St. Vincent and the Grenadines’ (SVG) social security agency is the least exposed to government debt in the Eastern Caribbean Currency Union (ECCU) and Barbados, notwithstanding the EC$15 million owed to it by the government.
Prime Minister Ralph Gonsalves made the announcement in Parliament on Tuesday as he presented a resolution asking lawmakers to allow the government to raise an EC$15 million loan from the National Insurance Fund to liquidate outstanding contributions owed to the fund.
“Indeed, when the IMF, on the last occasion when they were doing the Article IV consultations, they were surprised at the low level of indebtedness of the central government to the NIS (National Insurance Services).
“It is remarkable in the Caribbean an in the world,” Gonsalves said.
Gonsalves, who, as Minister of Finance has ministerial responsibility for the NIS, said the size of investment portfolio of the various social security agencies held by their respective governments were:
Antigua and Barbuda, 84 per cent; Dominica, 34.6 per cent; Grenada, 24 per cent; St. Kitts and Nevis, 49.3 per cent; St. Lucia, 24.7 per cent; Anguilla, 20 per cent; Barbados, 75 per cent; Bahamas, 40 per cent; and SVG, 10.7 per cent.
In addition, Gonsalves said that in accordance with the investment policy of the NIS, the government puts a 25 per cent cap on the percentage of the NIS portfolio that can be invest in central government instruments.
In addition, he told lawmakers that
there is no cap in Antigua and Barbuda, St. Kitts and Nevis, Barbados, and the Bahamas.
However, in Dominica, where the cap is 35 per cent, the government holds 34.6 per cent of the investment portfolio; in Grenada, the government holds 24 per cent, even as the cap is 20 per cent; and in St. Lucia, the government holds 30 per cent, 6 percentage points more than the cap.
Gonsalves said that before and especially after the December floods last year, his government has been having challenges paying the EC$1.7 million in contributions to the NIS on behalf of public workers.
He said his government will replay over 10 years the EC$15 million owed, and will from this month pay the EC$1.7 each month.
The resolution passed without opposition support.