|The Courier N° 148 - Nov - Dec 1994 - Dossier: Education - Country Reports: Saint Lucia - St Vincent and The Grenadines (EC Courier, 1994, 104 p.)|
|Saint Lucia: Weathering the economic storm|
'We cannot take to the boats!'
John Compton, who was born in 1926, studied law and legal economics at the London School of Economics. Starting a legal career beck home in 1951, he went on to enter politics in 1954. A decade later, he was elected leader of the United Workers Party and was appointed Chief Minister (1964-67). As 'Premier' and Minister of Finance, Planning and Development (1967-791 he led his country to independence in 1979 as Prime Minister. A/though he lost power shortly afterwards, it was only for three years and, in 1982, his UWP regained its parliamentary majority. John Compton has held the political reins of St Lucia ever since with his party winning each subsequent election. In the last poll, held in April 1992, the UWP won 11 of the 17 parliamentary seats (a gain of one) with the opposition St Luda Labour Party taking the remaining six.
In power for virtually three decades, John Compton is one of a group of long-standing Caribbean leaders who have had a dominant role in shaping the region's development He is a keen advocate of regional cooperation and, at the level of the smaller islands, even favours closer political integration. He has also been a zealous defender of the vital banana industry. All too aware of the maelstrom whipped up by the falling away of old forms of protectionism and the need for greater competitiveness in the world's emerging market blocs, he seems more determined than ever to force St Lucia to face up to the new challenges. In the following Courier interview, Prime Minister Compton (who continues to hold the finance portfolio) sets out his vision for the future.
· Prime Minister, you have been in power in St Lucia for all but three of the last 30 years. Would you agree that considerable progress has been made, particularly in the field of in*astructure, and what do you think are the main achievements of St Lucia over the three decades?
- Speaking about infrastructure, the first thing we have tried to do is improve our communications, both internally and externally, by modernising our ports and airports. One of the features of St Lucia is our safe harbours and we thought we should capitalise on those by developing them, not just for local trade, but with a view to attracting regional trade as well. We have been reasonably successful in that. When we look at our other assets we end up inevitably at tourism, which also needs good communications. We have improved our seaports by building tourist facilities as well as developing our principal airports for jet traffic. Because of that we have been able to enter the tourist industry and we are now a major player in the game.
Before tourism, we were, and of course still are, an agricultural country. An important area in developing agriculture is road communications, to open up the land and the countryside. We have done that reasonably successfully. We used a fair amount of our EDF funds for that purpose during the 1970s and early 1980s. The effect of our field road development programme can be seen by the fact that in the space of just four or five years, our banana production increased from 40 000 tonnes to some 120 000 tonnes. That shows the importance of infrastructure development.
Having done that we then were able to increase our social services. We expanded the education system, for instance. In 1979, we had only two secondary schools with a total complement of less than a thousand pupils. Now we have nine secondary schools with almost 12 000 pupils. We have also entered into tertiary education, albeit to a limited extent. Then we started looking at improving the quality of life, particularly in the rural areas. We expanded our water supplies, for example. 50% of all homes are connected to the system and 85% of the population are now within reach of potable water from public sources. We have also extended our health facilities, ensuring that no major community is more than one mile away from a health centre.
Going back to the subject of agriculture, the banana industry is really the one that has brought us to where we are today. Previously, our main export product was sugar, but we were producing, I believe, less than 30 000 tonnes a year and that was uneconomic, so we moved into bananas. The basis for that was the protected market that we had in the UK. Another thing that the banana industry has given us is what amounts, virtually, to a social revolution. In the days of sugar, we had large estates and the population was segmented - either large farmers or labourers. There was no small farming in between, because you needed large estates to keep the factories supplied. Now, with the banana industry, there is no factory that needs to be kept fed and the farmers are working for themselves. Of course, the small farmers have had to absorb the technology of banana production but they can plan the business for themselves and have more control over decisions that affect their own lives.
