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2020 BUDGET SPEECH “Transforming the Economy, Building Resilience, Cr Ea T I Ng Jobs, and Developing Sustainably”

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2020 BUDGET SPEECH “Transforming the Economy, Building Resilience, Cr Ea T I Ng Jobs, and Developing Sustainably” © 2020 Government of Saint Vincent and the Grenadines The Budget Speech is delivered annually, and precedes the Parliamentary debate on the Appropriations Bill. Budget 2020, and its attendant Estimates of Revenue and Expenditure for the year 2020 are prepared under the guidance of Mr. Edmond Jackson, Director-General of Finance and Planning, Mr. Recardo Frederick, Director of Planning, Mr. Ken Morris, Budget Director, and the entire staff of the Ministry of Finance, Economic Planning, Sustainable Development and Information Technology. The Budget Speech and the Estimates are published by the Government Printery. Ministry of Finance, Economic Planning, Sustainable Development and Information Technology 2nd Floor Administrative Complex Kingstown Saint Vincent and the Grenadines [email protected] www.gov.vc Government of Saint Vincent and the Grenadines 2020 BUDGET SPEECH “Transforming the economy, building resilience, cr ea t i ng jobs, and developing sustainably” Hon. Camillo Gonsalves Minister of Finance 3 February 2020 Contents Executive Summary………………………………………………………………………… ii I. Introduction: 2020 Vision, 2030 Foresight………………………………………….. 1 II. Keeping Commitments, Keeping Committed………………………………………. 2 III. Global, Regional & Local Economic Environment ………………………………… 5 IV Sectoral Summary…………………………………………………………………... 6 A. Agriculture & Fisheries……………………………………………………... 6 B. Tourism…………………………………………………………………….. 10 C. Climate Resilience & Environmental Protection…………………………...... 14 D. Decent Work & Job Creation………………………………………………. 19 E. Citizen Security……………………………………………………………... 21 F. Health & Wellness………………………………………………………….. 24 G. Education…………………………………………………………………... 26 H. ICT & Innovation………………………………………………………….. 30 I. Sports………………………………………………………………………. 32 J. Youth & Women………………………………………………………….... 33 K. Foreign Affairs……………………………………………………………... 37 L. Private Sector, Entrepreneurship & FDI…………………………………… 40 M. Infrastructure & Housing…………………………………………………... 43 1. Modern Cargo Port………………………………………………… 44 2. Regional Disaster Vulnerability Reduction Project (RDVRP)………. 45 3. Geothermal Energy………………………………………………… 46 4. Road Repair & Reconstruction……………………………………... 46 5. Pedestrian Access for Village Enhancement (PAVE)……………….. 47 6. Modern Parliament & High Court Complex………………………... 48 7. Kingstown Clean-Up……………………………………………….. 48 V. State-Owned Enterprises…………………………………………………………… 50 VI. Grenadines Development…………………………………………………………... 51 VII. Reducing Poverty, Protecting The Vulnerable & Combatting Inequality……………. 52 VIII. Implementation…………………………………………………………………….. 56 IX. NIS & Pension Reform……………………………………………………………... 59 X. Prudence & Enterprise…………………………………………………………….... 62 XI. Debt………………………………………………………………………………... 66 XII. Resource Requirements……………………………………………………………... 67 XIII. Fiscal Measures & Incentives……………………………………………………….. 68 XIV. Conclusion…………………………………………………………………………. 71 Appendices 1-5: Fiscal Measures Appendix 6: On-going works under the Regional Disaster Vulnerability Reduction Project (RDVRP) Appendix 7: Fiscal Responsibility Framework i EXECUTIVE SUMMARY Budget 2020 represents an ambitious attempt to accelerate the economic transformation of Saint Vincent and the Grenadines. At $1.2 billion, it is the largest budget ever tabled in Parliament. Building on the foundations of the Governments’ work over the past two decades, Budget 2020 hastens the transition from colonial-era economic underpinnings towards a modern, competitive, post-colonial economy. Significant investments in ICT, tourism, infrastructure, renewable energy and entrepreneurship further this objective. Nowhere is the process of transformation more apparent than in agriculture. Long removed from the late-1990s dominance of banana exports, the Vincentian agricultural sector is now increasingly diversified around banana and plantain production. Root crops, fruit and vegetables, livestock, poultry, cocoa and coffee are now all major employers and economic contributors. The medicinal cannabis industry, legally-established in 2019, signals greater diversification in the sector. Additionally, the policy of engaging the private sector to expand fisheries production has hooked major investors, including a new exporter that will begin operations in 2020. The Government is investing heavily in tourism, with capital expenditure on new hotels, tourism facilities and capital improvements. Many private sector entities are also investing in the hospitality sector. Given the rapid growth in arrivals by cruise ships, Budget 2020 offers special incentives to investors interested in purchasing tour boats and buses. Budget 2020 