BASSETERRE, St. Kitts – IN the wake of the Federation’s EC$3B national debt and the recent announcement of a US$84M Stand-By Agreement in Principle between the IMF and the Federal Government, Political Leader of the People’s Action Movement (PAM), Lindsay Grant is of a strong view that the country’s economic deterioration was caused by Prime Minister Dr. Denzil Douglas and that the worse is yet to come.
“It is important that each and every citizen of this Federation understands the present context of our economic deterioration that has necessitated IMF loans. It is 15 years of recklessness and callousness by Denzil Douglas and not a global crisis that has placed St. Kitts and Nevis into this position,: Grant said.
Grant made this pronouncement among others at a press conference today (June 8) held at the Ocean Terrace Inn.
He said over the years his party had been warning the nation about the Labour Government’s reckless spending, which now stands at EC$3B, and that it “would one day come back to haunt us. That very day is upon us”.
Grant noted that since 2000 the IMF had warned that the Federation’s finances were becoming unsustainable and there was a need for corrective measures to be put in place.
He added that in his 2006 Report, the Director of Audit said the warning bells were ringing loudly about the escalating debt, but it went unheeded.
“The People’s Action Movement was at pains to consistently point out that if the recklessness and callousness went unchecked, then the time would come when we would be in the kitchen of the IMF feeling the heat.
“As a consequence of our relentless attack on the debt crisis, it led to the infamous statement by the Prime Minister in Old Road, and I quote, ‘National debt my ass.’ That time has now come when the very said national debt has taken centre stage,” Grant said.
PAM’s Political Leader stressed that Dr. Douglas was very reckless and callous in disregarding all the warnings, and that he did not listen to the advice or the local, regional or international voices.
Grant stated that Dr. Douglas has brought the country to its knees and it is the working class people who have to bear the brunt of the measures.
“The sacrifice that the Prime Minister has asked us to bear to recover from this morass should not be placed on the ordinary working class man and woman, but rather on those who have been responsible for bringing this country to this sorry state of affairs,” he added.
In his explanation of what the IMF’s Stand-By Agreement means, Grant said it is the “workhorse operation of the IMF when a country is in trouble with its balance of payment obligations. It occurs when a country cannot meet its debt payments”.
He added that under normal circumstances, the Federation’s loan limit would have been US$14M but the government had borrowed six times that amount.
Despite Alfred Schipke’s confirmation that the IMF had expressed confidence in the home-grown Economic Development Programme submitted by the government of St. Kitts and Nevis, Grant said it should be dispelled because of statements made by Dr. Douglas.
Schipke is the Division Chief of the Caribbean Division in the Western Hemisphere Department of the IMF.
“It is first necessary however to dispel what the government has tried to put in the media about how the IMF expresses confidence in its economic programmes. Indeed, the statements leading up to our current position reveals a very different story.
“Here, the Prime Minister’s statement that ‘the debt at its present level is unsustainable’ is a confession, long overdue. This is in fact what the People’s Action Movement has warned about for years. The Labour Party has run the national debt to record highs. Now at $3B, and I am reliably informed a debt to GDP ratio of now in the region of 203 percent,” Grant said.
Additionally, Grant said it has been touted by economists that a debt to GDP ratio of 100 percent causes economic hardship, and “we are twice that figure…so we can expect twice the pain”.
He labelled the government as a deceitful one, noting that it has attempted over the years to conceal the country’s dire economic conditions, and that in the height of deceit it now admits that the current state of affairs is grave.
