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May
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May
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33 comments:
In this current void of economic leadership and government derailment, the Anthony administration needs to make use of economic stabilization methods in order to hold the line and avoid further disaster.
Day after day, the Anthony administration is busy transferring wealth from citizens to state apparatus, via more taxes – more borrowing and increase deficits, while the economic stimulus packages and the welfare programs are been directed to the political elites and party faithful.
In fact, the Anthony administration has given lots of quantitative evidence to demonstrate their lack of proficiency on how to grow the economy. Their inability to adapt to changing labour market conditions and capital acquisition, as well as their inability to think practical about the situation at hand!
The Prime Minister and minister for finance is clearly of the mark talking about trickledown economics and state job creation of approximately 2000 part-time jobs in “STEP” and “NICE” to win over the skeptics.
Therefore, the minister for finance arguments is rather baseless, having being designed on false and twisted logic of “Better Day’s.”
Please explain the five (5) million dollar that walk away from Dennery South.... Tell me which administration wasted more of the tax payers and international government donation money???
More proof of the incompetence of our elected officials. As it turns out, this debt-equity swap with respect to WASCO is nothing more than a ruse. The former Communications and Works Minister has revealed that the company is 100% government owned.
Hence, technically speaking, there really are no shares; common or preferred stock. As if we needed further evidence that the company--whose liabilities already exceed its assets--has no equity.
The Infrastructure Minister just described it as a simple restructuring of WASCO's balance sheet in order to secure a loan. Am I to believe that the "government has shown confidence and taken shares" in a company that it fully (100%) owns?! Man, this ruse. Is the World Bank hearing this reasoning?
Anonymous said...
The Infrastructure Minister just described it as a simple restructuring of WASCO's balance sheet in order to secure a loan. Am I to believe that the "government has shown confidence and taken shares" in a company that it fully (100%) owns?! Man, this ruse. Is the World Bank hearing this reasoning?
May 16, 2013 at 3:44 PM
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Is there a kind of third party holding company involved?
And did the government "buy" the company's debt, and replace the value of that debt with an equal dollar amount, as an injection of fresh capital?
The man screwed up with all the financial losses, Rochamel, Grynberg, NCA etc are we are now in a bind. But you say 'our' fiscal position. He created the mess. How can it be 'our'. All of us told him to do the $#*t he is doing?
When Chastanet wins king we will have a better budget
Forget the misdirection, the point is as it stands now WASCO has no equity. Furthermore, I'm not even sure if the official explanation offered can't be deemed as a tad misleading to an international lending institution.
The person impersonating Juk Bwa couldn't be any more pathetic. Do better.
Those two words "Fiscal Position" should not be aligned next to each other like this. Such loose language can engender much confusion in the minds of some.
Governments generally use two basic sets of mechanisms to steer their economies, viz, monetary policy and fiscal policy.
In our case, a great deal of our monetary policy and authority is in the hands of the regional ECCB.
In a very real sense, the ECCB operates and controls certain aspects of monetary policy like the European Central Bank of the European Union.
On the other hand, our fiscal policy is fully in the hands of the individual national governments of the members of the ECCB -- until the IMF says differently when it acts as "the lender of last resort".
(We perhaps know where questionable fiscal policy, for example, in the hotel sector in Antigua got that government.)
Fiscal policies relate to the mix of instruments and mechanisms aimed at creating incentives (encouragement and growth), and placing disincentives (discouragement and penalties) regarding certain economic activities. This is, of course, beyond the expected goal of collecting revenue from taxes, levies, etc., to fund the operations of central government.
A great deal of that has to do with taxation policy, for example, the direction -- up or down, telegraphed by the rate, and the special-focus sectors, for example, the household, and specific industries (nascent and/or non-existent ones).
And since government and NOT the layman in the street sets these policies and puts those mechanisms in place, their failure or success is not the direct responsibility hence ownership, of the ordinary man in the street, but the administrations, past, present, and future.
