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Debt reduction
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By Observer

Below are several quotes from the parliamentary records of 2001, the first year of the ULP’s administration. These quotes are not necessarily in the order in which they were presented; or in the same session. We hope that you will make the necessary comparison with where things are today, and what you may have heard recently. You may refer to two of our recent publications, regarding your estimates. You may also wish to consider recent news items, for comparison.

Once again, these are all from the year 2001, and not necessarily from the same session.

The Government’s strategy is to keep the public debt and debt service payments within manageable limits. At the beginning of 2001 total public debt amounted to $640 million or 65% of the GDP, this is slightly outside the targeted corridor, as recommended by the Eastern Caribbean Central Bank. Accordingly, we have been attempting to reduce the debt ratio by a mix of policies, for example, growth in the economy, debt forgiveness, and prudent management of the public finances and by ensuring that loans contracted are used in the most efficacious manner.” — Prime Minister and Minister of Finance

“The Government’s medium term economic strategy had stated that the total external debt should be limited to about 45% of GDP. That is to say the economic strategy which the NDP government had formulated. However, this ratio, has been exceeded with the assumption of the Ottley Hall debt and amounts to roughly close to 47% of the GDP at end of December 2000. The Eastern Caribbean Central Bank has recommended to member countries that total public debt including domestic debt be limited to 60% of GDP. As at December 31st 2000, total public debt for St. Vincent and the Grenadines amounted to 65.7% of GDP, again it had to do with the huge Ottley Hall indebtedness.” — Prime Minister and Minister of Finance

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Our reaction: You may have gathered from recent pronouncements that your current total debt is somewhere north of EC$2.5 billion, with a GDP ratio of probably close to or exceeding 90%.

“But Mr. Speaker, I want to point out that during my time as Minister of Finance we did make significant efforts to reduce the Ottley Hall debt. And Mr. Speaker, if you look on page 496, of these Estimates at the bottom of that page, on section J Ottley Hall Ship Yard project you will see Mr. Speaker, that the disbursed debt outstanding is $106.7 million. And that there is a rescheduled loan for that amount and a subordinated loan for that amount of $49.5 million. And if you look at the total external debt in the line below Mr. Speaker, you will see that, that was put at $424.9 million. But the $49 million was subtracted from it in these estimates, thus showing the total external debt of $375 million. And if you look at the footnote, Mr. Speaker, on that page you will see that this amount that is the $49.5 million represents a portion of the loan forgiven by consortium of banks. That was debt forgiveness that achieved before we left office.” — Opposition Leader, Arnhim Eustace

Our reaction: With close to EC$50 million forgiveness in Ottley Hall debt, you were left with an external debt of $375 million. Today, your external debt amounts to over EC$2 billion.

“You would recall in the Estimates in my broad introduction. I gave a report, I gave a brief synopsis of the report from the Caribbean Development Bank where the Caribbean Development Bank was very concerned about the phenomenal increase in the external debt, since the assumption of the Ottley Hall debt, and we must never forget that. Ottley Hall is a millstone around our necks, eh. If I could shake Ottley Hall off, I will have so much elbowroom, I wouldn’t be jumping like how I have to be jumping to do some of the things that I have to do. But they really left the ULP Government with a big hook inside of the gill, that Ottley Hall debt. It is a real problem.”Prime Minister and Minister of Finance

Our reaction: An Ottley Hall total debt of $106.7 million minus the forgiveness of $49.5 million apparently left a big hook inside the gill of the ULP government. Perhaps you should consider what the debt of $600 million to Taiwan really is.

“When I came in, at the end of the third month, well the beginning of April, because Cabinet was sworn in on April the first. There was a deficit in excess of $14 million. Now that is a serious problem I was faced with. I had no money, no loans to finance the Public Sector Investment programme, so I had quickly to go and negotiate these loans, continue to do some bridging with the Treasury bills, while at the same time seeking to push the grant fund, and that is why I went very early to the Republic of China on Taiwan and that is why on April the 26th, three weeks after we got into office we negotiated this arrangement with the European Union on the $5.5 million.”Prime Minister and Minister of Finance
Our reaction: at the end of 2022, you had a reported deficit of EC$193.12 million

“Now, Mr. Speaker, Honourable Members, I am not saying that everything that the NDP did was bad. I can’t say that. Because you in power for 16 years, 17 years, you must do some good. But the point is this we were left a terrible hand. But once I got the hand I can’t run away from it, I had to play the hand. Mr. Speaker, the final element there the recurrent estimates 4 of 2001, you notice $176,700.00 were approved to provide funds to pay for remuneration of the advisory committee to review the salaries of Members of the House of Assembly. That is what the Venner Report costs. And, of course, it is that expenditure which pave the way for the demise of the NDP regime.”Prime Minister and Minister of Finance

Our reaction: EC$176,700 paid to consultants led to the demise of the NDP. The NDP government had established a committee to review the working conditions of parliamentarians. In short, this is essentially what led to the “greedy bill”, where senators would have received a gratuity. The teachers had reportedly rejected a 12% salary increase as well. Public servants converged on Kingstown in protest. What say you today’s SVG?

As we have previously done, we not only encourage you to pay attention to your current affairs and how they may impact you, but also remember not to forget and make the necessary comparison when possible. That’s the only way to measure your advancement.

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