I am a citizen of St. Kitts - Nevis and have been silently monitoring the election activities for the past two years and with a much keener interest over the past few months. We are now down to days and with a day to go I feel duty bound to state objectively the facts as I see them. I have no axes to grind and have no particular party preference. However, I believe that as a citizen we owe it to ourselves to properly evaluate the political landscape and assess the situation objectively.
LABOUR
DEBT SITUATION
The Labour party has been in power for twenty years now. The party came to power in 1995 and has remained in power since then. Undoubtedly there have been some achievements under the Labour Government. The controversial debt re-structuring and land for debt swap have certainly helped to ease the fiscal position. Prior to the debt re-structuring St. Kitts’ debt to GDP ratio was over 200%. An astonishing figure by any count. With that ratio St. Kitts held the dubious distinction of being one of the highest debt to GDP countries in the world (among the top 10). It was untenable. Failure to act would have placed significant hardship on the country and even have hyper-inflationary impact. In other words, in order to service the debt, the country would have had to impose significant taxes that would have sent the cost of living even higher than it is perceived to be now.
VAT
VAT was introduced on November 1st 2010 as one of a series of recommendations by the IMF to address the National Debt issue and bring some fiscal discipline to the way government spent money. The VAT of 17% was viewed as significant and had adverse impact on cost of living. Families were forced to make fiscal adjustments and implement belt tightening measures. Today many persons still complain about VAT. The initial impact of this tax imposition was fiscal surpluses in keeping with Budget projections and, in fact, exceeding projections for both years so far. To the Government's credit, they have since removed taxes on the majority of food items and have redefined the food basket to bring it more in line with the living conditions of everyday people by expanding it to include medicines and pampers. The result is a reduction of the food bill on most food items and the retention of VAT on other services. There are many of the view that consideration should be given to reducing the VAT on all items and providing relief to the citizenry. The fact is a nominal decrease of 1%, 2%, or even 3% would have very little identifiable and real impact in the pocket of consumers and would most likely be frowned upon by the IMF and affect our ability to work with them in the future.
ELECTRICITY
There remains a constant cry about electricity in the Federation. The Government privatized St. Kitts Electricity Department (SKED) into SKELEC and the company is still 100% owned by the Government. The cost of electricity continues to plague residents and is a factor that seriously affects the competitiveness of the country when it comes to attracting Direct Foreign Investment. The Government has installed a 1 Mg plant at RLB Airport and is presently installing a second plant on the Frigate Bay Road. The Minister of Energy has recently announced the near signing of a contract between SKELEC and Windstar to provide wind energy in Bellevue.
CITIZENSHIP BY INVESTMENT
The Citizenship by investment program was introduced since 1984 under the former PAM Administration making it the longest running program in the world. However, in 2010, on the eve of the closure of the Sugar Industry, the program got a new lease on life when it was re-vamped and heavily marketed having gained Schengen Visa Free status to travel to most EU countries.
This status is significant for it allows many persons from the Middle East, Asia and Russia, among others, who have St. Kitts-Nevis citizenship, to get access to these countries once they have been vetted and have passed a due diligence test. The result of this has been phenomenal as the revenues that have been gained by the Federation have helped to significantly positively impact the Federation's fiscal position allowing the government to pay off the IMF's obligations earlier than scheduled. One direct benefactor of this program is the SIDF.
The program has come with its challenges. There have been instances of persons who have been of concern to the US government resulting in a FINCEN advisory that was issued in May of 2014. In addition, the Canadian Government revoked visa free access to Nationals of St. Kitts-Nevis effective November 22, 2014. This is an unfortunate situation as a visa was never before required of St. Kitts and Nevis Nationals. This development speaks to the need to strengthen the application and due diligence process and foster greater cooperation with Foreign governments in order to have these restrictions and advisories removed.
The reality is that looking at past experience with other OECS islands, most notably Dominica, these requirement once imposed, take years to be removed. At present of all the OECS islands, Dominica, Grenada, St. Lucia, St. Vincent and St. Kitts require visas to enter Canada. Antigua is the only OECS Country with visa-free status.