· The basic economic issue involves bananas, does it not? They played a major role in the past development of St Lucia but there are a lot of doubts about the future. Can they continue to be the engine for future growth?
- They are just one of the engines here in St Lucia. Our economy has been fairly diversified and although bananas are important we are not totally dependent on them. They are particularly significant, though, because of the multiplying factor. There are so many people involved - small farmers, traders and so on. But we know we have to face the future and we know we have to compete. It is not a question of diversifying agriculture but of diversifying the sector around bananas. We still need them, not just because they give us a guaranteed regular income but because of the shipping aspect. Bananas are a weekly, non-seasonal crop and, if we are going to export anything else, then we need the regular shipping service that comes with the banana sector. Our other products, such as pineapples and oranges, are seasonal, and it is the banana industry that provides the foundation which will allow us to diversify. We do expect some people to stop growing bananas, however.
· Those that are less competitive and produce less?
- Yes. The less efficient ones will move into other forms of agricultural production.
· But problems in the banana sector have been looming for some time and yet isn't it the case that people did very little about it?
- They didn't believe it.
· Do you think they believe it now, after the events of October 1993? We are talking here about changing mentalities which can often be a slow process.
- It will be a slow process but, as I said, some people will leave the industry while the more efficient ones remain. The important thing for those who have to find something else is knowing that they can sell the crops they plan to grow, whether in the domestic market or overseas. The market organisation we have is now geared up to that.
· Is it true that the government subsidises banana growers?
- We have to sustain them yes, for the time being. In the longer term, we have to find ways of increasing the productivity of the land. Our big problem is that production per acre is too low. If we can just increase our productivity from seven tonnes to 10 tonnes per acre we would produce our quota of bananas on less land with fewer farmers. The people involved would then be able to make a decent income. But they have got to take it seriously. There are a lot of part-time farmers who just grow bananas because it is a crop they can sell. The people who are seriously in bananas should be assisted. The basic thing is to get a good contract for them. We have a market even if it is only until the year 2002.
· But that is only another eight years. Isn't that a source of worry?
- Of course we are under stress all the time but at least we have the market for the time being. We have to capitalise on that with a good contract to keep the more efficient farmers in the field and to ensure that the institutions - the banana association in particular - are in a healthy financial state and able to supply the inputs to allow them to face the future.
The government has a role to play here. The trouble we had in October was because the institutions were not properly nun, so when the stress came they just collapsed.
· I have heard it said that although the government has made a tremendous effort in putting the infrastructure in place, the private sector - which should be coming in - is not yet up to the task.
- I think that is probably right. The private sector is very conservative and slow to change. Now that we are moving away from protection in the banana industry, they are asking for protection in other fields. In fact, they want protection from the changes that are taking place in the outside world. The mentality is pretty well the same as it was in the 17th and 1 8th centuries. They haven't moved into other areas of production or even into the provision of services but the fact is that they have to play a bigger role. The government can only do so much. It has provided the infrastructure - the education and so on - but somebody has got to provide jobs. That is the task of the private sector.
I should stress that we have a very young population. About 135000 people, of whom some 40% are under 25. One of our big problems is the high population growth rate. We cannot afford it. It is putting too much strain on our social services .
· But has the private sector not been looking at what is happening in the outside world? Protectionism is no longer acceptable.
- You are right, but throughout the Caribbean we have always been used to protection. We used to sell sugar to Britain under the Commonwealth sugar agreement. Then we moved over to the Lomystem but the protection was maintained. Then we moved into bananas and we still had our guaranteed markets. There were even guaranteed prices for other products such as coconuts. But we have to recognise that all that is coming to an end. It's not just a question of changing the mentality of farmers, but of society as a whole. If we don't change fast enough we are going to be left behind.
· tourism has been growing quite fast over the last decade and indeed has overtaken bananas as the main foreign exchange earner. But there is a view that this has happened in a somewhat uncontrolled manner. For example, a lot of people are unhappy with the all-inclusive resort hotels which are now more numerous than the ordinary hotels. Some argue that local businesses - taxi firms, restaurants and so on - lose out as a result Where should tourism go from here?
