Opposition Leader Arnhim Eustace. (IWN file photo)

By E. Glenford Prescott

The government of St. Vincent and the Grenadines is subtly introducing austerity measures on its citizens as a result of an agreement with the International Monetary Fund (IMF), says Opposition Leader, Arnhim Eustace.

Eustace made the assertion during his weekly radio programme on Monday as he reviewed the recent disbursement of a US$6.4 million loan to SVG from the IMF to assist with rehabilitation following the December 2013 floods.

He said that prior to the loan being given, the government had agreed to certain conditions.

These conditions, Eustace further said, do not bode well for the country, and in particular its workforce.

Eustace said his concern is based on a release from the IMF, following the approval of the loan.

The release outlined the financial status of the government with regards to the public debt.

“Rehabilitation and reconstruction spending is expected to widen the fiscal deficit this year. Mindful of the high and growing public debt, the authorities have reiterated their intention to rely mainly on grants and concessional resources to finance the recovery,” the release said.

“At the same time, they will step up their efforts to mobilise budgetary resources by increasing revenue collection, containing the wage bill, and reducing transfers to state-owned enterprises,” the release further stated.

Related: IMF approves US$6.4m disbursement for SVG

Commenting on the release, Eustace said that when interpreted, the language used points to a very bleak picture.

“You have got to study this language and what it is saying is that the government has agreed to contain the wage bill and this can only mean no new hiring, little or no promotion, and no salary increase. In other words, they are imposing a wage freeze on the civil servants,” he explained.

He said this is more obvious based on the fact that there has not been any salary increase for the last three years.

Eustace, an economist and former finance minister, urged the government to “come clean” with the Vincentian public.

“The Barbados government is sending home thousands of workers, and in St. Lucia, the government is meeting with the unions to institute a cut in salaries.

“These are tough decisions and these governments are prepared to deal with them head on. But here we are playing games by making out that everything is hunky-dory. They must tell the people the truth,” Eustace said.

He said that the actions taken in Barbados could have a positive effect on stabilising its currency since calls could be eventually be made for a possible devaluation if there is no turn around.

Eustace said that the reducing transfers to state-owned enterprises means that monies to BRAGSA, the SVG Tourism Authorities and the University of the West Indies will have to be cut and this will also create problems since those entities and in particular BRAGSA require government funding to carry out their operations.

“You have BRAGSA, which carries out government work, and already not getting enough funds to do that the government is now agreeing to cut those funds even further to satisfy the agreement which they have made with the IMF.

“And if the Tourism Authority is involved in the promotion of the country, they too will suffer. So this means they will do less things and they will employ less people.”

He said that the government failed to exercise financial prudence and this will have a negative impact on the standard of living of the citizens with monies being borrowed to finance the airport, which, Eustace said, continues to push the national debt “through the roof”.

He accused Prime Minister and Minister of Finance Minister Ralph Gonsalves of “playing politics with people’s lives” and trying to blame the NDP for his shortcomings.

Eustace further accused Gonsalves of “being out of his depth when it comes to handling the country’s economy”.

“You cannot be borrowing loans to pay salaries. These types of loans must be used to do projects and salaries and wages must come from your taxes. When you don’t have financial discipline as a government, you will get involved in spending that do not encourage growth and leaves your economy stagnated.”

Eustace said that while the ULP criticised his NDP government for operating a surplus, the ULP has now promised the IMF that it will seek to achieve a surplus as well.

Eustace cited the IMF release to support his view.

The release said: “Looking ahead, the authorities remain committed to securing a sustainable fiscal position. To this end, they intend to generate a primary surplus of at least 2 per cent of GDP in the medium term to ensure that the debt-to-GDP ratio is put on a declining path.”

Eustace said that among priority for the government must be the country’s import-export ratio since for the first six months of 2013, EC$472 million were imported to this country as against EC$59 million exportation.

He said that the high cost of electricity must also be addressed if local businesses are to be competitive in their field of operations.

