(SNO) — Saying that his administration inherited the largest and fastest debt accumulation, Prime Minister Allen Chastanet has vowed that he will not increase Saint Lucia’s debt burden.
In his new year’s “State of the Nation” address, he laid the blame for the high-debt burden squarely at the feet of the previous Labour Party Administration, and said when his party came to power all economic indicators were pointing out that Saint Lucia was on an unsustainable economic path.
“My administration inherited the largest and fastest debt accumulation in five years at $3.1 billion,” Chastanent remarked. “The highest recorded youth and overall unemployment rates and the weakest economy in the OECS.”
He stated that over the past 30 months, his government has been able to stabilize the country’s economy.
“After several years of negative and low growth under the previous administration, we have now recorded, for the past two years, over three percent growth; with a reduction in youth unemployment, from close to 45 percent to about 38 percent, and an overall unemployment from 25 percent to just over to just over 20 percent,” the prime minister said.
He stated that his government inherited a major challenge from the Labour Party.
“One of the major challenges my administration inherited was the limited space to borrow money given the high level of debt accumulated by the previous Labour Party Administration,” he said. “Although borrowing is necessary to undertake public sector capital investment projects, we have been determined not to increase the existing debt burden. Our government did so by ensuring, that as much as possible, new borrowing comes with its own revenue stream.”
Chastanet also announced the commencement of major road works throughout the length and breadth of Saint Lucia and the redevelopment of the Hewanorra International Airport, in 2019.
He pointed out that the two projects are funded by two new revenue sources and will not add to the island’s debt burden.
“The funding for these projects were created by two new revenue sources, namely: the Airport Development Tax and an additional $1.50 on the existing fuel excise tax,” he explained. “I reiterate, this will not put undue pressure on the government’s budget, as this new debt is supported by dedicated revenue streams.”
He noted that the two project will trigger what he described as “a wave of economic activity”.
“Their completion will assist in expanding our capacity to reach our growth potential. I am also very excited about the significant number of jobs that will be created in the process,” Chastanet stated.