By Caribbean News Global contributor
CASTRIES, St Lucia – The government of Saint Lucia has announced that it continues to balance the needs of the country and the financing for essential COVID-19 pandemic related health emergencies, economic and social recovery; meantime, engaged in extensive borrowing has seemingly approved, according to a leaked Cabinet Conclusion No 855 of 2020, dated July 6, 2020, “that the restructuring of all government agencies be placed on hold. ”
The result of this is more prevalent in the optimal choice of winners and losers – based on which sector (s) of the economy is permitted to operate and how. Consequently, there is a problem when preferential economics is implemented, and people are thoroughly ignored. Even worse, are decisions based on the edicts of curfew and the imposition of a State of Emergency. The economic reality is such that Saint Lucia is on the verge of economic collapse with a credit rating downgrade, massive current and recurrent deficits.
Prime minister and minister of finance Allen Chastanet last Tuesday borrowed extensively, inclusive of a motion to borrow the sum of US $10.7 million from the Caribbean Development Bank (CDB).
A statement from the office of the prime minister on Friday said: “The CDB is a key development partner of Saint Lucia and continues to provide critical support to the government of Saint Lucia in periods of distress. The COVID-19 pandemic is one such event, as this global pandemic has caused unprecedented distress to individuals, businesses, and economies; locally, regionally, and internationally.”
However, the minister of finance concept of borrowing is averse to his declaration December 2019 that “the only thing the previous government did well was to increase the debt. And those of you who are small business people will understand what I am saying. You cannot borrow money to pay for a debt. So, if you have a loan you cannot make another loan to pay for that loan,” he said.
The statement continued: “In addition to losses in revenue, the impact of COVID-19 has placed added pressures on the government’s expenditure, as we have had to undertake additional expenditures to strengthen and expand our healthcare systems to mitigate the spread of the virus,” prime minister Chastanet said. “The government has had to fund the operations of isolation and quarantine facilities, the accelerated transition from Victoria hospital to Owen King European Union (OKEU) hospital, the rehabilitation of the Victoria hospital into a respiratory hospital, hosting the Cuban Brigade of doctors and nurses, amongst other expenditures while having to honour usual governmental commitments. ”
According to the prime minister, the pressures on the operations of central government remain and is now compounded with the obligations to respond to the ongoing pandemic. Daily, tough decisions are made to prioritise initiatives, protect the nation, and sustain economic and social activity.
“We are to meet our financing needs without directing resources away from the critical social and economic recovery needs. It should be noted that the terms of the loan are concessionary, at one percent, with an appropriate grace period, which will allow us as a country sufficient time to recover, before repayments are required,” the minister of finance added. “Given that this is a concessionary loan with a low-interest rate and an extended maturity profile, its inclusion into the existing debt portfolio will have a minimal effect on our financing cost and risk profile.
“This loan will permit the government to preserve fiscal space and allow for the financial resources that would have been required for debt servicing to be directed to financing other immediate needs of the country, in responding to the COVID-19 pandemic and resuscitating the economy,” the statement concluded.
Evident by the arrogance, ignorance and hypocrisy that confront governance in Saint Lucia and claims that Saint Lucians have complete confidence in the current government and are not fooled by mischievous propaganda; the contents of the said Cabinet Conclusion No 855 is measured is that which merits government planning.
“That all appointments including temporary appointments, acting appointments and promotions, are suspended for a period of one-year, effective July 1, 2020; and that the restructuring of all government agencies be placed on hold.”
- St Lucia parliamentarians accept salary increases amid COVID-19 crisis
- St Lucia Trade Union Federation response to government
In the increasing depth of despair and the practice of preferential economics, perhaps, there is no connection to be made with extensive borrowing, conditionalities of borrowing and the secrecy of governance in a democracy.
But once again, the questioned is asked: Is Saint Lucia in the hands of the IMF?