Eustace questions extent of SVG’s debt to PetroCaribe

The figure being quoted by the government is not a true reflection of St. Vincent and the Grenadines’ (SVG) national debt, Leader of the Opposition, Arnhim Eustace said Monday.

Eustace said on his weekly radio programme that the debt under the PetroCaribe oil initiative with Venezuela is not reflected on the government’s records.

“There are two issues here: the size of the debt, and where to find it,” he said.

Eustace quoted a report compiled by the Bank of Nova Scotia, which says that the overall debt for all members of PetroCaribe amounted to EC$29.7 billion.

The report also says that SVG owes 3 per cent, EC$900 million of that amount.

But Prime Minister and Minister of Finance, Ralph Gonsalves has said that SVG only owes EC$140 million under PetroCaribe.

PetroCaribe is an accord with Venezuela that allows countries to defer payment of part of their oil imports from the South American nation.

Eustace has tabled a question on the debt to be asked in Parliament on Wednesday.

At tomorrow meting of Parliament, Eustace will ask Gonsalves to indicate the level of debt owed by the government of SVG to Venezuela under the PetroCaribe Oil facility as at June 30, 2014.

Eustace will also ask Gonsalves to tell Parliament where the debt recorded in the National Debt, “given it’s not recorded in the Estimates for 2014”.

He will also ask Gonsalves to say how much has been paid in interest and principal under the loan facility and where it is recorded in SVG’s National Debt Records.

Eustace told listeners to his programme that the government often speaks of the nation’s debt-to-GDP ratio, which stands at 72 per cent, as being not too bad.

However, Eustace, an economist, said that the international best practice is to keep the debt to GDP ratio at 60 per cent.

“We are a bit over that, but it tell us nothing of the PetroCaribe debt,” he said.

Eustace said he was alarmed that as a Member of Parliament he was not given that information by the government.

“… you can’t find it anywhere in the Estimates. I should have known how much will be paid and how much it added to our debt,” said Eustace, who shadows the finance ministry.

“So, I ask those questions specifically … to get the size of the debt — because the only one I had is Bank of Nova Scotia, which, by the way, I believe is pretty accurate, despite the Prime Minister’s protestations.”

Eustace said that even if the debt is EC$140 million, it should be added to the National debt, which he said stands at EC$1.5 billion.

“That’s what we are asking about. Where is it? Where can we as a people identify where that debt is, because those figures are important in terms of how we are viewed by the international community.

“Because, if Bank of Nova Scotia is right, then our debt to GDP ratio will go over 100 [per cent], instead of being 70 or 72. It will go up to about 116.”

Eustace cited Gonsalves as saying that the EC$140 million that SVG owes to PetroCaribe is tied up in two state-owned companies.

“But the fact remains it has to be repaid and some of it is being repaid. But where do we see it? How is the company able to repay it without any government involvement when government is spending it?

“… He hasn’t convinced me up to now when it comes to that. I believe the Bank of Nova Scotia did some good work. Until he can come with something that is more convincing, I will stick with that, because I have heard nothing but hear him speak. And now he says when it comes to the real answer in parliament he will do it in a perfunctory manner,” Eustace said.