18 replies on “Eustace accuses gov’t of entering austerity deal with IMF”

  1. Mr Eustace, you really must understand that if we are to complete the economy conversion from capitalism to true communism in SVG. It is necessary to bankrupt the country first. The attempt to put the country in an unrecoverable financial position is a very important objective of the Unity Communist Party [ULP].

    That’s why it has been important for the ULP to get the Diaspora on board, because with their help, conversion to communism is guaranteed. They do not care if we have to suffer the hardships under a Marxist regime as long as they can have an airport at Argyle to fly directly home to. The ULP have been fortunate to have such help financially and morally from so many living abroad. The ULP leadership work on the premise that you can take the idiots out of SVG, but you cannot take ULP out of the idiots.

    1. Patrick Ferrari says:

      Mr Binose, now that they want to take away my keyboard WITHOUT ATTACKING WHAT I WRITE, I think I go have to pay more attention to your Marxist scum business.

      Someone wrote asking, “Please Mr Editor, take away his pen and give this idiot a spanner instead.”

      1. Mr F, You will notice on these blogs that they attack the writer, because it is more difficult for the Marxist scum to attack the truth.

        The truth is the most damaging thing for the Unity Communist Party [ULP]. The spend all there waking moments working on stratagies of how to destroy the truth and replace it with lies. That procedure is many times more difficult than attacking writers.

    2. James the lion monroe says:

      Mr Binose, if by now, the people of svg and in the Diaspora, do not understand the grave situation which svg is headed, when will they get it. the country is in a mess, the people are fighting over political B.S and here we have a pm playing political mind games with the people of svg to get votes. .When wiil we, as vincentians learn that an Airport will not solve the problems of svg. We need to voice our opinion without the fear of loosing our jobs or being punish for our god giving right. Until we are all free to express ourselves, svg will never be free. keep up the good work, svg needs you.

  2. I think it is time for the opposition leader to step down and let a younger person step up and lead. Which banking institution gives loans without conditions? He is way out of touch and need to employ a communication specialist in order to get the right message out. ##tooold forthejob##

    1. Junior

      That post of yours is why our country went backwards for 14 years. The Opposition leader is trying to let you know that the government has been in Austerity for years, but people like you still don’t get it. The PM has been saying that his government is against it, but by the very strict definition of the word the government has been in Austerity for a long time.

      What is wrong with people like you? is it because Mr Eustace is a black man or something, I have been asking if it is a race issue for years because Vincentians seem to have lost all their sense, both common and uncommon. The man is talking in basic talk for you to understand and you still don’t get it. If a government would lie on something as simple as this, imagine what else they are lying about. But you don’t care about that, Party before country right? Lawd have mussy.

  3. Many of us have predicted on this site that the lending agencies will increasingly put us on heavy manners to get our fiscal house in order. I laud the IMF, World Bank, and other lenders for doing so.

    I also support cuts in the numbers and salaries of civil servants and other government employees along the lines of Barbados, Greece, and other countries because their numbers and salaries far exceed the value of their perfomance. Many were put on the payroll only for patronage reasons, many are unqualified to do their jobs, and many are lazy or indifferent in executing their duties. Moreover, much of what government employees (pretend to) do could easily be farmed out on a contract basis to the private sector saving the country millions while dramatically increasing the level of worker productivity.

    If we cut government staff by 25 percent in this way, would any of us ever experience a decline in service levels? I doubt it.

  4. Leonard Slaterretals says:

    Mr.Junior, I can see that you are a stooge of the ULP.You are correct in your observation of
    most banks policies. Loans are granted on the ability pay.If one does show that he/she would be able repay a loan most

  5. Junior, the PM is the one that took out the loan, the people of SVG have to pay back that loan. Yet the people were not told about the conditions of the loan by the PM.

    And you want the opposition leader to step down for explaining the terms of the loan to people. While the PM gets a free pass, for not explaining terms of the loan that he took out in the name of the people.

    Your bias has exposed your credibility. (Stop drinking the RED Kool-Aid)

  6. JUNIOR, instead of bad talking the Honourable Arnhim Eustace. You should consider getting yourself a brain transplant. You are such a silly childish twerp.

