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It is obvious both our governments made in the past some catastrophic financial decisions.To avoid in future something like this government need to show more transparency how, where and why this sums are spend. Only to say in the budget xxx millions of dollars are intended to spend on yyy project is not good enough.The question remains where all this millions going.
The following statements make quite a great deal of sense regarding the SOLVENCY ISSUE. In fact, the IMF country visits and reports are never clear NOR certain whether countries are facing a solvency problem or a liquidity problem. That is why the one-cap-fits-all austerity prescription for the Euro-currency based economies, received such mixed reviews. ================ Anonymous said...We need a proper accounting and analysis of our debt obligations. I don't know that anyone in the Ministry of Finance INCLUDING THE MINISTER OF FINANCE knows how to go about this. That's the problem and an unhappy situation to be in at the moment. Everyone is groping with the issues, sadly with no clarity of vision, just like the proverbial blind Indians going to see the elephant, mainly because the appropriate data are just NOT collected NOR analyzed. We hear a lot of confusing and idle chatter leading to some very sterile discussions. The Chamber o Commerce saw the last budget only as "interesting". But some key questions for critical decision making are:a) Who are we borrowing from to pay just what? b) What is the size of EC-dollar dominated debt? That's easier to handle or manage.c) What is the size of the US-dollar dominated debt? d) What have we done to REDUCE the bunching of payments, and e) What are the foreign US-dollar denominated debt payments and amounts that are due this fiscal year? These are the mission critical issues that are to be managed.All of these issues are related to FINANCIAL MANAGEMENT, which leads us to ask this question: Who then is really minding the shop, so to speak? That to me also, is not at all clear. Thanks Micah for raising some appropriate issues.May 30, 2014 at 5:42 AM ==================== Anonymous said...The situation we are in currently did not happen overnight and was not solely the construct of the last UWP administration but of prior administrations before. It came about successive governments going about a lending and spending spree in much the same way that was possible when we enjoyed export-led growth by virtue of a booming banana industry, and a relatively vibrant tourism industry. Once the fate of the banana industry was sealed we should have begun to scale back spending and look for a sustainable crop (cocoa) to fill in that gap in foreign exchange revenue. John Compton died still thinking that the UK would fight for us, while Kenny Anthony blithely went along trying to even scores lining all his sycophants around the trough. No thought out economic strategies were implemented to shore up the economy and our reserves for economic "wet days". Of course the King-led UWP was really out in the woods primarily going about in much the same way with everybody seeking for ways to line their pockets with Taiwanese and other government largesse. Economy? What economy? seem to have been their modus operandi. Then this new SLP administration knew all along that coming in we needed a paradigm shift but a leader lacking moral courage went about picking up from where he left off and made a bad situation worse by going on a tax, borrow, and spend binge much to finance profligate jobs-for-the-boys schemes, and other non productive programs. That is how we got here. What is required to get us out of that morass is true grit, leadership grounded in moral courage and not political expedience and vote-securing pandering. Leadership with the courage and credibility to clearly articulate the hard choices we have to make and to summon ALL to put some skin in the game to shore up our precarious economic and fiscal situation for the benefit of all in the long run.May 31, 2014 at 5:06 AM===========================The engineer continues to raise very important issues while providing perhaps the most critical insights into the management philosophies of our up-the-creek-without-a-paddle past and current Finance Ministers.
Do we really believe that the lawyers who form oyr government have any clue about money management and economics? How many of these guys have business which are profitable? All thriving countries invest in their ppl. In St.Lucia the logic is to make the avg. man surfer. Lucians stop voting for clueless greedy lawyers.
The issue of solvency is captured within the debt/GDP. While there are exceptions history clearly shows that beyond a certain level debt/ GDP ratio is a clear indicator that you are unable to service your debt. The st kitts situation sighted is not clear changes this assertion. The issue is not whether st kitts grew while having high debt but how much more it would have grown if the debt burden was lower. Data on debt composition is readily available and I think published in the social and economic review. When I needed the data I found it without any issue. From my private discussions with ministry of finance officials these issues are studied and analysed in great detail. Secondly the notion that IMF has one size fits all is just an impression. Read the details of the st kitts program and the Antigua look at the micro details of the programs their are alike only to the extent that the problem is the same.
No two counties are alike in terms of economic structure, especially with respect to taxation. That said, when the net impact of IMF policy is first and foremost to recover the full value of loans dispensed (as lender of last resort)and the protection of institutional lenders (to shore-up any potential collapse of the banking infrastructure), and foreign bond holders, AT THE EXPENSE of the borrowing country even with no growth in sight, one-size-fits-all is the solution. The countries and the numbers will differ; the general prescription remains unchanged.
He is really the first ever serious writer of any sort to comment effectively on the local economy, be it politician or not. Thanks for making the difference. What a refreshing change! You should be in the Senate.
