Eustace blames government for undersubscribed bond issue

The $40 million bond auctioned by the government of St Vincent and the Grenadines on the Regional Securities Market on March 19 was undersubscribed because of the mismanagement of this country’s economy.{{more}}

Leader of the Opposition Arnhim Eustace expressed this view yesterday, as he spoke on the ‘New Times’ radio programme.

He said despite the reasons given by Prime Minister and Minister of Finance Dr Ralph Gonsalves for the undersubscription, the $14 million shortfall was because of poor management by his government of the economy.

“Our credit is bad!” he charged.

“People don’t have confidence and while the other OECS countries will have a negative effect on us, we ourselves are not doing anything to give the confidence in our currency — the government’s finances are in a mess and when people see these things, and they are investors, they take warning,” Eustace said.

The Prime Minister had attributed the poor performance of the bond issue to poor marketing, saying that the broker made very little effort to market the bond, and that only eight entities purchased the new issue amounting to just over $25 million.

Gonsalves said other possible reasons for the poor performance were the recent default on its sovereign debt by a member of the Eastern Caribbean Currency Union (ECCU) and the uneasiness in the long-term market.

He also explained that the decision had been taken to give the Bank of St Vincent and the Grenadines (BOSVG) the opportunity to arrange the bidding this time around, while investors were required to submit bids through any of the licensed intermediaries on the security exchange.

But Eustace said that the Prime Minister ought to blame himself, as he hired the financial institution to carry out the issue.

“You hired them to carry out the issue for you, then turn around and blame them? S,o something is wrong with you in the first case,” the Leader of the Opposition said.

He said that he has been talking about the country’s financial situation, which keeps getting worse and worse every day.

He added that there is no coherent policy and that the country will suffer as a result.

Eustace referred to the instance where a treasury bill was also under-subscribed.

“It is the lack of confidence in your government, Gonsalves, that is what is causing that problem — lack of confidence in the economy which you have been running for the last 10 to 12 years.”

Eustace said that it was not only St Vincent and the Grenadines that was facing challenges due to the economic crisis, but that the rest of the world was dealing with it.

Eustace called on the Prime Minister to accept the responsibility, saying that he was the one reason for his own financial loss.

“You are responsible, you are the Minister of Finance — you present the budget, you control the flow — don’t blame anybody else; the buck stops with you,” he said. (DD)