By Vernon Harris - Economist

The Federation now faces a general election in which the main issues are management of the economy, maintenance of law and order, good governance, and the retention of freedom of speech and association. Management of the economy includes the creation of jobs and the reduction of unemployment, the provision of essential services such as education, health, security and social welfare. Poverty reduction and eventual eradication is a priority. The creation of an investment climate with fiscal and investment incentives for nationals in the private sector to invest in our economy is a priority. These all contribute to economic growth, progress and development.

The rampant growth of the National Debt is one of the key issues in this Federation. The outgoing LABOUR Government came into office in 1995 with an economy which was growing at six percent per annum. The NATIONAL DEBT was EC$212 million. The debt service ratio was 3.73% of GDP (the total value of goods and services produced in a country in a year) and 5% of recurrent revenue. By 2008 the national debt amounted to EC$3,000 million dollars or 3 billion dollars. Each individual, i.e. man, woman and child in the Federation owes $62,500.00. The debt service ratio is 200% of GDP and rising. St. Kitts and Nevis has the dubious classification of being the second most heavily indebted nation in the world. The PRIME MINISTER pours contempt on the question of the size of the National Debt. However the Governor of the Central Bank of Trinidad and Tobago; the IMF, ECCB and the CDB have expressed concern about the size of the National Debt in the Federation. The Debt service obligation is EC$188 million and rising. This accounts for 45 cents out of every dollar of revenue collected. Together with salaries and wages for Government employees and Ministers this amounts to 77 cents. Only 23 cents out of every dollar annually is left to provide for health, education, security and social services. Citizens should be aware this situation is the core of the ills which faces the Nation. It is the prime example of ECONOMIC MISMANAGEMENT. The LABOUR Government must be made accountable for the wanton borrowing from commercial sources to finance unproductive programs which only benefitted the construction company owned and operated by the Prime Minister’ personal friend and advisor from Barbados. According to an Auditor’s report on the activities of this company, it seemed to have been given an open cheque book to spend the Nation’s money as it saw fit. The other Ministers of Government sat around like sheep in a flock whilst the Nation’s resources were being squandered to enrich a chosen few. It is ironic that the LABOUR PARTY is claiming that the country is in safe hands and it should be returned to power to continue on the road to economic destruction, oblivion and poverty.

The cost of living has doubled during the past five years. Food prices have escalated due to the high rates of import duties. These are necessary to service the high National Debt. Thus whenever a mother cannot afford to feed her children because of the high food, or that the Nation has according to the IMF “an unsustainable National Debt”. In other words the country has been brought to a state of economic collapse. At home the Government has shown no understanding of economic and fiscal management. Agriculture has not developed over the past 15 years. Farmers have not been encouraged to produce a variety of crops to certain minimum standards. Prices in that sector are unregulated so that even though famers have duty free concessions, food produce are geared to the prices charged for imported items. The food import bill stands at over EC$400 million. This uses foreign exchange which could otherwise be used for the benefit of this country. The agro-processing sector is non existent ant this important element in any development strategy is relegated to a guessing game.

The Nation should be cognisant that the official level of poverty stands at 25% of the population. In reality that figure could easily be double. Poverty is the inability to provide a plate of food daily. Children are then sent to school without the basic calorie intake and are therefore unable to concentrate in school. They then become disruptive, are shunted to the bottom streams and “minded” until the fourth year when they are unceremoniously put on the scrap heap. These youths then join gangs and are hounded by anti-gang units. They then learn to fight violence with violence to the detriment of the Nation. The YES program is testimony to the Labour Government’s failure to provide adequate education, training and development for the Nation’s human resources. The “YES” program serves no useful purpose except to drain the Treasury of EC$2 million per month. The most reprehensible part of that scheme is that the employers are being paid vast sums without having to ensure that they provide adequate training for these youths. The education structure, the content and the delivery in this Nation needs to be reviewed in order to ensure that with the limited resources available our youths are given a more than equal chance to become productive individuals who can contribute to the Nation’s development instead of being part of the present political philosophy of DEPENDENCY and handouts. This malaise is manifested in the increase in crime and domestic violence in the community. Solutions to these require urgent attention and an inclusion of the best professional minds in this Federation.

At a time when the Nation should be concerned with austerity and develop new strategies to solve the impending economic disaster, the Ministers are loosing their waste and feting down the place. The Minister of Finance has purchased a Land Cruiser Prado for EC$270,500 duty paid or EC$168,500 duty free. Safe Hands/Secure future?