The territory's financial crisis today is the direct result of continued government growth over a decade while the private sector remained stagnant, economist Richard Moore and Industrial Development Commission director Frandelle Gerard told members of the League of Women Voters Saturday.
Moore and Gerard were asked by the League to speak about their participation on the Governor’s Economic Recovery Task Force, which is expected to submit its first draft report to the administration by the end of this month.
"The objective of this task force is not only to come up with a plan to improve government efficiency," Moore said, but also "to bring about an improved standard of living."
The task force, formed last August, is chaired by John de Jongh Jr. of Lockhart Caribbean Corp., who is also president of the St. Thomas-St. John Chamber of Commerce.
Moore and Gerard will write the portion of the plan that addresses the development of the private and public sectors. Moore, who headed the Bureau of Economic Research in the Department of initially Economic Development and Agriculture and then Tourism in the last two administrations, said the current situation "is the direct result of a crisis in the private sector. There would have been no government crisis had the economy continued to grow like it did in the 1980s."
He estimated that in the '80s the economy grew by 5 to 6 percent per year, with tourist arrivals increasing and more money being pumped into the territory.
"The crisis is due in part to the private sector not growing in ten years." he said. "We’re in an economy today like we were in 10 years ago — a decade ago, that’s a long time." he said.
He said the problem will persist as long as the private sector remains dormant and the government delays in its downsizing.
"Because we have had no sustainable growth since Hurricane Hugo, and because the public sector continued to operate as if growth would occur, we have the financial crisis we are now experiencing," Moore told league members.
In addressing the portion of the plan he and Gerard will develop, Moore said, "Our chapter is to craft language which can be implemented to help our private sector grow with as little interference as possible."
Gerard spoke of a plan to market the Virgin Islands as a place to do business through incentives offered by the IDC. She reiterated Moore’s view that the implementation of the five-year recovery plan will be key to the territory's financial turn-around.
"If it's not what the community wants, the plan — like others drafted in years past — will sit on the shelf and collect dust," she said.
Gerard, a longtime member of the St. Croix business community, also warned that if an economic development unit such as the proposed authority is not put in place, "there will be a number of agencies that because of structure cannot work together and lack leadership," she said.
Gov. Charles Turnbull has proposed an economic authority which would consolidate the Small Business Development Agency, Government Development Bank and the Bureau of Economic Research. At present, the three operate independently within Tourism Department.


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