the approach adopted by Government, in spite of our best advice. And yes, we continue to lobby for clarification, and change.
Our objective remains to lower the cost of doing business and make it easier to do business in St. Lucia. As we evaluated the Labour Code our philosophy was that the Code should not make it too costly to hire, retain or fire workers. We need a balance of rights and responsibilities and we must encourage investment with our laws and policies. Our perspective has not changed on any of these issues over the course of time that we have been debating them: at least eight years on both counts.
The effect of our Doing Business Agenda as far as I am concerned, is now being seen. In the last six months, the Ministry of Commerce, Business Development, Investment and Consumer Affairs, has convened numerous meetings with the World Bank, IFC, IDB and other agencies speaking about the Business Environment or some aspect of Making it Easier To Do Business. In addition the Ministries of Finance and Economic Development have also convened meetings on the same subject. We have been informed of regional initiatives on e-government introduction and other related matters.
I now feel that though movement and buy-in has been slow, Making it Easier to Do Business is gaining traction and picking up speed; this language is becoming “vogue”. The last meeting attended by the Executive Director, was convened by the Ministry of Economic Development. They spoke of a new initiative called the Caribbean Growth Forum which “seeks to stimulate quality growth in the Caribbean by focusing on areas which can cause growth to take place from within as well as from external impetus.” One of the focal areas which attracted our attention was that of business environment reform. We wish to go on record as fully supporting this initiative; we believe that the high debt, low growth conditions which we are experiencing must not be allowed to continue; we believe that there are solutions which we as a nation can find and implement but we need to stop talking, studying, consulting and just implement.
Over five years ago the Chamber spoke about the crisis of “non-implementation” in our economy. We spoke to the slow pace of Government implementing decisions, and even taking decisions. We spoke about studies that showed that improving the business environment, eliminating unnecessary government bureaucracy, could add 2% to growth in the economy – irony perhaps. We are now hearing the donor community, who are equally fascinated with this conundrum of no growth/slow growth in the Caribbean, speaking to tackling the business environment.
The well documented approach suggested by the Chamber, calls for a Doing Business Forum, where the following will be done:
1. A National Forum Chaired by either the Prime Minister or the Minister of Commerce would be convened.
2. All Agencies whose work impacts on the World Bank Ease Doing Business Report will be invited to the Forum and the Report, its’ structure, format and process explained.
3. The Agencies will be showed what is being said about their cost, length of time and number of procedures
4. The Agencies will be given an opportunity to clarify or refute the information in the report
5. The Agencies will also be given an opportunity to indicate what changes they think they can make to improve the process
6. The Agencies will be asked to commit to the schedule for changes which they have indicated they can make
7. On a quarterly basis the Agencies will meet to report on progress
8. Bottlenecks to progress will be indicated and identified
9. Resource needed to remove those prioritized bottlenecks will be requested
10. A scorecard will be kept and publicized.
We hope now that the World Bank and the Growth Forum have adopted a similar approach, our proposed Doing Business Forum will finally take place.
I must admit that we are disappointed in the slow pace of action. Yet, we are pleased that we have been able to stay the course and cause discussion on this critical issue to be taking place nationally. The pebble has got its first nudge to roll down hill – hopefully the avalanche will follow.
This is actually a good juncture for action: the new 2013 World Bank Doing Business report was recently released.
This is the result of inaction! We have slipped a further 2 places in the ranking. Why? Because we have failed to implement even one, single reform!
This is our clarion call to action!
The Chamber is advancing a simple methodology regarding Ease of Doing Business and Trade Facilitation which we put to the Government:
(1) Require that the Private Sector or Firm provide information only once
(2) Introduce Simplified Electronic Payments
(3) Make Information on Procedures for doing Business with Government transparent and standard
(4) Stop Government agencies and departments from operating in SILOs
(5) Report regularly on what Government Agencies are Doing to advance our Easier Business mantra
(6) Let Government Agencies retrieve information they already have rather than demand that the private sector provide it again
(7) Allocate and spend resources on the implementation of studies and reports.
I do not believe that the Private Sector is asking too much. The above is not beyond Government’s reach and it is not a big budget thing. We are asking that Government change the way it operates, use its resources better, organize itself so that it can use the information it already has, measure its performance, and disclose the results. In fact we are calling on Government to be more efficient, transparent, and accountable.
I know many would like me to speak out on VAT and its impact. VAT was implemented only 6 weeks ago and returns have not yet been filed. In that context, I believe The Chamber is better served by being patient, observing, getting feedback from members, lobbying/advocating for changes & clarification we deem necessary, and, in due course, make informed, measured and intelligent comments on this most important fiscal instrument. This is not to suggest the immediate impact and experiences are not real and should not be taken account of, but rather to say that, we would prefer to assess the impact over a longer period and be armed with solid data prior to making any definitive comments about VAT’s impact. In the interim, please continue to share your concerns, experiences and thoughts on the matter with the Chamber.
In closing, I must say that my year as the President of the Chamber has been extremely rewarding: I have learnt a lot; had some interesting experiences; better understand the role and expectations of the Chamber; faced the perfect storm of VAT, Labour Code and struggling economy. I wish to thank those of you who encouraged me to take on this responsibility and while it has been much more than you promised, it has been much more rewarding and enlightening than I imagined.
Yet the Chamber needs the continued support and participation of all of you. Please continue to encourage our business colleagues who are not yet members of the Chamber to become Chamber Members. They are already benefitting from our very existence and from the work which we have done in the past, the causes we have championed, and the issues that we continue to Champion; Not to mention the valuable services which we offer.
Finally, I invite the Government and you the business community to join the Chamber in our Quest to Make it Easier To Do Business in St. Lucia.