SVG and the IMF Report

The main discussion over the past two weeks was related to a press conference held by our country’s prime minister and Sergei Antoshin, head of the IMF staff team that visited this country from April 21-28 for the Article IV Consultation. I said discussion, which it was to some extent but was to a larger extent political ‘ole talk’ by followers of the opposition party who seem to have forgotten that they were, just five months ago, trounced by the party now holding the reins of power. It is interesting that in recent elections in the Caribbean the parties that controlled government in St. Lucia, Barbados and Antigua and Barbuda were returned overwhelmingly by the people. Only in SVG was this reversed, that is, the opposition party defeating overwhelmingly the party in power. Granted, the party in power had controlled the state of affairs for 25 years, but there were obviously lessons to be learned from that, although that party looked at its defeat as a mistake made by the people, which can soon be reversed. They did not say how, if it would be by any means possible or necessary! The other point that needs to be made is that it hasn’t occurred to many opposing voices that the IMF report was one on the state of the economy under the reins of the past government. The discussion, if there was one, should be on the way forward, although some of the suggestions are certainly not new.

This IMF Report was timely because there was much speculation about the true state of the country’s finances. There had been bits and pieces put out by some government sources, making many eager for more information in order to do their own assessment. Many will remember that in 1984 when the Mitchell administration took on the reins of government that they had set up a Venner Commission/Committee that reported on the state of the country’s finances giving the populace an indication of the state of things. The Government is now into its six month of governance and now might be the time to broadly address some of the issues or at least bring them to the attention of the public, especially given that the IMF Report is largely technical. Speaking to the people about the realities of the inheritance that was left is now critical.

What has been happening since November 27 needs to be better known. To be fair most ministers have been holding consultations and at times been speaking to the people through the media, unlike what had happened over the past twenty five years where one man spoke for all. But there is more, given the IMF’s assessment of the way forward, the government will have to re-examine some of its strategies for nation building without going into an IMF programme, many of those programmes having a dark history behind them. True enough the PM did say that their programmes are going to be home-based taking the interests of the people in mind. We need to hear more.

The IMF is against a new National Bank, based on high fiscal risks and regional experience. This must be looked at again, especially the regional experience. Opposition spokespersons are always looking for a chance to criticize the Citizenship-by-Investment Programme. Contrary to the comments by some, the Report was not against the CBI programme but warned against the risks and suggests that it “needs to be designed carefully”. The risks are well known and the ECCB had been working with countries that have such programmes to redesign them in an effort to reduce the risks. The IMF was of the view that CBI revenue “should be used solely for debt reduction”. This obviously relates to the continued state of the economy and the designs that are agreed on by participating countries.

The IMF has indicated areas with which it is comfortable. One is “Improving the business environment (that) will further support private sector activity”. At the recent Invest SVG discussion in the BVI, Kevin Hope who is chair of that body indicated that they have begun the process of cutting the Red Tape and reducing the length of time it takes to do business from two months to five days. For quite a while now the bureaucracy in place had been identified as an impediment to doing business. Improving data collection is apparently underway. This has always been a drawback to the overall functioning of government and of independent persons willing to invest.

The other area I want to highlight is the recommended movement toward solar energy. This should be given priority considering what is happening in the Middle East and its impact on oil prices but also because of our vulnerability to natural disasters. Any new buildings, including schools should be designed to operate on solar energy. Moreover, much needs to be put in place to facilitate this movement throughout the country.

There is much to chew on. The IMF report is important in describing the state of affairs where the economy is concerned and proposing what can be done. We must examine them, but let the way forward be home grown and taking the interests of the people into consideration. If this is the direction, then we are on the right track! And We need to hear more!

•  Dr Adrian Fraser is a social commentator and historian