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The Federation is facing a prolonged period of economic recession. The unwarranted political instability which engulfs this Federation will create an economic catastrophe which will prolong the recession. The citizens of this Nation seem to be in a daze as they appear to be unaware of the economic and financial disaster which faces it. The facts are evident no country as tiny as St. Kitts and Nevis has even incurred a public debt of this magnitude, EC$3billion with a debt service ratio of 200 percent of GDP.
Most of the money borrowed was spent on non- productive projects such as La Vallee Golf Course (EC$225 million); building roads to anywhere so that the construction company which was foreign owned and operated could generate revenue and profits. Houses were constructed and allocated to party supporters who were duped into believing that they did not have to pay for them. Consequently the audited accounts of the National Housing Corporation were never tabled in the National Assembly as required by law.
The result of this cavalier attitude to economic and financial management has been severe recession accompanied by a high level of unemployment especially among the youths and the working class. This is evident by the present employment 0f 1800 persons on the PEP program with a similar number on the waiting list. This program clearly manifests the Government impotence and inability to manage this economy and illustrates that it has no idea or resources to stimulate the economy. After the various short-term assignments which will end abruptly there are no employment opportunities for the youths other than back on the scrap heap on which they were tossed by inept economic management.
The Government has waged an economic war on the Nation for the past 18 years. The principal weapon was the accumulation of the Nation Debt. The Government eventually had to concede that it was broke and surrendered itself into the waiting arms of the IMF who accepted the invitation with alacrity. The structural adjustment programs included the introduction of VAT at a punitive rate of 17%; drastic cuts in government spending without consideration as to the social effects on education, health and social welfare and reducing the size of the civil service. The IMF then turned its attention to reducing the size of the National Debt. The land for debt swap which resulted in 1200 acres of land being transferred to the National Bank in return for EC$9 00 million accumulated credit was instituted. The people’s heritage was privatized and has affected the transfer of public wealth into private hands.
Electricity has become a public corporation with the resulting increase in electricity bills by 85%. The net result has been an increase in cost of living and the poverty level to 40% of the population.
The hair-cut adversely affected investors both domestic and foreign. The National Bank lost EC$47.391 million in that exercise. The Bank and other publicly owned companies in the Federation reported significant reduction in profits. The National Bank Financial Report is cause for alarm. That institution reported a group profit of EC$13,970,000.00. This included a sale of securities of EC$112.4 million. When this figure is deducted the group would have reported a LOSS of around EC$4.23 million. The comments of the Chairman of S L Horsford & Company in its annual report that, “the results for 2012 have been disappointing as the economies of St. Kitts and Nevis continued to decline, which has resulted in the Group recording a significant further decline in profitability.”
The economic recession will continue into 2014 and beyond. The IMF and the Government have projected positive growth in 2013. This institution seems unaware that its statements which are based not on the realities of this economy but on dubious projects which have suddenly materialized and if implemented will take several years before impacting the economy. The Government which is illegal and has no basis to be in office will take these statements by the IMF to show that they are doing well.
The vote of no confidence must be heard or the Government should go to the polls. A Government with a clear mandate from the people is required to design, develop and implement economic and social policies and programs in keeping with the needs of the people whilst utilizing all the resources in this Nation. The present government has shown that it can only function in a tribal environment with its main weapons being fear, victimization and intimidation. No country can prosper in such an environment, whereby prospective so called investors are either questionable or state that a particular government must remain in office for the project to be implemented.
Talk has run its course; the Nation needs a period of healing and a change of direction and leadership. The Federation cries out for leadership with integrity, vision and a love for this country. Survival will be determined by the degree of inclusion, an end to nepotism and the willingness and strength to make the hard decisions. The way forward will not be easy. Heaven help this Federation.
