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‘Too Much ($2.9b.) Debt’

Image of Dr. Ubaldus Raymond [PHOTO: Stan Bishop]

Image: Dr. Raymond says Saint Lucia’s high debt is creating headaches for government’s plans. [PHOTO: Stan Bishop]
Dr. Raymond says Saint Lucia’s high debt is creating headaches for government’s plans. [PHOTO: Stan Bishop]
MINISTER in the Ministry of Finance, Dr.Ubaldus Raymond, says government remains resolute in generating increased revenue through more efficient methods while simultaneously reducing its exorbitant debt.

Dr. Raymond said the national debt currently stands at about $2.9 billion, $800 million of which was incurred in the last four years, adding that government currently pays $180 million in interest, compared to the $110 million four years ago.

According to Dr. Raymond, government’s recurrent revenue currently stands at around $950 million.

He said that with debt instruments either becoming due or maturing and government’s inability to pay down the debt due to limited finances, a decision had to be made to roll over that debt which, he said, will not result in increased debt.

Dr. Raymond said he has since met with the heads of departments in the Ministry of Finance and expressed government’s policy sentiment as far as debt management is concerned, adding that government will be replenishing the sinking fund, which is basically money put away to pay off debts when they mature.

Dr. Raymond, who serves as Leader of Government Business in the Senate, said government’s traditional approach to the financial markets every six months seeking to raise funds to finance its operations places “a tremendous burden on our cash flow.”

“If we missed just one of those payments, we are in serious crisis as far as the financial market is concerned,” Dr. Raymond warned.

Two of the loan reissuances he sought Parliament’s authorization for on Thursday were loans incurred in August 2006 for ten-year tenures that matured last April. Dr. Raymond said government had no choice but to roll over the debt since no money was allocated for debt payments in this year’s $1.4 billion budget.

Dr. Raymond said government will use the amortization method of paying off its debt, which entails paying both interest and principal simultaneously so that when the debt matures, there is nothing left to pay.

“We are taking a very aggressive approach in reducing our debt because debts are not good, especially the unsustainable debt we have in this country, which is something we take very seriously. Our policy decision as far as debt management is concerned will be reflected in our 2017/2018 Budget.”

He chided the previous administration for the current high debt level, adding that no records exist of any debt management practices implemented by that administration. He believes that had the last administration remained in office any longer, Saint Lucia would have been “heading to the IMF.”

“We are in a very dangerous situation in this country, not just our debt levels, but the unemployment situation,” Dr. Raymond lamented.

Nevertheless, he said plans to generate increased revenue include reforming the Inland Revenue Department (IRD) and Customs Department to make them more efficient.
Dr. Raymond said the Eastern Caribbean Central Bank (ECCB), Caribbean Development Bank (CDB) and International Monetary Fund (IMF) are currently conducting a joint diagnostic assessment of Saint Lucia’s fiscal state. A report on their findings, he said, is expected by this month-end.

NOTIFIED

“Upon receipt of that report), we will see exactly where we have found ourselves. The public will be notified as to what we inherited as a government as far as the fiscal position of this country is concerned,” he explained.

Having inherited a $1.4 billion budget for which, he said, there is no policy statement as guidance, Dr. Raymond said government has no choice but to “try our best in managing what we have within that budget.” He said the current environment pales in comparison to that of 2011 when the UWP left office with lower debt levels and unemployment rates.

“We are walking, basically, on a thin thread. So it is an emergency in this country right now as far as debt management is concerned and we are taking on this thing aggressively,” Dr. Raymond said.

While Prime Minister Allen Chastanet had previously said that government would seek a supplementary budget should it become necessary, Dr. Raymond said that possibility seems unlikely. However, he said Saint Lucians can expect a ‘growth strategy budget’ next year.

“It will be a performance-based budget,” Dr. Raymond said. It will not be a budget that we just put together and just say it’s a mathematical budget.”

Stan Bishop began his career in journalism in March 2008 writing freelance for The VOICE newspaper for six weeks before being hired as a part-time journalist there when one of the company’s journalists was overseas on assignment.

Although he was initially told that the job would last only two weeks, he was able to demonstrate such high quality work that the company offered him a permanent job before that fortnight was over. Read full bio...

4 Comments

  1. I am now convinced that ubaldous Raymond has no understanding of basic economics. Sir may I advise you to listen to the skilled technocrats you have in the ministry who are well trained in the field. Sir if you understood anything about market dynamics and the had a proper appreciation for the fiscal you would know that you cannot generate a sinking fund from a deficit position when you struggle to borrow to even cover current obligations.

    If you were serious you would understand that the only way to reduce the deficit is either by increasing revenue not cutting taxes and expecting revenue to increase or a significant reduction in expenditure. Sir before you came to the media with your half cooked remedies please read the last IMF report or the Eccb report on Saint Lucia. If you do not understand the contents the technical officers in the ministry can surely take time to explain to you. Please take time to understand the problem you trying to solve before coming out and making silly statements which embarrasses your ministry

  2. ANONYMOUS

    SIR /.MADAM PLEASE REMEMBER MR. UBALDOUS RAYMOND IS THE ST. LUCIA MINISTER OF FINANCE HE WAS A PROFESSOR OF ECONOMY AT A UNIVERSITY IN THE USA
    HE WAS JUNIOR MINISTER WITH THE SLP GOVERNMENT . ( ECONOMY /FINANCE ) ??
    HE WAS ..SOME THING IN ONE OF THE ISLANDS WHERE HE WAS FIRED 4 NOT HAVING THE PhD THAT HE SAY HE HAVE ( IN WHAT AGAIN ) ??

    U-BALL-DUST RAYMON IS A MASTERPIECE THE MASTER OF DISGUISES THE MODEL OF WHAT LUCIAN’S VOTED FOR. VERY PROFICIENT IN MONET MATTERS.
    MY BATTLE CRY
    “I AM LAMENTING IN SACK CLOTH AND ASH”
    PLE TA PLE TWIST
    TA TOE TA TOE

  3. SO A SAMBO IS PUPPETED TO TELL US THaT “Caribbean Bank & IMF are coming to TAKEOVER THE MINISTRIES OF FINANCE:(
    The arrival of DARTH VADER was predictable once the the emperor was elected to STRIKE BACK
    This minister is a papier mache replica of Peter Judas Josie

  4. DASSAULT MIRAGE, I was thinking that this was a move by Allan Chastanet to use the, WE HAVE NO MONEY, as a move to cancel the promise he made to remove THE VAT. But if Raymond Is Allan’s puppet you may be on to something to observe closely. I M F. SAINT LUCIA IS DESTROYED, May God help us.

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