After 7 years in office the ULP regime has not produced a positive economic trajectory for the SVG economy. Stakeholders, such as the private sector, are at a loss as to where the SVG economy is going.

SVG Green party strongly believes that the SVG economy will experience a recession in 2008. What are the indicators?

1. A visibly widening trade deficit.
2. Very low consumer spending.
3. High VAT depleting households’ disposable income and choking the economy.
4. A spiralling high cost of living.
5. A substantial fall in exports pushing up unemployment.
6. Agricultural output is at its lowest since independence and getting worse.
7. Low private sector investment because of lack of confidence in the economy.

Recession is a very serious economic variable. The incompetent ULP regime has no mechanism in place to correct 1-7 above.

The outcome of recession is higher rates of unemployment, enormous crime, lack of confidence in the economy and social pressure on the poor. Businesses will see their sales plummet and be forced to cutback on staff. In a recession, the government has less money coming in but the recurrent expenditure, such as public servant salaries, remain the same and must be paid. Government is forced to borrow money to pay debt. In short, the ULP regime may dig a hole to fill the big hole they have already created. Dominica tried this strategy and failed. Thousands of jobs were lost and many businesses went bust.

The SVG Green party is calling on the ULP regime to drop its punishing economic stance and abolish VAT to stimulate the economy. VAT is a noose around the neck of Vincentians’ financial ability. VAT is pressurising poor people beyond their endurance. And in an economy not geared towards VAT, VAT will always have a negative impact on the economy and our people.

The ULP regime’s reliance on capital expenditure in the construction industry is not enough to avoid a recession in 2008. The continued high price for energy in SVG is as bad as VAT. There is nothing on the horizon to create sustainable jobs for young people, and in addition, there is nothing to create income for the families of the rural poor.

Getting into a recession is one thing, but climbing out of a recession will be very painful. The economy will be in a mess and when the IMF is called in to help correct the situation, they will dictate the economic strategy. This is usually to cutbacks on government jobs, less money to maintain schools and hospitals, less money to maintain roads and major increases in taxation.

SVG Green party recognises the serious implications of recession and is very concerned about the suffering the ULP regime’s short-sighted economic policies are causing Vincentians. If the incompetent ULP regime ignores the SVG Green party then SVG will go beyond recession where starvation becomes a reality for many people. There is a well known dictum which says ‘a hungry man is an angry man’.