One of the biggest problems in the Caribbean is the cost of governments.
Notionless prime ministers who want to play with the big boys on level playing fields. Want the same salaries and the same perks as large countries while only administering countries the size of small towns or large villages in real countries.
They cost so much to employ that small country incomes cannot support their cost and expenditure. It’s well-known that many countries are robbed blind also with money skimmed, paybacks, and kickbacks from such things as awarded contracts. Many try and hoist a family dynasty on the poor people via the route of nepotism.
These small island states are also very likely more open to election fraud and bribery. Some of the very same politicians should not even be in the position they are in. Having come to power via election fraud and vote rigging, they want to stay along with their families in power for generations and will do what they can to attain that. They pervert the police and criminal justice system, even in some places, the civil law is under their corrupt control.
Prime ministers and leaders who want to be the big smart guy and put on a show to suit that pretence. Travelling week long and staying in expensive hotels. Using public funds to attend university talks and conferences and even speaking at the same, all of which benefits their countries in no way at all. Taking the wife and family along with them and calling them delegates and assistants. Millions down the drain every year. They are suing anyone who would dare question the nepotistic cost of the family and friends spending and travelling schemes.
Paying off ardent supporters who helped to get them elected and then helped keep them in power, also for helping their grown children to get started on the political stairway to heavenly politics. Usually, the reward for such help by such people is a Knighthood from Her Majesty the Queen; the Queen obviously unaware of the real reason for the grant. They are also given top jobs in government and installed on government-owned companies as directors, frequently on several boards and quangos’ at a time. The rewards are enormous and even spill over to members of their families, sons and daughters.
Knighthood is a rank and honour given to those who perform exemplary service to their countries and the realm. So, the misuse of the honour is little more than an act of theft, fraud, and deception by the prime minister recommending the person for a knighthood for his own personal and family reasons.
It’s rather common in the Caribbean as in some of the south, and Latin American countries for leaders to be Marxist-Leninists, brought to power with the assistance of Cuba. Cuba having trained some leaders as students and then sending them home to wait for the opportune time to grab power.
So, what do I suggest as a cure or procedure to stop or curtail such behaviour? Stopping altogether is impossible.
Firstly, all first world countries should stop giving funding or goods to Caribbean nations unless they have strict rules attached. Developing countries can never repay their loans. They should not be given debt relief unless they agree to the following because forgiving debt without terms does not help those countries very much.
Insist on tax cuts
Why? Some Caribbean tax rates are amongst the highest in the world. In St Vincent and the Grenadines personal tax is graduated from 10 percent to 55 percent, corporation tax 10 to 35 percent. Plus, to make things worse, there is a 15 percent VAT rate which gets added to just about everything you buy, even salt and sugar. Hotels have a 10 percent occupancy tax, which instead of stimulating tourism, stifles it. So, when you pay a hotel bill it is often plus service charge, plus 10 percent occupancy, plus 10 percent [hotel rate] VAT on the total. There are enormous import duties on many item totals [cost of the item, shipping cost, insurance cost] and VAT is then added to the total cost including the duty paid on the product, sometimes resulting in doubling the cost of a product.
High tax rates in the Caribbean make it impossible to build capital in the Caribbean countries; nothing gets built, not factories, not roads, not anything. Poor governments are forced to neglect roads, bridges and all infrastructure and their real-estate property pool. Poor Caribbean countries have the lowest paid workers in the Caribbean. Corporations cannot put a factory in such countries like St Vincent and the Grenadines because of the repressive tax rates. High tax rates kill any possibility of any development; kill any possibility in putting the workforce to work. Countries should be helping themselves, but at the moment they are completely at the mercy of charity and loans and prime ministers touring the scrounging circuit every week. It’s an evil circle; tin-pot [expletive] poor countries charge high rates of tax to be able to pay back the loans. However, taxes cannot raise any money if they eventually kill the economy. The money given and loaned to these countries has locked them into a terrible situation. So, unless these countries are forced to cut their tax rates, they will never grow their economies, they are doomed to the garbage can taking their workforce with them.
People are living lifetimes without employment; hospitals are neglected with shortages of drugs, dressings and equipment. Children and old people are going hungry while prime ministers of these countries massage the figures to prove otherwise. The charity of other countries will never be enough; prime ministers will never be able to scrounge enough to fulfil some of the silly projects that they pretend will help the situation; they never do. Commercial vehicles are taxed so much on importation that few are brave enough to risk their capital on the meagre returns such investment will generate.
One of the most detrimental things to happen to a poor country is to have a socialist government and administration. Venezuela and St Vincent and the Grenadines are evidence of that.
The four poorest Caribbean countries [US Dollars]
|Rank||Country||GDP per capita (PPP)|
|4||St Vincent and the Grenadines||$7,505|
Banks and money lenders in the islands are taking advantage of citizens and businesses. Why? Because they can! But besides that, because there is so little commercial movement in some of the Caribbean islands that banks struggle to stay in business, hence low borrowing interest and very high lending interest.
China and Russia are currently open to lending money to governments for capital schemes. Caribbean governments are such bad businessmen, except perhaps when it comes to scrounging. Inevitably just about every capital scheme goes wrong, and China and Russia end up taking over the projects and then owning a part of that nation from a position of command where they gradually drive countries into the ground and will end up taking over the Caribbean without lifting a weapon to do it. The traditional allies of the Caribbean countries will not lend money for such fancy capital schemes because they know they will never get repaid and they are not interested in owning these countries, which has taken years to divest themselves of.
Take for instance Sri Lanka wanted to build ports, roads and highways and build fancy high-rise buildings. So, they borrowed money from China, and China made everything that was required for the development; they also insisted on using Chinese workers. When the government was unable to repay the loans, the Chinese now own everything. China now owns land and docks, a base, near and within striking distance of their old adversary, India. You can currently see the same of the same happening in Venezuela where the Russians and Chinese all but own the oil, gold and uranium production. They are now pumping in military troops to defend their investment.
For the EU, British, Canadians and the US, it is better to give the Caribbean countries money and goods than lend them money. However, only on the insistence that they drop taxes to such a level that things start to work again that includes people. No one ever objects to paying a flat 10 percent rate; no one wants to cheat the system for the sake of 10 percent.
But perhaps better than all the preceding, creation of a country or island wide free port, sometimes called a free trade zone or special economic zone. Whereby taxes and tariffs do not apply, so you can import goods, store them and re-export them without bothering the tax collectors. Going further, allowing firms to import raw materials, make finished goods and then export them, with no border taxes or import and export taxes — just 10 percent on profits and 10 percent on wages. Work and wages for everyone.
Real top-notch capitalism will; bring with it real democracy.
The views expressed in this letter are the author’s own and do not necessarily reflect Caribbean News Now’s editorial position.