The government may hold a certain "position", stance or attitude on the way (nature) to impose a tax (a burden), or reduce its incidence (where it falls), when to impose it, or if to eliminate it altogether.
In the final analysis, however, the government, carefully weighing the various impacts of various fiscal policies and instruments, is duty bound, to emerge NOT with a "fiscal position" per se, but with an optimum mix of fiscal policies.
Did the budget give you the sense that the Kenny administration knows what to do to fix his and King's past mistakes?
A budget is supposed to be a planning and control tool.
Kenny has himself revealed that this economic activity is largely alien to his nature. He only does it when he gains the government. In other words, the manifesto is EMPHATICALLY SLP window dressing.
Until the would-be PM gains the majority of seats, nobody believes in it!
Small wonder that the SLP does not plan for anything more than first winning enough votes to win the next government even when it holds the reins of power! How sad for those of us looking for long-term change.
This means the focus is almost always on five years.
The SLP planning horizon is just the next years. Now it is the next few years before the next election.
Now tell me this. Which enlightened people or great nation on the face of the earth ever vote for people with such a short-term horizon?
Did the Ancient Romans, and Ancient Greeks think in terms of five-year time frames?
Is there any responsible leadership there? Or is this just Third World backward backwater politics?
The control element of the budget requires data.
You need data to compare benchmark achievements and to find out whether or not you are on track t, so as to take corrective action to get or put you back on track.
Whenever will Saint Lucia ever get to this?
Yet, if you do not know what to measure, what is it that informs you regarding which data sets you need, in order to generate fact-based management of any situation?
Why do we keep spinning our tops in mud with all this annual charade delivered with so much hot air?
Answer me this too. What part of our NATIONAL ECONOMIC LONG-RANGE GOALS did the present budget INTRODUCE to create a celebratory milestone at the end of this fiscal year?
Now, then this. What part of a national long-range economic change did this last budget seek to enhance or move a step forward?
Is this administration running on "empty"?
@ May 17, 2013 at 1:08 PM, true, true, true. There is nothing innovative or creative or even traditional in the tool bag. The engine is spluttering at less than 1% growth, it would seem. No solutions are forthcoming from SLP. None either from UWP. Tweedle-dee and tweedle-dumb.
Kenny Anthony really looks like a devil. Wow Wow; me Jab-La.
Yes, I can see the evil in his eyes.
This entire exercise in Parliament in this country, has become a farce, a sham, if you will, and unfortunately, it has turned many of us off. We just don't even bother to watch. And that may not be quite right to do.
Because we need to watch them shit around with our lives; so that when they day of reckoning comes about; we can rejoice and laugh in their faces.
SLP is Saint Lucia's Lapo Leadership Party. FOS!
Are you saying that the L in SLP stands for lapo?
The budget shows that the PM has run out of ideas or has absolutely no idea how to jump-start the economy. Nothing from nothing leaves nothing.
Next time, Saint Lucians should truly be given a chance to vote for robots.
I believe that they would do a lot better. They would do much better than the host of idiots we have had to vote for in the last 30years.
At least they would not sign stupid agreements that they would not have to understand, waste our money on so-called investments, they would not try to play the role of entrepreneur, and steal money with cabinet agreements, from the Treasury. But they would still be able to read speeches drafted by the CSA, showing how smart they are by putting emphasis on the wrong words, as our ministers of finance do most of the time.
Why would a prime minister believe that because 60% of our workforce did not attend secondary school, they are not fit for gainful employment.
The minister also blamed poor economic growth on low productivity and increasing wages. This appears to be putting the blame on the work force.
what is the PM doing to increase that productivity? while i have no problem with STEP and NICE, i ask how productive are these areas of employment opportunities? how sustainable is it? If a government is interested in productivity, let your projects reflect it. The 60% of the work force who our PM says does not have the requisite skills for gainful employment may just be the ones who hold the lock to maximum productivity, GIVE THEM THE KEY.