SIDF
The SIDF was established in 2006 as a result of the revamping of the Citizenship By Investment Program. Arguably, the SIDF has had a significant impact on all lives of the Federation. There have been several programs that have been implemented by the SIDF, according to their website, including:
FREESH - 5% Residential mortgages fixed for the life of the loan up to XCD$500,000
GRASP - 5% Mortgages for students returning home from College and needing a start. The debt refinancing package allows graduates to payout their student loan and take out a residential mortgage; they may also acquire a vehicle once the loan does not exceed XCD$500,000
HELP - 6% loan for house repairs, renovations, re-modeling up to $100,000 maximum
Payment of the Customs Service Charge (CSC) on Electricity to avoid increasing electricity bills
Payment of Electricity Subsidy to reduce monthly electricity charges for all residential consumers
LED Program - Every household in St. Kitts and Nevis had the opportunity to get all the bulbs in their homes replaced with LED bulbs for free
SEED Program - 48 Businesses at various stages of operations. Businesses receive interest free loans (0% interest) and assistance with Management and Accounting Services for Free
Capisterre Farm -Aimed at providing a consistent supply of food to ensure food security
REACH - Scholarships with a minimum value of $2,500 for all students attending CFBC-TVEMS & ASGS and Nevis Sixth Form in 2014; Grants of $2000 for students attending AVEC.
According to Labour's Manifesto, the Labour Government has realised the following achievements
Labour's Achievements:
Halving the National Debt - While this cannot be verified as an exact claim, there has been some reduction in the National Debt resulting in accelerated debt re-payment to the IMF.
Wi-Fi in every school - If this is true then this is significant in bringing our children on par with first world countries
'One laptop for Every Child - A reality for students entering 1st form; at implementation a laptop was presented to all students in 1st form and higher. The effect is that all high school students have access to internet and a device. This is above even the best first world standards.
A High Standard of Healthcare for All - While the JNF has been recently refurbished there is much that is left to be desired in so far as the availability of top rated health care services and facilities. Basic health services need improvement including the ER at JNF. Declarations have been made by both parties to upgrade the Mary Charles Hospital in Molineux to the level of a full hospital.
Pioneering Renewable Energy - Some strides have been made in the exploitation of solar energy. There needs to be greater cooperation between St. Kitts and Nevis regarding geothermal in order to achieve any sustainable long term reduction in energy costs
Helping First Time Homeowners - According to the government over 2000 homes have been built. In addition, the SIDF FREESH Program has helped in this area.
Low Interest Student Loans - Student loans are not lower than other loans. Student loans are about 9% - 10%. There is a definite opportunity for improvement in this area. Efforts should be made to make loans more affordable. Without regard to who gets elected, a national prioritization must be given to students accessing loans as the vast majority of graduates are graduating with Business degrees and the economy lacks the absorptive capacity to deal with them.
The highest minimum wage in the region - This is a fact. However, wage inflation has potential inflationary impacts so this must be done carefully.
Equal pay for Men and Women - This can only be achieved on a limited basis as women are still kept out of key top management positions.
Modern Manufacturing - There is uncertainty as to what is meant by this.
Creating a Sustainable Future - Fluff!
The Fastest Economic Growth in the Caribbean - It depends on what metric is used. However, on an aggregate basic in terms of GDP growth, the economy is outperforming many of the islands in the Caribbean and particularly in the OECS
Helping to Start New Businesses - St. Kitts-Nevis continues to lag behind in the Doing Business Ranking. Significant work is needed in this area. The SIDF SEED program is the only known initiative aimed at helping new start ups.
More Exports to the USA than the Eastern Caribbean Combined - This is a fact. This is because of the strength of the factory workers at the C A Paul Southwell Industrial Site. Strong commendation to our women at the Industrial site for their work in light manufacturing!
