Published 8 October 2019
Buckie Got It, St. Kitts and Nevis News Source
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Feature Address for National Consultation on the Economy
By
Dr. the Hon. Timothy Harris
Prime Minister and Minister of Finance
8 October 2019
St. Kitts Marriott Resort
Salutations
On behalf of my Government, I extend a warm welcome to everyone to this year’s National Consultation on the Economy.
Working with you and our citizens and residents throughout the length and breadth of St. Kitts and Nevis, our Team Unity Government has spent the last four years rebuilding our economy.
The challenge we face today is how we keep our economy strong so it can continue to deliver a better future for all our citizens and residents.
Economic strength is not an end in itself. It is a means to sustain an excellent quality of life for our people.
It is the fundamental means by which we provide hope and build a stronger, better and safer future for all citizens and residents of St. Kitts Nevis.
A strong economy means we can create more jobs, especially for our young people. We note that the largest number of jobs created in our economy occurred under a Team Unity administration and for the period January to June 2019, 25,975 jobs were taken up by our citizens and residents.
A strong economy means we can invest in rebuilding our infrastructure, making our roads safer, better connecting the island and building more homes. The massive and comprehensive St. Kitts island-wide main road resurfacing programme, the first since the mid-90s; the construction of roads in our housing projects, and the construction of a new cruise pier are good examples of how our Team Unity administration has succeeded where others have failed.
A strong economy means we have the resources to improve our education and our health system. That is why for 2019 our Government has invested millions in tertiary education. At least 300 citizens are receiving support to pursue studies around the world – the largest number on record, and the Basseterre High School remains a priority for our Country. We will deliver on the National Health Insurance Coverage and we shall be the first Country in the OECS to provide health care to all and sundry, irrespective of their class, wealth or income. These are historic legacies which we must promote and defend. We must be careful never to reverse these gains. Never go backwards, but forward on to Progress and Prosperity. Forward on to the Future.
Working Together
No one – not government, not civil society, not industry nor business – can deliver a strong economy on their own.
We must continue to work together – Government, civil society, our diplomatic allies, our regional and international partners and advisors.
That is why we have continued our consultations with civil society since the Growth Forum series, which we inaugurated in partnership with the Chamber of Industry and Commerce.
Today, we meet ahead of our Budget Estimates Committee meetings, where we will deliberate on how to utilize the financial resources we have at our disposal for the upcoming fiscal year 2020 and over the medium term.
Your Team Unity administration remains focused on delivering a stronger, safer and better future for all people in St. Kitts Nevis.
Economic Performance
By working together over the last 4 years, we have built a strong economic foundation. The Financial Secretary has advised me that our economy is projected to record robust growth of 3.7 percent for 2019. For the 5th year in a row, our economy is growing. The economic growth in 2019 is expected to be driven by activities such as Construction Services, Distributive Trade, Tourism, Transportation and Communication, Financial Services and Government Services. The Transport, Storage and Communications Services Sector contributes about 14.8 percent to GDP and is estimated to grow by 5.3 percent in 2019.
With respect to the fiscal operations of our Government, preliminary data indicate that for the first eight (8) months of 2019, our government has achieved a Recurrent Account Surplus, an Overall Surplus and a Primary Surplus. These surpluses compare favourably to the corresponding period of 2018, as the Overall and Primary Balances are higher: 40.0 percent and 35.1 percent, respectively. Through continued prudent fiscal management, the outlook for the 2019 fiscal year suggests that my Government’s fiscal operations would continue to perform favourably, allowing us to reward public servants with a double salary for the 4th year in a row.
This fiscal prudence and progress are in stark contrast with just five years ago, when our nation was indebted to the International Monetary Fund. We promptly repaid the $117 million contracted by the former government. A strong economy and stable fiscal environment have been core tenets of this Government. For the period 2010 to 2014, the economic growth averaged just about 1 percent with negative growth of 3.8, 1.9 and 1.0 in 2010, 2011, and 2012, respectively. That past we must never go back to.
Economic Drivers
One of the key drivers of our economic growth is the increase in tourist arrivals.
