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domelargeIllustration by:Jan Feindt

Editor’s note:This post was guest blogged by Dan Tanner of dan-ruth-tanner.com

The New York Times today had an article entitled “Trickledown Downsizing” talking about how, in the current recession, those who had hired domestic help were being forced to lay that help off. I noticed immediately that the first layoff mentioned involved a woman from Dominica.

I personally know of three Dominicans residing in the US who could face the same thing. One works as a nanny, the two others make their living in home renovations. The two in the renovation field don’t have regular long-term jobs with families as do domestics, but with incomes down, job insecurity up, and credit tight, their prospects for renovation contracts are severely dimmed.

Worse, all three of these hard workers are not legally entitled to live or work in the US. Thus, they’re worse off than even the legal working poor laid-off in the US, because they can’t claim unemployment insurance, food stamps, etc. without risking deportation. If things get worse for them in the US, although they had once not only supported themselves but also had rent money home to help their families, they may decide to return to Dominica and instead rely on their families for a place to live. At least you can’t easily starve in Dominica, and you certainly can’t freeze.

History repeats. My natural father arrived in the US from Hungary, a teenager with his family fleeing Nazi persecution, only to struggle with the Great Depression. My mother’s family came to America from Austria under the same circumstances, with my mother’s father previously having had to become an exile from Belarus, his birthplace because of tsarist anti-semitic pogroms. They did not have the option of return open to them. My adoptive father emigrated to the US from Switzerland to work on rich peoples’ estates as a landscaper and gardener, and the life savings he built up were lost in a depression-era bank failure. He could have returned to his homeland, but his first wife was too ill to make the trip. They stayed, she died, World War II intervened, he met my recently-divorced mother, they married, and so on.

I can’t say that everything happens for the best. We all are victims of circumstances, carried in the stream by forces larger than any of us — depressions, recessions, wars, life-and-death, chance meetings. We must simply all make do. I’m writing this two days before we move to Dominica to live in retirement. We were lucky to have sold our house in the US (although it would have fetched more a few years ago, and took longer to sell), and our invested savings, upon which we will depend on for old-age income, are worth perhaps 60% of what they were a year or two ago, at least we can make the move. In old age, recovery isn’t available.

At least the lessons my wife learned from her parents and which I also learned from mine and my adoptive father too set us up well enough to get by. They taught us to be thrifty; to know the difference between what we need and what we want, and between what we could afford and what we could not. They also taught us that education was a way out of poverty and upward through economic class; that is something that we could always use, which would become more valuable through experience and wisdom gained, and which we could pass to our children, share, sell, or give away yet leave us richer, not poorer.

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One of the most contentious issues in Dominica is whether Government is doing enough to develop an enabling environment for local and overseas private investment.

Many persons cite Government’s failure to put appropriate policies in place to facilitate private sector investment, as well as the existence of entrenched bureaucracies in public offices as major inhibitors to investment. They say this has caused local and foreign entrepreneurs to seek overseas options for investments originally planned for Dominica.

These critics acknowledge that Government has an overriding responsibility to protect Dominica from unscrupulous investors. They also accept that Government has every right to scrutinize the business bonafides of would-be investors and also to insist that they set up business in compliance with established laws and business practices.

But they contend that Government has been slow to attract and assist new investments in Dominica and this impedes the growth of the private sector. They also say the list of significant new investments created or supported by Government in the last five years is much too short to generate the type of economic upturn the island needs.

It seems fair to note that some of the investments under the auspices of Government did not unfold in a way that fully satisfied the public in terms of time-frame, magnitude or local involvement. A recent example is the ongoing public outcry about a geothermal project granted to a foreign company while a local one was seemingly sidelined.

It certainly looks as though Government has a lukewarm outlook on private investment. For example, Government’s proposed broadcast legislation contains severe restrictions on overseas investors’ participation in Dominica’s broadcast media. It also lists draconian criteria for the entry of local entrepreneurs to the broadcast media.

Potential investors often complain about crippling bureaucracies in the licensing and registration processes. Hiccups are to be expected in any business environment and no system is perfect, but if Dominica hopes to create a truly business-friendly environment, the problems caused by unnecessary ‘red tape’ must be fixed quickly and permanently.

Businesses cannot rely on Government or its agencies to make them viable, but if Dominica seeks to promote private investment to create national wealth, Government should help them as much as possible. If acquiring necessary licenses and permits is too slow or difficult, then Government should move decisively to streamline the processes.

Global economic forces have pushed Dominica into an era of free trade and open markets. This is the basis on which the island receives much of its foreign aid from the Western developed world. This is also the basis for creating an enabling environment for private investment.

Attracting and maximising investment in Dominica requires much more than a spoken commitment. Among other measures, there must be clear and precise moves by Government to give investors attractive concessions and to refine legal and licensing systems to support business, trade and investment.

It is not Government’s ‘lip service’ but the way investors are treated in ‘real terms’ that determines the business climate here. Protection of the nation and the people comes first when dealing with investors, but Government should fine-tune the process of wooing and retaining investors to turn the private sector into the engine of economic growth.

This Article was published in the Editorial section of the Chronicle Newspaper – September 19, 2008

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Commencing January 2008, Dominicans should have some more money in their pockets. The Dominica house of Assembly unanimously passed the Income Tax (Amendment) Act 2007. The Income Tax Amendment Act makes changes to the current tax system, increasing the personal allowance from EC$15,000 to $18,000.

Beginning 1st January 2008, government’s intends to increase the tax free allowance threshold to $20,000 big ones, reduce the rate of the first $20,000 to taxable income to 15%, reduce the rate on the first $30,000 of taxable income to 25% and reduce the rate on taxable income above $30,000 to 35%.

Source – Chronicle Newspaper

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