Government’s intention to enact new legislation governing how the State borrows and accounts for monies borrowed and paid is a commendable albeit overdue effort.
During last week Tuesday’s Parliament session, Prime Minister Dr. Kenny Anthony, as part of the discussion on resolutions before the House to authorize guarantees for payments to road contractors, said that introducing such a measure had become necessary.
For many years now, there have been calls for such a measure to be introduced in an effort to ensure transparency and accountability on the part of government’s handling of the public purse, especially when it comes to borrowing funds for major government projects. Citing concerns raised by Castries Central MP, Richard Frederick in the House that day, Dr. Anthony noted that he, too, had made similar recommendations while in opposition years ago. He also referenced longtime banker and former permanent secretary, George Theophilus, offering similar suggestions years ago that went unheeded.
At the heart of the push for the new legislation is that while a government’s fiscal budget is simply a statement of its intentions to embark on its ambitious plans and projects for the country, sourcing the necessary financial wherewithal to fund such budget remained crucial.
In recent years, especially since the drying up of financial aid from traditional allies, low output from the local banana industry and an anaemic manufacturing sector, successive governments have had to seek the assistance of both internal and external financial institutions to finance government projects. While successive governments have argued that such borrowing comes with reduced interest rates, many have also made the point that the national debt has escalated too high.
While the Prime Minister did not give specifics as to what components will make up the new legislation governing government borrowing, he indicated that “both sides of the House need to speak in similar language on the issue of borrowing.” Neither did he give a timeframe within which such legislation can be expected to come into force.
Pending legislation notwithstanding, a system can only work well when the intentions it governs are purely for the good. As is the case with many pieces of legislation, there always exist situations where loopholes are abused. Saint Lucia’s debt-GDP ratio is already at unacceptable levels and borrowing huge amounts of monies to finance government projects – however important they are – does not change the fact that runaway debt levels are proving too difficult for us to curb.