For the year 2018, cruise passenger arrivals increased by 7.0 percent to 1,142,080 visitors, while visitor arrivals by air increased by 5.7 percent to 125,561. The Financial Services Sector, which contributes 11.8 percent to GDP, is estimated to grow by 2.7 percent in 2019. This growth rate is hinged on an increased demand for financial services by business enterprises and households. Construction activity continues to contribute significantly to the overall growth in the economy, contributing 17.8 percent to GDP. This Sector is anticipated to expand by 4.3 percent in 2019. This is not surprising with the surge in construction activity in both public and private sectors.
Economic Outcomes
Pursuing our Public Sector investments has contributed to sustained economic growth and development here in St. Kitts and Nevis. It has also delivered real jobs and opportunities, especially for our young people. Such investments include the Upgrade of the Island Main Road, the Rehabilitation of the Old Road Bay and the Construction of the Second Cruise Pier. These activities are also being complemented by Private Sector investments and the completion of ongoing work on major projects in the hotel industry. We have presided over the construction and completion of 4 hotels – Park Hyatt (120), KOI Resort (110), Kings Pavilion Hotel (18), T-Loft Wyndham Hotel and Residences (168) and Ramada Hotel Phase I, which will deliver nearly 700 hotel rooms during our tenure. Several other projects are on stream – Ramada Phase 2; Sea View Garden Hotel will deliver Phase I with 146 rooms, 13 commercial units; Hillsboro Suites is making steady progress and looks set to deliver 55 suites in Phase I; Era Development too is making steady progress, Royal St. Kitts Hotel and Casino is delivering on its Cove high-end residences, following the success of its commercial plaza, and St. Kitts Castle is preparing itself for Phase 2 after the successful launch of Phase I under the Team Unity Government. We look to the future with hope and faith. The performance of the economy can also be assessed by the number of new businesses that are operating in the Federation. I am pleased to indicate that for the period January to September 2019, 489 applications for new businesses were processed by the Ministry of Finance. This means even more jobs, and more opportunities are available to our citizens and residents.
The Digital Economy
We have made a strong start in rebuilding our economy and have a strong base to plan for the future.
Today is all about building that stronger, better and safer future.
That is why we have chosen today’s theme to be “The Digital Economy.” This is an emerging phenomenon that will have tremendous implications for our socio-economic development.
The Digital Economy is changing the way that business is conducted and will necessitate that we become more agile in revisiting our business models and processes in the Public and Private Sectors. Businesses that make use of digital technologies would have better opportunities to gain easier access to customers at home and in foreign markets across the globe, thus broadening their customer base. It is expected that those who embrace the new technologies would experience an improvement in productivity and competitiveness and ultimately wealth creation. Importantly, consumers would have access to a wider range of goods and services at competitive prices.
We have the expertise and experience of several entities to put forward the case for our seizing the opportunities for modernization, efficiency and effectiveness by embracing the digital economy. I welcome the illustrious panel comprising some of the most successful entities in the private sector, in addition to our ECCB.
FINTECH
Financial Technology or FinTech, as it is called, is an important part of the Digital Economy that has seen remarkable growth over the past few years.
I am happy that the Central Bank is well represented here today and would share with us some interesting information regarding an important project looking at the development of a digital Eastern Caribbean Dollar.
We know that the achievement of sustainable and inclusive economic growth requires the co-operation and expertise from across all areas of society to work in partnership with the People’s Government, and that is why we are all here today.
Future Opportunities
We do not pursue a digital economy and technological innovation because we are driven by a particular ideology or because we see it as the latest trend.
We do so because we see the real potential and job growth that can come from it, especially for our young people.
With new technology, we can play a leading role in the Caribbean and globally.
New employment opportunities will open up in commerce, real estate, banking and the financial sector, cyber security and merchandising. It would mean more people could work for international companies in New York, London or Hong Kong without having to leave our Federation. As we master the digital potential in all spheres of society, a new spirit of entrepreneurship would be unleashed in our Nation, where people could sell their services, their products and their produce to previously unattainable markets.
New jobs in the renewable sector will come online, providing more opportunities to help fight climate change.
The digital economy is how we prepare our people for the jobs of the future.
St. Kitts-Nevis will not be left behind when it comes to the digital economy. Not under the watch of Team Unity. Forward to the Future. The past is already gone. We are focused on delivering a better tomorrow for our people than their today.