    If you are so stupid that you don’t get what Mr Eustace is telling us. He is saying that there have been agreements done which are cloaked in terminology that the ignorant like yourself do not recognise or understand. He is asking Gonsalves to be honest with the people and tell them that the squeeze has been put on us, and what that squeeze is and how it will affect individuals, groups, and in particular us as a nation.

    Junior its Marxist scum that attack writers personaly instead of attacking and disproving what they write or say.

    You will notice Junior that I describe Mr Eustace as honourable, because he is honourable, doesn’t tell lies, and he has never been accused of rape. Everything he has predicted about the finances and this Unity Communist Party [ULP] government fiscal policies have come to pass.

    Now Jason put on the dunces hat and go and sit in the corner, if there is room, because there are dozens like you already there.

  7. Can the NDP win the next elections with this sort of message that Mr Eustace is putting out here? Mr Eustace is essentially saying that the NDP is willing to make the hard decisions and speak the “truth” to the Vincentian electorate. A truth that entails the cutting of salaries and the workforce as alluded to by Mr Eustace.

    I am waiting for the time, to hear the NDP members go on the rostrum and tell Vincentians, if they elect the NDP, they will have to “band their belly” and “suck salt”so that they could appease the IMF and world bank in carrying out their fiscal policies…Is Mr Eustace willing to tell the electorate the truth?

    In their haste to be hyper-critical, the Opposition sometime paint themselves in a corner, I think this a prime example of such an occurrence. I believe, given the constraints of our small economy and the universal economic conditions, its almost inevitable that countries like SVG, will sooner or later will have to indeed make some hard decisions in an attempt to stabilized the economy. However, this is not a message you want to be preaching to an electorate, with an elections on the horizon. When the Opposition starts to fling words like austerity measures all willy-nilly, in an attempt to tarnish the Government, one will expect then the opposition would have other ideas that will stave off the country from said austerity measures, right?…but you listen to Eustace and you get the distinct impression, that he would gladly embrace such measures in a heartbeat. Am I missing something here? I think Eustace is thinking like a bureaucrat and a run -of-the-mill economist rather than a man looking to lead the country and trying to make things not so hard on the people.

    Are Vincentians ready to accept the “truth” and tough decisions of the NDP as alluded to by Mr Eustace or are they willing to go along with the “hunky-dory” illusion of the ULP, as suggested by Mr Eustace?

    I think the NDP JUST WALK RIGHT OFF THE CLIFF…but we will see if they survive the fall in due time.

    1. How do you spell “politician”?
      L-I-A-R

      What’s the definition of an honest politician?
      A person who can never get or stay elected.

      What is the definition of a voter?
      A person who can’t understand the truth, rejects the truth, and hates the truth.

      This is the real dilemma of politics all over the world and why our own elected leaders — Joshua, Cato, Mitchell, and Gonsalves — have so easily deceived us.

      I agree with you that if Eustace is an honest man willing to speak the truth, he will never become Prime Minister.

  8. Anyone with a simple understanding of how the IMF works will have known that on lending money to a country, they do so on certain conditions. These conditions, more often than not, leads to the implementation of austerity measures by that government.

    It is almost safe to say, that in return for the loan, the government of St Vincent and the Grenadines would have had to sign up to certain conditions around reducing their spending budget – or national deficit.

    In order to reduce a country’s deficit, the government will either have to directly reduce spending, or offset their spending by increasing revenues; i.e. increased tax revenues or the sales of national companies.

    Given the size of St. Vincent, it is unlikely that the Government will be able to raise the extra capital from taxes; also in a country of already high unemployment, spending cuts may not be feasible or and even if it is considered the reduction in spending (salaries, development projects, etc) may not have the required impact.

    This leaves the sale of the national companies which are namely water and electricity. In the hands of a private (most likely foreign company) the people of St Vincent will be left to the mercy of capitalist.

    This may sound far fetched – but the IMF does work to a certain agenda and there are many countries out there who are still learning this – Greece, Indonesia, Africa, Chile and a few other of our South American Allies.

    Any country that the IMF ‘helps’ invariably ends up poorer and the people are enslaved by debt!