== The minister also blamed poor economic growth on low productivity and increasing wages. This appears to be putting the blame on the work force. ===
This is just more evidence of the load of crap that forms our budget speeches, year in, year out.
Labour productivity is an outcome of the combination (mix) of human capital and other forms of capital.
People are not to blame for any lack of it.
Because of a lack of business loyalty, government is tasked with providing the correct fiscal incentives and business environment to encourage businesses to recombine or improve their existing human capital with the factors of production and technology mix, to increase labour productivity.
People of the nation do not get out of their freaking beds one day and say to themselves that they will either decrease or increase national productivity.
You either know what you are talking about or you don't.
Yet, if all this productivity talk is not a lot of just empty words and usual political blather, where in the budget or what measures were placed in the budget to address this lack of productivity?
This is the kind of empty talk, froth, and vacuity that emerges from the Ministry of Finance irrespective of which government is in place.
Every year we get huge helpings bullshit talk. Just Hot air.
Did the framers of this miserable budget speech get even a very small hint, that that if there is an increase in the price level with a national tax like a VAT, that this is inflationary? Everything goes up 15%.
And to make up for the loss, even those items with zero rating, sellers will attempt to increase their prices to make for shortfalls in the sale of other items coming under the VAT?
The resulting inflation has increased the cost of living.
Even the IMF recognizes this. And when Argentina, poster child of IMF recommendations, its economy failed, the IMP was not there to help.
People's reaction to the inflation is that they will want to return to their previous levels of disposable income, take-home pay and spending levels.
What was previously $1.00 now costs $1.15. What did cost $10, people now have to find $5.00 more in order to be able to buy.
Naturally, people smarting from this economic pain will agitate for wage increases because of this.
But there is NO automatic link between an increase in wages and a dampening of the national growth rate.
Perhaps, if only you learned your economics from a badly written sixth-form textbook.
Look at the freaking wage gap!
The price level goes up by 15% with the VAT. But your wage level grows by a mere 4% with a wage/salary settlement! And it is imposed!
Even without the benefit of guidance from a reasonably calculated Consumer Price Index (CPI), the fall (gap) in household purchasing power is HUGE!
Those living on fixed incomes (for example pensioners) are even worse off!
Where the hell do our stupid governments and technocrats get their knowledge and learning from nowadays, uhn?
Erratum: up there
"What was previously $1.00 now costs $1.15. What did cost $10, people now have to find $5.00 more in order to be able to buy."
Is incorrect. It should have been this instead:
What was previously $1.00 now costs $1.15. What did cost $10, people now have to find $1.50 more in order to be able to buy.
There seems to be a one size fits all global shoe that is forced onto the feet of all nations. The squeeze seems to elicit similar anguished pronouncemtnt from the victims of high finance. Our excesses are great, therefore, impoverished people must find the straw in order to have their hands pulled out of the mire made by unscrupulous les bougouise.
When did St.Lucia accumulate such high debts? On whom was the money spent? and what do we have to show for the gain of it?
St. Lucians are known to be financially conservative; debt is almost taboo in our culture. People will eat sabre twapay and wassin bamboo to find the money to send their children to school. A majority of students who have attained advanced education degrees wander disonsolately in a wastelands of intellectual nowhere-to go-nothing-to do. So, who benefitted from this tsunami of rising national debt?
How much more can the St. Lucian consumer take? What more can he give for the cost of food, health, education, and security when his wages are deminished to levels of indignity, and the prospect of impending misery bares its fangs at his hungry children?
St. Lucians are known to be financially conservative; debt is almost taboo in our culture.
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This up there is a very accurate statement. This matter has been very well documented in an academic paper regarding the problems associated with the attempt to reduce the "dead capital" with respect to family lands in the country.
