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National insurance scheme on firm financial footing, says St Vincent PM as IMF concludes review
Published on August 22, 2014 Email To Friend    Print Version

By Caribbean News Now contributor

KINGSTOWN, St Vincent -- St Vincent and the Grenadines prime minister, Dr Ralph Gonsalves, has made it clear that the country’s National Insurance Services (NIS) is on a firm financial footing, as the International Monetary Fund (IMF) published the results of its most recent consultation.

gonsalves18.jpg
Dr Ralph Gonsalves
Gonsalves gave the assurance regarding the financial state of the NIS as he moved a resolution in Parliament on Wednesday to seek to raise a loan of $15 million from the National Insurance Fund, to liquidate outstanding contributions owed by the government to the fund.

The sum is being raised by the issue of treasury notes, representing an investment for the NIS to be paid over a ten-year period at 4.5% interest.

The prime minister said that the NIS is currently in a very good position relative to its cash flow, at this time. He also noted that the loan is in keeping with the investment policy of the NIS.

Meanwhile, according to the IMF, the economy of St Vincent and the Grenadines shows signs of recovery, but at a slower pace than expected.

The IMF directors noted that the St Vincent and the Grenadines’ economy is showing signs of recovery following a series of negative shocks. Nevertheless, the near-term outlook for growth is challenging due to the high level of public debt and weaknesses in the financial sector. Directors considered that continued commitment to prudent macroeconomic and financial policies as well as structural reforms to improve competitiveness are key to sustaining growth and enhancing the economy’s resilience to shocks.

Directors welcomed the authorities’ commitment to fiscal consolidation and to the realization of primary surpluses in the medium term. They emphasized that ensuring fiscal and debt sustainability, making room for growth-enhancing capital expenditures, and building buffers against potential future shocks will require further efforts to increase revenues and reduce current expenditure. To this end, directors encouraged steps to contain the wage bill, limit transfers to state-owned enterprises, and reform of public pensions system. They also called for elimination of discretionary exemptions, strengthening administrative capacity, and improving tax compliance. While recognizing the need for commercial borrowing for the international airport project, directors urged the authorities to continue to pursue a prudent debt policy to safeguard fiscal and debt sustainability.

Directors underscored the need to monitor the bank and the non-bank financial sectors and to address the vulnerabilities by strengthening supervisory and regulatory standards.
 
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Comments:

C. ben-David:

If things continue like this, SVG will have to start issuing new bonds to raise money to pay our mounting debts. Because we are such an insignificant global economic player, SVG’s credit rating is listed by only one of the three major credit-rating agencies, Moody’s, which gives the country a B1 rating.

This is a fairly good grade if you are a schoolboy in short pants. But it is a very poor score in the credit-rating world because B1 means the country’s debt-repayment prospects are considered “speculative,” meaning there is a high risk of default.

Also called “junk” bonds, these financial products have to be offered at very high interest rates — well above the 4.5 percent mentioned here — in order to attract high risk-tolerant investors. When sovereign debts or interest on the debts cannot be paid, the whole credit market of the country starts to disintegrate. When poor countries can’t borrow money, their people face unimaginable hardship.

Other countries sharing our low rating are hungry places like Lebanon, Papua New Guinea, Mongolia, Senegal, and Sri Lanka.

The only Caribbean islands with a lower rating than SVG are Jamaica and Cuba. (Haiti is not even given a rating, presumably because there is nothing to rate.)

In the Western Hemisphere, three members of the “coalition of the willing” have even lower ratings than SVG: Cuba, Ecuador, and Venezuela. Perhaps we should rename our beloved coalition the “gang of deadbeats.”

This is where the ULP Government is leading us.

May Almighty God have mercy on us all.

Patterson:

“May Almighty God have mercy on us all.” So says C. ben-David:

Thank you C. ben-David for that little financial synopsis and abridgment of SVG’s plight, indeed, there are so few individuals in SVG who has any understanding of the rating agencies work, the nature of bonds, interest rates movement and other financial variables and products driving the Money Markets. It is so refreshing to observe that someone here does know something!

Now whatever is the ins and the outs of the “country’s National Insurance Services (NIS)” and the International Monetary Fund (IMF) published results, one may well ask why should Almighty God have mercy on us all! Do we deserve Almighty God’s mercy? Are we standing up as a nation for the values of Almighty God? Are we as a nation defending the wholesome values of Almighty God? After all are we not informed that Almighty God is a righteous God!

Only this week we read “Former registrar charged with theft, abuse of office, false certification” “Former Registrar of the High Court Tamara Gibson-Marks was today granted EC$30,000 bail after she appeared before Magistrate Rechanne Browne-Matthias at the Kingstown Magistrate Court on three charges.

Gibson-Marks, who was asked to resign on May 21 during a 30-minute meeting with Attorney-General Judith Jones-Morgan, was charged with the theft of EC$21,925 between April 30 and May 21, 2014.” What does that news report say of our ethical and moral rectitude?

Moreover, with the number of murders recorded here each month, SVG is fast looking more like Boot hill and Dodge City, rather than the Caribbean paradise, land of the blessed, names of SVG that I keep hearing being thrown about shamelessly.

If one was to enquire as to what is the “Gold Standard” of the nation’s social calendar, for sure, we would all agree that it is, “Carnival” Vincy Carnival and what a descent into debauchery and looseness that is! And how may one ask does such immoral and wanton depravity brings honour to Almighty God that he should see fit to have mercy on us all in our times of need?

Our Licentious shamelessness has carried us very far indeed from Almighty God’s favour to with which we as a nation, its peoples and its Churches needs repent! Just take a long hard look at us as a nation with poverty at every turn. Indeed the entire country resembles a large, sprawling, god forsaken slum and every man accusing his neighbour for the neglect!

It is my retained view that our poor state of affairs here as a nation, is the direct result of our abandonment of Almighty God and his righteous standards, therefore, he, Almighty God, has abandoned us in turn and has left to fend for ourselves in our poverty, immorality and squalor, thus we needs return in reverential worship and repentance to him before we can look to him again for any mercy whatsoever! We are truly adrift in our plight!

Patterson.
Kingstown Park,
SVG.


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