NewsVaccination Uptake Is The Only Way To Save The Saint Lucian Economy from Crashing

St. Lucia News OnlineJuly 4, 202239395 min

The Philip J Pierre Administration’s worst fears about the state of the Saint Lucian economy have been confirmed. Years of reckless borrowing and misplaced priorities during the last administration have left the country in mounting public official debt of $3.3 billion, plus over $150m of debt arising out of projects undertaken by Direct Construct Finance (DCF), a method used to finance government projects while keeping the related debt off the government’s books until payment becomes due. These DCF arrangements typically become due 5 -7 years after the completion of a project. To get a more complete picture of the government’s level of indebtedness would require the inclusion of another $150 million in payables, amounts due to companies and individuals providing services to the government of Saint Lucia.

With this level of indebtedness and reduced size of the economy since Covid, the country’s ratio of Debt to GDP is very likely to be over 100%, a worrying figure which requires major fiscal adjustment. It now appears that in the coming months, the new government will be under severe pressure to meet its recurrent expenditure, of which debt servicing is a major component.

The new government’s only hope of extricating itself from this financial cliff is to undertake a debt restructuring programme, by consolidating short-term loans and converting them into longer ones. This should improve the government’s cash flow position and ability to meet other recurrent expenditure commitments, especially Covid related expenses.

The government’s weak fiscal position is now compounded by an increase in Covid cases which is threatening economic recovery. Some are calling for a closing down of the borders to bring the spread of Covid under control. But can the government afford to do so, given that tourism remains the country’s main economic driver? This situation places the government on the horns of a dilemma: close the borders and you run the real risk of economic collapse, keep the borders open and you run the risk of being overrun by new variants and Covid infected visitors.

Perhaps, the answer lies in making it mandatory for all visitors to be vaccinated and the requirement of a second test upon arrival, whatever time the health experts decide is best. And as it relates to in-country spread and control of the virus, in addition to the standard protocols of social distancing and hand washing, vaccination remains the best option, and every effort should be made to get the required number of citizens vaccinated to achieve herd immunity. It is important to remind readers, especially the Vax-Hesitant people, that while vaccination does not preclude one from getting infected, it significantly reduces hospitalization and death.

The government needs to be single-minded and determined in securing an uptake in vaccination if it is to save the country’s health system and economy from collapsing and the time is now.

St. Lucia News Online

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