$53m loan for new buildings ‘is precisely what we need’ — Camillo

Minister of Finance Camillo Gonsalves, on Monday, defended his government’s decision to spend EC$53 million in loans to construct a new court, Parliament building and a hall of justice, saying that the spending would help the economy recover from COVID-19.

In addition to the two structures to be erected in Beachmont, Kingstown, the government will also build a temporary parliament building in the Calliaqua-Glen area, which would later be converted to a students’ hostel.

A temporary courthouse would also be constructed.

Gonsalves dismissed Opposition Leader Godwin Friday’s argument that during a pandemic that has significantly affected the economy is not the right time to execute in such projects.

“This loan at this time is precisely what we need… Look, the government isn’t shutting down just to build a parliament… We can walk and chew gum,” the finance minister said.  

He also quoted the bible as he made his case, telling lawmakers:

“He that observeth the wind will never sow and he that had regarded the cloud will never reap.

“If you wait for perfect weather, you never do anything. You’ll never sow a single seed. And if you keep watching every cloud, you will never harvest. That is what we heard today from the Honourable Leader of the Opposition.”

The finance minister said that there is a fundamental disagreement between the opposition leader and the government about how stimulus spending works in a time of economic crisis and contraction.

“It was John Maynard Keynes, who said that it is in the boom, not the bust when you tighten your hand at the treasury, because when things are tight is when you have to spend some money to come out of the tight situation that you’re in,” Gonsalves said.

He said that during the supplementary estimates debate in March, the government said it would spend EC$30 million on infrastructure, because it will assist us by putting people to work.

Gonsalves said the drivers of the Vincentian economy are tourism, agriculture, and construction.

“Well, tourism is dead right now. And if we are going to drive our GDP, we’re going to have to drive it primarily with agriculture and with infrastructure and construction.

“And we had that argument. And the refrain was now is not the right time to do infrastructure. Put the money where the pain is. Yet I stood in Parliament today and heard no less than four members of the opposition was asking about roads and community centres that need fixing.

“Why did they not say, ‘Well, I understand things tough right now and you really shouldn’t be taking money to fix road. Let us put the money where the pain is’?”

The finance minister said infrastructure spending is a useful fiscal stimulus in the context of a country like St. Vincent and the Grenadines.

“And just like the roads that they want built, and justifiably so, those roads are being built with loans… But I didn’t hear anybody say, ‘Leh we send back da’ loan dey, don’t fix the road, times are hard. Because we know that the road needs to be fixed.”

The EC$53 million is a loan from Taiwan that will be for a term of 20 years with three years’ grace and the interest rate will be 1.2% plus the six months London Interbank Offered Rate (LIBOR).

Gonsalves noted that Minister of Works, Senator Julian Francis had said that the four new buildings would put 400 Vincentians to work at a time of COVID.

“So where are we going with the facile analogy of somebody who is buying a car when they lose their work? We’re not buying a car. We’re putting 400 people who are out of work,” he said in response to an analogy that Friday had used during his contribution to the debate.

He said that the opposition leader had also spoken to the symbolism of such spending on new buildings for parliamentarians and the court during an economic crisis.

“Well, I believe in symbolism too. …  And there is a symbolism in disrespecting the institutions upon which this country stands. The institutions of democracy and justice require respect in a multi-faceted set of ways and one of them is to put them in decent housing and conditions,” Gonsalves said.  

He said another symbol is that the government “will not be cowed, we will not be daunted, we will not be scared in this time of the COVID pandemic. COVID will not terrify us into inaction. That is a symbol as well.”

Gonsalves said there are some “who tiptoe through life, only to arrive safely at death and there are others who seize the day and seize the opportunities that lie present and display optimism and faith in the country and their people in a time of difficulty.

“And that is a symbol as well. Because yes, we could all hunker down and lock down and hide and wait and crawl out of our caves a year from now, stick our noses out and see what the world looks like. Or we can deal with the world as we have it. And we can say that we intend to continue our march of development and progress in St. Vincent and the Grenadines.”

The finance minister said that the government would not be reckless or profligate. He further noted that there is a three-year grace before repayment recommences.

“We’re not paying it back today, in the midst of COVID. We’re not beginning to pay it back next year in the aftermath of COVID; A whole year hence.

But in the meantime, we’ll be putting 400 Vincentians to work. We will be taking employees out of a sick building,” he said, noting that the current building is 200 years old, played an important role in the history of the country and needs restoration.

“We must not let it deteriorate to the point where it cannot be rehabilitated? Or must we get money from an ally at a fantastic rate of interest so that we can spend it on construction and stimulus activity in the midst of a pandemic when people are out of work, to put people to work?

Gonsalves said that SVG built the Argyle International Airport during the global economic and financial crisis.

“It was the wrong time to do it, Honourable Prime Minister. It was the wrong time to do it. The logic will come back. If we follow the logic today, they will say don’t build a new port. Because it’s a wrong time to build a port,” he said of the port that the government intend to build at the western end of Kingstown.

“They will say don’t build the hotels, because it’s the wrong time to build hotels. Don’t build a new hospital at Arnos Vale because it is the wrong time to build a hospital.

“That is not what this government does. This government invests every opportunity in the people of St. Vincent and the Grenadines and the development of St. Vincent and Grenadines. And we will continue so to do.”