The source of the financial crunch the government finds itself in today is the result of a government that continued to grow while the private sector remained stagnant, economist Richard Moore told the League of Women Voters on Saturday.
Moore was tapped by the League to address his participation on the Governor’s Economic Recovery Task Force, which is expected to submit its first draft to the governor by the end of this month.
"The objective of this task force is not only to come up with a plan to improve government efficiency but to bring about an improved standard of living," Moore told the league during a joint presentation with Frandelle Gerard who is also a member of the task force formed in August of last year.
Gerard is the director of the Industrial Development Commission. The task force is chaired by John deJongh Jr. of Lockhart Caribbean Corp. and president of the St. Thomas-St. John Chamber of Commerce. Moore and Gerard will author the portion of the plan that addresses the development of the private and public sectors.
Moore, who headed the division of economic research in the Tourism Department under the past two administrations, said what we see today "is the direct result of a crisis in the private sector. There would have been no government crisis had the economy continued to grow like it did in the 1980s."
Moore estimated that during that period the economy grew by 5 percent to 6 percent per year with tourist arrivals increasing and more money being pumped into the territory.
"The crisis is due in part to the private sector not growing in 10 years," he said. "We’re in an economy today like we were in 10 years ago, a decade ago. That’s a long time."
He predicted that the challenge will continue as long as the private sector remains dormant and the government delays its downsizing.
"Because we have had no sustainable growth since Hurricane Hugo and because the public sector continued to operate as if growth would occur, we have the financial crisis we are now experiencing," Moore told League members.
In addressing the portion of the plan he and Gerard will develop, Moore said, "Our chapter is to craft language which can be implemented to help our private sector grow with as little interference as possible."
During her remarks, Gerard spoke of a plan to market the Virgin Islands as a place to do business through incentives offered by the Industrial Development Commission. She reiterated Moore’s comments that the implementation of the five-year recovery plan will be key to the territory's financial turnaround.
"If it's not what the community wants, the plan, like others drafted in years past, will sit on the shelf and collect dust," Gerard said.
She also warned that if an economic development unit such as the proposed authority is not put in place, there will be scattered attempts at fiscal development in the government.
"If we fail to implement this plan, there will be a number of agencies that because of structure cannot work together and lack leadership," Gerard said.
Gov. Charles Turnbull has proposed an economic authority that would consolidate the Small Business Development Agency, Government Development Bank and the Bureau of Economic Research. Those three entities now operate independently.
