Published On: Wed, May 8th, 2013

The Role of Government

Melanius AlphonseMuch can be argued about the role of government in modern economies, such as its responsibility to balance the concerns of the populace via meaningful consultations with trade unions, civil society, NGOs, and the private sector, to attain harmonized national policy outcomes, while recognizing the many challenges that plague the global economy.

Nevertheless, the role of government centers on the smooth operation of matters pertaining to national security, social services, economic development, the provision of oversight; protection of the public interest, equitable taxation and good governance in accordance with the rule of law, which creates the conditions for citizens to make the most of their resilient character.

If these interpretations above do not relate in harmony, the nature of our business environment will lead to significant economic decline, and force a reliance on state financing to prop-up uncompetitive temporary jobs, low wages, health benefits and social services at a hefty cost.

These drawbacks cause growing pains that undeniably cut the prospects for real growth and sound economic policy.

Government has the ability to create “work” and facilitate an environment for “jobs” directly or indirectly. However, should it be job attainment programs that satisfy political needs at the expense of growth and public debt of 80.2% of gross domestic product (GDP) and climbing, as is the case in Saint Lucia? Can government justify this as spending on resources for productive gains in the future that can begin to return the debt-to-GDP ratio to the recommended 60% level?

The role of government is vital – don’t get me wrong!

Government must play its distinctive function - to present a plan designed to spur investment in national projects, with secondary linkage to put the country on a growth path.

Government also has a responsibility to set a sustainable base to support development. Government must likewise allocate adequate resource to ensure productivity blooms from that economic base.

If not, there will be an enabling environment that will lead to poor economic performance and further economic distress.

The irony is that both shortcomings are evident in the estimates of revenue and expenditure for 2013/2014, tabled by Saint Lucia’s minister for finance Dr Kenny Anthony.

Moreover, the lack of leadership and management of the resources received by the incompetent Anthony administration may have contributed to higher unemployment, productivity issues and cost factors that may have stirred Small and Medium Enterprises, (SME’s) and foreign direct investment (FDI), to cautiously hold on to their capital and invest scarcely.

Such situations most often strangle commerce, which leads to significant decline in government revenue and, by extension, forces significant downward cuts in government(s) budget estimates due to loss of leadership confidence.

A good case to reference is the forceful reduction of $130 million in Saint Lucia’s estimates of revenue and expenditure for 2013/2014.

What happen or didn’t happen is yet to be answered by incompetent administrators of the public purse. Especially, when the reduction is made in capital expenditure!

This is dead wrong!

A vital public prediction was that the minister for finance reduces recurrent expenditure to reflect its lack of revenue generation and to cushion the costs incurred.

However, two issues remain unclear with this administration; job creation and boosting job growth.

This will continue to pose a challenge to competiveness, growth projections and more preposterous assumptions from the Anthony administration.

The need now is to design a sustainable national implementation and resource allocation plan for nation building. And so, it is imperative that the Anthony administration of top heavy bureaucracy - steps back, seeks help, and reformulates practical workable solutions that are built on a sustainable private sector driven economy.

To achieve this, Saint Lucia must clearly define the type of development and investment (s) it needs. The mindless approach and clueless government leadership is not helping – without a vision, a plan and a strategy!

Good governance must seek to transition citizens of traditional farm jobs, industrial jobs and service jobs toward a knowledge base and modern industrialize economy.

Also, government and citizens must be more responsive to acquiring the core needs of food self-sufficiency, housing, health-care, security and financial obligations.

This would also set the basis for an improved standard of living to higher education, research and development needs for continuous renewal; and for value jobs that would be created by adopting an entrepreneurial agenda in the marketplace.

Everyone has a responsible role to play -- the private sector, NGOs, civil society, trade unions and related stakeholders -- and after meaningful dialogue to ensure that national policy outcomes clearly reflect their concerns as part of the way forward for our nation.

But, the Kenny Anthony administration has a responsibility to get rid of “willful blindness” in order to get the role of government right!

Melanius Alphonse is a management and development consultant. He is an advocate for community development, social justice, economic freedom and equality; the Lucian People’s Movement (LPM) critic on youth initiative, infrastructure, economic and business development. He can be reached at malphonse@rogers.com

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