Pierre’s statement on “$100M loan by government from the NIC”

Pierre

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.

(11)(13)
This article was posted in its entirety as received by stlucianewsonline.com. This media house does not correct any spelling or grammatical error within press releases and commentaries. The views expressed therein are not necessarily those of stlucianewsonline.com, its sponsors or advertisers.

16 comments

  1. This, SLP, is beginning to look rather ugly. How come there is no felt moral outrage when a group attempts to get political mileage from the blunders it left its wake, that those following are forced to clean?

    (4)(1)
  2. From "NIC For Dummies" by Smarter People (c) 2019

    1) The uneducated and ignorant may never understand that the NIC must lend the money it collects to a safe borrower. It must.
    2) The larger the intake of money from the workers, the greater the capacity, the amount or the ability of the NIC to lend to reliable borrowers
    3) A safe borrower is any government UWP or the SLP, but with an asterisk regarding the SLP. The latter might give us MADURO-TYPE GOVERNMENT.
    4) NIC or the Fund is only in trouble if it cannot meet the demands of those with legitimate claims for benefits.

    (3)(1)
    • If the mouthings coming out from those Press Releases are anything representative of the next round of the SLP and a majority vote for this, then Heaven help us all. This country will be up the creek without a paddle.

      Then too, we must brace ourselves for Kenny Version 2.0. Welcome to country-buck idiocy on steroids.

      (3)(2)
    • If the government is facing a liquidity crisis, even with good revenue inflows and improved GDP QUARTERLY FIGURES, then one of the following may be at play here.

      A) The previous administration borrowed so RECKLESSLY, that a series of bond issues all matured for payment at the same time, for due payment immediately, after the CHASTANET administration was sworn into office; or

      B) Following this, the Chastanet administration had to have one or several bond issued to cover payments maturing due just after being sworn into office, because of a low or the non-existence of requisite revenue inflows to pay up; or

      C) The Chastanet administration, upon being sworn into office had bonds with 3-year maturities -- meaning debts incurred by the previous SLP administration and NOT the UWP --- due for payment.

      In any case, sums borrowed and denominated in local currency like the EC dollar can be settled more easily. It would not be unusual to see in the near future great use of the 2-month Treasury.

      What is most ironic in all of this, are the explicit displays of SLP schadenfreude about the financial challenges inherited by this administration. Just watch some members as they try to make political hay out of a situation that they themselves have largely created by past mismanagement and historical incompetence.

      (2)(1)
  3. I guess Pierre can answer or explain fully well these questions:

    1. The Government of Stephenson King left 200 million in reserves before SLP took over. Where is that money and on what was it spent?

    2. IF we had such reserves then why was the country in a recession during the greater part of the administration of the SLP?

    3. Is raising VAT the SLP's only means of generating revenue for the country?

    (3)(2)
    • Ok, let's assume all your questions are legitimate but don't you also think that the situation as it stands raises questions that need to be answered? Firstly, Ubaldus did say that the government does not have the $100 million dollars to repay bond holders the money but at the same time he said that we will borrow that amount and pay interest in one month. Where is the government going to get that $100 million and to pay the interest? Are they going to borrow to repay that debt which the borrowed? This will be INSANE!

      We need government to account by asking questions. By not asking questions we allow them (Government) to get away with murder.

      (2)(1)
    • What did you expect from a Know-it-all with a Bachelor of Arts degree in General Studies?

      General Studies and not Economics. Mind you at that time, Cave Hill did not have a degree in Economics. And to get some recognition that you knew some economics, you would have to qualify with a Bachelor of Science in Economics.

      What this means is that not all the important economics courses were included in the Bachelor of Arts degree. Important areas like Mathematics, Econometrics, Statistics, Economics of Transformation, Agricultural, Monetary, Public Fianance and International Economics may not have been offered or studied.

      But political power dulls the thinking of many egotistical personalities. The simplistic approaches to economic governance is what some consider economic genius like STEP. Or, it translated in the inability to finesse a budget that would produce government revenue without stiffling GDP growth.

      These are not generally covered in undergraduate studies in Economics and far less in General Studies. MBA studies are no better at this.

      When the SLP needed money or revenue, the only tool their abysmally limited knowledge of economic informed them to do was to tax and tax and tax. That is all the SLP knows about revenue generation.

      When that would not cover their political extravaganzas, they borrowed. And borrowed. And they borrowed. They simply threw the payment burden on future and younger generations, who would not benefit from all that the borrowing. The proceeds, in large part, went to paying for non-growth STEP transfers of wealth, denominated in foreign currencies.

      Why accuse such people of corruption, when plain compulsive abysmal ignorance will do?

      (2)(3)
      • One have to just shake their heads in disgust and laugh at their theatrics all because he dared to ask questions in regard to country credit worthiness. Everything or anything the UWP does is of esteem fiscal level headed accuracy and is the best option for St Lucians . Their should be no checks and balance do as you please, as if to say when they were in opposition they were not been daily asinine critiques. They even want to undermine that mans intellect by his level of education, they will stoop anything to cover their irresponsible antics. Pierre when they go low just keep going high you always have them on defence

        (0)(0)
  4. Pierre don't worry about the insults and name calling. When they go low you go high.

    (5)(1)
  5. You hit it right out of the park again Pierre. Over to the illiterates and rable rousers. Facts are facts they can't debate it so because they can't debate it they can't deny it. Prime minister Pierre Even after you have spelled it out so "diligently" immaculately and with a economic zar accuracy for them there are those who still fear the 1000 pound gorilla in the room and will quick to believe abosulte nothing you say because they (UWP) members all have wings Coming out of their backs with hailos hanging over their heads. Watch them on the slippery slope.

    (17)(18)
    • He did not say anything. He asked stupid questions that will go nowhere.

      (15)(16)
      • And it's because of people like you who will allow our country to be plagued by uncaring political decisions. The attitude of "it's my party and they do not have wrong" is backward and unhelpful. The questions asked are legitimate and the UWP government has to provide answers for.

        (13)(8)
        • Haven’t you realize the SLP took a similar loan from the NIC with the exception of the amount. This amount is larger because people buys more bonds whe UWP is in government

          (4)(4)
          • Lol. You have absolutely no clue of what you speak. And the big question to you is where will this government going to get the $100 million to be paid back in one month with interest? Remembering that Mr. Ubaldcock said there was no money available.

            (2)(1)
    • The man is asking questions you want to disrespect people by saying they don't understand what he is saying if he knows the people don't understand what he is saying why is he saying it

      (5)(6)
      • What a jackass last question! You need a proper education, idiot. Stop being just a jackass echo chamber for your party. Wisen up. Drink less. Read a good book.

        (1)(3)
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