  9. Malcolm Adams says:

    PETER BINOSE YOU ARE WRONG!

    The reason they attack the writer (you), is because everyone now realizes that you are a complete idiot!

    Forget the trash you continuously write. What they are saying is that you, the empty barrel, continue to make the most nonsensical noise.

  10. I’ve been saying for years, Mr Eustace have to go. Why is he holding on to power? Many leaders lose election and step down to give another person a chance. Are we saying Mr. Eustace is the only competent person within the NDP to become a PM. Is the NDP sidelining leaders like Dr. Lewis purposely…After the NDP lose the next election, there will be confusion within the party… Time for Mr. Eustace to step down and allow another person to lead the NDP, IF they are to have a chance at wining the next election. Enough said I will echo it again when it come to pass.

    1. Steve Huggins says:

      COMMUNIST RALPHIE was the the POLITICAL WILDERNESS suffering for UMPTEEN YEARS – – – before he was pitieously RESCUED BY HIS LOUDLY PROCLAIMED “COCONUT BAT”.

      Ralph would have never won an election in SVG IF he hadn’t RUN TO HIS ARCH-ENEMY ST. VINCENT LABOUR PARTY of his POLITICAL NEMISES, Milton Cato, Tannis, Isaacs, Thompson, et al, and even ideologically politically infiltrated and subverted that party to the Castroite Communist and back-ward Russian ‘sovietist’ disgrace.

      WHILE ‘leader’ of his COMMUNIST POLITICAL PARTIES he LOST ABYSMALLY . . . in 1979, 1982, 1984, and again in 1989.

      In MOST CASES, most of his candidates LOST THEIR ELECTION REGISTRATION DEPOSITS!

      Communist Advocate Ralph Gonsalves NEVER WON A REFERENDUM !

      THAT doctrinaire LENINIST ideologue, YOUR POLITICAL IDOL AND WHITE MAASA GUNZI LOST THREE GENERAL ELECTIONS AS A POLITICAL LEADER OF HIS PARTIES.

      He didn’t “. . . step down . . . “!

      He LOST A BYE-ELECTION EVEN WHEN HE WAS IN OFFICE, CYNICALLY USED THE TAXPAPERS’ MONEY FOR HIS SIDE OF THE CAUSE, AND OTHERWISE USED THE MACHINERY OF GOVERNMENT AND “BOW-DOW” LARGESSE TO POLITICALLY BRIBE AND INTIMIDATE THE PEOPLE. Response: NO MAS !

      In 1989, MR. JONATHAN PETERS, who charged that RALPH WAS BORN WITH A GOLD SPOON IN HIS MOUTH, BRUTALLY WHIPPED THE COMMUNIST ADVOCATE GONSALVES INTO A PALTRY THIRD PLACE. Reporting that ballot count to my grounding group when one of our brethren asked him “WHO WIN ?” – – – the WANNABE SHOUTED “BEACHE LOSE !”

      Up to now, he still nah tell us whether he win or lose.

      UP TO NOW, he nah tell us that HE CAME THIRD – – – and LAST !

      What a creature.

      Talk about “trouble in party”.

      ASK the Gonsalves-designated “SHORT KHAKI PANTS BOYS” just what they feel about COUSIN FRANCIS, who never win ANYTHING, TAKING UP SENIOR MINISTERIAL POST in every term with “multiple COMBINED” super-portfolios like the political Judas. Remember ONLY “potogee” wan suppose to know ‘how to use money’ – – – HENCE THE IMF.

      ASK THE “SHORT KHAKI PANTS BOYS” [Ralph’s very words] about what they tink ’bout the UNDIPLOMATIC DIPLOMAT urchin who daddy giving all the big government jobs too – – – when he too nah win ah ting, and he a foreign born non-naturalized citizen to booth. But he and he dardy giving deyself THE TWO TOP-MOST PAYING POSTS in SVG.

      Ask Gonsalves SHORT KHAKI PANTS BOYS about the ill brat who was brought in to take to CATO’s riding [Sir Milts mus’ be ‘tunning in he grave], arrogantly DISPLACING THE INCUMBENT M,P. as if he was NOBODY.

