BASSETERRE, St. Kitts – SKYROCKETING national debt in a period of economic uncertainty has undermined the nation’s developmental thrust, but the next 10 years are to be a time for Government to concentrate its efforts on reducing the debt to GDP ratio.
These were the sentiments of Governor-General His Excellency Dr. Sir Cuthbert Sebastian in delivering the Throne Speech at the opening of the National Assembly on Wednesday (Mar. 10).
He noted that while the current government has worked to reduce the debt to GDP ratio in the last five years, there is still more to be done if the nation’s progress is to continue unthreatened.
“One of the major threats to our continued progress as a nation is the relatively high debt to GDP ratio that has plagued our nation since the passage of a series of hurricanes in the latter part of the 1990’s and the early part of this century. My Government is pleased, however, that we have been making steady progress in reducing the debt to GDP ratio, which at the end of 2008 was 165.38% after reaching over 190% in the first half of this decade,” Sir Cuthbert said.
A 2020 goal has been set to reduce the public debt to 60% of GDP, a healthy target prescribed by the Eastern Caribbean Currency Union (ECCU).
Though economic turbulence experienced during 2009 may have disrupted the downward trend in the debt, Sir Cuthbert projected that it would continue on the path to the 2020 target as the economy picks up. This is to be achieved through improving revenue management and tightening controls on spending, he informed.
“In the upcoming years, we must accelerate the pace at which we bring down the debt. As we have witnessed recently, the global financial system continuously throws up new challenges, and our ability to deal effectively with such challenges is significantly constrained by the debt burden,” said the Governor-General.
Prime Minister and Minister of Finance Hon. Dr. Denzil Douglas is currently in Dominica with his CARCOM counterparts discussing with top officials from the Inter-American Development Bank, International Monetary Fund and World Bank on matters of debt reduction and gaining greater international support.
Douglas, who has returned to lead the Ministry of Finance after two years without the portfolio, has seen a similar thrust at the ECCU level where its Eight Point Stabilization and Growth Programme has set debt reduction as a top priority.
The 2010 Budget to be tabled on March 23 is expected to outline the government’s plans of debt reduction and fiscal reform to achieve the 2020 objective.
