Services Policy For St. Lucia

TAC meeting in progress.
TAC meeting in progress.

THE formulation of a National Services Policy, Strategy and Action Plan is perhaps the single most significant undertaking for the services sector in St. Lucia to date. It will have far-reaching implications for the viability, growth and development of service industries on the island. It could also serve as a catalyst for a more robust and export-oriented services sector, and better position Saint Lucia to take advantage of opportunities for trade in services within the OECS, CARICOM and the EU, under the EPA. The project is being funded by the Caribbean Development Bank.

Services employ 3.3 billion people around the world and contribute 70 percent of total gross domestic product (GDP). According to the International Trade Centre, the commercial services exports of Least Developed Countries more than doubled to US $22 billion in the 6 years leading up to 2011, growing at an average annual rate of 15%, much faster than the world average of 9%.

In keeping with the global trends, services account for over 70 percent of business activity in Saint Lucia’s economy. With the decline of the banana industry, the services sector – led by tourism – has become the lead sector in the economy in terms of employment, revenue generation, foreign exchange earnings, and contribution to GDP. However, there is need to diversify the economy and broaden the range of services that are exported since there is currently too much dependence on the tourism sector. It is against this background that the process of developing a gender responsive and results-based Services Sector Policy, Strategy and Action Plan for St. Lucia is currently underway.

In terms of ‘best practice’ in developing services policy, Singapore is a good model. At the turn of the Century, Singapore developed a vision to become “Asia’s leading provider of world-class services.” A number of service clusters were identified and strategies developed to grow each one. Singapore realized that these strategies will only be as effective as how they are executed.

Singapore’s leading service industries include information and communications technology (ICT) trading and logistics, financial services, and tourism. Due to intense global competition and rapidly changing industry trends, Singapore recognized the need to differentiate itself, create more value, and find new growth niches to stay ahead.

That’s where policy comes in. A strong services policy can help enhance the business and operating environment for trade in services. Singapore recognized that just as its transformation into a manufacturing powerhouse did not happen by chance, a vibrant and robust services sector will not, and cannot develop on its own. The policymakers recognized the need to actively create the conditions that will allow Singapore’s service industries to thrive and flourish, by removing impediments to their growth and leveraging enablers that can catalyse their expansion.

Singapore adopted a four-pronged strategy for growing its service sectors which focuses on growing demand, removing regulatory impediments, nurturing enterprise and developing human resources. To drive growth in services and realize its vision of becoming “Asia’s leading provider of world-class services” and for effective implementation, sector champions were identified to work closely with the industry, to implement strategies and realize the vision. Singapore also saw the need to realign agency mandates and improve its existing services promotion framework. Coordination among government agencies was tightened, and incentive programmes streamlined.

In St. Lucia, the government agency responsible for services is the Ministry of Commerce, Business Development, Investment and Consumer Affairs, ably assisted by the Saint Lucia Coalition of Service Industries (SLCSI), the umbrella body for services on the island. Ever since its launch in 2009, the SLCSI has focused on lobbying for policies which will create the enabling environment for the growth and development of the services sector and has worked very closely with the Ministry of Commerce in achieving this objective. The Consultancy to develop a Services Policy, Strategy and Action Plan for St. Lucia is a major achievement for the SLCSI as the main sector champion on the island.

The focus of the project is on the following sectors: information and communication technology (ICT); health and wellness/spa services; professional services; tertiary education; and creative industries. The consultants have held preliminary discusions with a wide range of stakeholders from the different sectors and with various ministries and agencies that regulate service industries. A Technical Advisory Committee (TAC) comprising senior public officers from various Government Ministries has been formed, to build consensus on a framework for the execution, as well as increase stakeholders ownership of and commitment to implement the Services Policy, Strategy and Action Plan. The Technical Advisory Committee also serves as an information resource to the consultants, and will assist the Ministry of Commerce with the review and provision of feedback on the consultants’ outputs.

The TAC is expected to create greater networking and synergies between the various ministries, while ensuring that their focus on services is aligned with the overall Policy. This will ensure synchronized implementation of the Strategy and Action Plan. The Consultancy and the policy formulation process is also a good model of public private partnership for the benefit of all.

Facilitating the consultancy to develop a services policy, strategy and action plan for Saint Lucia, is a signal of government’s commitment to continue to take steps to create the enabling environment for the growth of the services sector, and by extension, trade in services. The Ministry of Commerce has a key leadership role in the policy formulation process, as the lead ministry with oversight of SLCSI, as well as the TAC.

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