In comparison TEAM UNITY has put out its Manifesto and as outlined their Team Unity Manifesto key Policies at a Glance:
KEY TEAM UNITY POLICIES AT A GLANCE •
$500 SIDF-funded family support grant for households earning $3,000 or less per month. A noble goal but impractical. According to the Deputy Prime Minister and any basic calculation, the PEP Program runs about XCD$5,000,000.00 per month for over 3,000 PEP workers. If one assumes conservatively that 10,000 households meet the threshold of under $3,000.00 per month that is an additional $5,000,000 per month in SIDF funded program. Though conservative, that run rate of XCD$10,000,000.00 per month is not sustainable and would bankrupt the SIDF. Also, does this mean that PEP Employees would also qualify for this benefit? More thought has to be given to this seemingly callous promise.
• Guarantee that programmes like PEP will continue, and be upgraded to STEP-UP, so young people can have real opportunities for self-employment, appropriate training for permanent jobs and earn a decent wage they can live on. This is a follow on to the point made earlier. The compounding effect of PEP plus the new Subsidy, plus the STEP UP which would, of necessity, further grow the payroll of PEP would result in a monthly bill in excess of at least XCD$12,000,000.00. That is a very conservative but highly impossible monthly bill to carry.
• No VAT on food, medicine, educational supplies and funeral expenses. This has been largely achieved already as a result of the Labour Government's recent interestingly timed decision to review and revise the tariff on food. The incremental impact would be negligible.
• Creation of 2000 new jobs within Team Unity’s term in office. No doubt this can be achieved within a five year term with the right policy prescriptions.
• Prompt payment of overdue $16 million gratuity still owed to former sugar workers, from the SIDF. The validity of the indebtedness is in question by the Labour Party but, if this is truly owed, this money can come from either the Treasury for the SIDF that is being proposed.
• Construction of 2,000 homes and provision of 3,000 house lots for our people who are in need of decent housing. An attainable feat. The present Government boasts of providing a similar number of homes.
• Reduction in mortgage payments for NHC Houses, and lower student loan payments. Mortgage rates have already been lowered at NHC. There needs to be a clear articulation of how much lower they will go and an identification of the source of funds at such low rates that can justify a further reduction.
• Free Preschool Education . Labour has pre-empted this and announced that they will be providing this already
• Education guarantee fund to underwrite university costs for young people lacking collateral for student loans. This is already in place at the Development Bank. There is an acute shortage of funds in this program but hundreds of students lacking collateral and signatories have already benefitted under this initiative.
The Douglas Factor
There is no apparent issue with the performance of the Labour Party. Douglas is the issue! Douglas is the issue for the Team Unity Candidates and even for some Labour supporters. It is often said, "I don’t have a problem with Labour but Douglas must go; He is there too long." I can't imagine that this is lost on him or even on the party. It is clear that the party must have the maturity to transition the leadership of the party very shortly if not sooner. The reality is that Douglas is needed to energize the party base but there is a need for a more moderate face and voice to move the people in the middle. Douglas must signal his departure without any ambivalence. This cannot be a game or a ploy to move the people to vote for Labour. If Labour were to win this election there is a lot of history that will be made. I can’t imagine that his legacy would be lost in the euphoria.
Therefore unequivocally Douglas must not just signal his departure but put definite parameters to it. This point begs the question of term limits which interestingly neither party is even mentioning in any serious way. I guess politicians and parties say what they need to say to get elected and then having been elected seek to retain power for life. A successor needs to be identified and the transition must happen on day one if Labour is to be re-elected.
The Unity Factor
The only seemingly unifying force for Team Unity is their dislike of Douglas. The well documented manifesto comes up short on serious meaningful initiatives to take this Federation forward. Many arrangements like the one that is being proposed have worked and many have failed. What is happening in Trinidad at present is a clear example of how these arrangements can fracture. The interests of the varying constituents represented in that arrangement lack cohesiveness and a common sense of purpose and for that reason it makes it likely to fail.
Conclusion
Having looked at the facts as presented, Labour represents the best chance for continued growth and stability. While the aspirations of Team Unity may be noble, the progress of our Federation is too much to risk and the facts as presented do not support a need to take that chance.
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