Letters & Opinion, Politics

Chastanet Stunned: Economy Rebounds

By Stephen Lester Prescott

FOR the past two years, Allen Chastanet, the beleaguered leader of the United Workers Party, has been on every programme in this country to moan, groan, in all his falsity that all other economies in the region are growing save Saint Lucia’s. It did not matter to him that an economy undergoing structural adjustment is not likely to grow in the immediate aftermath of adjustment measures. There was not one single ounce of patriotism or sympathy coming from him. Chastanet is the most unpatriotic Saint Lucian- if we can say he is- to have ever become leader of a political party in Saint Lucia since decolonization.

But Kenny D. Anthony knew what he was about. He was courageous. He took strong measures. He faced criticism. He pleaded; some responded and helped. For others, like Mary Isaac and Guy Joseph, it did not matter if the country was brought to its knees once the Saint Lucia Labour Party went down with it.

Today I present the second and final part of the statement made by the Prime Minister and Minister of Finance and Economic Affairs, Planning and Social Security, Dr Kenny D. Anthony, at his press briefing last week Thursday. This is what he said to the assembled media:

Notwithstanding the improved fiscal position during the first quarter, significant risk remains as evidenced by our high public debt stock. The stock of public debt as at June 2015 stood at $2,791.16 million representing an increase of 0.1 percent relative to December 2014. The low rate of increase was influenced by a $63.5 million loan which was paid off during the period under review.

Interest payment on the debt is expected to be the largest contributor to growth in current expenditure in 2015/16, reflecting past debt accumulation and the maturity profile of the debt stock. This trend of rising debt service cost is expected to continue, as an increasingly larger amount of the debt comes to maturity.

Despite the first quarter improvements in fiscal performance, I expect that there will be a widening of fiscal deficit in the current period as expenditure pressures accelerates. You will recall that I had indicated that this would happen in the 2015/16 Budget Statement. It is therefore important that measures to contain expenditure remain firmly in place.

On the basis of the performance of the economy during the first half of 2015 and expectations for the rest of the year, real GDP growth is estimated to expand somewhere within the range of 0.8 to 2.4 percent in 2015. However, this projection is subject to considerable downside risks given the precarious nature of the incipient recovery coupled with the headwinds emanating from the slow pace of global economic recovery. The economic slowdown in China and Brazil are particularly worrisome.

On the domestic front, downside risk associated with slower than anticipated pace of private sector construction activity and government capital spending on account of acute financing pressures, implies that the outlook although positive, remains fragile.

While I do not have updated figures on the rate of unemployment, I expect that unemployment will be contained and will gradually reduce as investment intensifies and the economy expands.

I believe that there is good reason, barring any major disasters or calamities to befall us, for our people to look forward to the future with greater hope and confidence. The Government has had to take some hard, difficult and unpopular decisions to correct the structural problems of our economy. Some of the decisions were greeted with dismay but they are beginning to bear fruit for all to see.

I remain thankful to all Saint Lucians for their understanding and patience. We have come through a difficult period. We are not home and dry! Far from it! There is still more to be done. Collectively, we can do it.”

Now what was Chastanet’s response? He proceeded to decry and denounce the figures, even accuse the Minister of Finance of lying about the figures. Now why would the Minister of Finance lie about figures when these figures undergo scrutiny by international organisations, the IMF and World Bank included? Surely, if Chastanet is going to accuse Dr Anthony of lying then all the civil servants conspired with him to lie and they too are liars? Never mind that he has acquired a reputation has an accomplished prevaricator!

More good news on the economy will come and Chastanet’s pronouncements are bound to become more absurd, more unpatriotic and more desperate. Wait and you will see for yourself! He cannot help himself!

1 Comment

  1. The economy is undergoing a real melt-down or a spiraling contraction. We have been recording negative growth and now a questionable 0.8 % growth rate. This is from the same government unit that that once told us that we were growing at 15% percent per year, when it was only 3%. What does that tell us?

    This 0.8% may be just be five times the real thing as was the real 3% to the imaginary 15%. So in reality the growth may be just (0.8/5) or 0.16%.

    Another sign that the economy is teetering. The Minister of Finance is constantly running away from the economic disaster here at home he has created. He is always at another airport. In other words he is an “airport prime minister”.

    Yet another sign that the economy is in turmoil is this. Just recently it was reported that a Saint Lucian company had purchased controlling interest in another company overseas to the tune of some $52 million. Good thing for that company. Good going!

    What some are reading loud and clear from this is that investor climate and confidence has fallen so low, and has dropped so sharply that even local investors do not see any potential, upturn or real uptick in the near future in terms of demand or expansion. They, when the national unemployment rate is nearly 30% and youth unemployment is estimated at 50%, are investing overseas rather than locally. What is this called in economic terms?

    The flight of capital. It may be isolated now. However, if the trickle becomes a constant official or unofficial capital outflow, it will signal that Saint Lucia is a failed state. The next stage will see economy in a free-fall.

    As if to re-enforce the totality of dysfunctionality, this administration continues to take aim at the national security apparatus in place and rubbing our noses in its characteristic infantile leadership behavior with claims of a coup.

    To all of the above, I say, watch after all this, how quickly investors will come pouring in with their investment dollars into the Caribbean’s best or safest haven for foreign direct investment.

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