There is fear too, that this country will find it very difficult to use private equity, which requires the level of risk-taking necessary to grow small businesses. This is because of our cultural abhorrence for life's commonplace and naturally occurring ambiguity.
Only our young, tortured and burdened by the incomprehensible egregious financial blundering of the oldsters and parents will save us. But look at the cumulative craziness that they are inheriting from the elders of this society today.
Anyone who defends and worse yet boasts about anything like STEP is just like someone going around with a stamp on their forehead carrying the letters F.O.O.L.
Politics is not the same thing as commonsense. We have a lot of politics but little commonsense. We so often confuse commonsense with idle talk of ignoramuses on radio, on tv, on talk shows. Some don't even have a proper education. You expect such characters to have much to say that helps us cope with problems facing the nation?
To blogger @ 12:04 pm, go back with that regurgitation. You have said absolutely nothing with many words. st. lucia news online anyone?
My only contribution to this article is for the deep consideration as what our next ste would be when/if tourism fails....the middle class is slowly fading on a global span, there will soon just be the rich and the poor...what then happens to all these businesses that thrive on said middle class...what is our 'kenny' words to that matter...the even bigger issue is our youth..they are symbolic to the country's existence its role...its reperesentation on the map...thousands of children are showing signs of simply not giving a damn about the importance of education....make money live life is their motto.....our young women of this society are propelling whilst our young males drop out of school...give their life to the streets....the nonsensical music that we so favor from this god forsaken place JA...why promote such hard times...why tolerate such realities...i say we fasten out seatbelts and fast...because this country is in a crash course and we are oblivious to just how present it may be...why are we allowing foreigners to thrive on our dollar...why do local businesses fail so quickly, whilst the others stay afloat...merrily..why is it so easy for us to permit people to come from their motherland root themselves within this island and we do not dare do they same in theirs....send some of our people to china!....send them to India, Syria, Trinidad...we can sell our nice local food...plenty to go around...this is coming from a concerned 21 year old young man...
Tourism and stubborn stupidly and embarrassing ineptitude and paucity of ideas coming from airhead Saint Lucian leadership to diversify the economy ensures that dwindling of the middle continues unabated.
Is there a kind of third party holding company involved?
And did the government "buy" the company's debt, and replace the value of that debt with an equal dollar amount, as an injection of fresh capital?
May 16, 2013 at 4:05 PM
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I expected someone would offer this as a flawed explanation. The amount of money being injected into WASCO as "fresh capital" is only a fraction of its debt. Therefore, not sufficient enough to realize any "equity" in a company whose assets already exceed its liabilities.
*whose liabilities exceed its assets
A key question is valuation. A guesstimate at best, this requires a certain level of competence in determination through a respected third party independent accounting firm. I think the uncertainty may be giving would-be investors pause.
Probably, the biggest hurdle for the Ministry of Finance may be a call for profit level guarantees.
Government can also buy the services of a managing company on contract. The tendering process need not fall victim to corruption as perhaps was the last HIA airport contract.
Absent from most discussions on the water company is the issue of transmission losses.
Every well-run water utility has a normal 11 percent transmission lost. That current management is apparently managing without key metrics is symptomatic of a much larger disquieting picture.
What is emerging here is a picture of absurdity in management: a total absence of management controls, with no benchmarks, and no key process evaluations, resulting in no corrective actions being taken or in evidence.
The focus is entirely on revenue collection without any concern for cost efficiencies.
Management is either too passive, untrained, at the deep end, or completely unsuitable.
If the Minister of Finance, who could be quite different from the Prime Minister as in Britain and now Barbados, was a more hands-on Minister of Finance, a more proactive posture would see greater and more careful involvement and reflection on the effectiveness of steps taken.
Today's economy is more dynamic than the passive grow-and-reap- bananas economy of the past. It requires greater sophistication, knowledge, and economic control.
With emphasis on tourism as the main driver of this economy, there are greater and difficult exogenous economic variables to monitor and counteract than ever before.
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