KINGSTOWN, St. Vincent – Opposition Leader Arnhim Eustace yesterday presented what could so far be his most convincing argument that the Unity Labour Party (ULP) administration has mismanaged the local economy.
Eustace, an economist, cited International Monetary Fund (IMF) figures that show that the Vincentian and Jamaican economies were the only in the Caribbean and Latin America to register three consecutive years of decline.
The IMF’s World Economic and Financial Surveys, published in September, however, said that the Jamaican economy is expected to break out of its recession and register 1.5 per cent growth this year, up from a decline of 1.2 per cent in 2010.
But according to the projections, the Vincentian economy will this year register a decline of 0.4 per cent, before growing 2 per cent next year and 3.5 per cent in 2016. (CLICK TO DOWNLOAD PROJECTIONS)
The projected decline this year follows contractions of the Vincentian economy of 0.6 per cent, 2.3 per cent, and 1.8 per cent in 2008, 2009, and 2010, respectively.
“… year after year, you hear Prime Minister Gonsalves making comments about how well we are doing, making comparisons with other countries in the OECS and other parts of the world, that we have withstood the international economic crisis and doing better than others. … But this will show you that he was lying all the time,” Eustace told supporters of his New Democratic Party at their convention.
“This ain’t my figures; these are the figures of the International Monetary Fund,” said Eustace, who noted that the local economy grew an average of 3 per cent every year between 1993 and 2002.
But the IMF figures are contrary to Eastern Caribbean Central Bank’s forecast of 0.4 per cent growth this year.
Prime Minister Dr. Ralph Gonsalves, who is also Minister of Finance, said last month that economic growth this year is projected at 0.8 per cent, fuelled by tourism, manufacturing and construction.
His government is forecasting 3 per cent economic growth in 2012 “unless a double-dip recession globally bites deeply”.
But Eustace said that the IMF and the Gonsalves government have “policy differences with respect to any austerity measure – … any hard measures – aimed at bringing our public finances into balance and proposals for the resumption of economic growth” here.
Gonsalves is reported to have said during a radio programme last week that the IMF is “schizophrenic”.
“… that is the statement of a person without a brain,” Eustace said of Gonsalves.
“… is it in the interest of St. Vincent and the Grenadines to describe the premier financial institution in the world as schizophrenic?
“Our job is to negotiate with them in terms of what we want to improve our financial situation, the fiscal situation of our country, which the ULP has destroyed,” Eustace said.
He, however, said that he was not saying that the government should accept whatever the IMF recommends.
“I am saying you must negotiate in good faith. Without it, all of our people will suffer, because our economy will continue to decline,” the former prime minister said.
Eustace noted that all of the other countries in Latin America and the Caribbean have also had to confront the global economic crisis.
But they took action to deal with their budgets and their projects and so forth to manage their economy in such a way that they won’t continue to have losses,” he said.
Eustace noted that the IMF figures were published in September.
“And since that has been published in September, we have black sigatoka not being sprayed, which will make it even worst.
“So, I want you to see it and have this piece of paper, so the next time that Gonsalves speaks, put that in his face. … He says that I am misleading people. This is the reality here,” Eustace said in reference to the copies of the IMF data distributed at the Vincentian.