We have met the debt reduction enemy and he is us

EDITOR: When it comes to developmental issues, an elementary feature of sound public policy analysis is the careful weighing of freely chosen local-level actions against those imposed by outside forces.

In his weekly syndicated essay in this newspaper describing the adverse effects of unsustainable debts in most Caribbean small states (“Debt strangling a Caribbean generation,” Sir Ronald Sanders pays scant attention to the endogenous reasons for the chronic and growing debts loads – listing only “poor policy choices by some governments” and the costs of recovering from nature disasters – thereby placing nearly all the blame on uncontrollable exogenous forces, such as reductions in foreign aid, high interest rates on external loans, the near disappearance of trade preferences for local agricultural produce, and the effects of climate change.

To be sure, the countries listed have been severely disadvantaged by the free-market and other effects of globalization because of their small size and lack of competitive exportable products. But such liabilities have not prevented other small, resource-poor islands, colonial dependencies, or tiny landlocked countries like Singapore, Taiwan, Hong Kong, Bermuda, Andorra, San Marino, Macau, Luxembourg, Lichtenstein, Monaco, the Seychelles, the Cayman Islands, and many others from holding their own, or even thriving in an increasingly competitive world, while facing all the adversities that other tiny enclaves seem to be incapable of overcoming.

This is mainly due to the determination of such fearless regimes to halt or reduce the effects of the internal policies and forces that Sir Ronald has downplayed or ignored: political corruption, cronyism, and mismanagement; wrongheaded policies and projects funded by reckless external borrowing and driven solely by political expediency; low productivity in both the private and public sectors, principally linked to poor training, sloth, and incompetence; exorbitant job and growth-killing tax rates; and deliberate featherbedding in the bloated public sector.

No better example is Sir Ronald’s own country, Antigua and Barbuda, during the notorious “Bird family-business” rule (1976-1994), followed by the Allen Stanford Ponzi scheme, for which public officials have still not been held accountable. No wonder, his country now has a debt level of 92 per cent of GDP.

In St Vincent and the Grenadines (SVG), there is no better example of the effects of incompetent or self-serving decision making by our political masters, resulting in stagnant economic growth and increased debts, than the many flawed or failed projects enacted by Sir James F Mitchell’s NDP regime (1984-2000).

These include the Ottley Hall shipyard and marina fiasco, for which this former prime minister has never been held accountable; the ecologically destructive and economically failed Union Island marina, whose damage will still take years to clean up; the white elephant Bequia airport, named in his honour; the barely used cruise ship terminal in Kingstown, which should have been built in Bequia instead; the financial complex monstrosity, constructed on a precious seaside portion of Kingstown, thereby destroying all prospects for the commercial development of the area; the traffic lights in Kingstown, which only increased road congestion during their brief period of use; the Windward Bus Terminal, which likewise has made traffic congestion more chaotic; the alcohol, drug and prostitution infested Little Tokyo shops, built alongside the bus terminal; and the hated central market, better known as “Mussolini’s Tomb,” an ugly concrete structure, shunned by vendors and shoppers alike.

Equally needless and foolhardy projects, such as Argyle International Airport, have been mimicked by the current Ralph E Gonsalves regime.

No wonder our debt to GDP ratio has skyrocketed to nearly 80 per cent since 2001.

To paraphrase the long-running satirical Pogo comic strip’s most memorable quote, “We have met the debt reduction enemy and he is us.”

C-Ben David