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PM Chastanet vows not to increase Saint Lucia’s debt burden

By MERRICK ANDREWS, St. Lucia News Online staff reporter/editor

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PM Chastanet. File photo

(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.

(8)(11)
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14 comments

  1. It's been 2 1/2 years and you still using the former govt as a scapegoat. When the same is done too you i hope dont complain

    (0)(0)
  2. Saint Lucians it is time to raise the bar. Raise the bar Saint Lucians!

    Why don't the various media houses in Saint Lucia invite experts in the field and other knowledgeable people, to educate the population about our national debt? I know a lot would shut their ears and eyes. These knowledgeable people would be able to write or give clear explanations about various aspects of our national debt and our debt burden. Some would be sufficiently neutral, if others would only listen. Partisan politics is crippling America. We should learn from this.

    Such an effort to my mind would surely take us past the continued cacophony of partisan drivel that is so commonplace in this society.

    A lot of us prefer to behave like pure idiots. The real issues are ignored or glossed over. Then we complain along party lines.

    We continue to show the whole world how ignorant we are. All those ludicrous comments seen here are supposedly coming from our more educated, not excluding our deified political retards.

    (5)(0)
  3. I am flabberghasted at the gall of this man!!! He's sold the country out to the Taiwanese and the Chinese, borrowing billions of dollars (he may call them gifts, but we all know that there's no such thing as a free lunch), with which he's doing roads, education etc, probably to get votes and smooth over other issues, but there's a brand new hospital, St Judes, standing unused and unequipped in Castries, whilst the Victoria Hospital is falling down around the ears of the staff who are doing their best to treat patients in conditions that can only be described as Dickensian!!. He really must think that the Saint Lucian population are all absolute idiots!! What an insult to his people!! It's about time someone with clout brought him to task and demanded exactly what has been borrowed, on what terms, and how it has been "spent", or he'll carry on putting the island deeper and deeper into debt.

    (8)(7)
    • Ha ha ha ha ha ha ha ha ha straight out of the comics with this guy he "PROMISE" not to increase St Lucia's debt ceiling WHAT A JOKE ha ha ha ha ha ha ha ha Hello you have already increase it by ONE HUNDREAD MILLION US that SEVEN HUNDREAD MILLION AND CHANGE EC almost a billion dollars and that is just the money for the airport alone, he was borrowing left right and center under the radar of parliament. When the extruded product took office the country already had high debt ceiling instead of United Worthless Party move to reduce it they roll the dice by borrowing monies to fund their pork barrel projects in the hope they will pay off the countries debt ? Oh yeah we are on the road to "prosperity" can't you all feel it only those who don't understand dollars and $ense think he is doing just great God help us.

      (7)(3)
  4. In one failed swoop you, Mr. Chastenet, increased this country's debt burden by $500,000,000. In one day! How do you justify that? From approximately EC$1 billion dollars to EC$1.5 billion? You are a heartless man . . . you and Ubaldus!

    (5)(3)
  5. chas you forget to tell the nation that all the airport taxes collected will go into the hands of the taiwanese that you borrowed the money from. did you give them operational control of our airport too? u have been determined to sell us to china for a dollar, dont know whats coming out of your mouth and if its true. our hard earned tax dollars at the airport wil go to taiwanese for the next 50 years or more. what does that say about our development? why cant we borrow that money from our own region and allow it to stay inside our hands. thats what the asians do, all of them. but we will never learn

    (5)(6)
  6. More than 95% of voting public, and of the population would fail a test on the fundamentals of the national debt. Another 95% or higher of our elected members and ministers would also fail such a test. One is not here just talking about reading out the amount or debt owed in a particular fiscal year, in a budget speech.

    Most Saint Lucians are just expressively emotional about our national debt, depending on who is in power or better said, where their party affiliation lies, to arrive at an opinion. Yet, in order to grow our economy, the government of the day must make critical judgements about where, and how (under what repayment terms and conditions) it is going to borrow, basically what should be investment dollars in order to grow the GDP.

    The latter point goes straight above the heads of most, because of the profound ignorance of developmental economics within the resident population.

    A lot of people just ".. don't know what they don't know". More charitably, what it is they need to know.

    For starters, and for the proper management of national debt, most people are just not smart enough each time, to make the critical distinction between local sources and foreign sources of funds. For example, most still do not appear to understand that borrowing from the national insurance is safter than borrowing from an overseas institution.

