The St. Kitts-Nevis Observer

The World Bank and the Organization for Economic Co-operation and Development (OECD) have just reported in their databases that, in the Year of our Lord 2008, the Government of Italy extended “debt forgiveness” to the People of St. Kitts and Nevis in the amount of $90,865,590. This report of the cancellation of a significant portion of our outstanding debt is most welcome news during these difficult financial times. It comes at a time when our run-away public debt has rocketed to the top of global financial charts with the Nevis debt-to-GDP ratio surpassing that of St. Kitts. Nevis now stands alone atop all heavily-indebted country rankings at a mind-boggling 258 percent.

This debt plays utter havoc with the ability of our governments on both sides of the Narrows to meet our most basic human needs. The interest costs of financing the public debt soaks up a substantial chunk of our revenues, denying the Federal Government the financial wherewithal for purchasing the required resources for waging an effective war against crime. The interest financing costs on this debt deny the Nevis island Administration the resources needed for enhancing the revenue-raising capacity of our off-shore banking sector.

This debt cancellation is a magnanimous gesture on the part of the Government of Italy. It is as if our credit card issuer sent us a note indicating that, effective immediately, it has cancelled the outstanding balance on our credit cards, restoring our financial health and making us whole. Yet, despite this windfall gain, not a drum has been heard in celebration on either side of the Narrows. Not one word of thanks has been openly expressed by our Governments to the good People of Italy. Surely, if a debt forgiveness check was disbursed in 2008, in the amount of $91 million, made payable to those foreign and domestic entities to whom we are heavily indebted; the Government of Italy is entitled to a word of thanks on behalf of all the People of Nevis and St. Kitts.

We are to be reminded that the proceeds from this $91 million disbursement do not belong to the Federal Government. Every loan extended to the Federal Government represents a joint obligation of all the people of both St. Kitts and Nevis. We in Nevis are as much liable for the periodic payments on a loan extended by the Caribbean Development Bank for repairing potholes in Dieppe Bay as are the People of St. Kitts.

Therefore every dollar of outstanding debt that is forgiven or cancelled represents a joint benefit to the People of both St. Kitts and Nevis that is to be shared by the two Governments. And, every dollar that we do not have to send to our various lenders from who we borrowed money means one more dollar that is available to our Premier for providing bed linen, surgical gloves and disposable needles for the Alexandra Hospital.

A careful review of our Prime Minister’s year-end 2010 budget address as well as an exhaustive electronic search of both the Federal and NIA Press Releases reveals nothing on this debt forgiveness blessing that has come to us. A hard copy search of the Federal and NIA’s Budget documents provides a detailed itemized accounting of all revenues collections, including “actual” development aid assistance received in 2008. But, there no line item that reflects this Italian largesse.

This lack of transparency is deeply troubling. In the absence of an explanation by our leaders, we are left to raise the entire menu of questions regarding the possibilities. Did out Honorable Prime Minister seize the moment to invoke the “ALL-FOR-ST. KITTS NOTHING-FOR-NEVIS” rule that was decreed by his national hero – the Right Honorable Robert Llewellyn Bradshaw? Did any of this forgiven debt go to reducing the outstanding loan to the Bank of Nevis that now stands at $27.5 million, as of year-end 2009? Was any of this forgiven debt used for retiring any portion of the principal on the $7.7 million owed by the Federal Government to the Royal Merchant Bank and Finance Co. of Trinidad and Tobago?

Did a sudden darkness enshroud Premier Parry – our Sunshine Government leader -- that silenced him? Has our Honorable Premier become so hopelessly entangled around the axle of his coalition partner that he has lost all ability to stand tall and denounce a blatant raw abuse of power whenever it raises its ugly head? A deadly silence does not provide answers to these questions. The cost of this burdensome debt is being borne by the People of Nevis. And, the People of Nevis have a right and compelling need to know.

Few in Nevis would wish to discover that, during this our darkest hour, Basseterre grabbed all $91 million of this debt relief when 600 Four Seasons workers are displaced, with the closure of our flagship resort drying up our dominant source of revenues. Times are hard. Our Premier needs his share of this free debt forgiveness money to reduce the humongous debt that he incurred after his request for a federal guarantee for completing the Main Road project was utterly rebuffed by his coalition partner. This outright rebuff forced our Premier to secure a loan at local retail banking rates that are several basis points higher than the Government of Basseterre enjoys on an IMF loan at a deeply-discounted loan rate and a protracted grace period before the first payment is due. The resultant cost to the People of Nevis is several million dollars higher than would be the case otherwise, over the life of the loan.

If it turns out that the Federal Government invoked the “ALL-FOR-ST. KITTS NOTHING-FOR-NEVIS” rule, this would not be the first debt forgiveness check that Basseterre has grabbed. On December 31, 1998, there was no Labor-NRP coalition in place. The United Kingdom issued a debt forgiveness check to St. Kitts and Nevis in the amount of $12,969,195 and Basseterre grabbed the whole thing.

This has been our history. It is one of rampant abuse of the People of Nevis at the hands of a fiscally reckless Government of Basseterre. It matters not which Party in Basseterre we are politically tethered to, the abuse of Nevis is the same. If the Government of Basseterre refuses to help us when times are good and is in no opposition to help us when times are bad, then this union serves no useful purpose to the People of Nevis.

IT IS TIME FOR US TO GO