- As far as we are concerned, the focus should be on expanding the number of hotel rooms and ensuring that the hotels are more integrated with the wider economy. That means we need to be offering the rights things in terms of service. When you speak about competing for the US dollar, it is not just locally, but also with Miami. K we don't produce the goods that the hotels demand, then we obviously lose the business. There is no point just complaining about it. We have to identify and supply the needs - go out there and fight for the business.
For instance, we don't produce enough flowers. Yet horticulture offers some good prospects and not just for export. A local industry geared to providing a fresh bouquet of flowers for every hotel room would be a big operation. There is a market for fruit and fruit juices. These are brought in from outside but we could produce them ourselves. We have a foreign market right here in St Lucia because the foreigners come here to buy these things.
· But I have heard it said that young entrepreneurs with innovative ideas have difficulty getting access to credit Apparently things are very slow and traditional, and lenders are averse to taking risks.
- There is some truth in that but there is also the problem that young entrepreneurs lack management skills. The enterprise culture is something that is new to the island. This takes us back to what I said before about being used to protection and now having to manage on our own. We are short of managers in all fields. A lot of people have good ideas but they have to be able to manage money as well. You will find that that is one of our major drawbacks, which applies both to government and to the private sector.
· And how do you produce managers?
- By accumulating experience. They can't just be produced out of thin air. In any community, you have three sorts of people: the masses, the middle managers and the top echelons. If you are wealthy enough, you can import the top people and buy their services, at least in the short term. But the middle managers, the people living in semi-detached houses, are not likely to uproot themselves to come and work in your country. These are the people that must be 'home-grown' but it takes time for this happen.
· From what you say, there seems to tee a need to translate ideas and decisions into concrete action. On a different subject - but one where a similar problem may exist - what are your views about regional cooperation in the Caribbean? Are you disappointed that in CARICOM decisions taken are not often acted upon? This appears to contrast with the situation in the OECS.
- I agree that there is a problem with CARICOM in translating political will into action. As you say, it is different with the OECS. This is an effective organisation because its secretariat has what are virtually executive powers. it can translate words into deeds. There is no equivalent set-up in CARICOM although I should say that some of our best people work there. The problem is that although they write papers and carry out useful research, once decisions based on their advice have been made, the secretariat is not strong enough to see to their implementation. The system is a cross between the bureau of the nonaligned movement and the set-up you have in the European Community - and it simply doesn't work. There is no Jacques Delors to exercise authority and take the decisions when they are needed.
· So people agree to a decision but end up going their own way. Take the example of the tax on cruise ships. Apparently, only St Lucia stuck to this agreement
- Yes, because there is no sanction. It is all voluntary.
· Of all the organisations that have been set up to bring the countries of the Caribbean closer together, which do you see as offering the most promising basis for integration?
- The OECS. We already have very narrow parameters for independent manuvre in the economic field, having set up a Central Bank and surrendered sovereignty in the key area of money. When we take a decision in the OECS, we have to stick by it.
· Do you believe political union can come about within the OECS or is that just a distant dream?
- I don't know. If you had asked me that question five years ago I would have said political union was possible. Today I would have to say perhaps.
I also think that there are too many organisations - too many balls in the air that have to be juggled with. We have the OECS, Caricom and now the ACS as well. We are members of the OAS and the United Nations. We are also in the Commonwealth and the ACP Group. As a small country, we cannot effectively service all of these organisations so we need to target. Are we going, for example, to concentrate on strengthening CARICOM or the OECS? I think we should be deepening our relationships first.
· You seem to be confronted with the same issue that Europe is facing - deepening versus broadening.
- Yes, but Europe has already deepened quite a lot. We have to do the same thing now to protect ourselves. How are we to face up to NAFTA, for instance? As little islands, would it not be better for us to strengthen CARICOM so as to have, if not a huge market, at least a larger one which might be able to exercise some influence. But at the moment, this market is fragmented and so long as each of us keeps doing his own thing, we will not get very far.
