KINGSTOWN, St. Vincent – The official line on this country’s economy varies based on the audience, according to Opposition Leader Arnhim Eustace.
Eustace on Thursday accused Finance Minister Dr. Ralph Gonsalves of “double talk” on the nation’s fiscal situation.
He pointed to a June 27 letter Gonsalves wrote to the International Monetary Fund (IMF), saying, among other things, that the local economy is expected to contract for a fourth consecutive year because of Hurricane Tomas last year October and the April flash flood and landsides.
“… real GDP growth in 2011 is now expected to decline for a fourth consecutive year, while inflation is projected to increase reflecting the pass-through from high international food and fuel prices,” Gonsalves said in the letter to John Lipsky, acting managing director of the IMF.
“The deterioration of the export sector (tourism and agriculture) in 2001 and the necessary reconstruction-related imports will put pressure on the balance of payments,” Gonsalves further wrote.
Gonsalves, who is also Prime Minister, has since said that the economy is expected to grow by 0.8 per cent this year, even as the Eastern Caribbean Central Bank has forecast 0.4 per cent growth.
“This is the Prime Minister of St. Vincent, writing to the IMF managing director on the 27th of June this year. This is the Prime Minister who was saying that he believes we are going to be growing by 0.8 per cent this year,” Eustace said.
“He is telling the IMF the same thing that I have been saying: that he expects another, fourth year, of negative growth,” Eustace said, noting that banana production had not yet been affected by black sigatoka at the time of Gonsalves’ letter.
“What [do] you do with a person like that? When a prime minister and minister and finance of a country speaks, the donors, the people on the ground here and so on are wont to believe what he is saying an they will make decisions which reflect what he is saying,” Eustace said.
“But he is telling the IMF something else. If I didn’t read this letter, who would believe that the Prime Minister told the IMF that?” Eustace further stated.
“I will be frank with you: I don’t believe the Prime Minister when he speaks about the economy,” Eustace said on the programme, sponsored by his New Democratic Party.
“I think he says to different people at different times what he thinks they want to hear. And I, therefore, am looking forward to the exercise when we look at the estimates to see in fact what he is trying to do in relation to what the IMF has proposed,” he said.
“But I wasn’t the public to understand the double talk of the Prime Minister,” said Eustace, a former minister of finance.
The estimates of income and expenditure for 2012 will be laid in Parliament next Tuesday, with the budget to be tabled in 2012.
He said that Gonsalves was “very annoyed” when the NDP circulated at its convention last month an IMF document that said that this country is the only one of 32 in Latin America and the Caribbean for which negative growth is projected this year.
“It is clearly going to be a very important set of estimates in light of the present state of the economy and the government finances in particular,” Eustace said, noting the three years of negative growth, adding that the government’s financial situation “has deteriorated considerably”.
Eustace further said that he has documents that indicate that the National Insurance Service’s profits are down to EC$5.6 million in 2010 from $27.8 million in 2008.