Antigua and Barbuda - Domestic policy

One of the most significant economic changes which has taken place for public servants is an increase in minimum wage. The ALP increased the minimum wage to EC $1,000 per month on 1 August 1997. National savings also increased from EC $770.4 million in 1997 to EC $834.4 million in the first nine months of 1998. Bird attributed this increase to the fact that people now have greater disposable income; hence, they were able to save more. The tourism sector also saw a slight increase despite the damage done by the 1995 hurricanes. This increase has been seen mainly in cruise ship arrivals, which rose by 4.4% in the first nine months of 1998. The number of stopover visitors, however, declined by 7.8% during the same period due to hurricane damage to tourist facilities. The rate of inflation is one of the lowest in the region.

The ALP ensured efficient tax collection during its term in office. A Tax Compliance Unit was established with the objective of improving the tax collection systems of the Ministry of Finance. Central government revenue rose by 6.3% in the first half of 1996 when compared with the same period in 1995. Trade tax collections rose by 15.3%. In the tourism sector, collections from the cruise subsector rose by 13.3%. Overall, tax collections increased by 7.7% during the first six months of 1996.

The economy of Antigua and Barbuda continued to be one of the strongest in the region. Bird promised no new taxes during his second term in office. He strongly states that "our present tax base is sufficient to pay our way. Our goal is not to take money from the people's pockets, but to put more money in them." Although no new taxes will be introduced, Bird intends to make the tax system more efficient by providing an incentive scheme for tax and customs duty and by improving the tax administration and collection machinery. During his second term in office he planned to increase government revenue through economic expansion in tourism and the offshore financial sector. But while the prospect of growth in offshore banking was extremely positive, the international community—led by the United States and the United Kingdom—began to pressure all countries where these activities were fostered, citing their own tax losses as their reason. Lester Bird's government had no choice but to bend to international pressure; failure to do so would have led to serious sanctions, something the small nation could not afford to risk. New hotel construction in 1999 and a revamped telephone system completed in 2000 were two important contributors to economic development.

In November 2001, Bird announced a five-point plan aimed at helping the economy diminish the impact of global recession. The plan called for reducing interest rates to boost private investment, a freeze on wages for the subsequent two years, and price controls on a variety of consumer goods. It also included a bank-granted five-year extension of mortgage arrangements for homeowners and generous tax subsidies for hotels to help them offer competitive prices. In addition, the government has launched an aggressive marketing campaign in Europe geared to increase the number of visitors from those countries. However, forecasted economic growth is tied closely to income growth in the United States, which accounts for about one-third of tourist arrivals.

In addition, Bird announced a plan in early 2002 to improve the government's cash flow by targeting tax evaders. This replaced an earlier plan to keep employment levels steady by retrenching public workers. However, Bird's reversal of the retrenchment plan goes against International Monetary Fund (IMF) advice, which sees the measure as critical to shrinking Antigua's fiscal deficit. The Eastern Caribbean Bank, Antigua's central bank, also voiced concerns, urging Bird to reconsider the plan.

Accusations of corruption again plagued Bird's party. In August 2002 a Royal Commission of Inquiry recommended appointing a special prosecutor to look into charges that the government had not paid the contributions it had deducted from its own employees for medical benefits. The inquiry took place after a sixth of the population signed a petition calling for investigation. It was found that instead the money was diverted into the health ministry's budget, and to pay for a $37,000 children's party. Bird has resisted turning the medical benefits scheme into an autonomous agency, as the commission recommended. However, Bird himself was not criticized by the inquiry and the ministers involved in the affair are no longer active in Bird's government.

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