    Fear mongering will elevate anxiety to the level the the national insurance unit will go bankrupt. Yet that institution is managed proprly is collecting from the currently employed.

    Listen to the conversations about debt around you. Little or no mention is made, or attention paid to, regarding conditions of repayment, maturity dates and the servicing of the debt. Our ignorance is on wide and international display.

    Little or no attention is paid in the so-called House debates, to the bundling of payments and the conditions in place to repay large tranches of maturing debt in the current or coming fiscal year. So much ignorance is on display that is it amazing that the economy still survives the mass and depth of ignorance of so many of our politicians.

    The lack of knowledge required to manage the debt burden is staggering. Let's take a look at the ratio itself.

    The debt burden issue is about the debt ratio. A ratio is one number divided by another. The last administration, either through just plain ignorance, political insensitivity, or incompetence, never even attempted to have a policy on that.

    GDP hovered in negative territory for the most part.

    The debt-to-GDP ratio, which signals at what favourable interest rate lenders will allow Saint Lucia to pay back can be managed by manipulating (operating policy-wise) the numerator of our ratio, the debt, or by manipulating the denominator, the GDP figure or both figures at the same time.

    This most definitely calls for more than just a smattering of knowledge. Borrowing policy must adhere to one fundamental rule. We must borrow as an investment and nat for consumption.

    If the last administration had followed this rule, we would have borrowed for renewable energy projects, resulting in employment. lower energy and fuel price,s and most of all, greater energy independence. Then we would be able to sing lustily "Sons and daughters of Saint Lucia ... "

    But most political hacks may have a great deal of difficulty in either accepting or understanding any of this. "He who knows not, and knows not that he knows not, is an ass."

    It calls for deeper knowledge and insight not generallly available from basic economics textbooks or courses. Now you may have just realized why there is so much foolishness, and hot air in the House of Assembly passing for understanding and comprehension of the mechanics of our debt issues.

    (6)(3)
    • Most Saint Lucians do not know their @#[email protected]! from their elbow when it comes to economics. Look at the load of rubbish these blasted idiots repeat as parrots. Yet they think that they are making sense. Crap shooters.

      (5)(2)
    • Only the very ignorant among us continue to confuse the debt issue with taxation. We have a very long way to go to making wise decisions and utterances regarding these two very different issues.

      We must educate ourselves.

      Once you are unable to make the difference, between debt and taxation the ignorant and dumb politicians will make us even dumber people.

      Now we know why dumb politicians had us to believe we needed higher taxation every time they needed money to run the government.

      We as a people refuse to learn, just taking comfort in escapism, our recreational drugs, rum, and 'dunce' hall and country music.

      (0)(0)
  7. Fool me once, shame on me, fool me twice, shame on you. You complained and marched about Vat and taxes beening too high but have turn around and increase taxes and fees, some hidden, on people to replace what was lost on Vat. So basically we the people are paying for and will continue to pay for your shortcomings. Wonder why all those complaining about Vat before are not making their voices heard now.

    (5)(5)
    • Wow! Another idiot. First of al debt policy is not fiscal policy, which is really tax policy. So. do not confuse the two. Apples and oranges.

      What our stupid party hacks not understand is that once any administration expands government by increasing expenses, people come to expect the things given in the past will continue. People love handouts.

      Services expenditure tends to increase because of inflation. Therefore, it is extremely difficult to cut back whichever government comes to power. Stop talking foolishness.

      (4)(3)
      • Calling one names doesn’t change the equation. The truth is always hard to swallow. I feel for you.... deflecting just doesn’t cut it for some of us. It takes a patty hack to call one the same. The leader of the nation needs to be truthful to the people. Blaming the other guy for what he promised just doesn’t cut it for me.. Open government, transparency, truthfulness to name a few is in very short supply with this group

        (4)(1)
    • Wow! Another idiot making remarks. First of al debt policy is not fiscal policy, which is really tax policy. So. do not confuse the two. Apples and oranges.

      What our stupid party hacks not understand is that once any administration expands government by increasing expenses, people come to expect the things given in the past will continue. People love handouts.

      Services expenditure tends to increase because of inflation. Therefore, it is extremely difficult to cut back whichever government comes to power. Stop talking foolishness.

      (2)(3)
  8. Pure double talk. Open the hospitals. Publish the Impacs report. Make it real.

    (5)(2)

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