All of us in the room have the duty to ensure we anticipate, plan and prepare ourselves to not only embrace this change, but to lead the way.
Making a Start
For our past, our Team Unity Government has been working over the last four years to create the enabling environment for developing such a digital economy. We have made good progress in upgrading IT infrastructure and other assets, and introduced new e-Government services across various institutions of Government, including the Ministry of Health; the Ministry of Justice, Legal Affairs and Communication; the Ministry of National Security; the Citizenship by Investment Unit; the Inland Revenue Department, and the Customs and Excise Department.
We have implemented a new Police Records Management Information System within the Royal St. Christopher and Nevis Police Force in September 2019. This system would allow for the sharing of information across the Police Force and other law enforcement agencies and minimize the use of paper records. It would also provide access to real-time crime data that would enhance intelligence gathering and assist in effective policing.
Similarly, the services at the Citizenship by Investment Unit have been enhanced with the upgrading of the Citizenship Application Management System, which has led to marked improvements in the efficiency of the process, confidentiality of client information, and the preservation of integrity in the process from application submission to archiving. Additionally, we have also developed a digitalized medical record storage system at the hospitals and health centres in both Nevis and St. Kitts.
Work is progressing steadily with respect to our digitalized land database, which would result in a fully computerized and more efficient Land Registry. There are other opportunities to advance ICTs by providing more Government services and information online. The Inland Revenue Department, for example, has already made some of its services accessible online. Some Government agencies, such as the Inland Revenue Department, Water Department and the JNF Hospital, accept credit card payments.
Last year, we took the bold move by becoming the first country in the Caribbean to have its own Autonomous System Number. This will facilitate our ongoing efforts to establish the Government Wide Area Network (GWAN). The team from our Ministry of Technology will speak to the relevance of this.
In 2016, the Federation was honoured for outstanding improvements in ICT development at the 14th World Telecommunication/ICT Indicators Symposium.
The outstanding performance of the Federation is also recorded in the most recent publication of the ICT Development Index compiled in 2017, which ranked St. Kitts and Nevis 37th among one hundred and seventy-six (176) countries, placing the Federation first in Organization of the Eastern Caribbean States and second in the Caribbean to Barbados which ranked 34th. The smallest democratic Country in the world, St. Kitts and Nevis outperformed some 139 countries in the world. Something good is happening in St. Kitts and Nevis. The best is yet to come.
Given our good foundation, it is clear that St. Kitts and Nevis has great potential to leap forward with the development of the digital economy.
We have made a start in preparing our economy for the future, but it is just that, a start.
There is more to be done to integrate digital technologies in other aspects of the Government, business and society as we strive to improve the delivery of our services to our people.
Your Team Unity Government, with its eyes on the safer, better and stronger future, has been focusing on developing strategies for the digital transformation of the various government operations and our society at large. I am proud to say that we are on the brink of completing one of the major strategies that would help to catapult our efforts in the Public Sector, to contribute more to the development of a strong digital economy. I speak of the Government of St. Kitts and Nevis’ Digital
Strategy and Roadmap, which you will hear more about later in today’s event.
Conclusion
In conclusion, I am sure you would agree that digital technologies have great potential for transforming people’s lives and creating more jobs and opportunities, especially for our young people.
Therefore, businesses and individuals must all be part of the process of designing a comprehensive approach to digital transformation across the Public and Private Sectors. As part of today’s consultations, we will provide an update on the implementation of the Government’s Digital Strategy.
We will also have a panel discussion, where I am sure you will hear about the Eastern Caribbean Central Bank’s initiative to develop a digital EC Dollar as well as The Cable’s strategy for the expansion of its fiber network and broadband Internet, amongst other developments that are contributing to our Federation’s transformation to a Digital Economy.
I invite you to give your full attention to these presentations and welcome your input on how we can successfully transform our economy digitally to create more job opportunities and deliver a stronger and safer future for all our people.
Forward on with our agenda of Progress and Prosperity. Forward on with our agenda of Good Governance. Forward onward to our great Future, for the best is yet to come.
God Bless the People of St. Kitts and Nevis.
I Thank You.
