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STATEMENT BY THE LEADER OF THE OPPOSITION AND SLP SPOKESMAN FOR FINANCE, ECONOMY, INFRASTRUCTURE, PORTS, TRANSPORT AND PUBLIC UNITITIES HON PHILIP J. PIERRE ON THE $100 M LOAN BY GOVERNMENT FROM THE NIC”
The Saint Lucia Labour Party notes the statement issued by the Board of the National Insurance Corporation. It is in an attempt to provide assurances to the public that despite the loan request from the Government the pension funds of all working Saint Lucians are not in jeopardy.
The Board Members have now publicly stated that they are committed and will remain committed to not taking any decision that will impair the ability of the Corporation to discharge its obligations to the NIC contributors.
However, this issue is not related to the Board of the Corporation and it is unfortunate that it was forced to make a public statement. The loan request must be debated in the context of the state of the economy and the financial management of the country. The Saint Lucia Labour Party would be pleased if the Board would make available to the public a copy of the latest actuarial report prepared for the board.
The UWP Government must still answer the following:
1. If there is an oversubscription of Saint Lucia’s bonds and such confidence in the economy as claimed by the Government, why then is the bond holder demanding payment for the bonds instead of rolling them over.
2. Is the Notice by the holder of the bonds to cash in the bonds an indication of concern about the state of the economy of Saint Lucia and Government’s ability to meet its obligations?
3. If at least one bond holder is cashing in their bonds then why does the Government believe that it can repay the NIC through the sale of other bonds thirty days later?
4. If other bond holders decide to cash in, can the Government give the assurance that it will not force the NIC to provide more loans to meet its obligations?
5. The UWP insists that this is a cash flow issue. What does that mean in the context of the large fiscal deficits currently experienced in economy?
6. Why is the government requesting from the NIC a $100M loan at the interest rate of 1% when the actuary has advised that the minimum rate of return on loans should by 5%?
The Saint Lucia Labour Party notes that borrowing from pensioner’s savings to pay government debt seems at variance with the UWP government’s frequent announcements of increase confidence of investors in the government, increase revenue collection from VAT, the airport tax, the CIP, increase in Tourism arrivals and a general improvement in the economy. However, the government still cannot meet its obligation to bond owners even after having been given notice that they would be due.
The Saint Lucia Labour Party reminds the UWP Government that when such loans are requested it must be done with due regard for the viability of the Corporation and in the context of the large increase in borrowing by the government the latest being the announcement of a loan for $175 Million US or $450 Million EC.
The Saint Lucia Labour Party will continue to inform Saint Lucians on the state of the economy and will not be deterred by the nasty attacks of Ubaldus Raymond who has failed to provide sound economic advice to the government.