Private sector expansion is the path to sustainable, says Chief Minister Meade

LITTLE BAY – Chief Minister Reuben T. Meade on Thursday laid out the government’s plan to lead Montserrat into a sustainable future and said programmes that will significantly expand the private sector are essential and will also “generate increased levels of economic activity in the medium to long term.”

In his first budget speech since taking office last September, Chief Minister Meade presented the Appropriation Bill 2010 to the legislative council. It outlined the government’s fiscal plan for the 2010/2011, which begins April 1.

The chief minister who also has responsibility for finance, described Montserrat’s economic performance over the past two years as mixed, which had a negative impact on local revenue collections. He reiterated that his government had no intention of imposing new taxes and developing private sector ventures was an absolute necessity.

Cleaning services with the exception of the hospital, security services, vehicle and tractor maintenance, plant propagation and grounds maintenance, maintenance of government buildings, and the provision of school lunches are expected to be outsourced to the private sector in the 2010 fiscal year, the official said.

The Montserrat Development Corporation (MDC) is expected to offer business development support to the companies, which are successful in winning the government contracts. Chief Minister Meade added that interested companies would need to show how the business intends to develop the private market, so that the government is not their only customer. The MDC will also be a key factor in attracting foreign direct investment, which is also another important thrust for the government in growing the private sector.

The total budget allocation for the fiscal year 2010 is $123, 436,900 Eastern Caribbean Dollars, a decrease of 16 million from 2009. Estimated revenue from local sources is EC $45,095,100 and grant subsidy of EC $52,920,000. The chief minister pointed out that the figures were pegged at the exchange rate of EC $4.2 to the pound sterling and any downward shift in the exchange rate would mean that the government has less to spend.

Approximately EC $2,520,000 of the budget will subsidise transportation to and from the island, including the salaries of the access coordinator.

The development expenditure for 2010/2011 is EC $25,421,734, which is EC $17.4 million less than the previous year. This figure does not include projects already awaiting final approval from the DFID. Chief Minister Meade said the lack of funding for capital programmes, which is already very limited, will become more acute if the recurrent budget of EC $98,015,100 continues to consume a greater share of the overall allocations.

The United Kingdom through DFID has already stated that the Government of Montserrat must take steps to reduce its reliance on budgetary support. Chief Minister Meade stated that they will be using the next two to three years to find “alternate sources of funding or reduce expenditure to sustainable levels.”

The budget presentation was guided by the OECS/ECCU eight-point stabilization growth plan, the GOM Sustainable Development Plan, the departmental business plans, and the Road Map.
ENDS

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