Attracting local and Foreign Investments
We have emphasized that improving the quality of life of our people and our posterity will be the central pursuit of the Dominica Freedom Party (DFP). That ought to be so for all political parties and all national entities! The difference with the DFP, when it comes to unravelling what is required in terms of the policies and strategies to be pursued in the economic, social and environmental dimensions of sustainable development, is that we have, an excellent track record; the capability to craft and implementing effective actions; and the integrity that is required to ensure that the interest of the nation is pursued rather than self-interest. That latter point, along with a double dose of arrogance, is a huge reason why the Dominica Labour Party (DLP) under Prime Minister Roosevelt Skerrit has been has performed so badly.
But arguably, nothing is as important towards building a prosperous future than investments. So, in the next few articles under this column, we are going to focus much attention on what the DFP would do to attract investments.
Let us set the foundation in this article by looking at the importance of investments. If an individual consumes all he or she currently earns, then in the future, he or she would not be much better off than at the current time.
When an individual invests, he or she expects to get a return. A loss can also be made if the investment choice is bad. When you invest, you should study the matter carefully and generally expect to make a return although you should be aware that there is a chance that you can lose if the business doesn't quite work as you thought it would. When you gamble, you generally expect to lose, but there is a slim chance you can win based on luck. So do invest but don't gamble.
The return (profit) on your investment is what will allow you to be able to have a better life in the future. So really, investment is a sacrifice of current consumption, but for a good reason – having more in the future! To invest, one needs to save, borrow, or otherwise use someone else's savings.
An individual, for example, can invest in a piece of land and equipment for the purpose of agriculture or to set up an auto repair garage. He must also set aside some cash to pay workers or pay bills in the first few months – often referred to as working capital. All these are investments. But instead of investing, one can buy a fancy car, great looking clothes or too much beers among other consumption choices. But these choices will not yield a return. The right balance must be struck between enjoying our lives now and investing for the purpose of having a better future!
As a nation, the investments we make today should contribute to our ability to employ more of our people, have better pay and consequently result in increased government revenue. For instance, investment in an international airport should make it possible for more tourist to visit. While investment in physical infrastructure including feeder roads, are very important, a government must also invest in education and in other elements of the enabling environment necessary to make the nation more productive.
Investments by government including that in vocational training, often opens the door for the private sector to invest. In free market economies (those where there is unimpeded private sector activity), governments do not generally engage in investments that can otherwise be done by the private sector. Government investment in roads and an international airport for instance, will make it much more attractive for the private sector to invest in a significant resort hotel.
For developing countries like ours, where incomes are low and hence savings are limited, attracting foreign investment is an important avenue for spurring national development. In addition to local sources, government investments can be financed by borrowing from other governments, multilateral institutions such as the World Bank, or from private banks and individuals. This will increase the county's debt, but if the investments are wise choices, they will generally payoff in reasonable time. Grants from friendly countries and organizations are also important at this point in our country given the bad management of the DLP, but the Dominica Freedom Party is determined to set our country on a course to economic dignity.
It is also important to attract direct foreign investments into agri-business, fishing, manufacturing, tourism and utilities among other important areas. But investments from citizens are likewise very important. Importantly in that regard, a return on investment is generally a more efficacious way to have a better future quality of life than just relying strictly on wages and salaries.
Stay tuned for more in next week's article. Let us go places with Freedom!
Political Leader Dominica Freedom Party.