Wed | May 22, 2019

Orville Taylor | Conching the Budget

Published:Sunday | March 10, 2019 | 12:14 AM
Finance minister Dr Nigel Clarke opening the 2019/20 Budget Debate in the House of Representatives on Thursday.
Staff of the Fisheries Division sort through the 55,000 pounds of conch, crab, fish and lobster seized from poachers last week.
1
2

On a day when Dominican poachers were caught sucking conch from under our noses, our minister of finance, Dr Nigel Clarke, has delivered a Budget which is unusual and promising.

With an unprecedented loss of immediate revenue from April 1, 2019, this is no tomfoolery. It is a sort of entrepreneurial gamble.

General consumption tax (GCT) threshold up to $10 million, some $7 million up from the current $3 million. From GCT alone, the Government is likely to lose a minimum of $0.731 billion in revenue.

Massive tax relief due to reform of the stamp duty and estate tax will lead to a reduction in around $10 billion in Government income.

Finally, and to the glee of small business operators, there will be relief via the abolition of the minimum business and asset tax which non-financial institutions currently pay.

All in all, the Government will lose more than $14 billion in direct tax inflows based on the current system.

Clearly, there is a method to this ‘madness’ and it must seek to recoup this loss.

There is a clear logic. Globally the micro, small and medium enterprise (MSME) sector is the largest contributor to economic growth. For example, in the African nation Botswana, a country which I have never visited, MSMEs contributed some 40 per cent of gross domestic product (GDP) and were 90 per cent of all registered businesses in 2014.

On the other side, in Tunisia, some 44 per cent of the employed labour force was engaged in MSMEs. In a country with a wavering banking sector, it was not surprising that the engine of growth was seen by international policymakers as these smaller businesses.

ENVIRONMENT OF ENTREPRENEURSHIP

More than 90 per cent of companies and businesses worldwide are MSMEs, with Japan having the highest percentage in the developed world, with figures of 99 per cent. India has a rate of 80 per cent. Simply put, it makes a lot of sense and many more dollars to put money in the hands and facilitate an environment of entrepreneurship.

Interestingly, there are interesting parallels between what we heard from the minister and the shellfish find. Our authorities recognised that in our search for sustainable development, we had to take drastic and immediate measures to protect our marine food stock. Thus, as with the customary annual lobster ban from April fool’s day until June 30 annually, we have instituted a one-year lockdown on the big sea snail.

The fact is that if we are going to have real prosperity, there is going to have to be serious regulation and monitoring and protection of the vulnerable, because there will always be powerful minorities who are capable of subverting the process for their own selfish purposes. And to them it matters not what happens to the rest of the society. Small fishermen, who obey the rules or commit minor infractions to them, do not devastate our reefs like large predatory vessels.

We might not export the conch directly to Tunisia but the delicate mollusc with the soft pink interior shell is of a very succulent flavour and is nicely ensconced in a strategic location. Highly demanded by the French, who already have a cultural love of escargots and other bland snails, we have a niche.

Our warm water snail is precious, especially since the stocks in Florida have been depleted due to overfishing and poor environmental management. But the little conchs must be protected, like the small enterprises, and not be subject to the vagaries of unscrupulous elements.

On the whole, it takes three years for conchs to reach maturity after their parents do the nasty. Imagine, in one trip some 4,000 pounds being extracted.

Similarly, MSMEs do not become centres of profit making until around the same time as well. Nonetheless, we know that the threats to the little conch industry comprise poachers, who cross into our waters and illegally harvest our livestock, as well as poor management of the marine ecosystems.

With our paltry fines and short sentences, we have not come to recognise that poaching of conch, especially when there is a ban on their harvesting, constitutes illegal international animal trade, just like exotic fauna and body parts such as tiger bone and ivory. This criminal industry is worth US$19 billion per year. Only the trade in illegal drugs, counterfeiting and human trafficking rake in more filthy lucre. Even the illegal arms trade earns less to the criminals.

My point is, we need to see the severe criminality of the action for what it is and take drastic action.

Here, I would love to see enforcement of international treaties and border controls, where anyone who attempts to import conch and other rare seafood, such as lobsters, into countries such as France and the United States, must have the stamp of the custom agents of the countries of purported origins.

‘VALIDATE’ CONTRACT WORK

Finally, we go back to the MSMEs.

As we strive for increased labour productivity, which is what will make the MSMEs truly profitable, there is a quiet little storm brewing where the minister of labour is being tugged to ‘validate’ contract work.

Doubtless, Minister Shahine Robinson is right in that the International Labour Organisation (ILO) does recognise this type of work arrangement as an acceptable form. However, it has spent a lot of effort uncovering ‘disguised’ contracts, where bona fide workers are being exploited.

Well, here is the science and evidence. Workers who are engaged under valid contracts of employment, where they are treated humanely, even in micro enterprises, are more likely to go the extra mile to be productive. On the other hand, ‘indecent’ work fuels not only low productivity but also criminal activity, including local poaching.

Furthermore, if disposable income increases without a corresponding increase in productivity and GDP, we have more money chasing fewer local goods. This will lead to either inflation of the price of local commodities or an increase in imports.

Thus, my caution is, as we seek prosperity, let us protect the workers as we protect the conch.

- Dr Orville Taylor is head of the Department of Sociology at the UWI, a radio talk-show host, and author of ‘Broken Promises, Hearts and Pockets’. Email feedback to columns@gleanerjm.com and tayloronblackline@hotmail.com