We all see the lines at the money agencies around the country. Can the Vincentian diaspora shut SVG down? I’m afraid that we cannot ask this question without getting into the weeds a little and that we may lose some of you in the process. However, still follow the best you can.
According to data obtained from the World Bank-KNOMAD report, November 2022, in the years from 2014 through 2018, SVG averaged roughly US$45 million per year in remittances. In 2019, it jumped to US$79.3 million, went down to US$61 million in 2020 before going back up to US$86 million in 2021. All US dollars.
Let’s take the 2021 number (US$86 million). Its EC equivalent is about $232 million. That’s how much money came into SVG in that year whether by MoneyGram or Western Union or whatever means.
To put this in perspective, this was more than the revenue (current) earned by any single ministry that same year, except for the Ministry of Finance. About 87% of the country’s total current revenue came from taxes anyways, and the bulk of it is collected by the Finance Ministry. Besides Finance, the next closest two were Autonomous departments with EC$62.8 million, followed by the Office of the Prime Minister with EC$39.6 million earned in revenue.
The government in its reporting usually break out the revenue earned, by ministries, including Autonomous Departments and the Office of the Prime Minister. Autonomous departments include areas like the Registrar and the courts and so on.
In 2021, the government collected EC$681 million in current revenue. One can argue that a great portion of that came out of the EC$232 million that came from the diaspora in the form of remittances. That’s 34%. Now, you may say that the volcano happened that same year and may have had some impact but consider the 2019 and 2020 numbers. The comparison is quite consistent. Remember remittances for 2019 amounted to just over US$79 million (EC $214 million). That’s about 33% of what the reported revenue was for 2019 — EC$656 million. Despite the challenges the volcano and COVID presented, it is fair to argue that the amount in remittances have been somewhat consistent in proportion to the money that the ministries have earned.
Consider also that the government has been running deficit on its current accounts. This means that the amount it collects in revenue from all these ministries and departments are not enough to cover the daily bills. That’s what “deficit” means in this context. The government doesn’t make enough money to pay its bills.
Here’s a direct quote from a financial summary document put out by the government:
“Preliminary data as at December 31, 2022 indicated that overall, the Central Government fiscal operations deteriorated when compared to the same period in 2021. Current Revenue decreased by 2.2 percent to $666.60 million, while Current Expenditure fell by 3.1 percent to $672.75 million. Consequently, the Current Balance recorded a deficit of $6.15 million compared to a deficit of $12.60 million recorded in 2021. On the contrary, the Overall Balance worsened, moving from a deficit of $172.38 million in 2021 to a deficit of $193.12 million in 2022.”
Take away the diaspora, what happens next? This does not include the barrel economy, but you may consider that if you wish. What happens next?
We know this will never happen because people send monies for different reasons, but to think about it — can the diaspora effectively shut the country down?
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