But Zika Fears Linger.
DESPITE two major general elections looming on the horizon, Chief Executive Officer of Invest St. Lucia (ISL), McHale Andrew, believes prospects for Saint Lucia’s economic growth seem encouraging.
Americans are due to elect a new president this November and with unemployment figures there down to 4.9% month, Andrew believes that Saint Lucia’s largest market segment will be more prone to adding more leisure and travel time to their itinerary.
Saint Lucians, too, are scheduled to go to the polls later this year (or possibly within the first quarter of next year). With the global economy projected to grow by 3.4% this year, Andrew believes that a number of crucial factors can work in Saint Lucia’s interest and are, therefore, encouraging.
“That encouragement stems from a world economy that is generally on the up and up and lower commodity and oil prices,” Andrew said. “So the deleterious effects of inflation and growth, to a certain extent, have been removed. But you also have a situation where investor confidence in the Caribbean, particularly in Saint Lucia, has returned.”
Andrew made the comments at First Citizens Investment Services’ Caribbean Market Outlook seminar held at Bay Gardens Hotel last Tuesday where he outlined several private sector projects either under construction or earmarked to be undertaken in the construction sector.
The ISL’s vision statement projects that by the year 2020, that organization would have enabled US$ 1.5 billion in direct investment, resulting in the creation of 8,000 new jobs with significant linkages and substantial investment in health and education. The Citizenship by Investment Programme (CIP) that came on-stream earlier this year is expected to be a key player in that target mark.
According to Andrew, Saint Lucia attracted US$181.776 million in total direct investment last year, falling just over US$18 million of its projected US$200 million target. Of that amount, US$137.728 million was from foreign direct investment (FDI), while US$44 million was through direct investment.
While many of the projects cited by Andrew were tourism-related, the economist, a former Permanent Secretary in the Ministry of Tourism, said opportunities abound in Saint Lucia, with many sectors offering up linkages that are yet to be tapped. In Andrew’s view, “we are not connecting the dots” by providing saleable goods and services that can create jobs.
“There’s no way, shape or form that the government can legislate linkages,” Andrew asserted. “Linkages happen naturally in countries that have developed sectors.”
Andrew said Saint Lucia’s agricultural sector is not a fully-developed one, characterized by 60-plus years of selling outputs at steadily declining prices and importing food items at increasing prices. He said that while the sector has been focused on production, factors such as proper distribution, packaging, processing, after-sales service and transportation have lagged behind.
“(These things) are what are required to make (agriculture) a business and a sector,” Andrew said. “So that’s a very lucrative investment opportunity because there is a demand. If you looked at our food import bill, you will see there is a demand.”
Recent figures from the Statistics Department made public this week suggest that unemployment fell to 20% in the last quarter, down from 25%. The drop, a press release from the Office of the Prime Minister said, was due to 5,000 people gaining employment during the period under review.
With global oil prices averaging around US$30 yesterday, Lucians continue to capitalize on decreased costs for fuel at the pumps and LUCELEC’s recent announcement of a reduction in its electricity tariffs to a seven-year low.
However, Andrew said much of the projected growth depends on how well-prepared the island is in preventing the Zika virus from making landfall here. Currently, Zika has made its way to 22 regional territories and local hoteliers have already reported cancellations despite a single case yet to be reported in Saint Lucia.
“We are cautious because there are a number of down-side scenarios, with Zika being number one,” Andrew said. “The fact that we’re tourism-oriented, if Zika becomes an issue, then the perception – not the reality – that there is increased rick of visitors visiting our destination can have a dampening effect on visitor arrivals. That, in itself, can affect the forecast – both for investment as well as for growth.”