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St Lucia government to adopt debt ceiling recommendation
Published on May 5, 2014 Email To Friend    Print Version

By Caribbean News Now contributor

CASTRIES, St Lucia -- A recommendation by Saint Lucian management and development consultant, Melanius Alphonse, to implement a debt ceiling is now under serious consideration by prime minister and minister for finance, Dr Kenny Anthony.

melanius_alphonse7.jpg
Melanius Alphonse
In an article published by Caribbean News Now on October 1, 2012, entitled VAT or turning point?, Alphonse noted, “Saint Lucia is in serious need of a debt ceiling, which will limit the amount of money that this government and all future governments can borrow.”

Anthony’s acknowledgment of this came last Tuesday during his presentation of the 2014/2015 estimates of expenditure in the House of Assembly.

“I believe that the time has come for Saint Lucia, to enact legislation to positively set debt ceiling for governments on the conditions of moving forward. The first move would be to ensure that the constituents set their own fiscal position, and live in accordance with it,” the prime minister said.

He questioned, however, whether everyone will adhere to the discipline of the levels of a set debt ceiling, while noting nonetheless that it is practical for Saint Lucia to move in this direction, especially as many countries have already adopted this system and it has proven successful.

Alphonse seems to be on a roll in offering advice free of charge to both the government of Saint Lucia and the opposition United Workers Party (UWP).

In another article published by the government of St Kitts and Nevis on March 26, 2014, “St Kitts-Nevis an example of growing economy, regional consultant tells St Lucia opposition”, Alphonse explained his reasoning why a better exercise for the UWP would be to examine what St Kitts and Nevis is doing to have achieved economic growth of 1.7 percent in 2013, projected to rise to between 2.5 and 3 percent in 2014, notwithstanding the political pressures to debate an opposition motion of no confidence, and calls for the ousting of Prime Minister Denzil Douglas.

Instead, Dr Gale Rigobert and political leader Allen Chastanet visited Barbados on March 19 to meet with public and private sector representatives to discuss a number of issues, including meetings that were part of the party's policy development strategy ahead of the next general elections and its possible return to government.

In an invited comment on the 2014/2015 estimates of expenditure and debate in the House of Assembly, Alphonse referred to the pointed departure of three UWP parliamentarians while their colleagues were speaking during the debate as an “abdication” in spite of extensive coaching and rehearsals.

In his rebuttal summarizing some of the UWP debate contributions, the prime minister remarked: “The member for Dennery South (Edmund Estaphane) says fish landings drop when the SLP is in power; this reflects our refusal to rationalize with the people and tell them the truth on what we face. The member for Micoud South (Arsene James) reminded us that he was a teacher saying we (the SLP) have ‘gorjeted’ the people of Saint Lucia; and the leader of the opposition (Dr Gale Rigobert) disclosed that she interrogates figures. This is the first time in my life I have heard of this phenomenon. As far as I know, figures do not talk back to you.”

Alphonse also noted that the 2014/2015 estimates of expenditure, as stated, will require strict adherence to budget control of capital and revenue expenditure as negative budget divergence, unemployment and domestic demand for goods and services are still Saint Lucia’s largest barrier towards actual economic recovery. These factors, he said, require efficient management to prevent further derailed and dismal economic performance to permanent decline.

“The time has come for the prime minister to divest his dual portfolio and appoint a true finance minister to lead Saint Lucia out of this economic mess,” Alphonse said.

“Domestic demand, in particular is one of the economic sectors that is suppressing Saint Lucia’s ‘death row’ economy. Construction projects, such as Le Paradis and the Black Bay development, among others, remain abandoned with no achievable plans by Invest Saint Lucia and the government of Saint Lucia to resume construction and no funding likewise, although the country has settled for a heavy reliance on the hotel economy, with its uncertain and limited growth,” he continued.

According to Alphonse, the 2014/2015 estimates of expenditure project no hope on the horizon and he does not see a recovery anytime soon. Right now, 24.9 percent of working age Saint Lucians are unemployed – with 39.9 percent youth unemployment as the official number. The real figures will probably climb higher, with another 3,000-plus students graduating this summer.

“The government of Saint Lucia, under the stewardship of Kenny Anthony, delivered dismal 2014/2015 estimates of expenditure of how badly it has handled the economy and what is coming; carefully delivered during the Saint Lucia Jazz and Arts Festival April 29 – May 11, 2014, designed to lead Saint Lucians like ‘sheep’ to the slaughter,” Alphonse said.

With the prospect of continuing to wait for “better days”, the situation is not turning any better. The prime minister mentioned the possibility of Europe opening up as “Canada has slammed the door” on Saint Lucians, he pointed out.

For the first time in about 12 years, Saint Lucia’s oldest indigenous bank will reportedly be proposing to its shareholders the nonpayment of dividends for the 2013 financial year.

Further, Alphonse said, businesses keep shutting down, including banks like RBC/RBTT. Two branches, one located in Vieux Fort the South of the island and the other at the Gablewoods Mall in the north, while two other branches in the shopping centre of Castries will be consolidated.

“Dedicated and efficient economic management towards strategic development goals as well as prioritizing investment capital as described in my article of October 10, 2012: Build a Saint Lucian brand not a charity economy, is an immediate requirement that the minister of finance should put to action in order to re-energize local entrepreneurs and the business climate,” Alphonse said.

“It may take over a decade to reduce unemployment from 24.9 percent to 15 percent or, from 39.9 percent youth unemployment to 10 percent. The situation is critical,” he said.

“And, if any one was in doubt about the ‘death row’ state of the Saint Lucian economy, use of the sinking fund explains it all. Recently, the government of Saint Lucia has found itself unable to raise required revenue, neither can it borrow. As such, the sinking fund was predominantly used to service recurring expenditure and debt obligations such as bonds, together with the EC$55 million overdraft previously established. Instead of using the sinking fund to strategic investment in development and capital expenditure that would generate economic growth,” Alphonse concluded.
 
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Comments:

kelba james:

Mr Alphonse, with all your credentials, you have never heard of "Interrogate and analyse statistical data"? Yes figures can speak to you. Considering someone of Miss Rigobert's class the least you could have done if it was the first time you were hearing it, was to research it. I am ashamed.

Melanius Alphonse:

Kelba James: Nowhere in the article was I quoted as saying I had never heard of "Interrogate and analyse statistical data". The quoted remark in that respect was clearly attributed in the article to the prime minister as part of his "rebuttal summarizing some of the UWP debate contributions". Readers should therefore assume that Kelba James is in fact ashamed of Dr Kenny Anthony for making this remark.


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