By Caribbean News Global contributor
CASTRIES, St Lucia – A recent commentary by Denys Springer, titled, ‘Is St Lucia moving in the right direction?’ bring to bear the forte of the 2021/2022 budget adversely affected by COVID-19 pandemic, general elections and a government that has ‘fast-tracked projects and increased public sector expenditure to just over $200 million on pre-planned projects to stimulate the economy, that has fallen flat.
The 2021/2022 budget explains multiple misadventures of the Allen Chastanet government’s economic mismanagement, to which Springer acknowledged:
“Moving forward, without reservation, Philip J Pierre is a practical democrat politician with all the requisite abilities to drive Saint Lucia forward.
“Inclusive of this is his proficiency at crafting the issues, forming alliances with civil society and NGO’s; seizing the moment of action that is necessary for the development of the country, utilizing the resources of governance; presenting credible arguments and forging ahead albeit his detractors and a sea of contradictions.
“Saint Lucia needs Pierre’s leadership. At a time when we are witnessing a fearful nation, disillusioned and discouraged. Saint Lucians are becoming fearful and detach from politics and government – seen simply as a commercial transaction.
“Saint Lucia has reached boiling point awaiting general election; the country is skating on thin ice.”
As outlined by opposition leader Pierre: “We have to ask the question: Why did Saint Lucia borrow the most, but experienced the greatest contraction?”
Saint Lucia’s GDP contracted by 20.4 percent in 2020, after a further contraction of 0.1 percent in 2019. There is a current deficit of $232,491,500 and an overall financing gap and deficit of $383 million or an estimated 7.9 percent of GDP.
The official stock of public debt increased by 10.4 percent to $3.773 billion by the end of 2020. According to the multiple opportunities to rebased debt-to-GDP ratio, it is estimated at 86.5 percent at the end of 2020.
But according to prime minister Chastanet,“ours is a story of delivery,’ we have had a productive five years in office.”
- We reduced the VAT rate and we are going to continue to streamline and make taxation less burdensome in this country;
- The key sectors of our economy had to be modernised and rebuilt and we continue to walk along that path;
- In education, with improvement to the quality of the buildings, our investments in the teachers and modernizing our education system to digital education;
- The strengthening of health care, operationalizing OKEU, building a world-class facility in the south, our work on health insurance;
- With infrastructure, we have rehabilitated one-third of the road network in this country to new standards including drains and sidewalks;
- In Sports, we introduced the academy, upgraded sporting facilities and created five model facilities to be replicated through length and breadth of this country;
- In security, we have invested in technology, institutional building, training, our court systems and our social systems
- With the economy, we have created new business; opportunities, encouraged and nurtured small business with access to financing; we are finishing Ti Village in Gros Islet which will be replicated in other communities.
The prime minister further stated that “on every occasion that the UWP has been in power, it has taken this country forward.”
Financing the budget of $1.639 billion:
- Recurrent Revenue of $1.001 billion comprising: Tax Revenue of $909.02 million or 90.7 percent of total recurrent revenue. Non Tax Revenue of $92.69 million or 9.3 percent of total recurrent revenue;
- Grants amounting to $121.26 million from friendly governments and multilateral institutions was outlined in my address to this honourable House on March 16, 2021;
- Capital Revenue from the proceeds of the sale of assets amounting to $6.04 million;
- Government Instruments, including bonds and treasury bills of $240.86 million which represents a reduction of 9.8 percent or approximately $26.26 million compared to the approved estimates for 2020-21. Other Loans totaling $268.72 million from various regional and international financial institutions.
However, if the United Workers Party (UWP) vision remains focused on building a new Saint Lucia, let’s take a look at the current fiscal landscape characterized by:
- Real GDP levels that have fallen by approximately 20 percent vis-a-vis 2019 levels;
- A rising stock of “accounts payables’ in excess of $100.0 million;
- Higher debt levels associated with borrowings to replace displaced revenue;
- The need to rollover above normal levels of debt on account of creditor requirements for liquidity to address their own challenges;
- Lower levels of non-conditional financing from International Financial Institutions over the coming fiscal years;
- A rise in unemployment, especially in tourism and related sectors; and
- Social dislocation and increasing calls for fiscal support to supplement lost income from both the private sector and citizens.
“If anyone has wasted the last five years, it is clearly the opposition,” Chastanet said in parliament, unmindful to his notion that the Saint Lucia Labour Party (SLP) failed to conform to the norms of parliamentary decorum expected of ‘Her Majesty’s loyal opposition.’
Springer writes: “The common elegance of propaganda, lies, deceptions and half-truths, emerging in our politics and prominent in this government’s political armoury, is abhorrent.”
Listen to Philip Pierre’s budget response here.