ST. VINCENT: – Leader of the Opposition, Arnhim Eustace, has described as “sad” and “frightening” the reality that the state-owned National Commercial Bank (NCB) is being sold to private investors.
He said Prime Minster Dr. Ralph Gonsalves was “responsible for the failure” of the financial institution.
But Gonsalves, who is also Minister of Finance, said this week that the bank is “far stronger” than when he came to office in 2001.
He said that Eustace, a former prime minister and former minister of finance, was “really shameless when he talks about the bank”.
“In many ways tonight is a sad night … but it is sad for one particular reason: because in the next day or two, the National Commercial Bank will not belong to the people of St. Vincent and the Grenadines,” Eustace said at a political rally in Clare Valley on Wednesday, Sept. 29.
The Gonsalves administration is exploring “other modalities of ownership” and is considering divesting “a majority of the shares” at the NCB. (Go to the homepage to subscribe to I Witness-News)
Eustace said these phrases mean that the bank is being sold.
In July, the Caribbean Development Bank (CDB) loan the government EC$100 million “to reduce the outstanding public sector debt” at the NCB, and to “facilitate a restructuring” of the institution.
Eustace, an economist and former employee of the CDB, said last week that Gonsalves did not tell Parliament that the NCB has to be sold before his government could access the loan.
He said on Wednesday, at his New Democratic Party (NDP) rally, that the negotiations for the sale of the bank could be complete by the end of this week.
The Bank of St. Lucia is buying the NCB, which controls about 40 per cent of the banking sector in SVG, he said
“[Vincentians] have a lot of pride in the fact that that bank belongs to us. And it really is a sad time to have to accept that the bank is going to change hands for good,” Eustace said.
“Every time I think of that kind of mismanagement that caused the bank to be in that position, it pains. … [I]f Gonsalves was using his head, there was no need for the bank to come to that condition,” Eustace said.
He said Vincentian taxpayers will have to pay EC$9 million annually for 15 years to service the EC$100 million loan, adding, “When you do that, you cause suffering and hardship for people.”
“In a way, it is not only sad. It is frightening. It shows you that you have a country that is collapsing, a country that is failing. And when our country fails, you suffer and when our financial system fails, you suffer, because, in the end, it always has to come back to the people to pay. Things [are] already hard with people in St. Vincent and the Grenadines, and now we have that kind of situation,” Eustace said.
Eustace said the “situation” annoyed him, adding that it occurred because “Gonsalves didn’t know what he was doing, and he has damaged this country severely”. (Follow I Witness-News on Facebook)
“.. [Y]ou [are] walking like a cripple in this country, because you now [have] more and more debt and people are there suffering … and you now have to a $100 million debt on top of that to make things harder for people in St Vincent and the Grenadines and I can’t stand it,” he added.
“I keep talking about this matter because I know it is going to hurt. Apart from hurting our pride, our national pride that our own national bank is gone, it is the hurt that is going to come to some people when people lose their jobs, because of that same $100 million,” Eustace said.
But Gonsalves, speaking at a press briefing on Monday, Sept. 27, said that the NCB, “in the year 2010, is stronger by far than the National Commercial Bank when I got it in March 2001”.
He said the Bank was “far stronger on all the criteria”, adding that in 2001, government equity amounted to just over EC$20 million compared to EC$84 million at the last evaluation.
He further said that in 2001, the public sector owed the NCB about EC$110 million, or 42 per cent of total deposit.
When his government applied for the CDB loan this year, the public sector debt was EC$160 million, or 28 per cent of total deposits, said Gonsalves, who as prime minister, is the bank principal nominal shareholder.
“In other words, of the deposits which people made in the bank, the government in 2001, under Eustace, owed more money proportionately than today, Gonsalves said”
He said that in 1997, 1998, and 1999, when Eustace was Minister of Finance, the auditors gave the bank a qualified report.
“When your auditors give you a qualified statement, it means that they are not satisfied with the state of the account of the institution,” Gonsalves said.
But opposition senator, St. Clair Leacock, speaking at the rally on Wednesday, said SVG was “in a veritable crisis and all of it supervised by Ralph E. Gonsalves”.
“It is not just that the bank is buss by over 100 million but he personally … contributed to the wreck of this economy,” Leacock said.
“In nine years, he has had more motor cars than the rest of the Caribbean prime ministers put together. In nine years, he had found money, or voted money, to buy [a] house in America for his son, who happens to be the ambassador,” Leacock said.
He further said Gonsalves had change the furniture and tiles at his “house” and built “a bigger barracks in his house even though it is just a six-inch block that separates the main police barracks from his building”.
He further spoke of the EC$4 million spent on the constitution referendum campaign last year and “$750, 000 for hairdo and all this kind of thing in this country”.
“He has personally been reckless with the monies of the people of this country and he must pay a price for it,” said Leacock, who is the NDP’s candidate for Central Kingstown in the upcoming general elections, due by March 2011.