The United Workers Party (UWP) is duty bound to enlighten the people of Saint Lucia on the facts about the country’s fiscal problems. The Dr. Kenny Anthony Administration seems to have succeeded in hoodwinking the people of this country into believing that somehow the present crisis is the doing of the UWP.
The Deputy Prime Minister hit the all-time low when he told the nation that the country is in its current state because of the purchase of the Daher Building.
The Daher Building along with 10 acres of residential land at Union was sold to the government for $35M, and $41M to renovate. This would have been funded by a financial institution with no debt to the government as the building was being used as its own collateral. This building has 138 sq feet of floor space and a car park that holds 120 vehicles. The investment would have been paid off by savings and leasing within 12 years; the same period of time that the investment in the new SSDF home is expected to be repaid. So if the Daher transaction caused the country to go into recession in 2012 and 2013 then one must conclude that the purchase of the Coubaril home to house SSDF will cause further recession in the coming years.
The UWP takes full responsibility for allowing the SLP government to mislead the country into believing that the Daher transaction was a disaster without explaining the basics of the purchase to the population. The UWP places the SLP on notice that its PR timidity is a thing of the distant past.
Fellow Saint Lucians, the country’s current fiscal disaster has nothing to do with the UWP Administration. The current economic crisis has everything to do with the bad management of the economy by the SLP Administration which is now inundating you with excuses upon excuses, and blaming everybody else but themselves. The inconvenient truth is that 83 percent of the time that this country has suffered economic contractions – that is negative real GDP growth since Independence – has been when Labour is in power. Now, don’t take our word for it. Visit the IMF website or the Social and Economic Review publications from 1979 to present.
This is no coincidence fellow Saint Lucians. The SLP policies and programmes don’t usually cause economic growth. Their policies are about borrowing lots of money to fund cosmetic activities that will cause you to believe that things are nice, like plastering the country with flags for Independence; and not to mention, paying handouts to SLP supporters at every opportunity.
Coming out of a global financial crisis, one expected there to be fiscal challenges. Every country has had those challenges. But it would take appropriate fiscal policies to address those challenges, not excuses. The UWP suffered challenges in 2009-2011, but did not complain bitterly nor did it look for excuses; instead the UWP implemented policies that grew the economy while managing our debt position with prudence. That is why Saint Lucia recorded growth, albeit small in 2010, and 2011. The UWP handed over a buoyant economy to the SLP. Those are the facts.
The IMF in one of its recent reports, stated that the UWP administration “weathered the storm of the global financial crisis well.” If Saint Vincent, Antigua and Haiti are growing so too would Saint Lucia if we did not have a constitutional lawyer with no Economic or Financial Management skills as our Minister of Finance. But we must give the Deputy Prime Minister credit for being forthcoming with the truth – a rarity you may say. While commenting on the current economic disaster, he confessed by saying that “the decisions we took previously are coming home to bite us.” We are pleased to expand on his statement further by highlighting some of the decisions that brought us here:
1. Upon assuming office in 2011, the Prime Minister sent a tsunami of fear into the domestic economy claiming that the country is in a ‘mess’ and so households need to exercise belt tightening measures and make sacrifices. With growth in 2010-2011 was the country in a mess? Governments usually have to over borrow to spend in post-depression years in order to spur domestic spending, and here we had a prime minister, immediately upon assuming office, putting fear into the minds of households about a messed up country. The UWP never instilled such fear on its households, not even in the midst of the crisis!
2. With aggregate demand falling, VAT should have been held back until aggregate demand rose again. VAT in such a situation will cause recurrent revenue to fall which would naturally exacerbate your fiscal deficit. You see, before VAT, government got its indirect taxes at the ports of entry; but under VAT it is collected at the point of sale and if households are not spending; Government will not collect its revenues.
3. This Labour Government continues to embark upon huge levels of borrowing in programmes that do not grow the economy. In its first year in office since the 2011 elections, the SLP borrowed in one year more than what the last UWP administration borrowed in five years. What is crippling the economy is the fact that those monies are not spent on programmes that stimulate productivity and grow the economy.
So the Deputy PM was spot on; the decisions taken by this Labour Administration are coming back to bite us. If Saint Lucians really knew the record of the SLP in office, I don’t think that they would be eager to reelect them into office. But again, the UWP can only blame itself for being timid with its PR in the past. The SLP has proven to be terrible managers of the economy while excellent in doing things that make you think that they are better managers. In essence, they are better at deception by far.
The UWP party will keep the truth and facts alive. So the next time that you will be asked to choose between the SLP and the UWP, keep the following in mind:
When the SLP took office in 1997, debt to GDP was about 37 percent which the Labour Administration increased by 30 percent, bringing it up to 67 percent by the time they demitted office. The UWP only added a mere three percent to it, between 2006 – 2011, at a time when USA, Japan, Singapore, UK were all borrowing over 100 percent of GDP to resuscitate their economies after the global crisis. In 2011 the Labour Government inherited a debt to GDP ratio of 70 percent. In less than three years they have brought our debt level up to 89 percent of GDP. These are the facts that they refuse to tell you.