      ASK copy-cat ‘comrades’ SHORT KHAKI PANTS BOYS what they REALLY THINK about this usurper who was brought in to become SENATOR overnight, so, AND GIVEN YET ANOTHER SUPER-MINISTRY with multiple portfolios – – – just like PAPA DOC and blood COUSIN JULIAN.

      SO, between them THE THREE ‘FAMILY’ have ALL THE MAIN PORTFOLIOS between them.
      And, the SHORT KHAKI PANTS BOYS THEM hah a few insignificant ‘crumbs’ – – – here and there.

      WHAT A sickening EXCUSE FOR a ‘leader’.

      He still trying to grow up in the upstair verandah, looking down ‘pan people – – – and behind the counter HIDING BEHIND MAMA’s frack-tail. And the Cucumber Heel.

  11. This is a great topic for discussion in SVG. Austerity does need to occur. In most ways I agree with Mr Eustace. It is very true that the PM seems to be unable to “walk the talk”. Whenever I read his words in the newspapers he seems to say the opposite of reality. He says he is frugal yet he pays the “fat cats” “sweetheart salaries and benefits” for positions that are not needed. He constantly creates “jobs” in the government that do nothing but create more bureaucracy and cause the people to eventually pay even more taxes. With Climate Change and more droughts coming he closes the Irrigation Dept, (vital infrastructure!). Another example is that there are people in government that get paid “loss of practice” benefits even though they never had a law practice and to top that off, they practice law on the side. I guess this is called “triple dipping”. Not to mention that these people get approximately 30-40 thousand per month total in salaries and benefits!!! while others don’t get paid for months at a time. At least Eustace wants to stop this. Gonsalves has imposed more austerity on SVG than any past leader— VAT tax, Environmental tax, Bottle tax and even postal package tax! He has only slowed down for a few months because an election is coming. Do we need luxury Customs building, NIS building, Bank of SVG building, luxury police stations? meanwhile the private sector builds nothing because Ralph has stolen all our money with his taxes! Congratulations P Farrari for constantly telling us the truth.

  12. I wonder when SVG will get a leader that can “pull their head out”. Ivan Oneal has the best ideas and hundreds or thousands agree with him….they just won’t vote for him. SVG has some of the world’s highest Customs charges. It has a very high Corporate tax. We charge VAT on our own products. It is the most expensive country in the world to farm in, (in the US Mexicans get paid less than 8.US per day, S America averages 2. US, and Africa is .80 US per day, SVG is 18.US per day). SVG cannot compete with the rest of the world in Agriculture because the governments (plural) here have concentrated too much on raising taxes and that has caused labour costs to go up, not to mention that we were being overpaid all those years for bananas. The yacht owners I talk to say that SVG has about the highest fees for docking and such, in all the Caribbean! (I wonder why they go elsewhere). I hear the government is debating on lowering the Corporate tax from 32% to 30%. That is not a reduction, that is a joke! The UK lowered theirs from 25 to 21, Cuba went from 30 to 15. Singapore is listed at 17 but reality is that most pay less than 9%. If SVG wants to attract investors they have to make it worth the while for investors to come here. “Money goes where it is treated well”. It is treated like Siht in SVG. Customs ignores the law to get the max out of everyone….If you want to talk about corruption then talk about SVG Customs!!!!

    Corruption: Illegal or unethical behaviour conducted by a person or persons in an official position.
    SVG: The graveyard of investment

    No wonder that Billionaire investment groups have SVG on the list of “Bankrupt Nations.”

    If Ralph continues Keynesian, “Borrow. Tax, Spend” economics we will continue being bankrupt. SVG does not seem interested in enacting policy that creates jobs, (lowering the financial burden for the private sector). Instead, wealth for the government poverty for the people.
    Opportunity in SVG:…. get a plywood table set it up in Kingstown and sell breadfruit or plastic jewellery, or get a cooler and sell cold drinks. What about production? What about attracting investors to create jobs? As a start, we have to rid the government of greed and arrogance. The current Fiscal incentives policy attracts the corrupt elites, and ignores the grass roots.

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