BASSETERRE, St. Kitts – FINANCIAL SECRETARY of the NIA has declared that the local government is cash-strapped and, with the economic outlook for the island “still bleak”, it is in dire need of “an injection of revenue”.
On Tuesday (Sept. 11), Nevis Island Administration’s (NIA) Financial Secretary Laurie Lawrence, on behalf of Nevis’ Premier the Hon. Joseph Parry, addressed the gathering at the 2012 National Consultation on the Economy (NCoE).
Like most territories the world over, Nevis – according to Lawrence – has been severely impacted by the global recession which has been compounded by declining revenues and primary deficits for each of the years between 2008 and 2011.
“We have had to rely largely on internal resources because the debt restructuring is really affecting our ability to borrow, having asked creditors to accept haircuts on the face-value of debt as well as the present value of debt. Of course, they will be reluctant to lend for a period of time. So we find ourselves in a position right now that we have to rely on internal resources while, at the same time, revenues are actually declining.”
For the revenue booster, Lawrence informed that the NIA has intentions of seeking assistance from the Sugar Industry Diversification Foundation (SIDF) in addition to which he has outlined measures that the NIA is considering taking to keep the economic ship afloat.
He said the quandary in which Nevis has found itself is juggling growth stimulation and financial reform while fulfilling conditions outlined in the IMF programme. Targets for which he explained are barely being met as far as Nevis is concerned.
“In Nevis, we are barely meeting the targets on the IMF programme. We have only been able to do so by restricting capital expenditure. So, in Nevis, we are not undertaking any capital expenditure and, as a result, it has had a negative impact on growth and on the economy in general.”
Some of the areas which he says might have to be seriously considered or are already being considered include:
• The privitisation of private sector enterprises;
• The imposition of serious and realistic limits on borrowing;
• Improving revenue administration;
• The establishment of a bipartisan budget committee;
• Devising ways of mobilising domestic resources; and
• The reduction of pork barrel (political patronage) funding.
The Financial Secretary highlighted the need for “more transparent procurement processes” as one of the issues which is in need of attention as the island seeks to regain its economic footing.
“Procurement is another area, and from my own experience I suspect that is the area of corruption and we need to address it. We need for more transparent procurement processes and international bidding practices, and we need to establish appropriate protest and complaint mechanisms. We need to strengthen the budgeting process…There should be greater transparency and we have to link execution and monitoring with nationally-articulated priorities.”
Lawrence expressed his hope that the NCoE would have resulted in the identification of “a mix of policies that are necessary to generate growth and (promote) fiscal stability”.