continues to emphasise climate change adaptation, disaster preparedness and sound environmental practice. In addition to the continued capitalisation of the Contingencies Fund – now in excess of $31 million – a full 34% of capital expenditure is connected to climate change, renewable energy or disaster response. In its focussed efforts to stimulate job creation and decent work, Budget 2020 creates new public service posts and spends directly on a series of major capital projects. Budget 2020 anticipates employment growth in the construction, hospitality, manufacturing, agriculture and fisheries sectors. Budget 2020 makes provision for a 2% salary enhancement for, public servants, bringing to 4.5% the total increases since 2018. A 25% wage hike for certain low-paid part time workers will also improve workers’ overall compensation. The 25% wage increase for low-paid workers is part of a multifaceted plan in furtherance of the Government’s continued efforts to reduce poverty, vulnerability and inequality. Budget 2020 strengthens the social safety net while investing in geriatric care, reduced undernourishment, and the protection of citizens from weather events and climate change. The government’s signature focus on education is continued in 2020, with a special emphasis on school reconstruction and the provision of improved opportunities to access technical and ii vocational training. More students than ever before are accessing tertiary education and internships through state supported loans, scholarships and stipends. The $311 million capital budget is the largest such estimate tabled at the start of any year in Saint Vincent and the Grenadines. In addition to hotel construction, the capital budget is driven by school repair and construction, the modern cargo port, the Regional Disaster Vulnerability Reduction Project, investments in geothermal energy, road repair and the rollout of the Pedestrian Access for Village Enhancement (PAVE) programme. Investments in sporting facilities, including a new athletic track and football field, also add to the capital budget. The Government plans to meet the ambitious implementation targets of Budget 2020 through critical human resource enhancements, modified financing arrangements, and having an early start on the 2020 capital programme. The Government expects significant improvements on 2019’s record capital expenditures. A number of legislative and policy initiatives help to enhance fiscal prudence, good governance and climate resilience. These measures include a Fiscal Responsibility Framework, laws related to tax administration, regulations governing the work of state-owned enterprises, supervision of the Contingencies Fund, and new planning procedures. Amid a period of global economic uncertainty, the International Monetary Fund and the United Nations Economic Commission for Latin America and the Caribbean predict that Saint Vincent and the Grenadines’ economic growth will be around 2.3 – 2.4% Given the massive private investments scheduled to take commence in 2020, as well as the Government’s own ambitious programs, there are considerable possibilities for additional growth. However, exogenous circumstances – from the ever-present threat of natural disaster to the global uncertainties in advanced economies – could negatively affect growth prospects. Budget 2020 is ambitious, but attainable. It places its confidence in the people of Saint Vincent and the Grenadines, and sets forth a developmental vision that is sustainable, progressive, and people- centred. Saint Vincent and the Grenadines is well-positioned to accelerate its economic transformation. iii I. INTRODUCTION: 2020 VISION, 2030 FORESIGHT The first Budget Speech of a fresh decade is always a special and significant milestone in the developmental journey of Saint Vincent and the Grenadines. Since reclaiming our independence in 1979, each finance minister of this country has had the opportunity to deliver one – and only one – such address: The Right Honourable Milton Cato to usher in the 1980s, The Right Honourable Sir James Mitchell at the beginning of the 1990s, the Honourable Arnhim Eustace in 2000, and Dr. the Honourable Ralph Gonsalves in 2010. Today, it is a profound honour and privilege to address the Parliament and people of Saint Vincent and the Grenadines at the dawn of the 2020s. Turning the calendar page to welcome 2020 is an invitation to assess both the progress of the previous decades and to define a developmental vision for the coming ten years. While annual budgets, by definition, focus on the 12 months immediately ahead of us, they present an opportunity to elaborate how the next 12 months connect to the 12 that preceded it, and how those 12 months ahead of us will be built upon in subsequent years to achieve a cohesive vision for 2030. Looking back, we can state with confidence that the progress made in Saint Vincent and the Grenadines
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