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Wednesday, October 31, 2012


An economic crisis can change the face of things and in dramatic fashion, too. Undoubtedly, the SLP gov’t has a sublime mix of pro-poor social programmes (like STEP, NICE, SMILES etc); and yet, its economic and fiscal policies look distinctively “pro-republican”. This begs the question, “does St. Lucia have pro-democratic social policies and on top of them she has a pro-republican economic policy?

Impulsively, we may be tempted to rush to judgement and claim that the answer is a “resounding yes”, especially in the context of the mammoth VAT "cuts" and the proliferation of never-ending concessions granted to the hotel sector, with the bills being footed by the poor and working class of this country! 

But let’s be downright honest and agree that the answer is not as “linear” as we may think!

The hotel sector can turn the argument on its head and say “I offer hundreds of jobs – directly and indirectly - to the poor and I assist significantly in both the social and economic advancement of the country”. And this holds much water.

So how do we reconcile the contrasting but equally tenable positions? The answer lies in their conflation.

The fact is the two sectors are ostensibly mutually indispensable, with one sector being “more vulnerable” and the other being “more viable”. For a clearer perspective, let us summarise the arguments in the context of two hypothetical principles connecting “development” with “vulnerability” and try to rationalize the puzzle!

Principle 1: vulnerability varies inversely with development (VVID)
Principle 2: vulnerability varies directly with development (VVDD)

Principle 1 (VVID) suggests that vulnerability decreases as development increases. We generally tend to embrace the economic belief that development leads to growth - and that growth is potentially a general panacea for our economic and social problems including the reduction of vulnerability.  Indeed this “model” may work very well for the wealthy but it does not always work for the poor.

Principle 2 (VVDD) on the other hand implies that vulnerability increases with development. It is a principle embraced by institutions such as the World Bank (WB) the Caribbean Development Bank (CDB) and Canadian International Development Agency (CIDA).

Both principles and the models they support have merit. 

While development is indisputably essential and invariably leads to economic expansion, progress and transformation, it also creates vulnerabilities. Development will make a country wealthy (or wealthier) but it does always solve poverty; in fact, it is well documented that it can also result in more poverty and displacement. 


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