All Hope Is Not Lost

Investopedia defines the Gross Domestic Product (GDP) of a country as "the monetary value of all the finished goods and services produced within a country's borders in a specific time period", usually in a year. The site goes on to say that:

"GDP is commonly used as an indicator of the economic health of a country, as well as to gauge a country's standard of living. Critics of using GDP as an economic measure say the statistic does not take into account the underground economy - transactions that, for whatever reason, are not reported to the government. Others say that GDP is not intended to gauge material well-being, but serves as a measure of a nation's productivity, which is unrelated." [emphasis mine]

Read that last part carefully. Material well-being is NOT the same as productivity. In other words, a nation with state-of-the-art infrastructures but overwhelming poverty is still not a healthy nation! And if that doesn't describe the investment trend employed over here in the Nature Isle, I don't know what will. But let's delve into the specifics of our GDP first.

The GDP equation is as follows:

GDP = Consumer spending + Government spending + Business investment + (Exports – Imports)

Now, honestly try to recall: how have we in Dominica divided our GDP? Have we been spending exorbitantly as consumers? I would argue not, since upwards of 25% of us live in poverty and the outrageous 15% VAT has made it extremely difficult to purchase anything outside of basic needs. Has our government spending been outrageous? Compared to Nigeria's senate salaries, no (1 Nigerian Naira = half a cent in USD). But it's not beyond reproach. How about our business investments? Well, two years ago, small business owners at a National Development Foundation of Dominica (NDFD) Small Business Consultation complained of the unreasonable requirements and stipulations surrounding small business loans, and it was the local financial institutions that responded by reducing requirements and lowering interest rates. Surely our exports compensate for all this? Nope, exports of banana and other goods have all been declining for decades, what with few concessions for farmers and heavy competition from the global market. Okay last shot: is our import bill too high? I'd argue that it isn't, but it is troubling to see the nature of things that we import - they're almost always goods that we can, should, and often DO produce for ourselves: bottled water, fruit drinks, paper, and so on.

So, to where is all that money disappearing? Of course, of course there are other, more complex factors contributing to the quality of life in a given country...but if our administration is doing all the right things, why are most of us struggling just to get by? Why are we even on the IMF's reported list of worst economies in the world? The answer is simple: INFRASTRUCTURE.

The people up top have made one thing absolutely clear to us: the condition of our physical infrastructure is incontrovertible proof of our prosperity. We look around and see that neighboring countries have international airports, so we decide that we need one too. Never mind that our stay-over statistics paint a sorry story. We've been promised a new Princess Margaret Hospital and have rejoiced even before it has materialized. Never mind that health care costs are up to the ceiling and we still have very few specialized doctors to occupy the posts therein. We've got a brand new West Coast highway, but less than half of our working class population owns a vehicle. And, by the way, very little of the capital that funds these infrastructural feats comes from our own treasuries; these are mostly paid for by foreign investors or borrowed at the expense of taxpayers' money.

So I ask again: to where is all our money going? Maybe we will get our answer next Friday when the Prime Minister outlines the budget for the upcoming fiscal year. He has already made it clear that "if we want the country to get to a particular point in time, then we have to make a contribution to that endeavor" but stated that it is imperative "to invest both in the social infrastructure and also the physical infrastructure" of Dominica. (DNO) One cannot help but think (after his recent ultimatum of either continuing the Economic Citizenship Program (ECP) or increasing taxation) that by this he means higher taxes are almost certainly waiting in the wings, that the controversial "social programs" will continue, AND that more foreign investments will come pouring in to pretty up our physical infrastructure without actually benefiting the living standards of everyday citizens. Let's hope I'm wrong.

Already, economists McCathy Marie and Dr. Thomson Fontaine are painting bleak but non-parallel pictures of our financial situation, particularly in the wake of the IMF's report. Fontaine worries that we will be in dire straits if we run out of resources and default on our external debt, while Marie assures us this state of debt is old news and that most other Eastern Caribbean countries are on the verge of external debt crisis, just like us. Both agree, however, that any degeneration of the current situation would be disastrous. But Marie went so far as to say of the ECP that "...whether we think it is morally repugnant or not, we need it." Read more of their analyses here.

We have several industries here in Dominica in severe need of genuine attention and productive investment. The notion that the ECP is our only viable, profitable venture symbolizes to me 1) the stance of a governing body that has not even the decency to feign sincere efforts to revitalize our economy and 2) a people brainwashed into unquestioningly accepting helplessness and dependence on the "overt kindness" of those in authority in order to have civil needs met. If I am distorting the truth, comment by telling me how the new presidential state house has served the economy in Dominica in a way that personally affects the majority of our population. And, while you're at it, remind me who footed the bill.

I'll wait.