Austerity based economic and fiscal policy has worked for some economies and not for others and that is due to the fact that the fundamentals of some economies were stronger than others to be able to withstand then for a short adjustment period. Take the case of the UK and Ireland for example they seem to be on the rebound. Where there are indemic structural weaknesses in an economy like those of Small Island Developing States (SIDS) like Saint Lucia austerity measures can make a bad situation worse but the alternative of tax, borrow, and spend (what got us into this mess in the first place) will make the bad situation more dire. In our case austerity should mean going back to the fundamental principle of "living within your means" it is a time tested principle that has worked for families and it should apply to governments too. In the post-Compton era we have experienced an unprecedented wave of borrowing, particularly by the SLP administrations, much of which went by way of waste, fraud, and abuse. There has been more ill-advised policy decisions with huge cost implications for a small country with limited resources. These will always come back to haunt you, Rochemelle, Daher Building, Frenwell, Black Bay, NCA and the list goes on. Cutting public servants salaries constitutes a a pece of a slice of a sliver of what is required to make a dent this fiscal year as the deficit will not and should not be closed in one year as it will cause too much hardship. The government cannot and should not do s without both by-in from the unions and their OWN SHARE of the sacrifice that is required. That will constitute the spoonfull of sugar to make that bitter medicene go down for public servants. While they are at it look to cut out more unaffordable subventions, and subsidies. Then revert back to prudent management of our finances and exercise the courage and discipline to stick to it. Our proble has always been our champagne tastes on mauby pockets.
Not counting medicinal weed sales, Colorado sold nearly $19 million in their recreational weed market in the month of March, and $1.9 million of that goes straight into government coffers and towards building schools. At this pace, according to PolicyMic, Colorado will make $30 million this year in pot taxes alone.What’s even more promising is that these numbers are still low estimates, as the recreational and medicinal marijuana markets (coinciding just fine, take note Washington) are likely to keep trending upward. Many say that a figure closer to $60 million in weed tax revenue is a more likely assumption. Medical marijuana is also not as heavily taxes as recreational marijuana, and hopefully it will stay that way.
The cherry on top of this tax-generating cake? Crime rates are also down in Colorado, so while kids are hopefully going to get a better education, the government (idealistically) will spend more money improving infrastructure and other business opportunities for Colorado citizens, and unemployment rates are plummeting. The Colorado police can take a little rest from their duties.Crime rates in Colorado have dropped by 10.6% while Dunkin Donuts has begun expanding its brand in the state (really). It looks like a really good future for people living in Colorado, or any state that legalizes both medical and recreational marijuana – though it is admittedly too early to tell.
Video: Thousands march in Chile calling for marijuana to be legalhttps://www.youtube.com/watch?v=wdiB0Oi9lMs===========
So our dummy up there does not have the necessary intelligence to discern the difference between legalizing medical and recreational use of various strengths of the drug, and its cultivation for export? Do we have yet another jackass politician shooting his mouth, Lord?
One of the several reasons why the Minister of Finance is all out to sea is because the lack of milestones in the budget. But this comment presupposes that the Ministry of Finance is aware of how to do gap analysis. Our Ministry of Finance and the ECCB without an aggressive support, are so LAPO that they have the Minister of Finance just jabbering all over the place about the debt crisis.
5:03, 5:05 PM and 3:51 AM and other morons, good luck. See the state of leadership and the economy? Saint Lucia is on record as being idiot country.
That's the reason this hopeless assembly of the infirm should take the easy way out of being prostituted by Taiwan and sell Cocaine and Marijuana - become the drug kingpins for the world with Gromichelle Marijuana. Bunch of clowns that.
Barbados next door just got a MOODY downgrade, related to its government bonds. Now that the country has reached or is almost junkbond status, the IMF may have become the most likely "lender of last resort". The "conditionalities" can now be expected to be applied to any further financial assistance, with built-in mechanisms to protect the lending interests bond holders of Barbados' bonds. In the meantime, the writing is on the wall while the economic "Road Show" seems like the best game in town for the SLP. As expected the wise in the UWP are patriotically fuelling expectations with more gloom and doom. A Minister of Finance who knows his onions would have PROACTIVELY had mechanisms in place that would have been able to monitor CONTINUOUSLY, on a quarter-by- quarter basis, the financial flows taking corrective action to stem further negative impact. I don't see in the SLP and even LESS of that capability in the UWP.As debt management, if all that can be GUARANTEED with the wage compression element of the last budget is $18 million, then the framers and presenters of this last budget may have graduated straight from the clown school of economics.
Wow. some egg heads @ skunkworks. Good advanced eco deliberations. Thanks for sharing.
Unless and until the Minister of Finance and the Ministry of Finance perceive of the debt problem holistically, as debt obligations divided by the national GDP generated, we the stakeholders, ground zero for the fall-out of their asinine mistakes, will continue to pay a very dear price. There are no two ways about this.Today and lately there is even more confusion injected into the position of the Ministry of Finance and in this administration. The Deputy Prime Minister is suggesting a 3% cut in salaries. The question is this. How many positions will the SLP present to the population on this issue? The Minister of Finance has one position. The PS Finance has another position. The Minister in charge of the Civil Service has quite another. Now, the Deputy Prime Minister has yet another. When will this administration ever get to speaking on the national debt crisis with one voice? Why are these ministers in particular speaking with such a confounded level of ambiguity and obfuscation?
Thanks Mr. Engineer for raising the bar on the public discussion of a critical national issue. You've made, through your contributions, a heck of a lot of difference.
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