SVG may suffer same fate as Dominican Republic – Opposition Leader

Opposition Leader, Arnhim Eustace is worried that St Vincent and the Grenadines may face the same fate as the Dominican Republic under the PetroCaribe Agreement.{{more}}

During the New Times radio programme yesterday, Eustace explained that Venezuela had sold Dominican Republic’s $4 billion debt to PetroCaribe for $1.5 billion to a company. The Opposition Leader voiced his concern in relation to the issue and declared that he was dissatisfied with the state of PetroCaribe.

Bloomberg reported on December 4, that Venezuela’s state oil company is discussing a deal to bring in US$1.7 billion in cash in exchange for the cancellation of about $4 billion of debt owed by the Dominican Republic. Under the proposal, the Dominican Republic would issue bonds to raise money for the debt it owes to Venezuela for oil purchases over the past decade. It is said that the transactions would be handled by Goldman Sachs Group Inc., which is acting on behalf of the Dominican Republic.

“It means that Santo Domingo in the Dominican Republic still have to pay $4 billion, but now to the company that bought it for only $1.5 billion.

My understanding of that; the same thing is likely to happen to the OECS countries that have debt. It will be sold by Venezuela, because they want to get out of that you know, because their economy is in serious problems. They are wiping their hands of this matter and they are coming down the line. The same thing will happen to St Vincent. In our case, it may be worse because we have just been downgraded by Moody’s,” he said.

In recent times, Eustace has questioned the size of debt owed to PetroCaribe by St Vincent and the Grenadines, saying that it should be reflected in the budget in the debt to GDP ratio.

In November, while making reference to a document published by the Bank of Nova Scotia, the Opposition Leader, who is also the shadow minister of finance, stated that this country’s debt to PetroCaribe was between $800 million and $900 million. According to Eustace, this would mean that the country’s debt to GDP ratio will rise above 100 per cent.

However, last Thursday, Prime Minister Dr Ralph Gonsalves said that this was incorrect and that St Vincent and the Grenadines’ debt to PetroCaribe was approximately $140 million.

The Leader of the Opposition, however, is not convinced.

“I, really, as a member of Parliament, should have been given information on the size of that debt overtime. You can’t find it anywhere in the estimates. I should have known how much we repaid and how much it added to our debt, but I know none of these things and I am Leader of the Opposition and the shadow minister of finance,” Eustace said yesterday, while making reference to questions that he will ask at the presentation of the 2015 estimates tomorrow.

“I ask those questions specifically. To get a size of the debt, because the only one I had was the Bank of Nova Scotia, which by the way, I believe is pretty accurate, despite the Prime Minister’s protestations, until I can see the documentation from these two companies they say the Government established in 2005 and 2006.”

Eustace also stated that even if the figures given by the Prime Minister were correct, it was not reflected in the budget and that it was important that it be reflected as it will determine how the country is viewed in the international market. However, the Opposition Leader declared that he was not convinced by the Prime Minister’s presentation of figures.

“He has not convinced me up to now when it comes to that. I believe the Bank of Nova Scotia did some good work. Until he can come with something that is more convincing, I will stick with that,” the Opposition Leader said.(BK)