· Do you find it easier to make concrete agreements on specific issues among the smaller islands than in an arrangement that involves more and larger players?
- Yes. We can get things done among the smaller countries. You can get up in the morning, telephone your counterparts to say that there is a problem, say that you want something done, make an agreement immediately and act upon it. When you are dealing with the bigger countries, there are more formalities and things tend to get lost in the wash.
· Is LIAT one of those issues that got lost in the wash?
- You could say that LIAT got lost in the management wash. The problem of the airline was one of management, not political will. The decision to privatise it was a purely economic one. It could have been viable but the management was poor and we therefore decided to try and transfer it to the private sector. This generated a lot of emotion with people complaining about job losses and so on.
· But do you see the LIAT issue being resolved?
- I wish I could say I do, but I am afraid I do not. There are people who have ideas about trying to turn it around but I am not optimistic.
· To come back to tourism, how much further can this sector be developed? Is growth that involves local inputs - local people providing services and in management positions - still possible?
- You have to limit the physical growth. How many rooms can a small island support and still maintain itself without being overrun by tourists? As far as we are concerned there is a limit. We should reach 5000 rooms by the end of the century and, after that, we will try to see how we can maximise the benefits at this level. But the important thing in tourism is the marketing, not just in the sense of advertising externally, but also the internal organisation you need to meet the demands of a very sophisticated industry. The people who come on holiday expect certain things. You have to provide them with food of an appropriate quality. You have to package and market the product. We aren't there yet because we haven't been organising ourselves to meet the demands of the tourist industry.
· You agree then that, in addition to a lack of entrepreneurship, there is also a shortage of skills and of trained people? If you compare literacy levels, for example, with other islands, do you think that more efforts are needed in that area?
- We are already putting a lot of effort into this. We are expanding education. There is a school place for every child and a teacher to teach that child. We are also looking to reorganise the curriculum so as to train people for jobs when they leave school. We recognise that some of the education currently available will not be of much use in the future because it relates to jobs which will have become obsolete. So we have to look down the road and try to predict where the economy is going.
· Will the St Lucia economy be able to provide jobs for all those young people that are going to be coming on to the labour market?
- We can do it but we have to plan in advance. It is not so much a question of money but of managing the resources that you have. In other words, where do you put the money to achieve the best results? I think, for instance, that we should be looking at the new information technologies. We have to train our children to be computer literate. We have to ensure that they can cope with the type of world that they are going to be living in.
We are a very small community. We don't have a big population but we do have a lot of children - a lot of dependants who have to be supported by too small a workforce. Having said that, if the economy is properly organised, we should be able to cope with 3000 or so school leavers annually, whether in the service industries, tourism, agriculture or the public service. It is not too big a number but we have to start planning from the time that they enter school.
In this respect, we need to ask what the private sector is doing. Is it simply importing things to sell here rather than producing wealth? Can that be regarded as growth? I am afraid that this is where we face difficulties. At present, the private sector is not the engine of growth that one would expect.
· To conclude, would you accept the view that St Lucia is at a kind of crossroads - that with bananas no longer dominant in the economic equation, new strategic choices now have to be made?
- Yes. We will always have people in agriculture because we have the resources and the land is fertile. But there is a limit. That means we have to look towards tourism. But in doing that, let's not just build hotel rooms. It is really a question of servicing the industry and training our people - not only to make beds and lay tables but to manage all aspects of the industry. That means we need to be able to repair a refrigerator when it goes wrong and do all the other things that need to be done in a service industry. So we have to start educating our people for that.
And we have to look at meshing it all together. If you are a farmer, you should be asking what the hotels need. If bananas are out, what can they be replaced with? And you can't go back to the old slash and bum techniques either. We need to introduce appropriate technologies so that people can make a living on small areas of land. These are the kinds of challenges that we need to tackle.
· And are you optimistic that this will happen?
- It has to. We have no choice - we cannot take to the boats.
Interview by R.D.B.